Rolls-Royce shares – which were hammered during Covid – have produced spectacular gains for investors more recently. After falling below 70p in October last year, they’ve spiked above 200p in 2023.
Here, I’m going to highlight three other FTSE shares that have tanked lately. Could one of these stocks be the next Rolls-Royce?
Persimmon
It’s fair to say Persimmon (LSE: PSN) shares have been hit hard. Two years ago, shares in the British housebuilder were changing hands for around 3,000p. Today however, they’re trading close to 1,000p.
Could the stock produce an explosive rebound like Rolls-Royce at some point?
Absolutely. Housebuilders have done this before.
But I’m just not sure if we’re at the bottom yet. Right now, conditions in the UK housing market are very challenging and analysts are lowering their earnings forecasts for this year and next.
And with the Bank of England (BoE) talking about raising interest rates further, there could be more pain ahead for housebuilders.
Given the uncertainty, I’d rather wait for signs that the property market is recovering, instead of buying the stock now.
Vodafone
Another FTSE stock that’s been beaten up recently is Vodafone (LSE: VOD). Before Covid, it was trading near 150p. Today, it can be snapped up for under 75p.
I think this stock has the potential for a decent rebound.
Vodafone has produced underwhelming results in recent years. However, new CEO Margherita Della Valle has plans to streamline the company’s operations and improve its performance.
And her turnaround plan appears to be working. For the quarter ended 30 June, for example, the company generated group service revenue growth of 3.7%, versus 1.9% the previous quarter.
If the company can continue to deliver on the results front, its share price could get a lift.
Having said that, I can’t see Vodafone shares producing the kind of gains Rolls-Royce shares have lately. That’s because a turnaround is likely to be much slower.
Dr Martens
Finally, we have FTSE 250 fashion footwear company Dr Martens (LSE: DOCS). Over the last two years it’s fallen from above 400p to near 160p.
Looking at recent developments, I think there’s scope for a substantial share price bounce at some stage.
One reason I say this is that activist investor, Sparta Capital, has been engaging with the company’s board in recent months. This could lead to improved financial and operating performances.
Another is that in mid-July, CEO Kenny Wilson – who has over 30 years’ experience building and growing global consumer brands – bought around £400,000 worth of company stock. This large purchase suggests the insider sees the company as undervalued.
I’ll point out that in the short term, lower levels of consumer spending could hold the shares back.
Taking a medium-to-long-term view however, I think this stock looks quite interesting at current levels.
