By Jack Barnett
The Christmas lull is setting in. Investors are bracing to turn off their screens and get away from the daily City grind. Trading volumes on the FTSE 100 are beginning to thin.
It’s also that time of year when financial journalists pick through the UK’s worst (and best) performing stocks over the past 12 months.
Without further ado (or pressure from our editors), we – with the ever-helpful hand of Hargreaves Lansdown’s senior investment and markets analyst Susannah Streeter – take a look at who’s been dragging and boosting the FTSE 100 in 2022.
WORST PERFORMERS
Ocado
The middle-class favourite and online supermarket has had a torrid, torrid year that looks set to see it seize the unwanted title of worst performer on London’s premier FTSE 100 index.
It’s shed nearly 60 per cent over the last (nearly) 12 months.
Ocado was one the pandemic’s darlings. Shoppers flocked to its online shopping platform to avoid heading to physical stores and risk catching the virus, seeing its share price take off.
Now, buffeted by cost of living pressures and putting Covid-19 to the back of their minds, consumers have largely returned to normal spending habits.
“Ocado’s retail business has been sideswiped by a mini-reversal of the huge upswing in pandemic business and cost-of-living pressures with shoppers drifting off to cheaper competitors,” Streeter said.
DOWN 59 PER CENT
Persimmon
House builder Persimmon has been a big casualty of the Bank of England’s forceful campaign to get inflation lower.
The firm operates in a market that is highly sensitive to changes in interest rates, which the Bank has done nine times in a row, each upward and to taking them to the highest level since 2009.
House prices look set to fall sharply in 2023 driven by prospective buyers being priced out of the market by higher mortgage rates and a rapid upward march in home prices since the pandemic.
“The current dip in house prices could well be the start of a bigger correction, and just how much volumes might fall also remains to be seen. This will squeeze operating margins which has been one of Persimmon’s key attractions,” Streeter reckons.
The firm has been 2022’s second worst performer on the FTSE 100.
DOWN 58 PER CENT
BEST PERFORMERS
Pearson
A revamp toward providing learning resources digitally has sent publisher Pearson on an upward spiral this year.
Delivering educational materials remotely makes it much easier for people to access and, as Streeter points out, those customers are more likely to “hang around for longer so investors are clearly enthused by Pearson’s efforts and are hoping they will translate into robust future growth”.
UP 54 PER CENT
BAE Systems
It must feel odd seeing BAE System’s share price skyrocket. The company is the FTSE 100’s best performer in 2022 so far, surging over 52 per cent.
It tends to perform well when conflicts break out. Looking at the share graph, its price spiked around the time Russia invaded Ukraine and has held steady ever since.
The firm mainly makes and delivers heavy duty military equipment, which is likely to be in high demand in the coming years due to the likes of Britain, US and Germany pledging to ramp up defence spending in response to Putin’s illegal aggression.
“Its share price surged following Russia’s aggression and the enlargement of NATO alongside pledges of multinational support for Ukraine has helped maintain the momentum,” Streeter pointed out.
UP 52 PER CENT
HONOURABLE MENTIONS
HSBC UP 9.9 PER CENT
SHELL UP 38 PER CENT
BP UP 34 PER CENT
BT DOWN 31 PER CENT
TESCO DOWN 21 PER CENT
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