Many investors shy away from struggling stocks, but some see them as golden opportunities. Turnaround stocks, when chosen wisely, can create serious wealth in a short time. But how do you know which ones are worth the risk?
The key is to focus on companies with solid financials that are facing short-term challenges, not long-term issues. Let’s look at three such stocks that have strong potential for a rebound.
1. KRBL Ltd – KRBL, known for its flagship rice brand India Gate, has seen its profits dip recently, dropping 56% in the June quarter of FY24. Despite a 25% stock drop over the past year, the company has strong fundamentals, minimal debt, and a solid market presence, especially in the Middle East. With a nearly debt-free balance sheet and solid branding, KRBL could bounce back strongly.
2. Bajaj Consumer Care Ltd – Bajaj Consumer’s stock is down 20% from its 52-week high due to lower profits. However, with a dominant market share of 63% in the light hair oil segment (thanks to its Almond Drops brand) and a strong distribution network, the company is expanding its product portfolio. Its current valuation seems reasonable, making it a potential turnaround candidate.
3. Valiant Organics Ltd – This specialty chemicals manufacturer had a rough year, with its stock down 20% and a small loss in FY24. Still, the company has a strong balance sheet, low debt, and experienced management. Valiant expects FY25 to be better as markets stabilize, and new products are introduced. With its diversified business, it has strong upside potential once conditions improve.
While these stocks aren’t recommendations, they have the potential for more reward than risk. Just remember to do your research before jumping in!
This article is inspired from Equitymaster.com
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