Final week was a landmark week for the London inventory market, with the flagship FTSE 100 index of blue-chip shares hitting a brand new all-time excessive.

Regardless of that, some FTSE shares proceed to appear like a possible discount to me.

How can that be?

The forest isn’t the identical because the bushes

Think about the FTSE 100 index as being like 100 bushes planted in a discipline.

The peak of the forest cover could possibly be larger than ever earlier than – however that doesn’t imply that each one the bushes within the cluster are larger than they’ve ever been. Some might have shrunk, however that’s obscured by taller bushes when wanting on the forest from a distance.

In the identical means, regardless of the current FTSE 100 excessive level, some members of the distinguished index have mainly been treading water over the previous yr, whereas others have sunk considerably.

One overwhelmed down FTSE share to think about

For example of the latter class we now have Related British Meals (LSE: ABF).

Its share price has misplaced 19% prior to now yr alone as a part of a 29% decline over a five-year interval.

That signifies that the agency now gives a dividend yield of three.3% and trades on a price-to-earnings ratio of slightly below 10.

However I reckon the corporate has strengths that that price doesn’t recommend. It owns a bunch of well-known and long-established meals manufacturers similar to Twinings and Ryvita. Such manufacturers give the corporate pricing energy, one thing that may assist it preserve revenue margins.

Regardless of its title, ABF isn’t just a meals enterprise. It additionally owns the low cost garments retailer Primark. Its success within the British Isles has set a template that ABF is hoping will translate into new areas because it continues increasing in a wide range of worldwide markets.

However given these strengths, why has the FTSE 100 share fallen a lot?

A buying and selling assertion final week painted an image of a enterprise transferring sideways, with revenues prior to now sixteen weeks falling 2.2% (excluding change price strikes, they did develop – however solely by 0.5%).

The UK and Eire proceed to have tough market circumstances. Within the interval below evaluation, the agricultural division of ABF noticed demand for compound feed proceed to be smooth each in China and the UK. I see a robust threat that can proceed to be the case within the first half of this yr.

Taking the long-term method to investing

To me, although, these dangers appear like a part of the ups and downs of operating a diversified multinational enterprise like ABF.

I take a long-term method to investing. Over the long term, I feel the worth of ABF’s manufacturers and enterprise isn’t absolutely captured within the FTSE 100 firm’s share price in the intervening time.

So I see it as a share that traders ought to think about proper now.