When it comes to finding top stocks to buy, often the best place to start is among the biggest losers. Why? Because even when shares fall for a good reason, investors can often overreact, turning a once-overvalued stock into a bargain buying opportunity.
Looking at some of the weakest performers in 2025, Diageo (LSE:DGE) stands out as a frail player, having dropped around 34%. And Severfield (LSE:SFR) has seen its market-cap shrink even further by 45% over the same period.
So are these now some of the best stocks to buy in 2026?
Diageo’s turnaround potential
Let’s start with the FTSE 100’s leading beverages business. Diageo’s been mired by adverse market conditions alongside poor strategic decisions from management. But with a new leader at the helm since 2026 kicked off, the company’s already making some radical moves to change its fate.
Portfolio optimisation efforts are already underway, with several of the group’s underperforming brands now under review for potential divestments. No new major disposals have yet been confirmed in 2026. However, such moves would rapidly raise some welcome liquidity to tackle outstanding debts while simultaneously refocusing the business on its best brands.
Of course, divestments also carry significant execution risks. There’s no guarantee Diageo will be able to get a fair price and may end up destroying shareholder value in the process. At the same time, with younger generations seemingly drinking less, it introduces some notable long-term demand uncertainty.
Nevertheless, with the stock trading at just 11.6 times forward earnings following its multi-year share price decline, that might be a risk worth considering.
Engineering steely resolve
Severfield, meanwhile, is another international enterprise hit hard in recent years. As the UK’s largest steel contractor, the business has been hit with a number of headwinds.
Rising commodity prices alongside US tariffs have been squeezing profit margins. And the impact has only been compounded by soft construction sector activity due to higher interest rates. The result has been a sharp decline in sales and a complete collapse of underlying operating profits.
However, the firm’s fortunes could be about to change. With interest rates still on a steady downward trajectory, commercial infrastructure projects have started ramping back up again.
That’s already translated into some early recovery signs for its order book, with management highlighting attractive large-scale projects landing in its 2027 fiscal year (ending in May). And with the UK government also outlining new infrastructure spending ambitions in the coming years, Severfield could be positioned for a multi-year recovery.
What’s the verdict?
To say which stock is the best is very subjective. But between these two fallen icons, Diageo currently looks more interesting, in my opinion. The business appears to have notably more levers it can pull to get things back on track, while Severfield appears more dependent on an external market recovery beyond management’s control.
But these aren’t the only businesses that could be top-notch stocks to consider buying right now…
