Shares in Lonmin (LSE: LMI) have sunk by just 2% since the turn of the year. As such, they’ve beaten the FTSE 100’s return by around 8% and this could be a sign that investor sentiment towards the beleaguered miner is changing.

Certainly, Lonmin has been a hugely disappointing stock to hold in the last year. Its share price has tumbled by 99.5% in the last 12 months due to a severe fall in the price of commodities. While a further deterioration in the price of commodities is possible, Lonmin’s current valuation could offer a relatively appealing risk/reward ratio – especially for long-term investors.

The main reason for that is Lonmin’s turnaround plan. Following a fundraising last year, Lonmin stated that it now has the capital resources to follow through with its planned comeback strategy. This centres on reducing costs and generating efficiencies, which could help to boost the company’s financial outlook. And with its shares trading on a price-to-book value (P/B) ratio of only 0.2, they appear to offer significant upside.

Of course, things could get worse for Lonmin and its share price could come under further pressure in the short run. However, for less risk-averse investors it now seems to be worth a closer look.

Long-term play

Similarly, shares in support services company Cape (LSE: CIU) have also endured a disappointing period. Its profitability has come under severe pressure and it’s due to report a fall in earnings of 12% for 2015, with a further decline in its bottom line of 4% being pencilled-in for the current year. Clearly, this has the potential to cause a further deterioration in investor sentiment in the short run.

However, this level of performance seems to be fully reflected in Cape’s valuation. For example, it trades on a price-to-earnings (P/E) ratio of just 8.2 and it yields 6.7% at its current price. With dividends being covered more than twice by profit, Cape appears to have sufficient headroom to maintain them at their current level in the coming years. And with the combination of upward rerating potential and income appeal, investor sentiment in Cape could pick up, which makes now a good opportunity to purchase it for the long term.

Too volatile?

Meanwhile, shares in Cairn Energy (LSE: CNE) have risen by 15% in the last month, buoyed by an encouraging update released last month. As well as being confident of a positive outcome from its $1.6bn Indian tax dispute case, Cairn is also seemingly upbeat about progress made at its Mauritania and North Sea assets, with spending for the next two years due to be focused on its Senegal prospects.

With Cairn having a strong net cash position and considerable long-term potential from its asset base, it may prove tempting for a number of investors. However, with uncertainty in the resources sector being high, it may be prudent to stick to companies with bright futures and that are still profitable, due to the prospect for further volatility in the short run. In other words, Cairn may have appeal, but other resources stocks could prove to be better buys.

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.