UK stocks are still cheap even as the FTSE 100 makes new highs

UK stocks are still cheap even as the FTSE 100 makes new highs

British Isles on nautical map

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The best time to buy shares is when they’re trading at low prices. And even with the FTSE 100 making new highs, I think UK stocks still look like good value.

A handful of stocks have been pulling the index higher in 2024. But beneath the surface, shares in quality companies have been underperforming since the start of the year. 

Takeover time

Rising share prices aren’t always a sign of improved business performance. Anglo American, Hargreaves Lansdown, and D.S. Smith have both been the subject of takeover bids.

This has caused share prices for all three to rise sharply. Shares in D.S. Smith are up 21%, Anglo American shares are up 22%, and HL shares are up 45% since the start of the year.

These kinds of results have helped pull the FTSE 100 to record highs last month. But there isn’t much investors can do to try and take advantage directly. 

Looking past these results, performances have been much more varied. And it’s especially worth noting that some of the strongest businesses have produced the weakest returns.

Winners and losers

Here are the top five stocks from the FTSE 100 by share price performance since the start of January:

Rolls-Royce +53%
NatWest +45%
Hargreaves Lansdown +45%
Barclays +40%
Intermediate Capital +36%

With the exception of Hargreaves Lansdown, there’s a bit of theme here. The best-performing stocks have been ones recovering from the Covid-19 pandemic.

Elsewhere, growth stocks have been struggling. Bunzl (-7%), Rightmove (-2%), and Rentokil Initial (-3%) have all posted negative returns while the FTSE 100 has gained 7%.

I think this gives investors a good idea about where to look for buying opportunities. But there’s one in particular that stands out as worthy of some careful consideration.

Quality on sale

Since the start of the year, shares in Croda International (LSE:CRDA) have fallen by 13%. And the stock hasn’t shown any real sign that a turnaround is imminent.

The chemicals company has been hit by weak demand as customers work through high inventory levels compiled during the pandemic. But that can’t last forever.

There’s a risk the unusually high profitability levels of 2021 might not return. But I think things are very likely to improve from where they are now.

As things start to normalise, sales should recover and high barriers to entry for competitors mean Croda stands to benefit. This could well be a stock set for a big recovery.


The FTSE 100 is making new highs, but it’s not the case that share prices across the board have been climbing. Takeover bids have accounted for a significant amount of the returns.

A number of stocks have fallen since the start of the year, including some quality businesses. As a result, I still think there are opportunities worth considering in the UK.

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