The Turnaround Letter

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June 2016

Volume: 30
Edition: 12

Stock Pick & Stock Sales

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Time to lock in more than 100% stock profit.

Sale Recommendation - June 2016

This small-cap's stock has surged over the last month and a half on the back of better-than-expected 1Q16 earnings.
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Valuation on estimated 2017 adjusted earnings of $1.52 per share is an attractive 8.2x.

Purchase Recommendation - June 2016

With an impressive and completely new turnaround management team in place, this company is redirecting its focus toward paying down its debt, lowering interest costs, streamlining operations and re-investing to help generate new revenue growth. As the market sees the company grow its cash flow and reduce its debt, investors should give the stock a higher multiple. Some patience may be required, but shareholders can take comfort from the fact that their interests are aligned with a buyout sponsor that still holds a 70%+ stake in the company.
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Turnaround Investing Articles

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These five value stocks have significant exposure to the senior living sector--and strong long-term gain potential.

Seniors on the Rise; Senior Living Stocks Less So

The senior living sector has a lot going for it right now. First and foremost are demographic trends, with the number of senior citizens in the U.S. expected to rise dramatically in the coming decades. In addition, the industry remains quite fragmented with many senior living units run by small local operators. This means that public companies in the sector can continue to grow by acquisition, and eventually even these public companies may become acquisition targets for larger industry consolidators. Yet in spite of these favorable factors, most of the more focused senior living stocks have performed relatively poorly over the last year and half or so--creating a promising contrarian investing opportunity.
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These six REIT stock picks have stumbled but are now showing signs of recovery--and they offer attractive return potential.

REIT Turnarounds: Rebuilding Value

When investors think about turnarounds, they usually think about manufacturing, retail or service companies. One additional type of company that often is ignored is the real estate investment trust, or REIT. With REIT turnarounds, the mantra is “management, management, management.” That's because these often involve selling illiquid real estate, which can take considerable time. For patient investors, however, REIT turnarounds can offer substantial gains while often paying attractive dividends in the meantime.
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A short-term focus on Fed actions will distract you from that long-term approach.

Will They or Won't They Raise Rates? Don't Pay Any Attention to the Noise

For what seems like the umpteenth time over the last several years, investors – in both stocks and bonds – are once again focused on the questions of “Will the Fed raise interest rates? When? And by how much?” The stock and bond markets often react quite sharply to whatever the “expert” view is on any given day.
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Turnaround News & Updates

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Get the latest updates on these stock picks.

News Notes & Updates - June 2016

Two of our recommended value stocks have been quite volatile over the past month as short-term investors jump in and out of the stocks based on the latest news.
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George Putnam's Favorite Stocks for 2016

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Distressed Investing Blog

Distressed Investing Blog

Market Conditions Deeply Impact Turnaround Stocks

The best environment for turnaround stocks is when the economy is just beginning to improve after a slowdown. As broad economic conditions improve, the weakness of turnaround companies can become their strength as they benefit much more than healthier companies. Their sharper recovery can lead to outsized share price gains relative to other stocks. Read More.

Your Financial Security is Serious Business...

so why should you trust The Turnaround Letter?

  • The Turnaround Letter's 15-year returns were 11.3%--vs. S&P's 4.4%
  • 30 Years of Turnaround Investing Experience & Reliable Stock Market Advice
  • 2016's Closed Out Purchase Recommendations Averaged 49% Stock Profit
  • Diverse Monthly Stock Picks Personally Selected by George Putnam

Banking on a Financial Sector Turnaround

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MoneyShow.com recently tapped George's favorable opinion for a banking industry rebound. In "Turnaround Expert's Banking Bets," Steve Halpern highlights a trio of Putnam's top stock picks from the battered financial sector.

 

George reminds value investors: "Fortunately, many of the factors...just aren't present in the market, and the other reason that investors seem to be down on the banks is they sort of expected the Fed to raise interest rates a little faster than they have. And the banks do better when interest rates are rising because they have wider margins on their loans, but I think the Fed will gradually raise rates to we will see profits improve, and so I think this downturn is really temporary."

 

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