Turnaround Potential
Value-oriented investors often look for beaten-down stocks that have begun to show signs of a turnaround. The theory is that Wall Street can be slow to catch on to a company’s reversal of fortune, but when it does, the stock will eventually move upward. So using Market Guide Inc.’s database, The Times screened for companies whose stocks had fallen at least 50% in price during the last year through Friday, but whose latest reported quarterly earnings per share were at least 50% higher than analysts’ consensus estimates. Companies covered by fewer than three analysts were not considered. Of course, one quarterly earnings surprise does not make a bona fide turnaround, and the Times does not recommend buying or selling any of these risky, battered shares. However, this list could provide bottom-fishers some ideas for further research.
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1-year* Latest 3-5 year % earnings proj’d. Name Ticker change surprise EPS** growth OYO Geospace OYOG -60.3% 300.0% 16.7% Corsair Communications CAIR -70.9 200.0 28.3 Renaissance Worldwide REGI -60.8 200.0 21.7 Vesta Insurance Group VTA -80.3 147.4 15.0 InfoUSA IUSAB -52.4 116.7 15.0 Capstead Mortgage CMO -67.0 100.0 5.0 R&B; Falcon FLC -65.0 100.0 24.4 Safeskin SFSK -65.8 100.0 21.0 Team America TMAM -59.1 100.0 35.0 Twinlab TWLB -75.3 100.0 20.0 Splash Technology Hldg. SPLH -55.3 85.7 17.5 Industrial Distrib. Grp. IDG -62.3 83.3 13.8 Pentacon JIT -55.1 80.0 10.5 Gadzooks GADZ -61.7 75.0 21.5 Olin OLN -69.1 66.7 7.0 Evolving Systems EVOL -69.5 52.4 25.0
Wed. closing Name price OYO Geospace $10.63 Corsair Communications 4.00 Renaissance Worldwide 6.19 Vesta Insurance Group 5.00 InfoUSA 5.69 Capstead Mortgage 5.81 R&B; Falcon 9.25 Safeskin 11.38 Team America 4.81 Twinlab 8.63 Splash Technology Hldg. 7.06 Industrial Distrib. Grp. 6.44 Pentacon 4.81 Gadzooks 10.13 Olin 13.00 Evolving Systems 4.75
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*Through Friday
**EPS=Analysts’ consensus on earnings per share
Sources: Market Guide, Bloomberg News
For more information, go to https://www.marketguide.com.
