UK stocks are sliding, but I’m not worried!

Last week was brutal for the stock market: London FTSE 100 lost 5.3% in five days. However, the US S&P 500 the index rose 2.1%, offsetting losses for global investors. And some UK stocks are worse than others.

The FTSE 100’s biggest faller

As a value investor, I like to buy stocks after they fall. When Mr. Market is surprised, he sometimes offers stocks at low prices.

However, I don’t buy broken stocks. What I am looking for is a quality business with a share price that is under selling pressure. I call these stocks the ‘fallen angels’ – and they’re huge right now.

Here are the biggest losers in the FTSE 100 last week:

My desk is dominated by financial companies. Given that the latest market slide was triggered by the failure of two mid-sized US banks, this is not surprising.

However, it is difficult to accept that the rescue of two high-tech US banks should lead to a sharp fall in the British shares. Indeed, I consider the above asset managers – Legal & General Group, M&Gand Prudential – is one of the most ‘boring’ blue-chip stocks.

Then again, with the global banking crisis threatening to break out, shares in Britain’s Big Four banks took a hit last week. Thus almost 15% dive Barclays shares and 18% + plunge in Standard Chartered stock.

I will buy this cheap UK stock

Having invested since 1986, I have experienced the stock market crashes of October 1987, 2000-03, 2007-09 and the spring of 2020. But this collapse taught me the value of buying when there is blood in the streets – even if it is alone.

For the record, my husband is buying shares for our family portfolio in Barclays and L&G in the middle of 2022. After the recent rejection, I would like to buy more of these two UK shares if I have the money. Also, I see M&G as very undervalued and aim to buy this cheap stock in the next tax year.

Here’s how these three fundamental FTSE 100 stocks stacked up after Friday’s close (in AZ order):

To me, these three stocks look very cheap. But now for the bad news. These numbers are historic numbers – or behind them. Therefore, if this banking crisis worsens, all three financial companies could see their earnings decline.

Furthermore, these businesses could suffer if the UK economy weakens or slips into a full recession. But the latest government forecast is that our economy will shrink by just 0.2% in 2023.

In summary, these three dividend yields look very good to me as an investor looking for long-term income. What’s more, in these two companies, cash payments are covered many times over by profits. So if I had the money to buy cheaper UK stocks I wouldn’t hesitate!