Image source: Getty Images
I believe that some FTSE 100 stocks are now more attractive than ever due to market volatility.
Why have FTSE 100 stocks struggled?
For starters, macroeconomic volatility has hurt many markets around the world. This includes soaring inflation and measures to counter it, i.e. higher interest rates.
In the case of the UK, there are additional problems, including a cost of living crisis, as well as the looming specter of a housing crisis. Furthermore, foreign investors are uncertain about the direction of the UK economy due to Brexit and have therefore cooled their investment interests.
Finally, the tragic geopolitical events currently taking place in the world have not helped.
Despite all this, some FTSE 100 stocks have thrived. Marks and Spencer (LSE: MKS) is one.
Am I too late to the party?
Marks and Spencer is one of the UK’s largest retail chains selling clothing, homewares and food. It has 400 stores in the UK and 150 overseas, as well as a good online presence.
As I write, Marks shares are trading at 212p. This time last year they were trading at 106p, which is a 105% increase in a 12 month period! This is notable considering FTSE 100 shares have mostly stuttered in recent months.
Why have Marks and Spencer shares risen? I think this is partly due to its excellent performance for 2023. Revenue rose a healthy 9.6% to £11.93 billion compared to the previous year. In addition, pre-tax profit increased by around 22% to £475.7 million.
Additionally, the first quarter business update released a couple of months ago was also a good read. The company claimed that it had managed to increase its market share in the food and clothing segment. Comparable food sales increased 11% compared to the same period last year and food sales grew 6%. Despite the difficult conditions, business seems to be going very well.
Finally, Marks shares still appear to be good value for money with a price-to-earnings ratio of 11. The average ratio for FTSE 100 shares is around 14. So even after the rapid rise in share price shares, the shares seem to be a good value.
Risks and what I’m doing now.
One issue that could plague Marks is the fact that it is seen as a more premium retailer. Due to the cost of living crisis, there is a possibility that consumers will turn to cheaper alternatives and this could hamper Marks and Spencer’s performance. This doesn’t seem to have had any impact to date, but the next update is coming in November and I’ll be watching with interest.
Furthermore, since Marks’ share price has soared so noticeably of late, even a small bump in the road could send the stock tumbling.
I like the look of Marks stock and although I’m a little late to the party, I’d still be willing to buy some shares for my holdings next time I have some extra cash to invest. Marks is one of the FTSE 100 stocks that bucks overall trends and does well.
