5. Delphi Automotive Group
Delphi Automotive Group (DLPH) re-emerged in 2009 from bankruptcy in a sale to hedge fund creditors Elliott Management and Silver Point Capital after spending roughly 4 years in legal wrangling over its operations. General Motors, which spent $12.5 billion to support Delphi in its reorganization, took over some of the company's plants in the rust belt.In the bankruptcy process, creditors agreed to wipe roughly $3.4 billion of debt from Delphi's balance sheet and invest $900 million in the maker of vehicle electronics, power trains and safety systems. Formerly a unit of General Motors, Delphi was spun to an independent concern in 1999 with over 50,000 workers. After emerging from bankruptcy, the company's headcount has slimmed to roughly 14,000. In 2011, as the company geared up for an IPO, it bought out General Motors' stake. Meanwhile, hedge fund Paulson & Co. became the company's largest shareholder. In a near $580 million share offering, Paulson was the largest share seller, divesting 20.6 million of the 24 million shares sold, which priced at $22. Since the November share offering, Delphi shares have soared over 40% to $29.98, outperforming once-bankrupt parts-supplier competitors like Visteon (VC) and Lear (LEA), in addition to auto manufacturers like General Motors and Ford. In fourth quarter earnings, the company saw a year-over-year sales rise of nearly 10% to $3.9 billion and a more than tripling of profits to $290 million. Those numbers helped the company post better-than 12% sales growth and a near doubling in profit for 2011. Nevertheless, the company's debt increased nearly tenfold. Sterne Agee analyst Michael Ward noted that in Delphi's first earnings as a public company, the numbers beat expectations. "All told, 2011 was a successful year for the company and we expect the momentum to continue in 2012," wrote Ward in a Feb. 8 note, where he raised his price target on Delphi shares to $32 from $29, but left a "neutral" rating on shares. Delphi Automotive shares are expected to rise to $32.18, according to consensus analyst estimates polled by Bloomberg on risisng sales and profitability. The company is expected to earn a $1.2 billion profit on $16.5 billion in revenue in 2012 and see those figures grow to $1.3 billion and $17.9 billion respectively in 2013. Currently, 12 analysts rate Delphi shares a "buy," while 2 give the company a "hold" rating. For more on Delphi shares, see 6 stocks purchased by billionaire David Tepper
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