Stockformers! The Rise of the Fallen
In the spirit of the Transformers Movie, here are a few companys that have resurrected themselves seemingly from DEAD to a place where they are at least starting to look viable again.
I'll provide it in a TOP 10 list.
10) (SKX) Skechers: December 2008 everyone had the written off as another CROCS Fad and certainly not a long term investment. Those who disagreed have been and continue to be rewarded for their patience.
9) (COT) COT Corp. This is a beverage company's whose 2 consecutive years of struggle included losing their business with the #1 grocery store in the world, Walmart. Motley Fool investors declared the stock "Junk" and disregarded the company as uninvestable (as evidenced by the star rating it received). COT Corp produced profitability in a huge upside surprise showcasing their long term cost cutting and restructuring moves have paid off in Q1 of this year. The momentum has sent the stock from $1.00 or less to now just over $6.00.
8) (AXL) American Axle: This company was branded as heading to bankruptcy by just about anyone who lives in or near Detroit Michigan. But, the C.E.O. proclaimed profitability will occur sometime in 2nd half of '09 to the disbelief of the entire investment community. Things have since gone down hill with GM's bankruptcy after Chrysler's bankruptcy. Are Large Trucks and SUVs going the way of the DoDo bird due to the rising cost of Gasoline?
I think the move to Mexico along with the full support of the FEDs to resurrect GM and Chrysler will have the added benefit of resurrecting AXL's business. So, you don't have to be a Guns and Roses fan to believe in AXL!
7) CAR) Avis Budget Group recently shocked investors with a good bit of news. $375 million lease agreement along with Air Canada's declaration that Avis was their #1 rental car supplier. This company has seen it's share price obliterated below a buck....Now Avis Budget Group is on a growth path, still struggling though, to attract travelers to its cars. If we are on the beginnings of a economic recovery, then the beginnings of increased Air Travel will occur in 2010 and AVIS will be right there to benefit.
6) F) No Top 10 list should be written without mentioning the used to be $1.01 Ford Motor Company. Motley Fool Investors have gone from "Laughing and cracking jokes at this auto company's expense" to jumping on board the $4.75 secondary price offering. Imagine that! When it was offered Ford's share price was already trading above $6.00 a share making it super easy to see the profit. With GM now officially in bankruptcy and FORD cranking out more F-150s, could we see a comeback to 2006 share price levels?
5) BAC) Bank of America, say what you will about its "Zombie" Status, is simply trading sideways even with the huge capital raising and share dillution. No negative news has brought this bank down after it has resurrected itself to over $11.00 a share. It seems pre-mature to declare victory, but with Countrywide handling mortgages....and a housing bottom taking shape... who knows?
4) HOG) Don't be a Grease Monkey! Too many investors dumped HOG to extremely low share price levels for fear NOT dealing with their motorcycle business..... But with their financial business!
That negativity is in the past and this one keeps going higher... We may see $20.00 before the end of this week. Harley Davidson, like Ford, is still struggling but evidence is clear that their business is at or near bottom and now on the rise. Plus, it's Summer! So, get your ride on!
3) TXT) Textron was declared deceased prematurely by JIM CRAMER and also shoved into the Sell Block. Hmm... How about now? Only the banking side of business has kept this one struggling. Sure, Cesnas and Bell helicopters aren't selling like hot cakes. But, the reality was that the evident fear of investing in TXT due to its financials was palpable. With (BA) keeping an eye on TXT's business for a possible future deal...the TXT is back and the share price is well supported at its current level.
2) SFD) Smithfield Food's share price was a disaster.... Quarter by Quarter they were loss making.
Then to top it off we get *Spook* stories about a "Flu Pandemic" over Swine Flu. Investment community panics over any Stock that sells PORK or Rhymes with PORK, inspite of the fact that Swine Flu doesn't come from Pigs and can't be contracted through food.
So, what happened since? Share price skyrocketed....It did so by more (percentage wise) than any other Pork Stock company in the market. This is significant because this one was hammered the most downward on Day 1 of the WoW Swine Flu Spook Panic. Smithfield Foods reports their earnings this month, June 16th. Will SFD prove itself a STOCKFORMER "Rise of the Fallen" to Wallstreeters? Or will this one drop back down to Pre-Swine Flu levels?
1) AFL) Why is AFLAC mentioned here as #1 STOCKFORMER in the market?
Well, do you realize it wasn't that long ago that their portfolio of European Banks created such a mass panic attack and sell-off on the stock that their share price dropped to a $10 handle! This one was trading over $60 and the company has been listed as the #1 best insurance run business.
Further bad news struck the company when Walmart decided against Aflac's insurance for their employees. But, ultimately, the company is still paying $1.12 a share per year to investors and the community at large as resurrected this one to $36.50! That's a Triple Bagger with a HUGE dividend to boot!
AFLAC is sitting at a small P/E of 12.XX and thus has a lot of room to run. Perhaps the easiest investment opportunity is jumping on board this insurance company and riding it back to $60.