Investors are always told to hold for the long run, but sometimes even many years of patience doesn't pay off.
Some businesses are just duds. Or management and staff might be working very hard but for some reason market sentiment is against the stock.
After keeping a close eye on reporting season, Morgans analyst Andrew Tang reckons he's found a couple of long-term losers that are rejuvenated and ready to take off.
That will come as relief for long-time shareholders, or present a ripe buying opportunity for new investors:
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Huzzah, this company is finally profitable!
It has been an arduous march for Helloworld Travel Ltd (ASX: HLO) shares.
Even the most patient of shareholders must have gone well grey by now, with the travel agency stock losing 56% over the past 5 years.
Ouch.
But Tang feels like that's all about to change.
"Helloworld's FY22 result beat expectations with the group returning to modest (EBITDA) profitability in the fourth quarter," he said in a Morgans' Best Calls To Action memo.
"Cashflow and the balance sheet were also stronger than expected."
There was something of a catalyst earlier this year when Helloworld sold off its corporate travel division to Corporate Travel Management Ltd (ASX: CTD) in a $175 million deal.
Tang believes this has now made Helloworld shares an absolute bargain.
"Backing out its investment in the corporate travel division from its enterprise value, Helloworld is materially undervalued, trading on a recovery year EV/EBITDA multiple of only 2.9 times."
Management is so optimistic about the future that despite the years of capital loss, a dividend was paid out this time round.
"In a sign of confidence, Helloworld has rewarded shareholders with a 10 cents per share final dividend," said Tang.
"It also provided FY23 guidance which was well above consensus."
'Improving operating leverage' makes for a great 2023
Another atrocious long-term performer is payments terminal provider Tyro Payments Ltd (ASX: TYR).
Growth share fans ploughed into the stock when it listed on the ASX in December 2019 after an initial public offer price of $2.75.
The fintech stock rode as high as $4.38 during those early months, but has disappointed in the three years since.
In fact, currently Tyro shares are down almost 74% from those post-float highs.
Tang noted that in its latest results Tyro's net profit was below consensus, but earnings and financial year 2023 guidance landed above expectations.
"Our key result takeaway was the market had been waiting for TYR to give evidence of improving operating leverage, with FY23 EBITDA guidance of $23 million to $29 million (FY21 $10.5 million) particularly meeting that criteria."
The Morgans team therefore has lifted its earnings forecast for the company by more than 10%, and rates Tyro as a buy.
