Today I am considering the investment appeal of three London laggards.

Drugs dynamo

Medical giant Shire (LSE: SHP) saw its share price sink last week, taking it further away from the five-month highs struck at the start of June. I see this as nothing more than mild profit-taking, however, and believe Shire remains an exceptional long-term stock selection.

The company officially completed its $32bn takeover of US-based Baxalta this month, with chief executive Flemming Ornskov noting that “we have made impressive progress on integration planning since announcing the combination, moving much faster than other transactions of similar size.”

Shire expects the tie-up to generate double-digit compound annual revenues growth in the coming years, with the firm predicting sales of $20bn by 2020. And investors should be encouraged by the Dublin-based business having some 50 products in development at the present time.

The City expects earnings at Shire to shoot 84% higher in 2016 alone. And I reckon a subsequent P/E ratio of 14.2 times makes the business a great pick, given its solid long-term potential.

Up in smoke

I am not so convinced by Essentra’s (LSE: ESNT) earnings prospects, however, following the firm’s shocking trading update last week.

The cigarette filter manufacturer said that it is it is “unlikely to achieve” the trading levels it had earlier anticipated for the full year. The company now expects revenues to remain flat in 2016, at around £1.1bn, with adjusted operating profit estimated at £155m-£165m, down from £171.5m in 2015.

Essentra noted that “conditions in Filter Products have deteriorated owing to a more challenging market backdrop, and certain large projects either not being commercialised or being deferred.” The firm added that restructuring problems in its Health & Personal Care Packaging division have also dented performance in the US and UK.

The City expects earnings to edge 1% higher in 2016, resulting in a conventionally low P/E rating of 11.3 times. But I reckon the structural problems facing the wider tobacco industry makes Essentra a risk too far even at current prices.

Barmy bank

I am also less than enthusiastic over the investment prospects of Royal Bank of Scotland (LSE: RBS). And I am not alone in my bearish stance, with market jitters sending the stock to within a whisker of fresh seven-year troughs below 210p per share last week.

The impact of massive divestments has seen revenues sink at the bank, with RBS chalking up a 13% top-line decline during the first quarter alone, to £3.06bn.

And the possibility of a ‘leave’ vote at this month’s European Union referendum will add further pressure to the bank’s top line — chairman Howard Davies said last month that “around 90% of our income will be generated from clients in the UK” once restructuring is completed.

On top of this, RBS also faces the prospect of rising regulatory costs in the years ahead, particularly ahead of a potential 2018 claims deadline for PPI cases.

An anticipated 53% earnings decline leaves the bank dealing on a P/E rating of 12.4 times. I reckon much stronger banking selections can be found at these prices.

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