I often look for beaten-down large-cap shares with recovery potential. Thus, I went bargain-hunting in the FTSE 100 index on Tuesday afternoon. While browsing the index, I found four bombed-out shares that have suffered a terrible 2021. I don’t own any of these losers, but I’d buy two of them today.

The FTSE 100’s winners and losers

Over 12 months to 14 December, the FTSE 100 gained 10.8%, excluding dividends. However, returns generated by individual Footsie shares vary widely. Of 100 stocks in the index for a year, 70 have risen. These gains range from 0.1% to 88.7%, with the average gain across all 70 winners being 25.2%. This leaves 30 FTSE 100 losers. Losses among these 30 laggards range from 0.1% to 28.5%. Across all 30 losers, the average decline is 11.8% — 22.6 percentage points behind the wider index.

The biggest losers over one year

These are the FTSE 100’s four biggest losers in the year ending 14 December 2021:

Company	Sector	1-Yr Loss
Fresnillo	Precious metals	-21.7%
Polymetal International	Mining	-24.3%
Ocado Group	Retail	-26.8%
Flutter Entertainment	Gambling & betting	-28.5%

Note that each of these four stocks is in a bear market, having fallen 20%+, with yearly losses ranging from 21.7% at Fresnillo to 28.5% at Flutter Entertainment. Across all four, the average slump is 25.3%. As a veteran value investor, I often invest in battered stocks that might bounce back. Experience tells me that today’s dog stocks sometimes turn into tomorrow’s star shares. That’s why I’d buy two of these stocks today.

Two FTSE 100 flops I’d buy

The first share I’ll reject is online supermarket Ocado Group. I wrote last month that this FTSE 100 share could be a wild ride in 2022. Over the past decade, Ocado has been heavily loss-making while burning through cash. But OCDO leapt 7.3% on Tuesday following a well-received trading statement, so I might be proved wrong. The second share I will reject is Flutter Entertainment. Though I’m keen on this stock, I’d prefer to see Flutter’s next trading update before buying its stock.

Thus, the two stocks I’d buy are mining companies Fresnillo and Polymetal International. Established in 2008, Fresnillo is the world’s largest producer of silver from ore and Mexico’s second-largest gold miner. In 2020, it produced 53.1m ounces of silver and 769.6 thousand ounces of gold. Therefore, if precious metal prices rise next year, so too might Fresnillo shares. On Tuesday, they closed at 863.6p, valuing the group at £6.4bn. The shares trade on 13.8 times earnings, for an earnings yield of 7.3%. The dividend yield of 2.8% a year is below the FTSE 100’s 4%, but still worth having.

I’d also buy the stock of Polymetal International, an Anglo-Russian miner of precious metals, registered in Jersey with headquarters in Cyprus. On Tuesday, its stock closed at 1,245p, valuing the group at £5.9bn. POLY shares currently trade on a lowly price-to-earnings ratio of seven and a chunky earnings yield of 14.2%. Also, their dividend yield of 7.8% a year is among the highest in the FTSE 100.

Mining for value

Finally, I’ve had perhaps two decades of experience of investing in FTSE 100 miners. During this time, I’ve seen metals prices soar and slump in boom-bust demand cycles. Likewise, I’ve witnessed company profits collapse at even the world’s largest miners. And I know that even mega-cap miners sometimes cancel, cut, or suspend their dividends during tough times. Therefore, although I’d buy both of these mining stocks today, I’d fully expect their share prices to be volatile in 2022 and beyond!

The post These 4 FTSE 100 stocks crashed in 2021. I’d buy 2 today! appeared first on The Motley Fool UK.

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Cliffdarcy has no position in any of the shares mentioned. The Motley Fool UK has recommended Fresnillo and Ocado Group. 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.