Satellite communications company Globalstar (Nasdaq: GSAT) received FCC approval for its more limited spectrum request as filed on November 10th. The approval reduces the chances of bankruptcy as Globalstar can now start monetizing its spectrum. However, while strong upside potential exists if small-cell deployment gains acceptance, the path to monetization remains murky in both timing and magnitude. Shares have pulled back following their 95% run-up and peak of $1.84 on the December 23 news. Shares remain a BUY although we consider them to be speculative.
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.
While we believe that overall bankruptcy activity will remain at a high level for the foreseeable future, we think that filings in the energy sector may have peaked. We are optimistic that the increasing bankruptcy activity will provide some very attractive opportunities for turnaround investors.
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 2,849% gain is as of 1/17/17.
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."