Turnaround Investing Blog

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

Bankruptcy/Chapter 11 / Energy / Post-Bankruptcy Stocks

Energy's Wild Ride--Energy Sector Bankruptcies E-Report

New Generation Research's BankruptcyData has been monitoring U.S. Bankruptcy Court activity for 25 years now, and its most recent free e-report offers 40+ pages of detailed statistics and analysis of the ever-changing landscape in the battered energy sector.

BankruptcyData notes that the shale-driven resurgence of the U.S. energy industry hit a big obstacle in mid-2014 when oil prices began their precipitous decline. After years of relatively steady $100/barrel oil, the price dropped nearly 75% to a February 2016 low of $26/ barrel. In short order, oil and gas company revenues dropped by almost 50%.

As earnings and stock prices declined dramatically, the industry reacted by cutting capital expenditures, deferring projects and slashing expenses by reducing headcount and pushing suppliers for lower prices.  The sharp pull-back in drilling activity, combined with some discipline from OPEC, started affecting oil production and helped prices recover to the low $50s by mid-2016.

With the industry in its worst downturn in decades, energy companies dominated the bankruptcy landscape. Over 60% of the assets that filed for bankruptcy during 2014-2016 and nearly 50% of the total number of public company bankruptcies were from the energy industry (historically, the energy industry accounts for just 2-15% of public company bankruptcies). Also, these companies were often very large: 15 of the top 20 bankruptcies came from the energy industry.

Top 20 Bankruptcies – All Industries (2015-2016)



Caesars Entertainment Operating Company, Inc.


SunEdison, Inc.


Peabody Energy Corporation


Alpha Natural Resources, Inc.


LINN Energy, LLC


Doral Financial Corporation


Arch Coal, Inc.


Samson Resources Corporation


Walter Energy, Inc.


Breitburn Energy Partners LP


Energy XXI Ltd


Offshore Group Investment Limited


Republic Airways Holdings Inc.


Halcon Resources Corporation


Paragon Offshore plc


SandRidge Energy, Inc.


China Fishery Group Limited


Molycorp, Inc.


RCS Capital Corporation


Sabine Oil & Gas Corporation


Not only were energy bankruptcy filings among the largest Chapter 11 petitioners, this industry also dominated overall filing totals: Public company energy-related bankruptcies represented just over 50% and 40%, respectively, of 2015 and 2016's total public company bankruptcy counts. Detailed statistics and analysis are available in Energy Sector Bankruptcies.

BankruptcyData anticipates that overall bankruptcy activity will remain at a high level for the foreseeable future. Energy company filings have probably peaked and will gradually decline over the next 12 to 18 months. The flow of bankruptcies will likely shift toward a more diverse group of industries. The low interest rate environment since 2009 has led a wide range of companies to accumulate nearly $1.5 trillion of lower quality debt that will come due over the next five years.

Not all of that debt will be repaid or refinanced. If debt markets and the economy remain healthy, perhaps only a small percentage will require restructuring through Chapter 11. However, if debt markets become more selective or if the economy pressures cash flows, bankruptcy filings could increase significantly. In time, this would contribute to an opportunity-rich market for distressed debt and post-reorganization stocks.

Learn more: Download the free Energy Sector Bankruptcies e-report directly to your browser.

Read More Turnaround Investing Blog Entries

Learn George Putnam's Turnaround Secrets

Free Report: Top 10 Turnaround Stocks

Turnaround Investing Blog

Turnaround Investing Blog

The Turnaround Letter Takes a Look at Activist Investors

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? 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 1,390% gain is as of 7/19/17.

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.