Recommendation Updates

Follow the latest news on active Turnaround Letter purchase recommendations.

Large Cap / Software & Services

Sony Financials Released

On January 19, 2012, Sony Ericsson Mobile Communications AB (SEMC), an affiliated company of Sony Corporation (NYSE: SNE), which Sony accounts for under the equity method, announced its financial results for the fourth quarter and the full year ended December 31, 2011 under accounting principles generally accepted in Sweden. Under the equity method, in Sony’s third quarter (October through December) of the fiscal year ending March 31, 2012, Sony expects to reflect 50%, or approximately EUR 325 million (33 billion yen), of this valuation allowance in equity in net loss of affiliated companies in its consolidated financial results on a US GAAP basis. Sony is currently reevaluating its forecast of consolidated financial results for the fiscal year ending March 31, 2012, taking into account the transaction in connection with S-LCD Corporation announced on December 26, 2011, this valuation allowance and other factors, including the impact of the October 2011 floods in Thailand, that might affect its consolidated financial results forecast for the full year ending March 31, 2012. Sales for the quarter were approximately Euro 1.3 billion, down 16% year-on-year and 19% quarter over quarter. The year-on-year decline reflects the decrease of feature phone sales which was only partially offset by an increase in smartphone sales. The sequential decline is due to geographic and product mix, resulting in lower sales of both smartphones and feature phones. Fourth quarter sales were negatively impacted by macroeconomic challenges in advanced economies contributing to weaker holiday sales, and certain component shortages from the flooding in Thailand in late October and early November 2011. Xperia smartphones accounted for approximately 80% of total sales in the fourth quarter. Loss before taxes, excluding restructuring charges, was Euro 154 million for the quarter, compared to income of Euro 39 million for the same quarter last year and of Euro 31 million in the previous quarter. The year-on-year and sequential declines are due to lower gross margin and increased operational expenses, including higher development and selling expenses. The quarter ended in a net loss of Euro 207 million, compared to a net income of Euro 8 million in the same quarter of the previous year, and essentially a break even result in the previous quarter.

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Is there value in bankrupt PG&E’s stock?

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.

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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.

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Turnaround Letter Stock Pick Named Top Performer of 2017

 

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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."