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These two FTSE 100 Stocks have by no means been the index’s best performers this year, but they haven’t done well.
And while the market isn’t universal — some areas such as oil, energy and mining have done well this year — it’s a good time to dive in and buy stocks that I really believe in.
So here are a couple of companies I will buy for future recovery when I have some spare cash.
Four developments
Four developments (LSE:BDEV) is down 40% from last year. However, this negates some pretty cool performance data.
The firm recently reported that adjusted pre-tax profits for the year to 30 June rose 14.7% to a record £1.05bn, while revenue rose 9.5% to £5.27bn, with completions up 3.9% to 17,908. That final figure is broadly in line with pre-pandemic levels.
The company is offering a hefty 8.1% dividend yield, which appears to be well covered by earnings. Also, Bharat is well-funded with a net worth of £1.1 billion.
Looking ahead and based on the current market conditions, Bharat is targeting a growth of 3-5% in total house completions between 18,400 and 18,800 houses in FY23.
So there are many positive things. But why did the stock price go down? Well, things aren’t looking too good for the housing market right now. Interest rates are rising and could reach as high as 4% by 2023. This in turn prompts home buyers to delay their purchase.
However, with the cost of living crisis, this means home prices are unlikely to increase. Bernberg They argue that house prices will remain flat next year, with inflation at 5 percent. Therefore, margins may suffer next year.
Despite this, I see Bharat as a good place to put my money now. The stock hasn’t traded this low in almost a decade, and when the housing market recovers, I think it could explode.
Burberry
Burberry (LSE:BRBY) has been suffering this year and that’s largely the result of a lockout in China. In its first-quarter report, the luxury fashion house said same-store sales rose just 1% year-over-year as its sales were affected by lockdowns across China. The stock is down just 3% year-to-date, but is up about 15% since February.
However, Burberry continues with its ability to continue to grow. The business is targeting high single-digit percentage revenue growth and 20% margins. “In the mean time.”. And analysts are positive too. It expects the city’s revenue to grow by 27 percent in the current financial year to April 2023.
China is indeed an important part of Burberry’s business. Excluding mainland China, comparable store sales rose 16 percent in the first quarter. The big question is, will China continue with its lockdowns or adopt a more business-friendly approach? I certainly hope the latter.
An economic downturn can pose challenges for retailers like Burberry, but by the same token, luxury fashion is often fair. Despite the economic headwinds, I buy Burberry on the assumption that business will indeed take off when China opens up from Vivid. A weak pound should boost GBP earnings.