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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.

Risk & Diversification

While important to any investment program, diversification is critical to successful turnaround investing. 
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Volatility Up, Rates to Follow?

Excerpted from the October 2016 Issue
While everyone expects the stock market to drop in response to a rate hike, in the past the opposite has often happened. Interest rate rises are usually in response to strength in the economy, which is generally good for stocks. The effect on bonds is much more clear-cut: when rates go up bond prices go down.
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Mind the GAAP Gap

Excerpted from the September 2016 Issue
A good place to start is in the company’s filings with the SEC--in which Non-GAAP earnings must be reconciled with GAAP results. Earnings conference call transcripts, available for free for most companies, can reveal management’s reasoning. Investors will also want to look at history--how often and how large have adjustments been over the past five years? To be most effective, the investor can use both GAAP and Non-GAAP numbers. Minding the GAAP gap can help improve the chances that your stock profits become recurring.
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Avoid This Common Turnaround Investing Mistake

Turnaround investors recognize the opportunity in a battered stock well before the rest of the market and want to pounce immediately. But even if the fundamentals look attractive and there is a margin of safety in the valuation, the stock can still decline--sometimes substantially.
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Don't Make Too Much of Price History

It can be tempting to look at a depressed stock and think, “it used to trade at 40 and now it’s at 8 – therefore it must be a bargain.” Unfortunately, the fact that a stock once traded at a higher price does not guarantee that it will ever get back there. One big reason that a stock trades so much lower than before: its earnings potential or assets have deteriorated. Without some fundamental improvement, the share price will continue to lag, or worse.
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Focus on Worth not Price, to Create Stock Profit

One common stock market pitfall can be mistaking a low-priced stock for being cheap. Many stocks trade at low prices, say under $5 per share; but this is no indication of real value--or whether it’s a bargain. What really matters is what shares are worth.
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Learn George Putnam's Turnaround Secrets

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2016 Bankruptcy Review: More & Bigger

While we believe that overall bankruptcy activity will remain at a high level for the foreseeable future, we think that filings in the energy sector may have peaked. We are optimistic that the increasing bankruptcy activity will provide some very attractive opportunities for turnaround investors. 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:

200+ Club: Value Investing Stock Profits with 200% or Better Return

* Bristow remains in our active portfolio (currently as a Hold), and 2,849% gain is as of 1/17/17.

Bet on These Battered Stocks

Battered Stocks/Tribune Logo: Value Investing from The Turnaround Letter Highlighted in the Chicago Tribune

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Chicago Tribune highlighted this Kiplinger's Money Power write-up on George's contrarian investing approach and The Turnaround Letter's April 2016 monthly turnaround stock pick.

 

Darren Fonda notes, "…besieged stocks often start to recuperate as the headlines fade and investors anticipate a return to precrisis sales and profits. The trick, of course, is to find companies that are more likely to rebound from a setback than collapse entirely."

 

Learn more about Putnam's turnaround investing strategy.