Gutted Stocks to Buy – NeuStar (NSR)
Once owned by Lockheed Martin (LMT), NeuStar (NSR) was spun off to private equity interests in 1999 on neutrality concerns between it and COMSAT, a global telecommunications company that LMT acquired the same year.
NeuStar does a lot more than its original mission, which was to handle number portability for individuals wishing to change telephone service providers. Now it also provides marketing, data and security services to industries other than telecom.
In 2014, NSR stock has dropped 52% year-to-date. One reason for the drop is a four-cent earnings miss from its Q1 report in April. More recently, it has been losing ground because of a leaked email that suggests it will lose some business to Ericsson (ERIC).
Neustar has made no attempt to alter its adjusted EPS outlook for 2014, which currently sits in a range from $3.64 to $3.80. I don’t care how big this lost contract is, I highly doubt it’s worth a 50% haircut. For this reason, NSR makes our list of gutted stocks to buy.