These FTSE 250 stocks have sunk in Q1. Can they bounce back?

Shares in PZ Cussons (LSE: PZC) have slipped 4% during the first half of quarter one as, like its FTSE 100 rivals Reckitt Benckiser and Unilever, the household goods giant announced sales weakness in key regions.

The Manchester manufacturer saw its share value sink in January after announcing that like-for-like sales slumped 2.6% during June-November, to £378.2m. Cussons was whacked by a number of issues, from the knock-on effect of currency pressures in Nigeria on demand to tough trading conditions in Australia and a disappointing UK summer smashing demand for its St Tropez sun lotion.

These problems caused pre-tax profit to collapse 37.8% year-on-year, to £24.9m.

Cussons is looking to turn around its troubles by upping investment in its prestigious labels during the second half of the year. In Asia, the business is looking to introduce “significant brand initiatives… including a relaunch of the Cussons Kids range and a new range of Imperial Leather products.” And in Europe it is planning “new product launches including an extension of the Sanctuary range.”

The business clearly has a lot of work in front of it to get revenues back on the right track, but the City expects Cussons to rise again from next year onwards. Indeed, the firm is anticipated to bounce from a 7% earnings dip in the year to May 2017 with advances of 8% in both fiscal 2018 and 2019.

But I reckon the stellar power of Cussons’ labels, allied with its vast developing market bias, should deliver exceptional returns for patient investors. And a forward P/E ratio of 17.9 times represents a decent level for contrarian investors to leap in at.

Oil toiler

Like PZ Cussons, fossil fuel mammoth Tullow Oil (LSE: TLW) has also endured no little share price trouble over the past six weeks — the stock has shed 17% of its value since the first quarter kicked off.

The state of Tullow’s battered balance sheet came into focus again this month after the driller revealed net debt of $4.8bn as of December, surging $763m during the course of 2016. Consequently the company announced plans to slash capex in 2017 to $500m from $900m the year before.

Tullow will be hoping new oil at its gigantic TEN project in Ghana will help it to bounce into the black after three years of losses, and to soothe negotiations with its lenders. But the threat of prolonged oversupply in the oil market casts doubt over the producer’s ability to turn the top line around — revenues sank 21% in 2016 to $1.27bn.

While the City expects Tullow to bounce from losses of 65.8 US cents per share last year to earnings of 15.9 cents in 2017, I believe these bullish predictions are in danger of disappointing. And in my opinion, Tullow’s prospective P/E ratio of 20.3 times fails to address the company’s high risk profile.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Unilever. The Motley Fool UK owns shares of PZ Cussons. The Motley Fool UK has recommended Reckitt Benckiser. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.