"Investing in the stocks chosen for TheStreet.com Stocks Under $10 model portfolio is risky and speculative. The companies may have limited operating histories and little available public information, and the stocks they issue may be volatile and illiquid. Trading in such securities can result in immediate and substantial losses of the capital invested. You should use only risk capital, and not capital required for other purposes, such as retirement savings, student loans, mortgages or education"
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. Subject: Profit Now from Stocks Under $10 - Limited Time Offer
Date: 6/23/2004 1:21:10 PM Eastern Daylight Time
From: marketing@thestreet.com
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If you cannot see the pictures and links below, please click here to view them.
This is the time to discover under-valued stocks and put your money to work.
Recently, many of the best-performing stocks have started under $10. Flying under the radar of most Wall Street analysts, these companies generate both short- and long-term gains for those fortunate enough to discover them.
With TheStreet.com Stocks Under $10, you'll get email alerts of recommended buys, sells and commentary today!
See important risk disclosure below
Sample subscriber-only email alert:
Dear Subscriber to TheStreet.com Stocks Under $10,
One aspect of this service is to spot buys of large- and small-caps based on what we call the "alpha factor" of our proprietary rating system. Some businesses reach an inflection point -- a component of our alpha factor -- before the stock has time to react and the public catches on. Revlon (REV:NYSE), for instance, has been trashed by investors for years now and hasn't traded in the double digits since the market peaked in March 2000.
Most of the hatred was deserved. Annual sales have declined in four of the last six years, operating cash flow has been negative in five consecutive years, and the stock has left investors with nothing but a nice tax loss. And more recently, the company pulled a much needed debt offering that was intended to de-lever its debt-burdened balance sheet.
However, long-time Coca-Cola executive Jack Stahl took over as CEO in 2002 and since then sales have rebounded. Revlon has also focused on lowering costs and reducing interest expense, and the impact is finally starting to reach the bottom line. In the first quarter of 2004, sales rose to $308 million, a 6% year-over-year increase. The company exchanged debt for equity in the quarter, which had an $800 million net effect on shareholders equity.
What will it take to get the stock moving higher? Revlon needs to refinance a boatload of debt, which continues to eat away at gains in EBITDA. While EBITDA coverage has improved, a bigger cushion means the company can spend more on advertising and new-product development. Unfavorable interest rate movements forced the company to withdraw a further $400 million deal, but the 10-year has come back to 4.6% from 4.8%, increasing the likelihood a deal will get done.
The company has a solid mix of new products coming to market this year and new management is spending more on advertising, helping the company regain some shelf space. Having companies like Wal-Mart -- its largest customer, accounting for 20.6% of sales in 2003 -- and Target stocking their shelves will help the products reach a mass audience.
This stock is at $2.92 a share for a reason. Investors are pricing in a worst-case scenario that includes not getting a debt deal completed, dilution from further equity deals or a rights offering, and a smaller-than-expected ramp in sales and new products.
We are taking the other side of this view and initiating a 500-share position. A cleaner balance sheet, tighter cost controls and better leadership going forward will drive gains in new-product sales and operating results that we can't ignore.
Regards,
TheStreet.com Stocks Under $10 Research Team
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Important Risk Disclosure
David Peltier and William Gabrielski, writers of TheStreet.com Stocks Under $10, are research associates at TheStreet.com. Mr. Peltier is a contributor to TheStreet.com Save Safe Plan and maintains the model portfolio for that product. TheStreet.com is a publisher and has registered as an investment adviser with the U.S. Securities and Exchange Commission. The authors are restricted from owning individual securities other than stock or options in TheStreet.com.
TheStreet.com Stocks Under $10 contains the authors' own opinions, and none of the information contained therein constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You further understand that Messrs. Peltier and Gabrielski will not advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the information contained in TheStreet.com Stocks Under $10 may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
Investing in the stocks chosen for TheStreet.com Stocks Under $10 model portfolio is risky and speculative. The companies may have limited operating histories and little available public information, and the stocks they issue may be volatile and illiquid. Trading in such securities can result in immediate and substantial losses of the capital invested. You should use only risk capital, and not capital required for other purposes, such as retirement savings, student loans, mortgages or education.
TheStreet.comStocks Under $10 portfolio is a model portfolio of stocks chosen by the authors in accordance with their stated investment strategy. Your actual results may differ from results reported for the model portfolio for many reasons, including, without limitation: (i) performance results for the model portfolio do not reflect actual trading commissions that you may incur; (ii) performance results for the model portfolio do not account for the impact, if any, of certain market factors, such as lack of liquidity, that may affect your results; (iii) the stocks chosen for the model portfolio may be volatile, and although the "purchase" or "sale" of a security in the model portfolio will not be effected in the model portfolio until confirmation that the email alert has been sent to all subscribers, delivery delays and other factors may cause the price you obtain to differ substantially from the price at the time the alert was sent; and (iv) the prices of stocks in the model portfolio at the point in time you begin subscribing to TheStreet.com Stocks Under $10 may be higher than such prices at the time such stocks were chosen for inclusion in the model portfolio. Past results are not necessarily indicative of future performance. |
