Just as there are “hidden gems” out there in the market waiting to be bought, there are also plenty of stocks that are mispriced and due for a bounce. Arnie Alsin of Alsin Capital was on “Street Signs” to shed light on some stocks he said are due for a big turnaround.
First up on Alsin’s list is Georgia Gulf . The chemical company is currently trading at around $19.50 per share. Alsin has a price target of over $50. How does he see such a drastic turnaround happening? Well, Georgia Gulf recently finished a major acquisition of Royal Group, and took on a lot of debt in the process. Alsin says some of the company’s woes come from the depressed housing market, but the real story is hidden in its financials. Looking at the company’s financial statements, Alsin found that the stock market values the company at about $660 million. He expects Georgia Gulf to have $150 million of free cash flow over the next year. So as it uses that cash to pay down the debt, its real market value will be realized and the stock will shoot up, he says.