This automotive mid-cap's shares are among the cheapest in the market. The company has a relatively low level of debt, will likely produce over $400 million of free cash flow this year and is growing its organic revenues at a 4% annual rate. We think the wheels will keep rolling with this high-quality company, and when investors recognize that, the stock price should move up nicely.
Aluminum wheel producer Superior Industries (NYSE: SUP) pre-announced 1Q16 earnings of $0.54/share and raised its 2016 full-year outlook. It also announced that it won re-election of its slate of directors, denying GAMCO’s bid for three seats.
Aluminum wheel manufacturer Superior Industries (NYSE: SUP) reported very strong 4Q15 earnings and made upbeat comments about next year. Retaining BUY recommendation with a caveat for its higher valuation and fundamental risks.
This value stock pick's future looks much brighter than its past troubles imply: The company has many valuable assets, and its solid balance sheet provides financial flexibility. The catalyst to unlocking the value in these assets is the new CEO who is bringing a renewed sense of urgency and focus to the company. We also like the presence of a respected activist investor who has recently become a 10% shareholder and is pressing for a board seat. That presence should help keep the company focused on delivering strong results.
It can be tempting to look at a depressed stock and think, “it used to trade at 40 and now it’s at 8 – therefore it must be a bargain.” Unfortunately, the fact that a stock once traded at a higher price does not guarantee that it will ever get back there. One big reason that a stock trades so much lower than before: its earnings potential or assets have deteriorated. Without some fundamental improvement, the share price will continue to lag, or worse.
Market-Beating Profit: The 200+ Club
Turnaround stocks present a unique opportunity for savvy investors to buy in at bargain prices. Take a look at this list of just a few of our purchase recommendations that have realized a return rate of 200% or better:
* Bristow remains an our active purchase recommendation, currently as a "Hold," and 1,928% stock profit is as of 8/11/16.
Retail Turnaround Trio
MoneyShow.com interviewed George to learn more about his favorite value stock picks for today's market. In "Retail Turnaround Trio," Steve Halpern highlights three of The Turnaround Letter's recently-profiled retailers: JWN, TIF and SPLS.
Putnam notes, "Well the retailing sector is undergoing very fundamental change as people move away from the bricks and mortar mall doors to buying more and more online but that's not going to wipe out all of the old-fashioned retailers. Starting the middle of 2015, investors just moved away from retailers en masse and a number of them are trading at about half the level they were a year ago. We thought some of the higher quality names that definitely will be survivors looked interesting."