As a self-proclaimed value investor, I’ve a tendency to believe that the best shares to buy at any given moment are the worst recent performers. They’re cheaper and typically offer higher yields than before. Life moves in cycles, so why not buy near the bottom?
Sadly, it’s not that simple. Shares typically fall because they’ve lost their way or face an external challenge they haven’t yet conquered, and may never do. Despite that, I think the FTSE 100’s two biggest fallers of 2025 have massive recovery potential. I hope so, anyway, given that I hold them both.
Bunzl’s bottom of the bunch
I’d never have guessed distributor Bunzl (LSE: BNZL) would be the worst FTSE 100 stock of the year, plunging 36%. Media firm WPP crashed 60%, but it’s just been demoted to the FTSE 250. I always saw Bunzl as one of the most solid blue-chips, with years of steady share price growth and more than three decades of consecutive dividend increases.
I took advantage of the dip and bought it on three occasions. It hasn’t paid off yet, but turning round a company in trouble always takes time.
Bunzl’s a truly global operation, supplying essentials such as cleaning equipment, disposable packaging and till rolls to businesses worldwide. It’s grown rapidly through acquisitions but growth was hit by US tariffs and the global slowdown. And a profit warning in April sent the shares to a four-year low.
The upside? It now looks great value with a price-to-earnings (P/E) ratio of just 10.7 and a trailing dividend yield of 3.55%.
On 17 December, Bunzl reiterated its full-year profit guidance but the shares fell again after it warned that cost pressures will squeeze margins. I’m not expecting much in 2026 but with a long-term view, this feels like a compelling entry point to consider.
Diageo stock’s dreadful
The big danger with buying after a profit warning, as I did with Bunzl, is that more can follow. That’s been the case with spirits giant Diageo (LSE: DGE).
I dived in after its November 2023 shock warning, when sales in Latin America and the Caribbean slumped. I’ve since been hit by two more, in August 2024 and November 2025.
I averaged down on each occasion but the shares kept falling. The Diageo share price is down 35% over one year, and 55% over three. Personally, I’m down 40%. Nightmare.
Diageo looks a lot cheaper today, with a P/E of 13.3 and a dividend yield of 4.9%. But consumers remain under pressure, the global economy has the shakes, and there’s a trend towards drinking less. Alcohol isn’t the sure-fire winner it once was.
Still, 2026 could be pivotal, with Sir Dave Lewis taking over as CEO. Known as ‘Drastic Dave’, he’s the man who turned Tesco around. Equally drastic action’s required here. I’m backing him to deliver.
Back to my question in the headline, it’s hard to say anything is ‘the best’. The answer can be very subjective. But I think Bunzl and Diageo are solid companies to consider with better days ahead, although patience and a strong nerve are required. Investors who prefer momentum might note that five FTSE 100 stocks more than doubled in 2025. But I’m more excited by these two losers.
