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It was a brutal day for the FTSE100 index. As I write, the Footsie is down 160.73 points (-2.2%) today to trade at 7,277.36 points. This latest decline was led by sharp declines in the US yesterday. The S&P500 the index lost 4% of its value on Wednesday, its biggest one-day drop since June 2020. Nasdaq Compound the index closed down 4.7%. Ouch.
The FTSE 100 has been the safe haven of 2022
Here’s how the FTSE 100 fared against four other major equity indices in 2022 and over the past 12 months (sorted by 2022 change).
|Region||Index||change 2022||change over 12 months|
|Europe||STOXX Europe 600||-12.8%||-2.3%|
|UNITED STATES||Nasdaq Compound||-27.6%||-14.9%|
The FTSE 100 has been a relative safe haven so far in 2022, as well as over a year. It is down less than 2% this calendar year, compared to a loss of almost 28% for the Nasdaq Composite index. Moreover, it is the only major market index among these five to have increased in the last 12 months. Adding dividends of, say, 4% to the index’s 4.7% gain brings the Footsie’s 12-month yield to around 8.7%. To me, that’s pretty impressive, given the stock market crashes elsewhere.
Bargain hunting in the Footsie
Looking at the constituents of the FTSE 100 this afternoon, I see red screens. Almost all stocks in the index are down today. In fact, only seven of Footsie’s 100 stocks are up today, with gains ranging from 0.1% to 2.5%. Not a good day for UK shareholders, huh?
But the losing side of the FTSE 100 caught my eye this afternoon. Of those losers, 20 stocks are down at least 3.8% today, while seven Footsie stocks are down more than 5% in value. And all because investors fear the US stock market is sneezing and London is catching a bad cold as a result.
Four Great Footsie Deals I’d Buy Today
As a contrarian/value/income investor, I always look to buy quality companies at discount prices. Here are four stocks I don’t own that fell in value today.
|Company||Sector||Share price (p)||12 months of change||Market value (in billions of pounds sterling)||Price/
|Earnings return||Dividend yield||Dividend coverage|
|royal mail||postal services||298.99||-43.1%||2.9||3.4||29.2%||5.6%||522%|
Royal Mail Group is the worst performer on the FTSE 100 today, after its share price fell 12.4%. Meanwhile, Unilever shares are down 4.5% today, while Diageo the stock is at -5.3% and Tesco stocks lost 0.9% (after rebounding from the open this morning).
In summary, I would buy these four FTSE 100 stocks today, both for their dividend income and future earnings growth. Each is a market leader in their particular field, which can provide some security in these troubled times. Here again, all four face similar concerns: inflation (rising consumer prices), slowing economic growth, risk of recession, etc. Yet despite these risks to these companies’ earnings and stock prices, I would gladly buy all four stocks today!