Recommendation Updates

Follow the latest news on active Turnaround Letter purchase recommendations.

Mid Cap / Materials

Goodyear Financials Released

On February 14, 2012, Goodyear Tire & Rubber Company (NYSE: GT) reported higher sales and earnings for both the fourth quarter of 2011 and the full year compared to the prior year. Goodyear's fourth quarter 2011 sales were $5.7 billion, up 12% from a year ago. Tire unit volumes totaled 43.2 million, down 5 percent from 2010. The company achieved segment operating income of $196 million in the fourth quarter of 2011, down $28 million from the 2010 period. Segment operating income for the fourth quarter of 2011 reflected improved price/mix of $702 million, which more than offset $631 million in higher raw material costs ($583 million net of raw material cost reduction actions). Goodyear’s fourth quarter 2011 net income available to common shareholders was $18 million (7 cents per share). The company recorded a net loss of $177 million (73 cents per share) in the 2010 fourth quarter. Goodyear’s 2011 annual sales were a record $22.8 billion, up 21% from $18.8 billion in 2010. The company achieved record full-year segment operating income of nearly $1.4 billion in 2011, which was up 49% from $917 million in 2010. Goodyear’s 2011 net income available to common shareholders of $321 million ($1.26 per share) compares to a net loss of $216 million (89 cents per share) in 2010. The company expects that its full-year tire unit volume for 2012 will be essentially flat with 2011. For the full year of 2012 in North America, Goodyear expects the consumer replacement market to be flat to down 2%, consumer original equipment flat to up 3 percent, commercial replacement up between 2 and 6% and commercial original equipment up between 10 and 15%. Goodyear anticipates its raw material costs for the first quarter of 2012 will increase between 20 and 25% over the prior year. For the full year of 2012, Goodyear expects its raw material costs will increase approximately 5% compared with 2011.

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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."