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Is it time to buy the FTSE 100’s 3 biggest flops in April?

A beach at sunset where there is an inscription on the sand "Breathe Deeeply".

For investors, April was a tough month as global stock markets tumbled. The UK’s FTSE 100 index actually rose 0.4% this month, making it one of the best-performing indices. Meanwhile, the US S&P 500 index dived 8.8% in April and the tech-heavy Nasdaq Composite index plunged by 13.3%. This leaves the S&P 500 down 14.3% from its record high, while the Nasdaq has crashed 23.9% from its November peak, thrusting it into bear-market territory.

The FTSE 100’s champs and chumps

While some FTSE 100 shares thrived in April, others dived this month. As you’d expect, the range of returns from individual Footsie members was very wide. For example, of 100 stocks in the FTSE 100, only 32 gained in value during April. Among these 32 winners, gains ranged from a mere 0.1% to 8.2%, with the average rise being a modest 3.7%.

At the other end of this scale lie 68 FTSE 100 fallers in April. Declines among these losers ranged from just 0.1% to a hefty 20.7%. The average fall among these 68 losers was 6.1%. Also, no fewer than 14 Footsie shares recorded double-digit percentage declines this month.

The Footsie’s three biggest flops in April

These are the FTSE 100’s three biggest fallers this month:

Company Industry April loss 12-month change Share price (p) Market value (£bn) P/E Earnings yield Dividend yield
Ashtead Group Equipment rental -12.5% -9.1% 4,228.84 18.9 20.0 5.0% 1.1%
Rolls-Royce Holdings Aerospace & defence -17.5% -20.3% 83.38 7.0 56.6 1.8% 0.0%
Ocado Group Online retailing -20.5% -55.6% 930.66 7.0
Closing prices on Friday, 29 April. P/E is price-to-earnings ratio.

As you can see, April losses among these three FTSE 100 flops range from 12.5% at Ashtead Group to a chunky 20.5% at Ocado Group. The average loss across all three slumpers is 16.8%.

Furthermore, all three FTSE 100 shares have declined dramatically from their 2021 highs. Ashtead Group has lost 35.7% of its market value its peak share price of 6,572p on 8 December 2021. Likewise, Rolls-Royce Holdings has crashed by 44.6% since hitting 150.48p on 9 November 2021. And Ocado’s share price has collapsed by 58.3% since reaching 2,234p on 29 April 2021, almost exactly a year ago. Yikes.

Would I buy any of these sliding shares today?

As a veteran value investor, I prefer to buy shares trading on low earnings multiples that also offer market-beating dividend yields. From the table above, I see that none of these three sliding shares fits my bill. All three are former go-go growth stocks that face tough times ahead. For example, in 22 years of trading, Ocado has run up enormous losses in its pursuit of global growth. Likewise, Rolls-Royce’s earnings were obliterated by Covid-19 lockdowns. While both of these stocks have potential to bounce back, they’re not for me today.

In summary, if you forced me to buy one of these FTSE 100 shares, I would opt for Ashtead. This share has been a long-term winner, surging by 162.7% over the past five years. Its business — industrial equipment rental — is simple, plus it’s been trading since 1947. And, unlike the other two slumpers, Ashtead shares offer a modest dividend yield of 1.1% a year, covered 4.8 times. For me, it’s the best of this battered bunch!

The post Is it time to buy the FTSE 100’s 3 biggest flops in April? 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 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.