Gannett: 4Q17 Results OK but Progress is a Bit Slow. Compelling Value.

Gannett's turnaround is driven by revenue stability, higher EBITDA and steady cash flow production. Progress on achieving revenue stability is a bit slow, but cash flow generation remains healthy. EBITDA progress is a bit slow, as well--2018 guidance suggests more time is needed. Management continues to evolve the business as they learn. Even though challenges remain, there are opportunities for more acquisitions. Gannett's current valuation is a compelling 3.9x EBITDA, and offers an attractive, well-covered 6.3% yield.
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Viacom 1Q18 Results: Making Progress

The turnaround at media and entertainment company Viacom (NYSE: VIAB) rests on an improving balance sheet, combined with higher margins and revenue stability/growth, led by new CEO Robert Bakish. First quarter 2018 results showed progress in the first two, but some slippage in revenues.
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45% Gains on January Sale Recommendation: Time

With the sting of Wall Street disdain battering its stock, we saw promising value investing opportunity here and felt its depreciated price failed to reflect Time's implementation of several important changes that indicated that a successful turnaround was in the works.
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Viacom 4Q17 Earnings OK, Weak Near-Term Guide Offset By Turnaround Progress

Media and entertainment producer Viacom (NYSE:VIAB) reported mixed results for 4Q17 as domestic affiliate fees remain weaker than expected. Looking to 2018 and beyond, the new management guided toward weaker near-term revenues in the U.S. but provided encouraging signs that the overall turnaround is making progress. International revenues and profits continue to improve, and Paramount could become profitable in 2018. Stability under new CEO Bob Bakish and the ownership structure is working. At 7.6x forward EV/EBITDA with improving fundamentals, strong cash flow and a strong balance sheet, Viacom shares could be poised for a stronger 2018.
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Gannett Reports Strong Earnings, Thesis Remains On Track

Newspaper and media company Gannett (NYSE: GCI) reported strong 3Q17 earnings. Key components of the Gannett thesis (cost-cutting faster than revenue declines, growth of digital revenues and strong cash flow) remain on track. A week after the call, the company announced an organizational change into two units, Marketing Solutions and Consumer, which we believe makes sense.
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Better showing ahead for these six theater stocks?

Secular vs. Cyclical: What Movie Theater Stocks Are Showing

The movie theater industry presents a very timely example of the cyclical versus secular dilemma. The stocks of the theater operators have been among the worst performers this year. While the broad market has gained nearly 13%, many stocks in the theater industry have declined by 20-50%. Are the problems secular or cyclical?  The right diagnosis could mean a huge difference in returns.
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Like any contrarian stock, this month's purchase recommendation is not without risks.

Purchase Recommendation - August 2017

We believe the stock market has missed several critical parts of this value stock's story. Plus, its cash flow is healthy and debt is only $395 million, about 1.2x EBITDA, and is partly offset by the $90 million in cash. The small-cap also holds a surplus real estate portfolio worth perhaps $80 million.
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Bankruptcy Investing

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Free Report: Turnaround Investing Mistakes

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Turnaround Investing Blog

Who wants to buy stocks right now? Nobody.

At best, the broad stock market’s 15.8% drop since its peak only three months ago on September 20 has been disconcerting. The deeper 23% plunge in small cap stocks, as measured by the Russell 2000 index: startling. For the weakest 9% of S&P500 stocks – often those with some type of unfavorable macro exposure – their average loss of 40% in such a brief time has been simply jaw-dropping. Read More.

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."