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.Read More
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.Read More
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.Read More
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? Read More
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.Read More
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?Read More
...So you recently bought a turnaround stock, and now it is down 10% from your cost. You’re frustrated and worried that you made a mistake. You have the urge to sell now before the price goes down further. What now? First, manage the emotions. Successful investing in turnaround stocks can be a highly emotional experience.Read More
At its most basic, evaluating potential pay-off is straightforward--determine what the company could be worth if it recovers, then parse out the value between the debt and equity to estimate the potential upside; but traditional metrics like price/earnings ratios, price/book value ratios and dividend yields generally aren’t useful. Instead, investors should look to Enterprise Value/Ebitda on a post-recovery basis as an effective valuation method.Read More
A lot has happened since our August 2016 “Time to Move Out of the Comfort Zone” article, which focused on companies that were out of favor due to their “high volatility” earnings and share prices. While the market had ignored the six companies we featured, these “uncomfortable” stocks went on to produce some impressive returns, gaining an average of 35.1% as of March 15, 2017.Read More
When a company is distressed, its assets are probably worth less than its debts. The best indicator of whether a distressed company will recover is its willingness and speed in dealing directly with that reality. The Turnaround Letter tells investors how to evaluate if a troubled company can execute a successful turnaround.Read More
Learn George Putnam's Turnaround Secrets
Turnaround Investing Blog
With nearly $180 billion in assets under management, “activist” investment funds have become a powerful force in the capital markets: Nearly 40% of companies in the S&P 500 attracted activist attention in recent years. According to Activist Insight, 320 companies in the U.S. experienced an activist campaign in just the first half of 2017; but who, exactly, are these activists, what are they after, and what role do they collectively serve?
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:
* Bristow remains in our active portfolio (currently as a Hold), and 1,390% gain is as of 7/19/17.
Five Struggling Stocks That Will Turn Around
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.
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