2 Turnaround Stocks to Buy for 2021
The management teams of package delivery company UPS (NYSE: UPS) and multi-industry industrial 3M (NYSE: MMM) are in a hurry. Both are enacting significant changes to their businesses with the aim of improving performance. As such, their stocks represent excellent buying opportunities for value-oriented investors. Here's why.
Surging e-commerce volumes, particularly in business to consumer (B2C) deliveries to residential deliveries bring about opportunities, but also challenges, for UPS. In common with FedEx (NYSE: FDX), UPS has enjoyed strong e-commerce-related volume growth in recent years. That's undoubtedly a positive, but it also has some negatives as well:
As such, the earnings calls of FedEx and UPS have been peppered by questions from analysts enquiring on margin progression and capital spending requirements. The fear is that margins were permanently in decline and that both companies were stuck in an endless cycle of capital spending that would eat into free cash flow generation.
Source Fool.com
