Waiting for a stock market crash? This FTSE 100 superstar just fell 19% in a day
A stock market crash feels like itâs just around the corner. But in this situation, things can get better as well as worse.
Thatâs why I think investors should be actively looking for opportunities right now. And there are plenty of big discounts around.
Discounted discounts
Anyone waiting for discounted stocks doesn’t need to look past the FTSE 100. Shares in 3i (LSE:III) just fell 19% in a day.
The company is a private equity firm that’s been a huge winner in recent years. But it’s fallen sharply for one key reason. It has a very concentrated portfolio. And its key subsidiary â a discount retailer called Action â had faltered recently.Â
Like-for-like sales growth is slowing. The latest update includes a forward expectation guide for between 4% and 5%. That’s a sharp fall from 6.2% in 2025. And it’s a huge decline from the 10% increase the firm reported in 2024.
Private equity
With a publicly-traded company, slowing growth usually gets reflected in its share price. But Action isn’t publicly traded.
This means 3i assigns it a valuation on its balance sheet. And they have the business marked at an EBITDA multiple of 18.5. That’s extremely high for a retail operation. And it might be justified if like-for-like sales growth is going to be close to 10%.
At 4%, however, it looks like a stretch. So the market reflects this in the only way it can, which is by discounting 3i shares.
That’s why the stock fell sharply. But the latest move means investors might be underestimating Actionâs growth potential.
Growth potential
Ordinarily, like-for-like sales growth is a good measure to use in evaluating retailers. But Action is an unusual case.
Most publicly traded retailers are somewhere near saturation. In other words, theyâre not opening many more stores. That means changes in like-for-like sales are a good indication of long-term growth. With Action, however, things are different.
The firm has plans to more than double its existing store count. And it also has ambitious US expansion targets from 2027. That wonât be straightforward. But there are still plenty of opportunities across Europe, where it already has a strong presence.
An opportunity
In its latest update, 3i reported that its book value had increased to £30.17 per share. But the current share price is 22% below this.
This means investors who buy the stock today arenât paying an 18.5 EBITDA multiple for Action. The real multiple is more like 14.5.
Given the retailerâs future growth potential, I donât think thatâs unreasonable at all. And itâs an extremely rare opportunity for investors.
Source: Fiscal.ai
Chances to buy 3i stock at a discount to book value in the last 10 years have been few and far between. But during that time, the share price has climbed 411%.
I think thereâs more to come from both Action and 3i. So thatâs why Iâm looking to add to my investment with the stock down.
Finding stocks to buy
Thereâs a lot going on in the stock market right now. But itâs somehow managed to avoid falling into crash territory (so far) in 2026. Despite this, 3i shares are down 27% since the start of January. And regardless of what happens next, thatâs enough of an opportunity for me.
The post Waiting for a stock market crash? This FTSE 100 superstar just fell 19% in a day appeared first on The Motley Fool UK.
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Stephen Wright has positions in 3i Group Plc. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
