Comeback stocks are excellent out-of-the-box picks for those on the hunt for companies poised for a rebound. The three companies spotlighted on this list are legacy enterprises operating in industries foundational to the economy.
In selecting companies for this list, I focused on three legacy enterprises that led their respective industries at one time. However, over the last 12 months, these comeback stocks have registered negative returns as they struggle against the competition and external factors. Despite these challenges, all three of these companies share one goal: to expand into new markets to recuperate lost market share and morph their operating model to future-proof themselves.
Considering these factors, I’ll discuss why these stocks are attractive to investors aiming to benefit from potential profits in a rebounding market, focusing on their latest strategic initiatives and position in the industry. By studying these elements, you, as the reader, will receive new insights into how these companies are planning a strong comeback.
Without wasting any more time, let us analyze these three dynamic comeback stocks.
Comeback Stocks: Macy’s (M)
The average customer and investor will be slightly shocked to find Macy’s (NYSE:M) on this list. A former holiday staple, it is, unfortunately, a casualty of the retail apocalypse, as legacy businesses struggle to compete with Amazon (NASDAQ:AMZN) and other e-commerce giants.
However, Macy’s wants to implement a bold strategy to make a comeback. One of the things I am most happy about is that Macy’s now has new leadership. Tony Spring stepping in as the new CEO is a breath of fresh air. He comes with solid experience in steering Bloomingdale’s and Bluemercury.
In addition, Macy’s recent increase in its dividend per share also sent a positive image to the market regarding its financial capabilities.
Finally, I would like to comment a bit on the digital side of the business, which is where the money is. Under the guidance of Massimo (Max) Magni, the new Chief Customer and Digital Officer, Macy’s is pushing forward with a dynamic digital strategy. The strategy zeroes in on omnichannel initiatives, enhancing how customers shop online and in-store. This approach resonates well with consumers, signaling a positive trend for Macy’s as a potential comeback stock.
BP plc (BP)
BP plc (NYSE:BP) is another global market player that is not doing well right now. Shares of the energy giant are down 11.8% over the last 12 months, contrasting sharply with the S&P 500 index, which posted a return of 24% in 2023.
To arrest the decline, BP is pouring substantial capital into transition businesses to increase shareholder value. This includes a major emphasis on bioenergy, where they raised the volumes of biogas supplied and biofuels produced. Additionally, the company is focusing on amassing growth and profits through the EV charging space, particularly in China and Germany.
In addition, BP is expanding its renewable energy portfolio too. This side of the business is crucial for the energy giant’s future. It involves wind energy assets in Germany, solar projects in partnership with Lightsource BP, and onshore renewables that help produce hydrogen in Australia.
I can sum up everything by saying BP is heading in the right direction. When looking for comeback stocks, this one is definitely on my radar.
Ford (F)
“Ford: Go Further.” That is the company slogan. However, it does not look like Ford (NYSE:F) is going further now. Instead, it looks to be two steps forward and one step back. It is not a familiar situation for Ford, which is used to leading the pack. Companies like Tesla (NASDAQ:TSLA), which focuses solely on EVs, benefit from their more niche approach. As a result, they generate significant revenue growth and profitability.
However, Ford is not taking this all lying down, which is why it is among my comeback stocks. Launches like the Mustang Mach-E and the F-150 Lightning are a testament to a growing line of EV products. The automaker is also looking to ink partnerships with other established players to increase its scope in advanced technology areas. Partnerships with companies like Rivian (NASDAQ:RIVN) (although later divested) and Google illustrate this approach.
Finally, Ford is looking to create profitable, smaller EV products soon. The emphasis is on trying to gain a competitive advantage by exploiting market gaps. With an investment of $50 billion through 2026, there is an immense war chest for Ford to exploit. So, the future is bright for Ford; when looking for stocks in line for a comeback, make sure to keep an eye on this one.
On the publication date, Faizan Farooque did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
