Having performed awfully for investors in recent years, Diageo (LSE: DGE) shares have climbed nearly 7% in the last month, thrashing the FTSE 100 index as a whole (down 1%).

Is the beginning of an almighty recovery in a stock I’ve long fancied owning? Well, last week’s trading commentary, released ahead of its Annual General Meeting certainly seems to have pushed some to take a fresh look at the company.

Primed to recover?

On 26 September, CEO Debra Crew said that the premium spirit maker’s expectations on trading hadn’t changed since it released full-year earnings back at the end of July. Part of this was down to “good progress” being made on some its strategic initiatives. These included sorting out its distribution channels in the US.

Deadly dull? Actually, I think it’s anything but.

Having scared investors off with news of slowing sales as drinkers switched to cheaper alternatives (particularly in Latin America), sentiment around this stock has rarely been more negative. However, low expectations should actually make it easier for it to eventually outperform.

Only a smidgen of good news — like the above — is needed. And with inflation getting down to more manageable levels around the world, Diageo might send analysts scrambling back to their calculators sooner than expected.

Baby steps

To be clear, this isn’t a nailed-on recovery play. Indeed, the £59bn cap said last week that the global environment remained “challenging“. Recent gains could easily be given back if the aforementioned inflation bounces back over the coming months. Since younger generations appear less interested in alcohol, there’s also the long-term outlook for earnings to ponder too.

But I remain a potential buyer here. I’d just like to see just a few more chinks of light before putting any cash I can find to work. Slightly-better-than-expected half-year numbers in January could be enough.

Big news!

Diageo isn’t the only laggard I’ve been watching.

Luxury products firm Burberry (LSE: BRBY) has also enjoyed a positive September, rising 6%. Again, this might not be all that great considering how far the stock has fallen in the last 18 months.

On the other hand, news that China will use “necessary fiscal spending” to hit economic growth targets has got some investors exited. About 40% of the fallen star’s total sales come from this market.

Considering the share prices of many of Burberry’s peers also jumped on this development, I wonder if now might be a great time to load up on a few different shares in this space.

Shorter’s delight

Not everyone is convinced. The 168-year-old company remains high up the list of the UK’s most-shorted stocks. And shorters tend to be extremely well-researched because their losses are technically infinite if they make a mistake.

Then again, a better-than-anticipated update on 14 November could see them rushing to close their positions. This could turbocharge Burberry’s share price in the process.

Like Diageo, I’m still mulling over whether I’m ready to buy. I’d particularly like to hear a little more from new CEO Joshua Schulman on his plans for getting things back on track.

But are recent developments potential green shoots that keep me interested? Absolutely!