Buying any stock that has fallen significantly in one day can be a risky move for an investor. In most cases, the decline in valuation is due to a profit warning or some other negative news which impacts on the future profitability of the business in some way. As such, it can be difficult to judge what the company in question is worth, as well as how its risk/reward ratio may have changed.
Today I'm looking at two stocks which I believe have the potential to deliver stunning comebacks. Both companies have been out of favour, but are starting to attract investor interest as trading improves.
Commercial inkjet printing specialist Xaar (LSE:XAR) made its name with digital technology for printing designs on ceramic tiles. But this former growth business has now matured and the group is trying to diversify into areas such as 3D printing.
Xaar's (LSE:XAR) share price was still on the offensive in Wednesday business. The stock was 2% higher following a positive reception to latest financials and news of a development accord with a North American heavyweight. The business was last at levels not seen since January, rising above 400p.
The digital inkjet printing powerhouse declared that trading came in as expected between January and June, with sales for the period predicted at around £44m.