Bankruptcy News

We've summarized the latest docket activity and news for publicly traded companies currently operating under U.S. Bankruptcy Court protection.

Bankruptcy/Chapter 11 / Post-Bankruptcy Stocks / Transportation

AMR Intended Terminations Announced

According to documents issued by AMR, the Company announced intentions to slash 13,000 jobs and terminate employee pension plans as part of a cost-cutting strategy that the Company says is necessary to compete with rivals. The cuts are part of overall efforts to reduce annual operating expenses by more than $2 billion. Proposed layoffs and other employee-related cuts comprise more than half of the total savings. The Company expects to cut about 4,600 mechanics and related jobs, 4,200 fleet service workers, 2,300 flight attendants, 1,400 management and support staff and 400 pilots. The Company also states that it would seek U.S. Bankruptcy Court approval to terminate traditional pension plans covering 130,000 workers and retirees. Those plans would be replaced with 401(k) plans with a Company match, according to the airline. The Company has a $10 billion shortfall in its employee pension accounts, according to U.S. pension insurers with the Pension Benefit Guaranty Corp. In addition to the labor cost reductions, AMR also plans to invest about $2 billion per year in aircraft with the goal of making American's fleet the youngest in North American by 2017. AMR’s chief executive officer, Tom Horton, added that the Company intends to increase departures across its five key markets - Dallas/Fort Worth, Chicago, Miami, Los Angeles and New York - by 20% over a five-year period.

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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."