Seeking Alpha
Value, growth, long-term horizon, medium-term horizon
Profile| Send Message|
( followers)  

If you are looking to invest in companies with good turnaround potential, this list may be an interesting starting point for your own analysis.

Value investors often find themselves buying cash-rich stocks trading at depressed levels. These investors also tend to look for companies with good corporate governance practices. All the companies mentioned in this article seem to fulfill these characteristics...

To construct this list we began looking for U.S. based stocks with market caps above $300M, stuck on a downtrend (i.e. trading below 20, 50 and 200-day moving averages) and with a price to cash ratio below 3. This gave us a universe of over 100 candidates.

Afterwards, we looked at each of these companies’ Governance Risk Ratings (based on research done by the RiskMetrics Group) and kept those with low risk profile with respect to the following areas:

  • Audit
  • Board Structure
  • Shareholder Rights
  • Compensation

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

We also created an price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.

Considering this information, which of these companies do you think is most likely to turnaround and make its stock rally?

1. Amkor Technology, Inc. (NASDAQ:AMKR): Semiconductor Industry. Market cap of $1.18B. This stock is trading -7.84% below its 20-day MA, -10.12% below its 50-day MA, -14.97% below its 200-day MA. P/Cash ratio at 3. This is a risky stock that is significantly more volatile than the overall market (beta = 2.41). The stock is a short squeeze candidate, with a short float at 18.12% (equivalent to 7.89 days of average volume). The stock has performed poorly over the last month, losing 12.5%.

2. Cisco Systems, Inc. (NASDAQ:CSCO): Networking & Communication Devices Industry. Market cap of $84.21B. This stock is trading -7.34% below its 20-day MA, -10.77% below its 50-day MA, -22.87% below its 200-day MA. P/Cash ratio at 1.94. It's been a rough couple of days for the stock, losing 5.78% over the last week.

3. EnergySolutions, Inc (NYSE:ES): Waste Management Industry. Market cap of $418.11M. This stock is trading -6.53% below its 20-day MA, -12.04% below its 50-day MA, -13.78% below its 200-day MA. P/Cash ratio at 2.29. The stock has performed poorly over the last month, losing 17.8%.

4. Standard Pacific Corp. (NYSE:SPF): Residential Construction Industry. Market cap of $649.58M. This stock is trading -10.07% below its 20-day MA, -11.28% below its 50-day MA, -17.15% below its 200-day MA. P/Cash ratio at 1.09. This is a risky stock that is significantly more volatile than the overall market (beta = 2.27). The stock is a short squeeze candidate, with a short float at 14.57% (equivalent to 13.87 days of average volume). It's been a rough couple of days for the stock, losing 13.42% over the last week.

*Corporate governance data sourced from RiskMetrics Group, other relevant data sourced from Finviz.

Source: Turnaround Potential: 4 Beaten Up, Cash-Rich Stocks With Strong Corporate Governance