If you missed this 75% share price surge here's another turnaround stock you might like

I hope you saw this one coming. If you did, it is time to pop the champagne corks. Venerable electronics manufacturer Laird(LSE: LRD) has rocketed 75% this morning after publishing its final results for the year ended 31 December and supplying details on its recommended £1bn cash acquisition by private equity group Advent International.

Cashing out

The 200-year-old company has struggled lately but management said today's much improved results are laying strong foundations for the future with continued progress across all three divisions. Group revenue jumped 17% on a reported basis and 10% on an organic constant currency basis. Profit before tax stood at £57m, turning around last year's loss of £122.3m.

This is nice, but of no use to anybody who does not already hold the company's stock as the board also announced it has reached agreement on the terms of a recommended cash acquisition of Laird's entire issued and to-be-issued ordinary share capital.

Shareholders are to receive a highly generous 200p in cash for each Laird share held, representing a premium of approximately 72.6% to yesterday's closing price of 115.9p. This has driven Laird's shares to 202.6p. It's too late, but don't despair as there are always more opportunities out there, like this high-flyer.

Sky high

Defence and aerospace engineer Cobham (LSE: COB) is putting on a show today, its share price soaring 15% on publication of its preliminary results for the year ended 31 December. It needed some good news like this, its share price is still trading 55% lower than it was three years ago.

Management struck a bullish tone from the off by hailing an encouraging first year of turnaround, with increased focus, reduced risk, and a more resilient balance sheet. My Foolish colleague Kevin Godbold saw this coming months ago.

Highlights included a 6% rise in revenue although this was mostly due to favourable currency translation, with organic revenue growth of just 1%. Underlying operating profit of £210.3m was slightly ahead of expectations. Cobham also reported strong free cash flow generation as a result of management focus, later phasing of 2016 onerous contract cash flows, lower capital expenditure and £27m of advance customer receipts.

Risks and rewards

Cobham is also progressing delivery on its 2016 onerous contracts, including KC-46, although it says risks and challenges remain. Best of all it has a more resilient balance sheet, with year-end gearing ratio at 1.3 times and US$545m revolving credit facilities refinanced for five years or more. The agreed divestment of AvComm and Wireless test and measurement will bring in US$455m cash. It will also increase focus, reduce risk and further strengthen the balance sheet.

Last month my Foolish colleague Roland Head was warning of the many dangers posed by this turnaround stock and the sky is not completely clear. Earnings per share growth has been negative for years, with City analysts forecasting another 1% drop in 2018, but then a 23% rise in 2019. I only wish Cobham was cheaper, but it trades at a pricey-looking 22.4 times forecast earnings. Buckle up: the ride could be bumpy but ultimately rewarding.

Takeovers like Laird's can make far-sighted investors brilliantly rich and there are plenty more ways of getting wealthy on the stock market.

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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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