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George Putnam, one of the country's leading turnaround and distressed investing professionals, shares his timely insight on the economy and turnaround investing opportunities.

Puerto Rico Government Bankruptcy: Uncertainty But Also Investing Opportunity

Excerpted from the June 2017 Issue
Because of special tax law provisions that exempt the territory’s debt from not only federal taxes but also state taxes in every state, the bonds are widely held by investors across the country. Since the legal action is under a new law that has never been tested, there is tremendous uncertainty about how much creditors will recover and how long the process will take, but there may be opportunities for stock investors to profit from the island’s restructuring as well--perhaps with less downside risk than in many of the bonds. We found four public companies based in Puerto Rico that could benefit from stabilization in the island’s finances as well as three major insurance companies with exposure to Puerto Rican debt.
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What Makes An Ideal Turnaround Investment? | Putnam's Top Stock Picks

MoneyLife Radio's Chuck Jaffe recently interviewed The Turnaround Letter's George Putnam to learn more about what he looks for in an ideal turnaround investing opportunity: a solid core business, strong brand recognition and a healthy balance sheet. Putnam also talks specific business sector trends—namely in the troubled retail and energy arenas.
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Bank Stocks: A Comeback Investment?

It’s been a remarkable turn of sentiment for banks since early last year, when we wrote “Everyone Hates the Banks” in our February 2016 issue. At the time, not only was the stock market selling off, but bank stocks were falling even faster. Investors were worried that a weakening economy would delay the Fed’s interest rate hikes and increase loan losses, particularly from the energy sector--both of which would crimp banks’ already tepid earnings outlook. Both the economic upturn that started in mid-2016 and the Presidential election were very favorable to banks. After continued price volatility in the first half of 2016, the KBW Bank Index surged 18% in the months ahead of the election. Following the election, bank stocks surged another 32% to their peak on March 1, 2017, a total gain of over 55% from their early 2016 level.
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Post-Chapter 11 Oil & Gas Stocks: Good Assets Freed From Shackles of Debt

Excerpted from the May 2017 Issue
Since the start of 2016, over a dozen energy companies have emerged from bankruptcy as public companies. Knowledgeable distressed investors have not been able to soak up this large supply of new post-bankruptcy stocks, leading to their stock prices being even softer than usual. We think many of these post-reorganization oil and gas stocks look like good bargains right now.
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Distressed Investing: How to Handle Emotion & Realize Outsized Gains

As the range of potential outcomes for a distressed security is wide, the path to the endgame is uncertain and the timing can be protracted, it is easy to let your emotions drive your strategy. Once you’ve made the decision to invest, the waiting--doing nothing--is the most difficult part.
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ESG Investing: Doing Well by Doing Good

Once dismissed as irrelevant or even a detractor from good investment returns, there is a growing body of evidence that shows this ESG (aka "sustainable," "socially responsible" or "impact") approach actually contributes to better returns over the long run.
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Distressed Investing: What Happens in a Bankruptcy?

While investing in distressed companies can produce enormous gains, not all distressed companies fully recover. Some slip into bankruptcy, yet this might still produce a positive return for some bondholders. However, in some cases the company has little value at all, and is best sold piecemeal, for scrap, in essence. What happens to your investment then? 
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Turnarounds Outside the United States: Opportunities Are Everywhere

Excerpted from the April 2017 Issue
Investors here in the United States usually have plenty of turnaround opportunities to invest in; yet change is everywhere, and the trends that affect American-based companies can affect companies all over the globe. Just like many companies here, issues surrounding governance, scandals and complacency can create the need for new leadership and strategic re-positioning no matter where a firm is based. Since many of the foreign stock markets have not been as robust as the U.S. market in recent years, the stocks of some of these international turnarounds may be more compelling values right now compared to their U.S. counterparts.
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Distressed Investing: Exploring "The Dark Side"...What To Do When Recovery Unravels

Investing in distressed companies can produce enormous gains: When the recovery is successful, it is not uncommon for the stock to produce multiples of the initial investment and for bonds to generate 50-100% gains along with often-generous interest income. However, not all distressed companies recover, and some decay into bankruptcy. What happens to your investment then?
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Puerto Rico Government Bankruptcy: Uncertainty But Also Investing Opportunity

Because of special tax law provisions that exempt the territory’s debt from not only federal taxes but also state taxes in every state, the bonds are widely held by investors across the country. Since the legal action is under a new law that has never been tested, there is tremendous uncertainty about how much creditors will recover and how long the process will take, but there may be opportunities for stock investors to profit from the island’s restructuring as well--perhaps with less downside risk than in many of the bonds. We found four public companies based in Puerto Rico that could benefit from stabilization in the island’s finances as well as three major insurance companies with exposure to Puerto Rican debt. Read More.

Market-Beating Profit: The 200+ Club

Turnaround stocks present a unique opportunity for savvy investors to buy in at bargain prices. Take a look at this list of just a few of our purchase recommendations that have realized a return rate of 200% or better:

Value Investing Stock Profit

* Bristow remains in our active portfolio (currently as a Hold), and 2,320% gain is as of 4/11/17.

Five Struggling Stocks That Will Turn Around

 

stock market advicex

 

Kiplinger points out that despite the post-election stock market surge, not all stocks have benefited from the uptick: "More than 100 issues in the S&P 500 have fallen in price this year, including dozens that have slumped by more than 10%....Yet these stocks won’t all stay in the dumps forever. Some will mount a comeback in 2017, making it an opportune time to try to identify the best candidates."

 

Quoting George Putnam, Kiplinger details five value opportunities for the new year.

 

Learn more about Putnam's investing success with turnaround stocks.