Are you panicking about being able to find good value stocks to buy? A lot of people are following the London stock market’s excellent start to 2026. The FTSE 100 has just hit fresh record highs, while the FTSE 250‘s also started the new year with a bang, sending valuations higher.
But not all UK shares have enjoyed spectacular gains. Some top-quality companies have actually slumped in value due to recent setbacks. This leaves eagle-eyed investors with excellent buying opportunities to think about before prices bounce back.
Take Bunzl (LSE:BNZL) and Gamma Communications (LSE:GAMA), whose share prices have toppled during the last 12 months. So what’s been happening recently? And what makes them excellent recovery stocks to consider?
A FTSE 100 faller
Bunzl was once one of the FTSE 100’s most brilliantly boring stocks. It produces and sells essential everyday products, the kind that remain in high demand regardless of economic shocks.
That’s not all. With exposure to different sectors and regions, it can thrive even when one part of the business slows. This resilience — combined with a brilliantly executed, acquisition-based growth strategy — delivered reliable profits growth almost every year.
So what’s gone wrong recently? Bunzl’s share price has slumped 41% over the past year, reflecting tough end markets (especially in North America). This has smacked sales, and — with rising costs also crushing margins — profits have uncharacteristically sunk.
Investor confidence remains at rock bottom after last April’s shock profit warning and suspension of share buybacks. Given the uncertain economic outlook, it’s perhaps unsurprising that dip-buyers are in short supply.
Still, I think this represents an attractive buying opportunity for long-term investors. Today, the FTSE 100 share trades on a forward price-to-earnings (P/E) ratio of 11.6 times. That’s well below the 10-year average of roughly 18, and could drive a price rebound.
Might this happen in 2026? There’s a good chance, in my view, as falling interest rates support its end markets, and the benefits of recent acquisitions filter through to the earnings column. Signs of stabilisation in December’s latest market update have boosted my optimism.
Another top stock to buy?
Gamma Communications has also fallen victim to tough economic conditions over the last year. Its share price has crumbled 34%, as soft demand from UK small-to-medium businesses (SMEs) has hit profits. It’s also suffered from pricing pressures in a competitive market.
The FTSE 250 share helps companies move their traditional phone systems to modern voice and video systems ‘in the cloud’. It’s a hot growth area, but one which could struggle in the near term as the British economy splutters.
But Gamma has exceptional recovery potential further out, in my view. This is supported by its rock-bottom forward P/E ratio — at 9.5 times, this is well below the 10-year average around 26 times. Companies who don’t spend heavily to digitalise their operations tend to get left behind. This could deliver strong and sustained sales growth at Gamma.
Like Bunzl, I think the firm may spring a surprise and rebound sooner than expected. The UK plans to shut down its copper-based phone network next January, which could spark a wave of customers switching to Gamma’s systems during 2026.
