Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

These FTSE 350 shares have performed poorly over the last 12 months. Will they fall further or bounce back?

Stock MarketsOct 13, 2020 08:10
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
These FTSE 350 shares have performed poorly over the last 12 months. Will they fall further or bounce back?

These two FTSE 350 shares have fallen because of the Covid-19 pandemic. For investors that raises one big question: are they now good value and primed to bounce back, or could there be further pain ahead?

A FTSE 350 share that could bounce back The share price of Royal Dutch Shell (LON:RDSa) (LSE: RDSA) has fallen by more than 55% over the last 12 months. Concerns over the price of oil, economic worries, fears over the future of the industry as environmental concerns move up the agenda, and lastly the cutting of the dividend, have all played a part in reducing the share price.

The falling share price means its shares have hit a 25-year low. The shares certainly appear cheap. They have a price-to-earnings of only around 6.

The risk is it will likely take a while for sentiment to return. However, oil has been out of favour before and share prices have bounced back. There’s still demand for oil, despite the focus on the green alternatives and Shell itself is keen to get involved in green and alternative energy. I think though it’s still unclear if that will ever offset reducing demand for oil over time.

In the short term I don’t know what the share price will do. Longer term, I expect it’ll bounce back. The falls of the last 12 months could well make now an ideal buying time. Although, with analysts turning negative on the stock it’s not without significant risk.

A share price that might continue to struggle 2020 started so well for on-the-move food group Greggs (LSE: GRG). The share price was rising strongly and then came Covid-19. Since then the share price has retreated.

The group recently revealed that like-for-like sales in company-managed shops averaged 76.1% of 2019 levels in the four weeks to 26 September. Sales were 71.2% of the 2019 level in the 12 weeks to the same date.

What’s next? Given sentiment is driving the share price in the short term it’s hard to predict where the share price will go over the next 12 months. The pandemic will be in control of what happens.

Longer term, I see Greggs as less affected by the smaller number of workers commuting than similar companies such as SSP Group. It has many more locations at places like petrol stations and high streets and provides cheaper food. This should make it better positioned once we have a vaccine, or lockdowns become less frequent – but this may be some way off.

For now then, I’d avoid the shares and wait to see what happens. Given the shares have recently jumped back up, another fall could be just around the corner.

Looking at Royal Dutch Shell and Greggs, both have the potential to bounce back. I prefer Royal Dutch Shell as the one with the potential to recover quicker and provide investors with income and growth. But there is risk, as much of its long-term value lies in a successful transition to green energy, which will require huge investment.

The post These FTSE 350 shares have performed poorly over the last 12 months. Will they fall further or bounce back? appeared first on The Motley Fool UK.

Andy Ross owns shares in HSBC Holdings (LON:HSBA). The Motley Fool UK has recommended SSP 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.

Motley Fool UK 2020

First published on The Motley Fool

These FTSE 350 shares have performed poorly over the last 12 months. Will they fall further or bounce back?
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email