Shares of Japanese conglomerate Hitachi have been flatlining for a decade, as the company has ricocheted from one failed restructuring to another. In 2009, it posted one of the largest annual losses ever by a Japanese manufacturer. And it recently announced a 44% drop in earnings for fiscal third-quarter 2011, suggesting there might be more pain in store for the owners of its shares (ticker: HIT). So why are some global investors bullish?
Because that same quarter was one of its most profitable. And if Hitachi keeps trimming low-margin and noncore operations, it will see cash flow, profits, and earnings increase-helped, too, by Japan's recovery from 11's earthquake. (barrons.com)
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