It’s been a miserable six months for FTSE 100 share 3i Group (LSE:III). It’s slumped 36% in the period, a lukewarm trading update last week sending it lower again.
3i shares are still falling on Monday (18 February), down 7% in start-of-week trading. Yet I’ve always been a fan of this investment trust, and believe it still has brilliant long-term opportunities ahead.
And at current prices, I think it’s worth serious attention from bargain hunters. Could it be one of the FTSE 100’s best value stocks?
So what’s happened?
3i invests a lot in US private equity, and has its fingers in many pies. The 50+ companies its portfolio specialise in areas as diverse as pharmaceuticals, infrastructure, business software and retail.
The problem? Roughly three-quarters of 3i’s capital is actually tied up in Dutch value retailer Action. And things there appear to be going from bad to worse.
3i actually put in a pretty solid performance in the financial year that ran to March. Last Thursday’s (14 May) full-year release showed net asset value (NAV) per share up 19% year on year. The trust also delivered a juicy total shareholder return of 22%.
But Action was a drag on the broader portfolio, with like-for-like (LFL) sales growth cooling to 4.9% in 2025 from 10.3% the previous year.
And things have remained tough since with LFL growth dropping to 2.4% in the first 19 weeks of 2026. It was a far stronger 6.8% in the same period last year. 3i says trading at the European retailer has been impacted by
cooler weather in recent weeks against high comparables last year [and] continued consumer caution in France and lower traffic in Germany.
What next?
I’m not expecting things to improve any time soon. Pressure is rising as the Iran War continues, hitting consumers in the pocket as inflation increases.
This in turn leaves 3i’s share price in danger of further sharp falls. Analysts at RBC Capital note that “Action has left itself with a lot to do in H2 to meet its guidance.” Any cuts to forecasts could see the share price slump again.
But then the trust is now so cheap, could the market be pricing in this possiblity? I think it might. At £20.69 per share, 3i trades at a near-30% discount to the NAV per share as of the end of March.
Stunning value
So is 3i one of the FTSE 100’s best bargain shares at current prices? There are clear risks, but I think it could be. RBC analysts consider the trust to be “a good, well managed business” and “Action… a high-quality retailer.”
Action’s recent performances aren’t terrible. It’s just that sales growth is now back around the average for value retailers following years of smashing the market average. In my view, the scale of 3i’s share price slump is hard to justify. And so I believe it’s worth serious consideration from savvy long-term investors.
Royston Wild does not hold any positions in the companies mentioned.
