FTSE 100 value destructors: 4 large-cap shares plunge 25-50% in 2021

 Highlights

• Domestic stock markets have categorically underperformed in 2021
• Over a dozen of blue-chip stocks have eroded more than 10% of wealth
• Businesses are set to face extended hardships of pandemic in 2022 

Domestic stock markets have categorically underperformed in the present calendar year as against the comparable regional peers and leading stock averages of the United States. The headline FTSE 100 has only managed to amass a gain of a little more than 10% with the biggest gainer among the pack of 101 constituents registering a return of nearly 70%.

The imposition of third national lockdown in January-February of 2021, the eruption of Covid infections linked to the Delta variant in May, the subsequent repercussions of sudden spike in the rate of infection and hospitalisation in the following months, the resultant business disruptions during July-September quarter and the widespread emergence of the Omicron variant have considerably affected the market sentiments.

The operative hurdles due to the short-staffed functioning, impaired supply chain and logistics arrangements, successive increases in the input prices, scarcity of raw materials, limitedness of essential components (semiconductor chips) and the evolving course pandemic furthered the jittery as a number of small-to-medium scale enterprises were unable to resume at maximum possible capacity.

In the meantime, a bunch of stocks have eroded shareholders’ wealth, effectively offsetting some of the positive points provided by the stocks that stand with a positive rate of return.

We take a look at 4 FTSE 100 blue-chip components that have plunged 25-50% in the present calendar year so far. 

Just Eat Takeaway (LON: JET)

Shares of Just Eat Takeaway.com NV have declined a little more than 53%, emerging as the biggest value destructors among the pack of 101 heavyweight stocks included in the benchmark FTSE 100 index in 2021 so far. According to the historical data available with the London Stock Exchange, the stock of Just Eat Takeaway plunged 53.15% to GBX 3,977 from a share price of GBX 8,488 apiece, as on 4 January 2021.

Just Eat Takeaway shares (YTD performance)

Source: REFINITIV

It seems that the investors are baffled with the ongoing growth at Just Eat, as a result of which the stock became the biggest wealth destroyer in 2021. During the July-September period of 2021, the Netherlands-headquartered food ordering corporations processed 266 million orders, registering an increase of 25% as against the net order processed in the same period of 2020.

As far as the earnings are concerned, the gross traded value (GTV) grew 23% to EUR 6.8 billion in the corresponding period. On the domestic front, the company surpassed the one billion order mark with the UK subsidiary effectively exhibiting the apparent stronghold since its incorporation. It would be crucial to witness if the company manages to post a favourable result in the upcoming corporate earnings season commencing from January 2021. Just Eat has provided a GTV estimate of EUR 28 to 30 billion for the full year 2021, including Grubhub’s contribution.

Other major decliners include shares of Ocado Group (LON: OCDO), Flutter Entertainment (LON: FLTR) and London Stock Exchange Group (LON: LSEG). All these FTSE 100 constituents have shed at least more than 25% in 2021 so far.

Businesses are likely to witness a host of challenges in the upcoming 12-month stretch as some of the pandemic-induced hardships are set to extend beyond the initial quarter of 2022. The uncertainty has increased further following the massive resurgence of Covid cases with the Omicron variant staging a dominant arrival as it is effectively overriding the highest level of immunity acquired from the two doses of vaccines, the maximum possible protection against the Covid-19 (SARS-CoV-2) virus.