Recommendation Updates

Follow the latest news on active Turnaround Letter purchase recommendations.

Automobiles & Components / Mid Cap / Post-Bankruptcy Stocks / Materials

Lear Financials Announced

On February 2, 2012, Lear Corporation (NYSE: LEA) reported financial results for the fourth quarter and full year of 2011. For the fourth quarter of 2011, Lear reported net sales of $3.5 billion, pretax income of $92 million, including restructuring costs and other special items of $72 million, and diluted net income per share of $1.03. Income before interest, other income, income taxes, restructuring costs and other special items (core operating earnings) was $176 million. This compares with net sales of $3.2 billion, pretax income of $119 million, including restructuring costs and other special items of $28 million, core operating earnings of $150 million and diluted net income per share of $1.08 in the fourth quarter of 2010. In the fourth quarter of 2011, free cash flow was $192 million, and net cash provided by operating activities was $274 million. For the full year 2011, Lear reported net sales of $14.2 billion, pretax income of $639 million, including restructuring costs and other special items of $98 million, and diluted net income per share of $5.08.  Core operating earnings were $787 million. This compares with net sales of $12.0 billion, pretax income of $486 million, including restructuring costs and other special items of $91 million, core operating earnings of $627 million, and diluted net income per share of $4.05 in 2010. Free cash flow in 2011 was $461 million, up $32 million from $429 million in 2010. Lear expects 2012 net sales in the range of $13.85 to $14.35 billion and core operating earnings in the range of $740 to $790 million. Free cash flow in 2012 is expected to be approximately $275 million, down from 2011 reflecting primarily the planned increase in capital spending in emerging markets. Lear’s interest expense outlook for 2012 is approximately $55 million.

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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

 

stock market advicex

 

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."