Fools wouldn’t touch these 5 FTSE 350 flops with a bargepole – how come I own 3 of them?

Harvey Jones took a chance on three struggling FTSE 350 stocks in the hope that they’d stage a dramatic recovery. Sadly, they’ve gone from bad to worse.

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Three FTSE 350 flops have been stinking out my portfolio, so I didn’t need reminding that I made a costly error buying them.

But that’s what I got last week, when my fellow Motley Fool writers named five FTSE 350 companies they thought had further to fall. My three flops were all on the list, throwing a bucket of cold water over hopes of a lightning recovery.

I wasn’t surprised to see luxury car maker Aston Martin Holdings (LSE: AML) there. I sensed I was making a terrible error when I bought it. It’s gone bust seven times in just over a century.

Should you invest £1,000 in Aston Martin right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Aston Martin made the list?

See the 6 stocks

Can Aston Martin get into gear?

The 2019 flotation was supposed to signal a fresh start, instead the shares were down 96% when I dived in on 16 September. They’re down another 35.63% since. Over 12 months they’ve crashed 56.41%.

Created with Highcharts 11.4.3Aston Martin Lagonda Global Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Fool writer Paul Summers noted that Aston Martin is weighed down by net debt of £1.3bn, dwarfing today’s £872m market cap.

Hope springs eternal and I cheered up when I saw the group’s Q3 loss was smaller than expected. That’s something isn’t it? 

Even Paul admitted that volumes and profits should rise in the second half of 2024. He called Aston Martin a “punt stock” and that’s exactly how I’ve treated it. So far, it’s been a losing bet but I still think there’s a chance new CEO Adrian Hallmark could turn things round.

I wasn’t surprised to see Burberry (LSE: BRBY) on the flop list. This is another luxury stock smashed by plunging Chinese demand.

The Burberry share price is down 42.36% over the last 12 months but here’s the thing.

Created with Highcharts 11.4.3Burberry Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

It’s actually my best performer over the last month, rebounding 26.19%. Sales are still falling but new CEO Joshua Schulman’s new ‘Burberry Forward’ strategic plan seems to play to the brand’s strengths. Rumours of a takeover bid from Moncler have excited some.

The Burberry price is flying (for now)

My fellow Fool Royston Wild admitted that appointing industry veteran Schulman “may prove a masterstroke”, but warned of tough times for luxury stocks. I’ll hold on and hope my recent winning streak continues.

And my final flop? Grocery retailer, e-commerce and logistics business Ocado Group (LSE: OCDO).

The FTSE 250 stock is a brilliant business on paper, but a nightmare in practice. It’s been pumping money into its cutting-edge customer fulfilment centres, while failing to turn a profit despite winning big-name customers.

As Fool writer James Beard pointed out, it’s borrowed heavily to invest in clever tech but hasn’t turned a profit for years. Worse, there’s no immediate prospect of it doing so.

This is another stock I bought after a crash. In this case 85%. I thought Ocado might fly when interest rates and borrowing costs fell. But with inflation sticky that scenario hasn’t panned out yet. The Ocado share price is down 46.07% over the last year. I’ll hold and hope, but I won’t buy more.

Created with Highcharts 11.4.3Ocado Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

All three were big flops before I bought them. They’ve taught me a hard lesson about bottom fishing. However, while they’re down, I don’t think they’re out. I’ve noticed that on days when the FTSE 350 climbs, these three climb a little faster. If we get a bull run, they might just lead the charge.

Should you invest £1,000 in Aston Martin right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Aston Martin made the list?

See the 6 stocks

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Harvey Jones has positions in Aston Martin, Burberry Group Plc, and Ocado Group Plc. The Motley Fool UK has recommended Burberry Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Like buying £1 for 51p

This seems ridiculous, but we almost never see shares looking this cheap. Yet this recent ‘Best Buy Now’ has a price/book ratio of 0.51. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 51p they invest!

Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.

What’s more, it currently boasts a stellar dividend yield of around 8.5%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?

See the full investment case

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