Are Rio Tinto plc, William Hill plc and TUI AG on the cusp of roaring comebacks?

Shares in William Hill (LSE: WMH) have fallen by around 3% today after it reported a challenging 17-week period to 26 April. Although the company is trading in line with expectations, it still reported a 3% fall in net revenue as European football results and Cheltenham horse racing results went against it. Looking ahead, William Hill remains confident in its growth prospects, but with the company’s online segment experiencing tough regulatory changes, its profitability could come under pressure.

Today’s 3% fall in its share price takes William Hill’s decline to 20% since the turn of the year. This is clearly disappointing for the company’s investors and there could be more pain to come. That’s because the company is forecast to post a fall in its bottom line of 5% this year and as investors begin to factor this in, its share price could come under pressure. And with William Hill trading on a price-to-earnings (P/E) ratio of 13.4, it still appears to be fully valued.

Growth at a reasonable price

Also reporting today was TUI (LSE: TUI), with the travel company reporting a wider loss in the first half of its financial year. Despite this, trading is in line with expectations and it expects to deliver at least 10% growth in underlying EBITA (earnings before interest, tax and amortisation) in the current financial year, as well as in the next two financial years.

This rate of growth has the potential to push TUI’s shares significantly higher and while it’s a cyclical company and therefore its profit outlook is perhaps at additional risk of downgrades, TUI offers a relatively wide margin of safety. For example, it has a price-to-earnings-growth (PEG) ratio of just under 1 and this indicates that it offers growth at a very reasonable price.

And with it announcing the disposal of Hotelbeds for €1.2bn as well as the intention to dispose of Specialist Group, it appears to have a sound strategy through which to grow its top and bottom lines. As a result, and while TUI’s shares have fallen by 14% in 2016, they appear to be on the cusp of a successful turnaround.

Comeback trail

Meanwhile Rio Tinto (LSE: RIO) also has excellent comeback potential. Its shares have slumped by a third in the last year. But with investor sentiment surrounding the wider resources sector having the scope to improve, Rio Tinto seems to be on the road towards a higher share price. In fact, in the last three months it’s up by 17% and there could be more to come.

A key reason for this is upbeat growth prospects and a wide margin of safety. For example, Rio Tinto is forecast to record an increase in its earnings of 17% in the next financial year and with its shares having a PEG ratio of 1.1, they seem to offer excellent value for money. Furthermore, Rio Tinto has a sound balance sheet, excellent cash flow and low costs, thereby providing it with a competitive advantage over rivals and making it a less risky long-term buy.

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Peter Stephens owns shares of Rio Tinto. The Motley Fool UK has recommended Rio Tinto. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.