Why Newell Brands Tanked… And One of the Best Calls I’ve Heard This Year

“Opportunities are hiding in plain sight. You just need know where to look, to do it, and how to interpret what you see.”  – Mike Alkin

If you regularly listen to my Wall Street Unplugged podcast, you’re familiar with frequent guest Michael Alkin.

Mike is one of the smartest analysts in the world. He spent 20 years in the hedge fund industry, and worked directly under the legendary Joe DiMenna—a man who Businessweek once referred to as “the best stock-picker no one has ever heard of.”

Prior to writing his own letter, Mike predicted the collapse of for-profit education stocks in 2006… the massive fallout in steel companies in 2008… and the plunge in energy stocks in 2014 (just before oil prices crashed 70%)… resulting in huge returns for his clients.

You see, Mike’s expertise is deep-dive forensic analysis of financial statements. He combs through annual reports, listens to hundreds of quarterly conference calls, and drills management teams to find out what’s really taking place inside a company.

This allows him to find cracks in the foundations well before most Wall Street analysts (whose firms in many cases are paid investment banking fees by the companies for which they provide research.)  

Back in June, during his first appearance on Wall Street Unplugged (click here to listen), Mike hinted that a short opportunity was on the horizon. The company was Newell Brands (NWL), and at the time, I didn’t know anyone who didn’t love the stock.

Two months later, Mike published a report called “Newell Brands (NWL)… Trouble Ahead.”

He told readers that Newell was “an egregiously overvalued consumer products company,” and that management had painted “a far rosier picture” than the reality of the company’s results.

Newell’s shareholders—along with those of a recently acquired company, Jarden Corp. (JAH)—had benefitted, he explained, “from numerous accounting adjustments, restructurings, and other items that masked the poor state of both businesses.”

In his report, Mike cut through the Wall Street noise to show his readers why the company would start to show strain in 6-12 months. And why, if he owned Newell, he’d “be a seller.”

Just two weeks ago, the stock fell close to 30% on a huge earnings miss. And in the four months since Mike first introduced his thesis on Newell Brands, the stock price has fallen over 45%.

This is one of the reasons we’re so excited that Mike has decided to leave the hedge fund industry and join us here at Curzio Research. Listen to Wall Street Unplugged, check our blog posts, and watch your inbox for more brilliant insights from Mike.

 

Good investing,

Frank Curzio

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