STOCK NOW One FTSE 100 stock I really wish I’d bought...

One FTSE 100 stock I really wish I’d bought this year, and one I’m glad I didn’t

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Picking the right FTSE 100 stock at the right time is never easy. There’ll always be the one that got away. With luck, there’ll be a few dodged bullets, too.

First, the one that got away. In June, I ran the rule over information and analytics firm RELX (LSE: RLX), and liked what I saw.

It had just been praised by Finsbury Growth & Income Trust portfolio manager Nick Train. He reckoned it would be a home-grown beneficiary of the artificial intelligence (AI) revolution, by harnessing the ground-breaking tech to enrich its proprietary datasets.

RELX, just do it

The RELX share price was already smashing the FTSE 100, rising 24.34% in a year at the time. I also discovered, to my surprise, that it had outpaced the Nasdaq since the start of the millennium, growing almost five-fold. So I shoved it on my buy list.

Unfortunately, that’s all I did. I didn’t actually buy it. That’s a shame because at the time, the share price stood at 2,646p. Today, I’d have to pay 3,055p. That’s 15% more. Measured over 12 months, the stock is up 32.01%.

The shares got a lift in July, when the board hiked the dividend after reporting a 12% increase in pretax profit to £1.4bn. The company got an even bigger boost last month, after reaffirming its 2023 outlook in a buoyant trading update.

RELX looked a little pricey in June but it’s pricier today, trading at 29.94 times earnings. I’ve spent the summer and autumn mopping up dirt-cheap FTSE 100 dividend stocks with valuations of around five or six times earnings. I wish I’d added a growth stock or two, to put a bit of zip into my portfolio. Namely this one.

Portofolio killer

RELX is back on my buy list and this time I won’t wait for a dip. I’ll buy when I have the cash. I’ll tread carefully around Rentokil Initial (LSE: RTO), though, which I almost bought in September at the height of the Parisian bedbug panic, but luckily didn’t.

All looked set fair for the pest killer after it reported strong first-half profits in July, only for the shares to fall to earth like a swatted fly on 19 October. Markets reacted badly to news that full-year performance in North America was set to be “marginally below” previous expectations, and the shares crashed almost 11% in a day.

Rentokil shares are now down 22.55% on three months ago, and 15.49% over the year. The market response was harsh, given that Q3 revenues were still up 53.3% to £1.38bn (albeit only 4.3% on an organic basis). That may be because Rentokil was priced for growth, so even minor slippage hit the investment case. Even after the crash, the stock still trades at 21.38 times earnings.

Rentokil has superb global diversification with operations across the US, Europe, Asia, and Africa. It’s good at hanging onto existing customers as well as adding new ones. It could do well when stock markets recover. I’m glad I didn’t buy it three months ago, but I’ll consider buying this one too, in the days ahead.

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