STOCK ANALYSIS - NEWELL BRANDS - CARL ICAHN STOCK
Channel: Value Investing with Sven Carlin, Ph.D.
Date: 2018-05-20

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Stock analysis - Newel brands (NYSE: NWL) 

The price to book is 0.91, the price to earnings ratio is 5.64 (distorted by income tax provision) where the expected forward price to earnings ratio is still just at 10.78 which is a real bargain when compared to other stocks. 
In this article, I will describe the situation with NWL and the risk reward of the investment but I will also discuss goodwill, an acquisition strategy and the turnaround concept that are very valuable lessons we investors can learn from this situation. 
What happened to NWL?
As you saw above the stock price was above $50 not even a year ago but if we take a longer term perspective the stock was even at $5 in 2009 and $11 in 2011. Up till 2017 the company was doing well but as Wall Street expects everlasting growth management often does complex things to satisfy the expectations and push stock prices up. 
In December 2015 the company announced a $13 billion acquisition of Jarden that owns various brands of which one is Coleman outdoor gear. When such an acquisition is made the management counts on synergy and savings. The goal was to unlock $500 million in cost efficiencies and saving, expand the company’s global reach and be immediately accretive to earnings.