Down 26% to 36% in 6 months, are these 2 FTSE stocks recovery plays?
Three months ago, the FTSE 100 index hit an all-time high on 3 March. It then eased back, before plunging steeply in April after President Trump announced hefty tariffs on US imports. However, after Trump backed down, the stock market raced back up and is now within 1.2% of its peak.
Two FTSE 100 flops
However, some Footsie stocks have fared much worse than others over the last six months. By my reckoning, 36 FTSE 100 shares have lost value in the past half-year, with declines ranging from 0.6% to 35.7%. Also, my family portfolio owns two of the index’s five worst performers over this period. Here they are.
1. Glencore
Shares in miner and commodity trader Glencore (LSE: GLEN) have had a torrid time of late. Over six months, the share price has crashed by 26%, while it has collapsed by 41.3% over one year and 46% over three years. However, it has beaten the FTSE 100 over five years, recording a 67.8% gain.
My hunch is that Glencore might be another ‘fallen angel’ — an otherwise sound business with a temporarily depressed share price. What’s more, the above returns exclude cash dividends, and Glencore’s yield is now 2.8% a year.
After these steep falls, Glencore is one of my family portfolio’s worst performers, down more than a third (-33.7%) since we bought it. At the current share price of 288.5p, the group’s market value has slipped to £34.3bn. Still, things have been worse, with the stock touching 205p on 7 April.
Alas, falls in metal and commodity prices have hit the group’s revenues, cash flow, and earnings. For Glencore shares to bounce back, demand for these industrial items would need to strengthen and push up commodity prices. I’ve no idea whether this will happen in 2025, but I will wait patiently for a sustained recovery from this FTSE 100 faller.
2. Bunzl
Now for a share we acquired fairly recently — on 16 April, to be precise. On that day, shares in FTSE 100 firm Bunzl (LSE: BNZL) slumped by 25.6% after the company unveiled weaker quarterly results. Feeling that the market had overreacted to these numbers, I swooped in, buying stock at 2,275p.
At first, my bet on Bunzl’s bounce-back seemed well-timed, with the shares closing at 2,538p on 12 May. However, this stock has since fallen back and now stands at 2,294p, just 0.8% above our buy price and valuing this distributor of workplace supplies at £7.5bn.
Like Glencore, I hope Bunzl will be a solid recovery play over the next 12 months. However, if Trump’s steep tariffs do come into force, this could further damage the group’s margins and earnings. Even so, this stock looks inexpensive to me, trading at 15.4 times earnings and delivering a dividend yield of 3.2% a year.
Though Bunzl has halted a £200m share buyback with £85m unused, three company insiders bought stock heavily after the share price crashed. This gives me confidence that they, like me, expect this British business to recover. Hence, we will also hold tightly onto these FTSE 100 shares!
The post Down 26% to 36% in 6 months, are these 2 FTSE stocks recovery plays? appeared first on The Motley Fool UK.
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More reading
- Why investors don’t need to wait for a stock market crash to buy shares
- FTSE 100 shares: an “act now” opportunity to build wealth?
- This FTSE dividend stock superstar is down 30% in 3 months – time to consider buying it?
- £5,000 invested in Glencore shares during the tariff-induced sell-off is now worth…
- 5 UK shares I think are worth considering now
The Motley Fool UK has recommended Bunzl. Cliff D’Arcy has an economic interest in Bunzl and Glencore shares. 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.
