Mid Cap

$1 Billion to $10 Billion

ARTICLES

Time, Inc.: Back to Square One, Yet Pressure Is On

Publishing and media company Time, Inc. (NYSE: TIME) reported weak 1Q17 operating results and cut their dividend by 80% to $.16/year. Investors are more actively involved with the company which puts pressure on the management successfully executing their strategic plan or face an eventual reconsideration of a sale.
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Mattel’s Disappointing 1Q17 Was Essentially a Re-Set on Turnaround

Toy maker Mattel (Nasdaq: MAT) reported a surprisingly weak 1Q17 result, with sales down 15% and a loss that was more than twice that of last year in a seasonally weak quarter. The new CEO likely used the period to clear the decks, but Mattel clearly has a lot of work ahead to make the turnaround successful. We think the dividend will be cut in the next 12 months to preserve capital flexibility.
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While not strictly speaking a turnaround, this pharmaceutical stock looks quite cheap relative to its potential. 

Purchase Recommendation - April 2017

This mid-cap has many of the key traits of a successful spin-off--including healthy revenue, profit margins and cash flow, and its former parent bestowed it with a solid capital base. The pharma’s leadership team is impressive and the stock pick comes with strong R&D, marketing and regulatory capabilities. While valuation is not cheap on an absolute basis at 20x 2017 earnings and 12.7x 2017 EBITDA, the stock trades at a considerable discount to its peers and to what we believe is a reasonable price given its attractive positioning. 
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This turnaround is not without challenges, so the shares are not without risk.

Purchase Recommendation - March 2017

This turnaround investing opportunity's game plan looks promising, debt maturities are minimal through 2018 and cash flow is already showing significant improvement.  Margins are likely to expand quickly with new revenues because the company’s cost structure will be lean. In addition, $1.7 billion in net operating loss carryforwards (NOLs) will largely eliminate any income taxes for several years--and if management can’t get results back on track, this value stock pick could be an acquisition target for healthier competitors.
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Turnaround Investing Blog

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Puerto Rico Government Bankruptcy: Uncertainty But Also Investing Opportunity

Because of special tax law provisions that exempt the territory’s debt from not only federal taxes but also state taxes in every state, the bonds are widely held by investors across the country. Since the legal action is under a new law that has never been tested, there is tremendous uncertainty about how much creditors will recover and how long the process will take, but there may be opportunities for stock investors to profit from the island’s restructuring as well--perhaps with less downside risk than in many of the bonds. We found four public companies based in Puerto Rico that could benefit from stabilization in the island’s finances as well as three major insurance companies with exposure to Puerto Rican debt. Read More.

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:

Value Investing Stock Profit

* Bristow remains in our active portfolio (currently as a Hold), and 2,320% gain is as of 4/11/17.

Five Struggling Stocks That Will Turn Around

 

stock market advicex

 

Kiplinger points out that despite the post-election stock market surge, not all stocks have benefited from the uptick: "More than 100 issues in the S&P 500 have fallen in price this year, including dozens that have slumped by more than 10%....Yet these stocks won’t all stay in the dumps forever. Some will mount a comeback in 2017, making it an opportune time to try to identify the best candidates."

 

Quoting George Putnam, Kiplinger details five value opportunities for the new year.

 

Learn more about Putnam's investing success with turnaround stocks.