Image source: Getty Images
Over the weekend, I screened the FTSE 100 index for shares trading within 5% of their 52-week lows. Six names came up.
Here’s a look at two I believe warrant attention.
First up, we have RELX (LSE: REL). The largest technology company in the UK (and the 10th-largest in the FTSE 100 overall), it’s a provider of data and analytics decision tools for businesses.
This stock’s experienced quite a significant pullback recently. Currently, it’s trading about 19% below its 2025 highs.
It seems the stock’s been sucked into the whole ‘AI is going to eat software’ thesis. The logic here is that automation’s going to lead to fewer ‘seats’ that data/software companies like RELX can charge businesses for.
Now, this is certainly a long-term risk. However, I wonder if it’s overblown and now baked into the share price?
Currently, the forward-looking price-to-earnings (P/E) ratio is under 25. That’s quite a reasonable valuation for a data company with a high return on capital (three-year average of 27%).
Looking at brokers’ price targets, analysts certainly like the stock right now. At present, the average price target is about £41 – roughly 21% above the current share price.
It’s worth noting that in July, the company said that demand for its generative AI tools from lawyers and scientists was high and that it was confident of further growth as new products launch.
“The opportunity in front of us remains very exciting,” said CFO Nick Luff in an interview.
Putting this all together, I think the stock’s worth a closer look right now.
A defensive dividend stock for portfolio protection
The second stock I want to highlight is Unilever (LSE: ULVR). The owner of brands such as Dove, Domestos, and Vaseline, it’s the Footsie’s largest consumer goods company.
The reason I think this stock’s also worth a look right now is that it’s defensive in nature. Defensive stocks haven’t fared too well recently, as investors have been in a ‘risk-on’ mood. However, if we start to see a bit more volatility in the market, things are likely to change. For example, if growth stocks suddenly pull back sharply and sentiment shifts to ‘risk-off’, I’d expect defensive names like Unilever to surge.
One other thing I like about this stock is that there’s a nice dividend yield on offer. Currently, it’s about 3.5% so there’s potential for income too.
Of course, if investors remain focused on high-growth AI stocks, defensive names like Unilever could underperform. It’s fair to say that this isn’t the most exciting company in the world.
I think it could play a valuable role in a diversified portfolio in the months and years ahead however, and is therefore worth considering. To my mind, this stock’s a good hedge against tech stock volatility.
