This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Top 10 Turnarounds for 2006, Part 1

This column was originally published on RealMoney on Dec. 1 at 7:01 a.m. EST. It's being republished as a bonus for readers.

The first two installments of my Top 10 Turnarounds list, posted at the end of 2000 and 2001 , were full of good stock ideas. Between the two columns, there were eight multi-bagger ideas, three companies that were acquired at healthy premiums and only two ideas that lagged the S&P 500.

Unlike the first two lists, though, this one is unlikely to have nine of its Top 10 Turnarounds outperform. That's because the competition, the S&P 500 index, is much more attractively priced. But while the relative performance may not be as good with the current list of turnarounds, I believe it has the most long-term upside potential of the three lists.

In this, the first of a two-part column, I'll highlight five of the Top 10 Turnarounds for 2006. Look for part two this time next week.

Molson Coors

Since the No. 1 Canadian brewer, Molson, and Adolph Coors merged early this year, the new stock, Molson Coors (TAP), has languished between $60 and $80 per share. Now trading at $66, this stock is very low-risk, with an impressive two- to three-year upside valuation potential of more than $100 per share.

The company is up against a difficult macro backdrop, with sluggish beer demand, but there are a lot of operational levers for management to pull to unlock value. Restructuring and right-sizing are going to be the name of the game over the next few years, as merger-related synergies are realized and cost-savings plans are implemented. There is a good chance that my valuation target will be too low, especially if current operating margins of 11.5% eventually are taken to 15%, a level that this operating structure can easily support.

DreamWorks Animation

Since trading in the low $40s after its IPO last year, DreamWorks Animation (DWA) has taken a hit and now trades around $25 per share. My valuation target is in the mid-$40s by 2007. Even at a mid-$40s quote, the company would be valued at a significant discount to key competitor Pixar (PIXR).

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs