These FTSE 100 shares are down 50%! Should I buy them now?

The FTSE 100 has risen by more than 5% over the last year. But these gains have been driven by heavyweights such as Shell and BP. Some smaller FTSE 100 shares have fallen by 50% over the same period.

Could some of these big fallers be bargain buys for my portfolio? Let’s take a look.

I’m getting tempted

My first stock is DIY investor platform Hargreaves Lansdown (LSE: HL). Profits at this FTSE 100 firm hit record highs in 2020, thanks to the lockdown trading boom.

Things have cooled off since then. Hargreaves’ share price has fallen by 50% over the last 12 months, and the group’s profits are expected to fall by 25% this year.

I think that a slump in activity was inevitable after the pandemic. But as the market leader, Hargreaves also needs to show that it still has room to grow.

In a bid to find new customers, CEO Chris Hill is investing in areas such as ESG funds and financial advice. This approach could help Hargreaves win customers who would previously have used full-service wealth managers.

I think Mr Hill has a reasonable chance of success. In the meantime, Hargreaves shares offer a useful 4.7% dividend yield.

On balance, I think the shares are probably fairly priced. But uncertainty on future growth is making me cautious. For now, I’m going to keep watching.

Heading for the exit?

Postal operator Royal Mail (LSE: RMG) is another stock that boomed during the pandemic but has fallen by 50% over the last year.

As an investor, handling a big drop like that can be tough. But I think Royal Mail shares could offer real value at current levels.

Chief executive Simon Thompson believes that higher parcel volumes are here to stay and won’t return to pre-pandemic levels. It’s too soon to be sure if he’s right. But Royal Mail says parcel revenues have held up quite well so far.

I think the big risk here is that Royal Mail will struggle to modernise quickly enough to compete with the big courier firms.

Even so, this 500-year-old business looks in good shape to me at the moment. With Royal Mail shares trading on just six times earnings and offering a 7% dividend yield, I’d be happy to buy today.

A FTSE 100 share to avoid?

FTSE 100 firm Ocado Group (LSE: OCDO) started out as an online grocer. But founder Tim Steiner’s real ambition was always to sell Ocado’s automated warehouse technology to other retailers.

He’s making progress, and Ocado has won some big contracts. If things go to plan, we could see Ocado deliver strong growth over the next few years.

My problem is that most of these customer projects seem to require Ocado to invest significant amounts of its own cash in the build. At the same time, I can’t get any idea from the company’s reporting of how profitable these projects might be in the future.

What I do know is that despite strong revenue growth, Ocado’s losses keep piling up. The group reported a pre-tax loss of £177m last year.

Ocado shares have fallen by more than 50% over the last year, but I’m going to continuing avoiding this business until I can see a clear path to profitability.