Retailing

Distributors; Internet & Catalog Retail; Multiline Retail; Specialty Retail

ARTICLES

Macy’s – Strong 1Q18 Results Indicate Turnaround is Working

Department store retailer Macy’s (NYSE: M) reported strong 1Q18 revenues and profits. A healthy consumer spending environment plus clear signs of innovative successes from new CEO Jeff Gennette’s team supported the quarter’s improvements. Macy’s remains significantly undervalued and provides investors with a 5.8% dividend along the way.
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Mattel Reports Encouraging 1Q18. New CEO Could (Finally) Be the Right One

Toy maker Mattel (NYSE: MAT) reported encouraging 1Q18 results. Global revenues grew 2% excluding the lost sales from the ToysRUs collapse, on strong Barbie and Hot Wheels sales. While operating profits remain deeply negative and the CEO turnover appears disruptive, we believe the changes actually keep moving Mattel in the right direction.
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These companies with high surplus cash could be solid value-stock picks for investors

Value In Cash-Laden Companies

With cash balances greater than their debt, these companies have the financial flexibility to weather the challenges without great concern about principal or interest payments. And once the storm clouds clear, shareholders could see a sizable profit.
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Mattel’s New CEO Has Hands Full but May Bring New Opportunities

Toy maker Mattel (NYSE: MAT) announced that director Ynon Kreiz will be the company’s CEO following the resignation of Margo Georgiadis, who is leaving to become head of privately held Ancestry.com.Mattel reports 1Q18 results this coming Thursday after the market closes. We will be looking for signs of revenue stability and progress with their $650 million cost-cutting program. We continue to rate MAT shares a Buy up to 38.
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DSW: 4Q17 Earnings Show Turnaround Gaining Traction

The turnaround at shoe retailer DSW (NYSE: DSW) showed clear traction in the fourth quarter of fiscal 2017, with management providing guidance for more improvements in the coming fiscal year. DSW increased the dividend by 25%. Although much work in revenue growth and margin improvement are still needed for DSW shares to reach our $33 price target, we are encouraged by the progress. DSW sells for a bargain 5.5x EBITDA and offers a 4.6% yield.
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Ugly 4Q17 Results but Setting the Table for a Much Better 2018

Toymaker Mattel (NYSE: MAT) reported a 12% decline in revenues and a $281 million net loss. While these numbers were clearly awful, the underlying franchise appears much stronger. New management’s strategy sounds promising for meaningful improvements in 2018.We continue to think Mattel’s turnaround will be successful despite the awful results in 2017.
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With tax reform now completed, we think deal volume could surge.

Mergers & Acquisitions--The Corporate Takeout Window Is Now Open

This article discusses six value stocks that have acquisition-friendly traits: niche businesses, decent cash flows, respectable balance sheets and attractive valuation. While making no promises, we think they could attract takeover interest.
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DOCUMENTS AND FILES

Bankruptcy Investing

Identify & Profit from Distressed Investing

Free Report: Turnaround Investing Mistakes

Turnaround Investing Blog

Turnaround Investing Blog

Tupperware: Not a Good Fit as a Turnaround Stock

At first glance, the shares have decent appeal as a turnaround investment. Looking deeper, however, the fundamentals are not as strong and stable as they appear. Surplus cash flow is tight, a key driver is weakening, it is increasingly reliant on China and has other nagging issues. We don’t see the new CEO as a catalyst for change. Despite the “first glance appeal”, Tupperware isn’t a good fit as a turnaround stock. Read More.

Comparing Stocks Vs. Bonds

While the common stock of a turnaround candidate usually has the greatest upside potential, other classes of securities, such as bonds or preferred stock, may offer attractive profit possibilities with less risk. Many turnaround companies have only one class of securities available to investors but where there are different classes to choose from, it can pay to do a little extra analysis of the various options.

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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."