While this value stock offers considerable upside potential, it also carries significant risk.
This small-cap stock pick disappointed investors almost from its first day as a public company, yet the Company has a lot of contrarian investing appeal: First, the accumulation of black marks has completely soured investors, leaving its shares trading at only 6.4x current year EBITDA. Further, its balance sheet and positive cash flow give the Company plenty of time for the fundamentals to rebound. Moreover, the Company continues to aggressively improve its cash flows in the face of its 62% revenue decline since 2014 and its positive free cash flow appears to be sustainable. With its considerable financial and operating leverage, this value stock is well-positioned to benefit from several opportunities.Read More
We think that given this stock pick’s current valuation, there is not that much upside left.Read More
Homebuilder M/I Homes (NYSE: MHO) reported a 12% increase in sales but operating margins dipped on higher costs.Read More
This REIT carries some execution risk, but we like its very attractive valuation and aggressive new management.
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. Read More
Homebuilder M/I Homes (NYSE: MHO) reported earnings growth of 21% and order growth of 23%, yet valuation remains at a modest 1.0x book value.
Brief Earnings Update: Title insurer Stewart Information Services (NYSE: STC) reported 2Q 2016 adjusted earnings per share of $1.00, up 39% from a year ago. Read More
These five value stocks have significant exposure to the senior living sector--and strong long-term gain potential.
The senior living sector has a lot going for it right now. First and foremost are demographic trends, with the number of senior citizens in the U.S. expected to rise dramatically in the coming decades. In addition, the industry remains quite fragmented with many senior living units run by small local operators. This means that public companies in the sector can continue to grow by acquisition, and eventually even these public companies may become acquisition targets for larger industry consolidators. Yet in spite of these favorable factors, most of the more focused senior living stocks have performed relatively poorly over the last year and half or so--creating a promising contrarian investing opportunity.Read More
These six REIT stock picks have stumbled but are now showing signs of recovery--and they offer attractive return potential.
When investors think about turnarounds, they usually think about manufacturing, retail or service companies. One additional type of company that often is ignored is the real estate investment trust, or REIT. With REIT turnarounds, the mantra is “management, management, management.” That's because these often involve selling illiquid real estate, which can take considerable time. For patient investors, however, REIT turnarounds can offer substantial gains while often paying attractive dividends in the meantime.Read More
These nine value stock picks all had IPOs over the last few years, have solid businesses and have stocks trading well below their initial offering price.
Many IPOs are for very decent companies--it's just that they tend to be over-hyped. As contrarians, our interest is sparked when a solid (although perhaps less exciting company) goes public but fails to capture investor enthusiasm. The stock then drifts down to a level where it becomes a good value investing opportunity.Read More
These value stock picks have already seen gains, but we think they have more ahead.Read More
Identify & Profit from Distressed Investing
Turnaround Investing Blog
In nearly every case, the shares of a company in bankruptcy become worthless. In very rare cases, however, they can become great investments. W.R. Grace (NYSE:GRA) shares produced a 75-fold return, as an example. With California utility PG&E (NYSE:PCG) now in bankruptcy, the range of possible outcomes for its equity is wide.
EV/EBITDA: What Is It & Why Are We Using It More?
In reading recent editions of The Turnaround Letter, you have probably noticed that we are increasingly using EV/EBITDA as a valuation measure, rather than the better-known price/earnings multiple. We thought it might be useful to describe this measure and why we like it.
Turnaround Letter Stock Pick Named Top Performer of 2017
What Last Year's Top Stock Pickers Are Buying in 2018
This Forbes write-up follows up on the recent Top Stock Tips report--naming The Turnaround Letter's Crocs recommendation the top performer of 2017: With 90% gains, CROX beat out 100 other investment ideas included in the report; and the stock continues to have value investing appeal, according to Putnam.
George notes, "We see additional upside for the stock in 2018 as management's efforts continue to bear fruit, though the gains will likely be more muted than we saw in 2017."
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