The market seems to like the story, sending the stock up more than 20% in the last month. The stock still trades at a forward price earnings multiple of 15, and at a 22% discount to its book value of $11 per share.
Another stock related to the automotive industry that’s showing fresh signs that the worst is behind is American Axle & Manufact. Holdings, Inc. (NYSE:AXL). The company is a producer of drive line and drive train systems, and related components and chassis modules for the automotive industry. It counts several global automakers as its clients. The stock has gained more than 22% over the last quarter, as investors came to realize the company is undervalued.
In the most recent quarter, the company reported a sharp drop in profits, but revenue increased, beating the Street expectations. As markets were already expecting lower profits, this did not come as a surprise, but revenue of $755.6 million topped mean analyst expectations of $750 million. The market has taken the results positively, as continued traction in revenue growth is likely to result in better profits in quarters to come.
Foolish bottom line
Investors have rightfully bought up shares of these three companies, as they have shown signs of turning around. Despite the recent rally in share prices, all three companies trade at relatively cheap valuations, which means there could be more upside ahead.
The article Should You Bet On These Turnaround Stories? originally appeared on Fool.com and is written by Jacob Wolinsky.
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