Turning around the fortunes of a struggling company can be a daunting task. It can mean changing the company’s culture, laying off workers, or paring management — upheavals that can roil a business for years. Sometimes, the turnaround strategy does not immediately translate into higher earnings for the company, trying the patience of investors.
Attempting a turnaround can also mean fighting against new business trends, such as brick-and-mortar retailers battling to stay relevant as e-commerce hacks away at their business model.
But there are success stories, and 24/7 Wall St. has chronicled 20 of them that unfolded in 2017.
These companies adopted business plans that in many cases helped to halt stock price and earnings declines and reversed the sliding fortunes of publicly traded companies. Many of these strategies were crafted by visionary chief executives, who stuck with their plans in defiance of skeptics and perhaps what might have been conventional wisdom at the time.
Some of the reversals of fortune at these companies are because of circumstances beyond their control such as the rebound in oil prices that improved the balance sheets of energy companies or the rebuilding opportunity brought on by natural disasters.
To identify the companies that turned their fortunes around this year, 24/7 Wall St. reviewed stock prices in 2016 and 2017, analyst price and earnings estimates, as well as analyzing the particular dynamics of a given industry of each company considered. To be considered as making a comeback, the company’s stock price had to hit a trough in 2016 or early 2017 and climb since. The forecast earnings per share (EPS) for each company’s current year also needed to exceed last year’s EPS.
We also took into account earnings estimates for next year when available. Only public companies were considered. Data was retrieved from Yahoo Finance and financial documents filed with the Securities and Exchange Commission.