The recent performance of shares in SSE PLC (LON:SSE) (SSE.L), Royal Mail PLC (LON:RMG) (RMG.L), BAE Systems plc (LON:BA) (BA.L) and Barratt Developments Plc (LON:BDEV) (BDEV.L) has been relatively disappointing. Could they generate successful comebacks?
SSE’s shares appear to have been hurt by its recent profit warning. Poor weather contributed to operational challenges, and the company’s financial outlook has been hit as a result.
SSE is undergoing a period of significant change at the moment. It is seeking to demerge its UK domestic energy supply business, while the wider sector is subject to political and regulatory risk. With a dividend yield of over 7%, though, I feel it could deliver a comeback in the long run. Volatility may be high in the near term, however.
Royal Mail’s recent profit warning showed that cost avoidance and efficiency strategies are not proving to be as successful as the company had hoped. It will therefore formulate a revised strategy in the coming months.
I feel that the business has growth potential from its parcels business and international operations. They could transform the business and reduce its dependence on letters. With a dividend yield of over 5%, I’m optimistic about the long-term outlook for the Royal Mail share price.
BAE’s share price has come under pressure in recent months, with the uncertainty for the world economy weighing on investor sentiment in my view. There have also been concerns about potential sanctions against Saudi Arabia, which is one of the company’s biggest customers.
With spending on defence set to increase in future years, I think the BAE share price could enjoy a tailwind. With its shares now offering better value for money than they have done for some time, I think they may offer investment appeal for the long run.
Barratt’s future prospects appear to be relatively uncertain at the moment, with the outlook for the UK economy being relatively downbeat.
The FTSE 100 housebuilder, though, has a large net cash position as well as a significant land bank. Alongside this, demand for newbuild homes remains relatively high, and this could spur its financial performance on in future years. With a dividend yield of over 8%, I think the Barratt share price may offer good value for money.