Although the FTSE 100 is down a full 11% over the past year, Ocado (LSE: OCDO)Marks and Spencer (LSE: MKS), and Shire (LSE: SHP) have managed to underperform even this low target. Do these three have the potential to turn things around and catch up to the market at large?

The outlook for Ocado was already dim even before competitor WM Morrison snagged a surprise deal with Amazon to provide the American e-commerce juggernaut with fresh food for its rapidly expanding online grocery delivery service. Competition from traditional grocers’ own online offerings and Amazon are likely to depress margins for the entire sector, much as has happened to traditional physical grocers.

This is why Ocado, although it has continued to grow sales by impressive numbers for 13 straight quarters, may find it impossible to ever raise prices to sufficient levels to provide stable profits. The one saving grace for Ocado could be a long-awaited agreement with an international partner. If the company were to use its technical expertise to help overseas grocers build out their own online platforms, I could see a path to profitability for the company. In the meantime, as long as Ocado is stuck competing with every other grocer, and now Amazon, for your online orders, it will be difficult to turn consistent and significant profits.

Foods good, clothing bad

Unsurprisingly, shares of high street retailer Marks & Spencer have had a miserable run lately as the company has struggled to adapt to the era of fast fashion and online shopping. The good news for M&S is that its food sales have increased for 22 straight quarters and now provide more revenue than the general merchandise division in the UK.

While earnings are forecast to increase in the low-single-digits over the next two years, the long-term outlook for Marks and Sparks still relies on the general merchandise division beginning to pull its weight. If the new management team can combine strong food sales with appealing clothing options, the business could be a stellar buy due to low valuations. However, until management finally reverses struggling sales in areas such as womenswear, I don’t see M&S catching up to the rest of the market.

Ready for growth

Questions over the merits of the $32bn acquisition of US drug maker Baxalta have kept pharmaceutical giant Shire’s shares lagging the market since the deal was first announced last autumn. This massive deal was part of a three-year $50bn acquisition spree with the target of turning the company into a world leader in the treatment of rare diseases.

Analysts have worried that management overpaid for Baxalta and that it will take some time for these many acquisitions to begin bearing dividends for Shire. However, this overlooks management’s long history of integrating new companies and ability to quickly pay down debt due to very high free cash flow from operations.

Furthermore, the pivot towards rare diseases is a wise move. The company is right now too reliant on just a few ADHD treatments, and rare disease treatments offer incredible margins, low competition and fast-track regulatory approval. With shares trading at a low 13 times forecast earnings, I believe Shire could be primed for significant growth.

Although Shire has the potential for high levels of growth, the sheer size of the company will likely stop shares from doubling or tripling in the coming years. However, the Motley Fool's crack analysts have discovered One Top Small Cap pharma company whose shares could perform this well.

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Ian Pierce 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.