This mid-cap's revenue and earnings appear to be stable, operating results are well above debt covenant limits, cash flows look reasonably healthy and overall liquidity is substantial. The value stock's very high 10% dividend appears well-covered. Valuation at 5.8x next year’s FFO is nearly half that of its peers, leaving strong upside potential.
Satellite communications company Globalstar (Nasdaq:GSAT) may yet see FCC approval which could produce tremendous share price gains, but a failure to receive approval could result in bankruptcy. Shares remain a BUY but we now consider it Speculative.
Despite its roster of highly valuable brands, this mid-cap stock pick has struggled to adapt to today’s Internet-based media and entertainment environment. Several important corporate changes greatly improve its outlook, however--and financials look very solid.
Toy maker Mattel’s (Nasdaq: MAT) 3Q16 revenues and earnings indicate that renewed growth in Barbie, American Girls and other segments is fully offsetting the loss of the Disney Princess/Frozen franchise.
This retailer isn’t standing still against industry headwinds. Qualified turnaround management has been recruited, and the company is slowing its new store openings to refocus on basic execution. New merchandising efforts look promising--and the stock has a solid balance sheet, generous dividend yield, insider buying by the controlling chairman and the new CEO and profitable operations that produce healthy cash flows.
Theme park company SeaWorld Entertainment (NYSE: SEAS) will suspend its dividend after paying a final $.10/share dividend in October. While disappointing as it removes a source of immediate cash return to investors, it helps bolster the company’s financial position on its way to recovery.
Automotive components maker BorgWarner (NYSE: BWA) held an Investor Day on September 7th, and outlined how it is well-positioned for profitable growth over the next seven years including strong participation in the rapidly-growing market for hybrid and electric vehicles.
Marine theme park company SeaWorld Entertainment (NYSE: SEAS) reported disappointing revenues and earnings for 2Q16 and lowered its Ebitda guidance for the full year, led by weak Florida revenues. Attendance and operating improvements in other markets are encouraging. To conserve cash, SeaWorld will likely cut its dividend.
Investors have newfound enthusiasm for domestic economic growth, as a Trump presidency could bring new infrastructure spending, lighter regulatory burdens and lower corporate taxes. While the distance between campaign promises and corporate profits can be vast, we agree with the market’s general assessment of how government policies might change.
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 in our active portfolio (currently as a Hold), and 2,057% gain is as of 11/9/16.
Darren Fonda notes, "…besieged stocks often start to recuperate as the headlines fade and investors anticipate a return to precrisis sales and profits. The trick, of course, is to find companies that are more likely to rebound from a setback than collapse entirely."