2 Massive Turnaround Stocks: Which Is a Brilliant Buy and Which to Avoid?
Both Lucid and Stellantis have been significantly sold off, but if their turnarounds make a financial impact in the near term, investors could be positioned for big returns over the next five years.
Overview
"The best thing that happens to us is when a great company gets into temporary trouble... We want to buy them when they're on the operating table." Warren Buffett said in a 1999 interview with Businessweek.
Buffett, of course, turned out to be pretty good at the whole investing thing, but he brings up a great point. There are few better developments than investors finding an oversold, beaten-down stock with clear upside as it fixes flaws in its business. However, there's also a fallacy in believing that all companies will bounce back, which is assuredly untrue, and investors take on that exact risk. Here are two of the biggest potential turnaround stories in the automotive industry that could reward investors over the next five years. Increasingly, Stellantis (NYSE: STLA) looks like a brilliant play, while Lucid (NASDAQ: LCID) has failed to produce a plan that inspires confidence.
Details
"Lucid has leading technology, compelling products, and deeply committed people, but potential is not performance," said Silvio Napoli, CEO of Lucid, in a statement. "We are going back to basics, with a clear focus on cash, customers, and culture. We are focused on delivering on our four must-win priorities, including our $1.4 billion cash flow improvement plan and the advancement of our Robotaxi, AMP-2, and Midsize programs, which will establish a strong foundation for Lucid's next chapter."
Source
Originally published at www.fool.com.