While an investment in this mid-cap insurer carries significant, speculative risks, we believe that the upside potential justifies these risks. On the one hand, there is a determined buyer working toward completing a cash deal worth 90% more than the current share price. On the other hand, if the deal fails to pass regulatory muster, the company is currently valued at a remarkably low 11% of book value and 2x earnings, even as the underlying businesses appear to be improving.
Sizeable market moves can increase the temptation to sell on downdrafts and buy on upswings. However, we strongly advise against attempting to do that. The chances of getting out at the right time and then back in again before the market rebounds are extremely slim.
This article names five appealing value stocks. They are all major, well-run mining companies whose shares or ADRs trade on the New York Stock Exchange, with generally beaten-down valuations and prices. They provide potentially more sparkle: If the price of gold does begin to go up, the stocks of gold mining companies generally rise faster than the commodity itself.
Investing when an outsider arrives as the new CEO of a struggling company can be quite rewarding. It's one of our favorite catalysts--few changes bring as much potential improvement as the fresh perspective and energy that new leadership provides. However, bringing in an outsider isn't necessarily a sure path to an immediate turnaround. This article details four turnaround situations where a new CEO's arrival hasn't yet produced much in the way of stock performance, but which have promising prospects once the company moves beyond transitional issues.
Amazon joined Apple in reaching a $1 trillion market capitalization. $1 trillion is about the same as the total value of New York City property and the total value of loans at JP Morgan, the nation’s largest bank in terms of assets. Jeff Bezos’ $160 billion stake would place him (personally) as the #33 largest company in the S&P 500 in terms of market cap, next to Coca-Cola, Disney and Netflix. We aren’t bold enough to predict whether the shares will continue upwards or if they are in a bubble reaching maximum inflation. Setting aside for a moment their investment prospects, let’s admire the truly remarkable milestone that these two companies have reached.
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.
This Forbeswrite-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."