Recommendation Updates

Follow the latest news on active Turnaround Letter purchase recommendations.

Large Cap / Food, Beverage, & Tobacco / Food & Staples Retailing

Kraft Foods Financials Released

On February 21, 2012, Kraft Foods Inc. (NYSE: KFT) reported fourth quarter and full year 2011 financial results. Net revenues for the fourth quarter were $14.7 billion, up 6.6%. For the full year, net revenues were $54.4 billion, up 10.5%. Operating income for the fourth quarter was $1.5 billion, and operating income margin was 10.3%. Operating income for the full year was $6.7 billion, and operating income margin was 12.2%. Diluted earnings per share for the fourth quarter were $0.47, while operating EPS was $0.57, including a negative impact from foreign currency of $0.01. Diluted EPS for the full year was $1.99. Operating EPS was $2.29, up 13.4%t, driven primarily by operating gains, lower tax costs, and favorable foreign currency. In 2012, Kraft Foods expects to deliver organic net revenue growth of approximately 5%, including a negative impact of up to one percentage point from product pruning in North America. Operating EPS is expected to grow at least 9% on a constant currency basis, despite a higher effective tax rate and a 4 percentage point headwind from higher pension costs. The company also said that it will incur one-time restructuring, transition and transaction costs of $1.6 billion to $1.8 billion as it prepares to separate into two companies later this year. In addition, the company estimates that it may incur between $400 million and $800 million of potential debt breakage and financing fees as it executes a migration of debt to the North American grocery company.

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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."