Retailing

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

ARTICLES

This article highlights a group of foreign companies showing signs of turnarounds

Turnarounds In Europe and Asia

Over the past few months, we’ve seen an increase in the number of companies outside the United States that have shown up on our screens as undergoing meaningful change. We also thought it was interesting to look outside the U.S. because international markets (measured by the MSCI EAFE index) have underperformed U.S. stocks (measured by the S&P 500 index) so far this year.
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Mr. Dow and Mrs. Jones – Welcome to Stock Picking

Only two days after joining the Dow Jones Industrial Average, Walgreens Boots Alliance fell 10%, as Amazon is entering the pharmacy business with its PillPack acquisition. This might not have been the effect that the S&P Index Committee had in mind when it chose Walgreens to better measure the economy and the stock market. Indices are seen as representing “the market” but they are baskets of individual stocks with all the risks these stocks bring.
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Crocs: Raising Price Target to 22 on Impressive Fundamental Improvements

We are raising our price target (Buy limit) on shares of shoe company Crocs, Inc. (NASDAQ: CROX) to 22 from our previous target of 18. The management team’s turnaround strategy is working well, as revenues are growing and profit margins are expanding even as the balance sheet improves. While higher than our initial price multiple, the valuation remains attractive, particularly with the steadily improving fundamentals. We continue to rate CROX shares a BUY and increase our Buy limit to 22.
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DSW 1Q18 Results Show Continued Progress with Turnaround

Shoe retailer DSW (NYSE: DSW) reported 1Q18 results that indicate that it continues to make progress with its turnaround. The 5.6% share price decline following the earnings release likely reflected too-optimistic expectations. We reiterate our Buy rating with a $33 price target.
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This article discusses stocks that have taken steep price dives but still have turnaround potential

Digging In The Dustbin: Stocks Down 70% From Their Five-Year Highs

The stocks discussed in this article have all fallen 70% or more from their five-year highs, and they all have one or more catalysts, while also having enough financial runway to allow a recovery to unfold.
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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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DOCUMENTS AND FILES

Bankruptcy Investing

Identify & Profit from Distressed Investing

Free Report: Turnaround Investing Mistakes

Turnaround Investing Blog

Turnaround Investing Blog

Amazon = US GDP 1970

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. 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."