Post-bankruptcy stocks are often undervalued because mainstream investors perceive them (often wrongly) as being of poor quality and very risky, suggests George Putnam, editor of The Turnaround Letter.
Investors remember the bad things that happened to the company to force it into bankruptcy. What they don't understand is that many companies take advantage of Chapter 11 to reshape their businesses and balance sheets so that they emerge as very strong competitors.
As a result, post-bankruptcy stocks can provide good returns to savvy investors who are not swayed by their past history, but focus on the future prospects.
The companies discussed below all emerged from Chapter 11 over the last several years and look to us as though they are still undervalued.
General Motors (GM), one of the world's largest automakers, went through a government assisted bankruptcy in 2009. The company used its sojourn in Chapter 11 to modify labor contracts, rationalize operations and restructure its balance sheet.
Top 5 Canadian Companies To Buy Right Now: Dollar Tree Inc.(DLTR)
Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise primarily at the fixed price of $1.00. The company operates its stores under the names of Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Giant, and Dollar Bills. Its stores offer consumable merchandise, including candy and food, and health and beauty care, as well as household consumables, such as paper, plastics, household chemicals, in select stores, and frozen and refrigerated food; variety merchandise, which includes toys, durable housewares, gifts, party goods, greeting cards, softlines, and other items; and seasonal goods, such as Easter, Halloween, and Christmas merchandise. As of April 30, 2011, it operated 4,089 stores in 48 states and the District of Columbia, as well as 88 stores in Canada. The company was founded in 1986 and is based in Chesapeake, Virginia.
Advisors' Opinion:- [By Paul Ausick]
The other stock the firm likes is Dollar Tree Inc. (NASDAQ: DLTR). The company�� shares have lost about 4.6% since reporting an earnings per share (EPS) miss for the third quarter and the Sterne Agee analysts see the lower price as a ��reat entry point��for buying the stock. Dollar Tree raised fiscal year 2013 EPS guidance from a range of $2.66 to $2.77 to a new range of $2.72 to $2.78, effectively raising the mid-point by $0.04. Sterne Agee reiterated its Buy rating on the stock with a price target of $63. Dollar Tree�� shares are trading down nearly 0.4% at $55.99 in a 52-week range of $37.47 to $60.19.
- [By Dan Moskowitz]
The shiniest dollar
Many investors and analysts like to debate which dollar store offers the best investment opportunity. The truth is that Dollar General, Dollar Tree Stores (NASDAQ: DLTR ) , and Family Dollar Stores (NYSE: FDO ) are all likely to be quality long-term investments.
Hot Undervalued Companies For 2014: Tupperware Corporation(TUP)
Tupperware Brands Corporation operates as a direct seller of various products across a range of brands and categories through an independent sales force. The company engages in the manufacture and sale of kitchen and home products, and beauty and personal care products. It offers preparation, storage, and serving solutions for the kitchen and home, as well as kitchen cookware and tools, children?s educational toys, microwave products, and gifts under the Tupperware brand name primarily in Europe, Africa, the Middle East, the Asia Pacific, and North America. The company provides beauty and personal care products, which include skin care products, cosmetics, bath and body care, toiletries, fragrances, nutritional products, apparel, and related products principally in Mexico, South Africa, the Philippines, Australia, and Uruguay. It offers beauty and personal care products under the Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo, and Swissgar de brand names. The company sells its Tupperware products directly to distributors, directors, managers, and dealers; and beauty products primarily through consultants and directors. As of December 26, 2009, the Tupperware distribution system had approximately 1,800 distributors, 61,300 managers, and 1.3 million dealers; and the sales force representing the Beauty businesses approximately 1.1 million. The company was formerly known as Tupperware Corporation and changed its name to Tupperware Brands Corporation in December 2005. The company was founded in 1996 and is headquartered in Orlando, Florida.
Advisors' Opinion:- [By Ben Levisohn]
Shares of Herbalife have gained 0.9% to $79.51 this morning in pre-open trading. Its shares have gained 139% this year, a nice gain, but lagging Nu Skin Enterprises 271% rise. Avon Products�(AVP), another multi-level marketer, has gained 21% so far this year, while Tupperware Brands�(TUP) has risen 49%.
- [By Teresa Rivas]
We think KMB will be perceived as the safest of the multinationals. Its sales outside the US are about 55% of total; this compares to 65%-70% for Procter & Gamble (PG) and Coty (COTY) and 80%-90% for Colgate (CL), Avon and Tupperware (TUP). In general, its risk to the most volatile currencies is below average (its exposure to Eastern Europe is less than 2% of sales), though it is still translating results in Venezuela (about 3% of sales and profit) at the official rate of 6.3 VEF/$ (the parallel rate just hit 175 VEF/$) and Argentina (also 3% of sales) may devalue again. The cost of important raw materials has started to weaken; as they follow oil�� decline they could boost gross margins in 2H15. Of note, polypropylene and natural gas are off 17% 4Q-to-date; pulp prices, while not declining much, seem manageable.
- [By John Udovich]
Everyone is familiar with�the Tupperware brand from�consumer products stock Tupperware Brands Corporation (NYSE: TUP) and you are probably familiar with the brands�of mid cap stock Jarden Corp (NYSE: JAH) along with small cap stocks Libbey Inc (NYSEMKT: LBY) and Lifetime Brands Inc (NASDAQ: LCUT); but what about the stocks themselves? Chances are, their brands or products are right under your nose at home and you probably don�� know anything about the mid cap or small cap stock behind them.
Hot Undervalued Companies For 2014: Schlumberger N.V.(SLB)
Schlumberger Limited, together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. The company?s Oilfield Services segment provides exploration and production services; wireline technology that offers open-hole and cased-hole services; supplies engineering support, directional-drilling, measurement-while-drilling, and logging-while-drilling services; and testing services. This segment also offers well services; supplies well completion services and equipment; artificial lift; data and consulting services; geo services; and information solutions, such as consulting, software, information management system, and IT infrastructure services that support oil and gas industry. Its WesternGeco segment provides reservoir imaging, monitoring, and development services; and operates data processing centers and multiclient seismic library. This segment also offers variou s services include 3D and time-lapse (4D) seismic surveys to multi-component surveys for delineating prospects and reservoir management. The company?s M-I SWACO segment supplies drilling fluid systems to improve drilling performance; fluid systems and specialty tools to optimize wellbore productivity; production technology solutions to maximize production rates; and environmental solutions that manages waste volumes generated in drilling and production operations. Its Smith Oilfield segment designs, manufactures, and markets drill bits and borehole enlargement tools; and supplies drilling tools and services, tubular, completion services, and other related downhole solutions. The company?s Distribution segment markets pipes, valves, and fittings, as well as mill, safety, and other maintenance products. This segment also provides warehouse management, vendor integration, and inventory management services. Schlumberger Limited was founded in 1927 and is based in Houston, Texas.
Advisors' Opinion:- [By Matt DiLallo]
Investors may wonder if peers like�Halliburton� (NYSE: HAL ) �and�Schlumberger� (NYSE: SLB ) �were pressured this quarter as well. Both companies have waded through the sluggish North American market by relying on growth overseas. If that trend continues, it should continue to mute some of the weakness Nabors experienced.
- [By Rick Aristotle Munarriz]
Bloomberg via Getty Images You can never know in advance all the news that will move the market in a given week, but some things you can see coming. From a parade of bankers' earnings to a pizza giant rolling out a new crust, here are some of the things that will help shape the week ahead on Wall Street. Monday -- X Marks the Spot: Data storage is a big part of businesses in the modern age; companies have massive amounts of information to manage and keep secure. Xyratex (XRTX) may not be a household name, but it is well-known to corporate IT departments seeking enterprise data storage solutions. Xyratex reports on Monday afternoon. It's seen better days, and analysts predict it will report a sharp drop in revenue. However, Xyratex has been able to beat Wall Street's profit targets with ease over the past four quarters. Tuesday -- Big Banking's Big Close Up: It's going to be a roll call of the "too big to fail" banking behemoths as they step up for their quarterly results. Wells Fargo (WFC) and JPMorgan Chase (JPM) kick things off on Tuesday. That will be followed by Bank of America (BAC) on Wednesday. Citigroup (C) and Goldman Sachs (GS) step up on Thursday. These are interesting times for the financial services providers. Interest rates are starting to move higher, and that may get in the way of demand for mortgages, but it will also help improve the chances that customers open and fund savings and checking accounts. Wednesday -- Tracking Trains: Railroads may seem like yesterday's mode of transportation, but rail remains a viable way to get goods moving across the country. CSX (CSX) reports on Wednesday. The provider of rail, intermodal, and rail-to-truck transload services and solutions has been shipping goods for 185 years. It offers coverage through every major metropolitan market in the eastern United States. Analysts see revenue inching up by 3 percent, with CSX's profit of $0.42 a share besting the $0.40 a share it posted a year earlier. CSX will
- [By Stephen Leeb]
The portfolio is concentrated, holding the 25 largest oil-service firms in the world by market capitalization. Indeed, the top five positions account for 44% of assets, led by a 20% position in oilfield giant Schlumberger (SLB).
- [By David Smith]
Big and not so big at your service
In the services sector, perhaps the most difficult to comprehend of the sub-sectors, you likely have a good handle on the kingpin, Schlumberger (NYSE: SLB ) . The company, with a $100 billion market cap, operates in about 85 countries, through the efforts of more than 100,000 employees. Its services include everything from soup to nuts, or seismic to production assistance. So, if you're looking for an ideal company to constitute a single proxy for the services contingent, Schlumberger's a good bet.
Hot Undervalued Companies For 2014: Caterpillar Inc.(CAT)
Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through three lines of businesses: Machinery, Engines, and Financial Products. The Machinery business offers construction, mining, and forestry machinery, including track and wheel tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators, backhoe loaders, log skidders, log loaders, off-highway trucks, articulated trucks, paving products, skid steer loaders, underground mining equipment, tunnel boring equipment, and related parts. It also manufactures diesel-electric locomotives; and manufactures and services rail-related products and logistics services for other companies. The Engines business provides diesel, heavy fuel, and natural gas reciprocating engines for Caterpillar machinery, electric power generation systems, marine, petrol eum, construction, industrial, agricultural, and other applications. It offers industrial turbines and turbine-related services for oil and gas, and power generation applications. This business also remanufactures Caterpillar engines, machines, and engine components; and offers remanufacturing services for other companies. The Financial Products business provides retail and wholesale financing alternatives for Caterpillar machinery and engines, solar gas turbines, and other equipment and marine vessels, as well as offers loans and various forms of insurance to customers and dealers. It also offers financing for vehicles, power generation facilities, and marine vessels. The company markets its products directly, as well as through its distribution centers, dealers, and distributors. It was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. Caterpillar Inc. was founded in 1925 and is headquartered in Peoria, Illinois.
Advisors' Opinion:- [By Travis Hoium]
Another Dow stock sinking is Caterpillar (NYSE: CAT ) , also down 1.9% after it was put on notice by short-seller James S. Chanos, who said he was shorting the stock because Caterpillar faces a lot of headwinds relating to the commodities market, where miners generate demand. If commodities demand drops in China, it will hit Caterpillar's sales and profit. The stock still pays a considerable 2.8% dividend yield and trades at just 12 times trailing earnings, but demand can swing wildly, and eventually China will have to stop its stimulus-fueled growth, which could have a big impact on demand. A short-seller's call isn't reason to dump the stock, but it may be a reminder to look at the macro picture and re-evaluate Caterpillar's prospects. �
No comments:
Post a Comment