3 beaten-down UK stocks to consider buying before they recover (rather than after)

Harvey Jones picks three UK stocks from the FTSE 100 that have had a poor run lately but may enjoy bags of recovery potential. Is it too soon to buy them?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Smiling white woman holding iPhone with Airpods in ear

Image source: Getty Images

It’s been a strong year for UK stocks, with the FTSE 100 hitting new highs again and again. Yet, plenty of blue-chip names have missed out, and that’s often where the best opportunities lie. Picking shares that have lagged the market can feel counterintuitive, but they may reward patient investors when the cycle turns. I’ve been hunting through the laggards, and three stand out to me right now. In fact, I’ve just bought one of them.

Schroders in transition

Shares in Schroders (LSE: SDR) have had a rough decade. Back in 2014, they traded around 500p. Today, they’re closer to 385p. Cheapness alone doesn’t make a share good value, so does this privately run fund manager deserve some love?

Schroders has struggled as investors drift from traditional stockpickers towards low-cost passive exchange-traded funds (ETFs) and DIY trading platforms. The company has responded by cutting costs and selling weaker divisions, but investors remain cautious.

On 23 October, third-quarter results showed a 5% rise in total assets under management to £816.7bn, boosted by new inflows. Schroders also plans to launch an active ETF range in Europe to stay relevant in a changing market.

Its price-to-earnings ratio sits at 14.4, with a healthy dividend yield of 5.6%. Yet, I fear the company transition has further to run and success isn’t guaranteed. But sometimes it pays to invest before a stock gets its act together. Afterwards, the big gains may have passed.

RELX shares hit a bump

Shares in information and analytics group Relx (LSE: REL) have soared 181% to 3,376p over a decade, plus dividends. Over the last year, they’ve slipped 5.7%. Which could be the entry point long-term admirers like me.

Relx confirmed strong trading momentum in its 23 October update, with underlying revenue up 7% for the first nine months of 2025, and reaffirmed full-year guidance.

The stock has been expensive for years, with a P/E of around 35. That has now eased, but only to around 28. That’s still well above the FTSE 100 average of 18. I’ve long admired RELX’s consistency and pricing power. The big question is whether artificial intelligence enhances its products or lets customers go it alone. Still a great company and worth considering, with a long-term view.

Is Bunzl a better bet?

I’ve finally bought shares in Bunzl (LSE: BNZL). The distribution and services group was on a steady climb for decades, with an unbroken record of dividend growth. But a rough year changed that, and I saw my chance.

Sales were hit by US tariffs and a major customer switching to own-brand products. The share price has tumbled 33% in the past year and 5% in the last week. Yet, Bunzl looks solid under the bonnet. The P/E is now below 12, the dividend yield has risen to 3.25%, and third-quarter trading on 23 October was in line with expectations.

It’s an international business, and the global picture remains tricky. I see potential for a recovery, even if it takes time. My holding is down 7% since I bought it, but these are early days. If it falls again, I’ll average down.

All three are at different stages of their recovery story. There are no guarantees, but patience could pay off. Of the trio, I reckon Bunzl is closest to bouncing back.

Harvey Jones has positions in Bunzl Plc. The Motley Fool UK has recommended Bunzl Plc, RELX, and Schroders 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.

More on Investing Articles

UK money in a Jar on a background
Investing Articles

A SIPP seems to offer investors free money – is there a catch?

This writer doesn't believe in magic money trees, but does see the offer of tax relief within a SIPP as…

Read more »

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

Here’s what £10,000 invested in Greggs shares a year ago’s worth now

Given Greggs large shop network and simple business formula, could owning the shares help this writer build wealth? Maybe --…

Read more »

UK coloured flags waving above large crowd on a stadium sport match.
Investing Articles

Recent BT share price performance is jaw-dropping but can it continue?

Harvey Jones is stunned by how well the BT share price has weathered recent stock market volatility. Can the FTSE…

Read more »

A senior man using hiking poles, on a hike on a coastal path along the coastline of Cornwall.
Investing Articles

Is the stock market correction a once-in-a-decade chance to target a million-pound SIPP?

After recent volatility Harvey Jones can see plenty of value FTSE 100 stocks to help investors build wealth in a…

Read more »

Woman riding her old fashioned bicycle along the Beach Esplanade at Aberdeen, Scotland.
Investing Articles

How to target a £10k annual income from just one year’s £20,000 Stocks and Shares ISA allowance

Today is the start of the new financial year giving us all a a fresh Stocks and Shares ISA allowance.…

Read more »

Rolls-Royce's Pearl 10X engine series
Investing Articles

Rolls-Royce shares have gone nowhere this year. Is that a warning sign?

Rolls-Royce shares stand within spitting distance of where they began the year. Has the company's long run of strong share…

Read more »

Tesla building with tesla logo and two teslas in front
Investing Articles

£5,000 invested in Tesla stock on Christmas Eve is now worth…

Tesla stock is stuck in reverse at the moment. This year, it has fallen by around 15%. Is there potential…

Read more »

Close-up image depicting a woman in her 70s taking British bank notes from her colourful leather wallet.
Investing Articles

2 UK dividend stocks to consider buying in April

High-quality established businesses with reliable cash flows often make for great dividend stocks. Here are two for investors to take…

Read more »