"If there's rapid progress, the recovery potential is much higher.
We retain our buy based on recovery potential and a steadily improving risk/reward profile.
This balances margin recovery potential versus revenue and execution risk in our view.
I took the view that the stock market, in its depressed state, was ignoring the company's recovery potential.
Coupled with his bias towards fund managers who target companies with recovery potential, he suggests the Schroder Income fund.
On Monday, just one of its stocks rose and that was supermarket group Morrisons, a defensive business with a bit of recovery potential.
Aggreko continues to be a high quality proposition, but the shares, trading on 18 times December 2015, continue to reflect recovery potential.
This may not be the cleansing statement that investors had hoped for, but there is as much recovery potential as ever and buyers will be watching closely".
But in my view, the failure to acknowledge Serco's full recovery potential, as the depressed share price indicates, offers a fine buying opportunity.
We remain positive on Carnival as we think the medium term earnings recovery potential remains intact, however with only 5% upside to our £34 price target we move our recommendation to hold.
Over at Numis, Lorna Tilbian said: We retain our view that Reed has world class assets, particularly in scientific, though our top down preference remains for groups which offer more cyclical recovery potential.
