5 top turnaround shares? Capita PLC, Petrofac Limited, Provident Financial plc, HSBC Holdings plc and Boohoo.Com PLC

Are these 5 stocks set to deliver improved performance? Capita PLC (LON:CPI) (CPI.L), Petrofac Limited (LON:PFC) (PFC.L), Provident Financial plc (LON:PFG) (PFG.L), HSBC Holdings plc (LON:HSBA) (HSBA.L) and Boohoo.Com PLC (LON:BOO) (BOO.L)

HSBC Holdings plc
HSBC Holdings plc

I’m focusing on the prospects for improved financial and operational performance from Capita PLC (LON:CPI) (CPI.L), Petrofac Limited (LON:PFC) (PFC.L), Provident Financial plc (LON:PFG) (PFG.L), HSBC Holdings plc (LON:HSBA) (HSBA.L) and Boohoo.Com PLC (LON:BOO) (BOO.L). Could they be worth adding to my ISA today?

Capita faces an uncertain future in my view. It is in the process of delivering a turnaround, with asset disposals and efficiency gains being a focus for the company at the moment. However, with operating conditions being tough and regulatory risk being higher than I would like, I think there may be better options available elsewhere. Therefore, while I’m watching Capita, I’m not buying it just now.

Petrofac also faces an uncertain outlook. The oil price may have risen in the last few months, but it could easily fall again. This may mean investor sentiment towards the oil and gas industry remains pegged back to at least some extent. Petrofac also has the SFO investigation and this may hurt investor sentiment yet further. Therefore, I’m not buying it just now.

Provident Financial could deliver a successful turnaround in the long run. It has made several changes to its home credit division, including a change of management. This could cause the company to deliver improved performance in future. However, I’d rather wait for more updates on this subject before buying Provident Financial.

HSBC is performing relatively well at the moment, but I feel there could be scope for a turnaround when it comes to its cost base. Operating costs at the company had risen to record levels, and its cost to income ratio was higher than many of those of its sector peers. However, with cost cuts being delivered and growth being impressive in my view, HSBC seems to have upside potential.

Boohoo could also be a good addition to my ISA. The company has made multiple acquisitions of late and they could diversify the brand to some extent. This may help to catalyse the company’s EPS in future. With a successful business model and high forecast EPS growth, Boohoo is still a stock which I feel optimistic about for the long term.

About Robert Stephens 3883 Articles
Robert Stephens is a CFA Charterholder and an Equity Analyst by trade. He is a passionate private investor who has been buying and selling shares for many years, owning a wide range of UK shares in the process. He has written for Citywire and The Motley Fool US and now runs his own business. To contact Robert, please email [email protected] or use one of the other contact methods available on the 'Contact Us' page