3 Shares That Have Missed the FTSE 100 Rally to 6,400: Vodafone Group Plc (ADR) (VOD) and More

LONDON — The FTSE 100 index broke through the 6,400 level today before dropping back a bit to close at 6,395 — more than 1,000 points above its 52-week low.

Not all companies have joined in the great rally. As a contrarian investor, I’m always interested in stocks that are out of favor with the market. Unloved shares have the potential to be some of the best long-term investments.

Mobile giant Vodafone Group Plc (ADR) (NASDAQ:VOD), gas specialist BG Group plc (ADR), and top Footsie gold-miner Randgold Resources Ltd. (ADR) (NASDAQ:GOLD) have all sunk while the market has soared.

Vodafone Group Plc (ADR) (NASDAQ:VOD)

At a current price of 163 pence, Vodafone is down 15% from its 52-week high. This 80 billion pound titan is now trading on a forecast price-to-earnings ratio of 10.7 for the year to March 2013, and it offers a prospective dividend yield of 6.2%.

Of course, companies don’t trade on these kinds of value ratings for nothing. Many investors were disappointed at the back end of last year when the board decided to use a 2.4 billion pound distribution from the company’s U.S. associate Verizon Wireless on a share buyback program, rather than a special dividend. Vodafone’s ordinary dividend is also up for review this year, while continuing revenue weakness in Europe — particularly Southern Europe — has added to the doom and gloom.

Nevertheless, for income seekers, that 6.2% yield from one of the Footsie’s biggest megacaps has to look attractive — even if future dividend growth is more modest than in the past.

BG Group (OTCBB:BRGYY)

At a current share price of 1,160 pence, BG Group is down 25% from its 52-week high.

Once seen as a rare FTSE 100 growth stock — and rated accordingly — this gas and oil group is now trading on a more humdrum forecast P/E of 14 for the year to December 2013, though it retains a skinny growth-stock yield of 1.5%.

Production setbacks and operating-cost issues, which led BG to lower its volume targets through to 2015, have cooled the market’s love affair with the stock. However, BG’s world-class assets — estimated by analysts to be worth as much as 19 pounds a share — and the possibility of a bid for the company have this stock on the radar of short- and long-term contrarians alike.

Randgold Resources Ltd. (ADR) (NASDAQ:GOLD)

At a current share price of 5,510, Randgold Resources is down almost 30% from its 52-week high.