Pádraig Floyd rounds up the FTSE 100 stocks whose share prices are lower now than they were 10 years ago . And eight of these were in the red before Covid-19 struck …
The lost decade
As the old saying goes ,
“ getting to the top is the easy part ; it is staying there that is difficult ”, and nowhere is this more apparent than the FTSE 100 . Less than a third of the original constituents have held on to their position in the index , with General Electric Company , House of Fraser and Ferranti among those companies that have since collapsed . The disruption that has accelerated in the past decade has shown that a large cap ’ s size has little bearing on its longevity . According to Russ Mould , investment director at AJ Bell , one of three factors is usually to blame when a company enters longterm decline . “ Either competition catches up with it ; customers get sick of it and go elsewhere ; or the heavy hand of the regulator gets involved ,” he says .
“ Any one or a combination of these will undermine a company ’ s competitiveness , market share and ability to generate profits and cash , which it needs to shore up that position . “ There is also the possibility of pilot error , as management makes a tactical blunder , such as a badly overpriced or misjudged acquisition , or leveraging up the balance sheet through share buybacks .”
The disruption that has accelerated in the past decade has shown that a large cap ’ s size has little bearing on its longevity