While the common stock of a turnaround candidate usually has the greatest upside potential, other classes of securities, such as bonds or preferred stock, may offer attractive profit possibilities with less risk. Read More
Sometimes a company will struggle because of an isolated problem that is not related to its core business prospects. Litigation is a common example. When an otherwise healthy company becomes encumbered with a potentially major liability, management gets distracted and investors flee. A mighty battleship can’t escape its anchor. However, if the company can resolve this problem its stock and bonds may advance sharply and present a potentially lucrative turnaround investing opportunity.
Year after year, many of the biggest winners on Wall Street are struggling companies that turn themselves around and return to favor with investors, but not every laggard is going to turn into a success story. You can improve your chances of spotting a successful opportunity by following some basic rules that apply to almost all turnarounds.Read More
Excerpted from the April 2016 Issue
Our answer is “No, at least not for many decades,” but many investors appear to disagree. When some retailers posted disappointing results last autumn, many retail stocks dropped 40-50% from highs set only a few months earlier. Read More
Excerpted from the March 2016 Issue
The key to deciding where to invest in a company’s capital structure--as with any investment decision--is evaluating risk and potential reward. Unfortunately, however, one of the fundamental rules of investing is that bigger rewards (higher returns) almost always come with higher risks...and vice versa. This is key for anyone deciding the most prudent investment strategy when it comes to distressed securities.Read More
Excerpted from the February 2016 Issue
January was a tough month for most investors. Where does the market go from here? Of course, we don’t know for sure; but we do think the gloom and doom is overdone.Read More
Looking back at 2015, research reveals a 14% decline in overall business bankruptcies but a 46% uptick in public company Chapter 11 filings—with a striking 51% of those filings coming from the battered Oil & Gas/Mining sectors. Economic indicators point to further increases in corporate bankruptcy, in general, and Energy-related filings, in particular. Just a few days into 2016, this viewpoint has already been validated by Arch Coal's long-awaited $8 billion Chapter 11 filing—and continuing oil price plummets severe enough that OPEC will likely convene an emergency meeting to address "shattered" economies.Read More
MarketWatch's Mark Hulbert recently tapped George's distressed investing expertise to determine the fate of the junk-bond market and what its nearly three-year decline likely means for your portfolio.Read More
Excerpted from the December 2015 Issue
Most of the time we recommend taking a long-term view and focusing on underlying business fundamentals when choosing stocks to buy as part of a solid turnaround investing strategy. However, around this time of year it is worth considering a shorter-term strategy based more on the quirks of the calendar--and the tax law--than on business fundamentals.Read More
Excerpted from the October 2015 Issue
If you look longer-term--both backwards and forwards--emerging markets look like much more promising investments...and many of the stocks have decent dividend yields to compensate you in case you have to wait a while for a rebound.Read More
George Putnam's Favorite Stocks for 2016
Distressed Investing Blog
While the common stock of a turnaround candidate usually has the greatest upside potential, other classes of securities, such as bonds or preferred stock, may offer attractive profit possibilities with less risk.
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Banking on a Financial Sector Turnaround
MoneyShow.com recently tapped George's favorable opinion for a banking industry rebound. In "Turnaround Expert's Banking Bets," Steve Halpern highlights a trio of Putnam's top stock picks from the battered financial sector.
George reminds value investors: "Fortunately, many of the factors...just aren't present in the market, and the other reason that investors seem to be down on the banks is they sort of expected the Fed to raise interest rates a little faster than they have. And the banks do better when interest rates are rising because they have wider margins on their loans, but I think the Fed will gradually raise rates to we will see profits improve, and so I think this downturn is really temporary."
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