The Motley Fool

2 turnaround stocks that could make you mega rich

Investor appetite for Matomy Media Group (LSE: MTMY) improved modestly in Thursday trading following the release of ultra-encouraging financials, the stock last 2% higher on the day. I reckon those seeking shares with hot growth prospects need to give it serious attention today.

The digital marketing expert advised that revenues surged 13% during January-June, to £141m, a result that pushed adjusted EBITDA 59% higher to £9.2m.

Claim your FREE copy of The Motley Fool’s Bear Market Survival Guide.

Global stock markets may be reeling from the coronavirus, but you don’t have to face this down market alone. Help yourself to a FREE copy of The Motley Fool’s Bear Market Survival Guide and discover the five steps you can take right now to try and bolster your portfolio… including how you can aim to turn today’s market uncertainty to your advantage. Click here to claim your FREE copy now!

More specifically, Matomy Media said that it enjoyed exceptional sales growth across its two core divisions. At Mobfox, programmatic mobile in-app revenues surged 104% to $25m, while at its Team Internet domain monetisation unit, the top line bulged 69% to $51.7m.

Today’s results highlight the rationale behind the restructuring measures Matomy Media announced back in May. The Israeli business announced plans to double down on its core operations and to exit non-critical areas like legacy web display, social, search, and virtual currency media channels to cut costs, create a more flexible operating model and improve cash generation.

Spinning around

Matomy Media slumped into the red last year, the company clocking up losses of 13 US cents per share. But City analysts believe a sustained revival is just around the corner.

In 2017 the media play is expected to report earnings of 14.1 cents, and the bottom line is expected to improve by 41% next year to 19.9 cents. And current projections make it brilliant value — it sports a forward P/E rating of 9.1 times, below the well-regarded bargain watermark of 10 times.

In my opinion, this value leaves plenty of upside on the back of Matomy Media’s ambitious transformation programme and vast exposure to the US. The business sources two-thirds of revenues Stateside, and sales should continue to boom as ad spending steadily increases across the Pond.

Toast terrific returns

Majestic Wine (LSE: WINE) is another stock the number crunchers expect to move back into the black sooner rather than later.

The AIM-quoted business has seen its bottom line steadily contract in recent years as sales have struggled and heavy investment costs have weighed. And the City does not expect the bottom line to move back into the right direction just yet — a 4% earnings drop is forecast for the 12 months ending March 2018.

But the fruits of its transformation strategy are expected to drive earnings skywards from fiscal 2019 onwards. It is now past the most cost-intensive part of its cycle, and sales continue to grow at a terrific rate thanks to recent customer service improvements (at Majestic Retail these have expanded for eight consecutive quarters on a like-for-like basis). And strong demand at Naked Wines in the US and Australia in the period underlines the brilliant revenues opportunities here.

Brokers are predicting an 18% profits bounce next year, and it is not difficult to see Majestic Wine maintaining this momentum as recent heavy investment pays off. In my opinion the wine seller is a great selection right now even in spite of its slightly-toppy prospective P/E multiple of 21.1 times.

There’s a ‘double agent’ hiding in the FTSE… we recommend you buy it!

Don’t miss our special stock presentation.

It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about.

They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market.

That’s why they’re referring to it as the FTSE’s ‘double agent’.

Because they believe it’s working both with the market… And against it.

To find out why we think you should add it to your portfolio today…

Click here to read our presentation.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.