Some FTSE 100 shares repeatedly seize the headlines and but battle to create wealth for his or her traders. Others quietly ship. At the moment, I’m two of the latter which have been massively outperforming the index.

High inventory

Shares in clothes and homewares retailer Subsequent (LSE: NXT) have been on a tear, rising 43% within the final 12 months and 26% in 2024 to this point. This compares (very) favourably to the FTSE 100 features of 8% and seven% respectively.

The agency’s most up-to-date replace gives me with a snapshot of why issues are going so effectively. In September, Subsequent raised its revenue forecast for the yr to £995m after full-price gross sales of the primary six weeks of H2 “materially exceeded” expectations.

A lot for a cost-of-living disaster — this firm is firing on all cylinders!

Massive vendor

Apparently, the shares now change palms at a price-to-earnings (P/E) ratio of 16. That’s on the costly aspect on the subject of client cyclical shares. So, Subsequent must preserve impressing the market.

There’s one other factor that’s obtained my consideration. It was not too long ago introduced that chief Lord Wolfson had bought 290,000 shares, equal to greater than £29m.

The truth that the index’s longest operating CEO has chosen to jettison such an enormous chunk of inventory now could be value noting. I’d be tempted to do the identical, if solely as a result of style retailing is a notoriously robust recreation. Subsequent can also be closely depending on the UK market, though it’s now additionally wanting overseas.

It will likely be fascinating to learn the Q3 buying and selling assertion — due 30 October — and observe the market’s response to it.

Using the rebound

A second top-tier firm outperforming the FTSE 100 has been Intercontinental Lodges (LSE: IHG). Its worth has climbed 40% within the final yr and 19% in 2024.

Perhaps this agency isn’t precisely a family identify. However not less than a few of its 19 resort manufacturers — together with Vacation Inn — will certainly be acquainted to many if the large restoration in demand following the pandemic is something to go by.

In some components of the world, buying and selling stays stellar. In August, Intercontinental revealed 3.2% in progress in Q2 income per out there room (RevPAR). Enterprise within the US has been significantly good.

Totally valued?

Like Subsequent, this enterprise scores excessive on the subject of working margins and returns on the cash it places to work. But additionally like Subsequent, it’s valuation now appears fairly frothy.

A P/E of 25 isn’t ridiculous, not less than relative to your common US tech titan. However I do have a couple of considerations.

Regardless of these nice features, the shares had been fairly risky through the summer season because of sluggish buying and selling at rivals, significantly in Asia. In keeping with this, Intercontinental’s RevPar in China fell by 7% in Q2. There are additionally worries about whether or not the US would possibly enter a recession.

A buying and selling replace on 22 October would possibly present some clues concerning the route of journey from right here. I’d say rather a lot depends upon whether or not China’s recently-announced stimulus measures handle to reverse slowing financial progress. The Federal Reserve’s want to attain a ‘soft landing’ for the US economic system may additionally dictate this agency’s near-term buying and selling outlook.

With this in thoughts, I’m not racing to purchase in the present day. But it surely’s presumably one for me to purchase on the dip.