The Turnaround Letter

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August 2016

Volume: 31
Edition: 2

Stock Pick & Stock Sales

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This company's stock doesn't need a turnaround but it is valued as if it does.

Purchase Recommendation - August 2016

This automotive mid-cap's shares are among the cheapest in the market. The company has a relatively low level of debt, will likely produce over $400 million of free cash flow this year and is growing its organic revenues at a 4% annual rate. We think the wheels will keep rolling with this high-quality company, and when investors recognize that, the stock price should move up nicely.
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Turnaround Investing Articles

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With valuations well into the bargain range, these bank stocks look particularly interesting.

European Banks--Not Dead Yet

As a group, concerns about European banks are legitimate: Capital is in short supply, lending profits are narrow due to the negative interest rates, banking and trading fee income is subdued by regulations, tough markets and competition, and costs are too high. The Brexit vote has investors fearing that more extreme adversity, combined with higher cross-border costs, could lead to bank failures that leave investors empty-handed. While these concerns are legitimate, investors often overreact and push stocks down further than is justified by the risks involved.
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There doesn’t seem to be much incentive to go public these days.

Number of Public Companies Shrinking?

These trends seem likely to continue. What is less clear is their impact: Do valuations increase for the remaining public companies as the supply diminishes? Will individual investors have less access to the best new companies? What will happen when interest rates rise and close off the spigot of cheap money driving private deals?
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These stock pics offer solid balance sheets and generous dividends.

Time to Move Out of the Comfort Zone?

Mainstream investors are a notoriously fickle bunch, and when they tire of the "comfortable" names, they could rotate into these more cyclical stocks pushing them up sharply.
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Turnaround News & Updates

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Learn George Putnam's Turnaround Secrets

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Turnaround Investing Blog

Turnaround Investing Blog

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. 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:

* Bristow remains an our active purchase recommendation, currently as a "Hold," and 1,928% stock profit is as of 8/11/16.

Retail Turnaround Trio

value stock

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MoneyShow.com interviewed George to learn more about his favorite value stock picks for today's market. In "Retail Turnaround Trio," Steve Halpern highlights three of The Turnaround Letter's recently-profiled retailers: JWN, TIF and SPLS.

 

Putnam notes, "Well the retailing sector is undergoing very fundamental change as people move away from the bricks and mortar mall doors to buying more and more online but that's not going to wipe out all of the old-fashioned retailers. Starting the middle of 2015, investors just moved away from retailers en masse and a number of them are trading at about half the level they were a year ago. We thought some of the higher quality names that definitely will be survivors looked interesting."

 

Learn more about these three retail stocks poised for a turnaround.