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The whole worth of all corporations within the UK’s FTSE 100 index is round £2.06trn. However, the index is dominated by 10 mega-cap corporations, whose mixed worth involves greater than half of the Footsie’s whole valuation.
Four FTSE 100 mega-caps
Right now, these are the 4 largest FTSE companies:
| Company | Sector | Market cap | Share value | 12-month change |
| AstraZeneca | Biopharma | £177.7bn | 11,504p | 25.7% |
| Shell | Oil & fuel | £175.5bn | 2,534p | 30.3% |
| HSBC Holdings | Banking | £124.3bn | 624.6p | 14.2% |
| Unilever | Consumer items | £106.5bn | 4,217p | 9.5% |
Each of those FTSE companies is a super-heavyweight in its discipline, with even the smallest value effectively over £100bn. (And solely two different Footsie corporations have valuations above £99bn.)
I instantly seen that each one 4 shares have risen in worth over the previous yr. Also, all 4 have overwhelmed the broader FTSE 100, which is up 6.9% over 12 months. So possibly there’s some fact within the previous saying about massive being stunning?
I don’t personal any of those super-stocks
For the report, my spouse and I don’t any of those 4 particular person shares in our household portfolio. To be trustworthy, this got here as a minor shock to me.
Then once more, the mixed market worth of those 4 companies involves £584bn, or greater than 1 / 4 (28.3%) of the FTSE 100’s whole capitalisation. Therefore, we have already got vital publicity to those big corporations by our UK and FTSE 100 index-tracking funds.
Which of those ‘London whales’ would I purchase right this moment?
As a veteran worth investor, I hunt for bargains by trying to fundamental share fundamentals. Here are the core figures for these 4 ‘London whales’:
| Company | Price-to-earnings ratio | Earnings yield | Dividend yield | Dividend cowl |
| AstraZeneca | 65.6 | 1.5% | 2.1% | 0.7 |
| Shell | 5.3 | 18.7% | 3.8% | 5.0 |
| HSBC Holdings | 12.4 | 8.1% | 3.5% | 2.3 |
| Unilever | 15.9 | 6.3% | 3.5% | 1.8 |
The very first thing I’d do is reject the shares of Big Pharma agency AstraZeneca. Based on fundamentals, these shares look very costly to me. Then once more, this can be a development firm with doubtlessly glowing future prospects. Hence, different buyers are comfortable to pay a premium to personal this inventory. All the identical, it’s not for me.
As for the three remaining mega-cap shares, all look moderately low-cost to me. In explicit, I’d snap up a bunch of Shell shares in a heartbeat, if I solely might. After all, they provide a good money yield coated a whopping 5 instances by earnings.
However, my spouse has adopted moral and environmental necessities for investing, so she prefers us to not purchase oil & fuel producers’ inventory. So I’ll need to go on Shell, regardless of it wanting like a bumper discount to me.
Moving on to HSBC Holdings, shares within the world mega-bank additionally look undervalued to me. But this group has vital publicity to China and Hong Kong. I’m not eager to be uncovered to those two areas proper now, largely as a consequence of worsening US-China relations. So HSBC can be out.
Finally, that leaves consumer-goods big Unilever, an organization I’ve admired for many years for its gross sales development and steadily rising money dividends. At their 52-week low, these shares slumped to three,267.5p in March 2022. I’d gladly have snapped them up at this low, low value.
Hence, with a well-covered dividend yield and affordable value score, Unilever is my decide of those London mega-caps!
