The Turnaround Letter

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April 2017

Volume: 31
Edition: 10

Stock Pick & Stock Sales

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Lock in 35% stock profit.

Sale Recommendation: April 2017

Although this large-cap continues to execute well and is likely to increase earnings, the stock's valuation already prices in a fairly rosy future that assumes no new meaningful competition. 
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While not strictly speaking a turnaround, this pharmaceutical stock looks quite cheap relative to its potential. 

Purchase Recommendation - April 2017

This mid-cap has many of the key traits of a successful spin-off--including healthy revenue, profit margins and cash flow, and its former parent bestowed it with a solid capital base. The pharma’s leadership team is impressive and the stock pick comes with strong R&D, marketing and regulatory capabilities. While valuation is not cheap on an absolute basis at 20x 2017 earnings and 12.7x 2017 EBITDA, the stock trades at a considerable discount to its peers and to what we believe is a reasonable price given its attractive positioning. 
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Turnaround Investing Articles

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Concentrate at the company level and work hard to keep emotions out of the equation.

Trump Bump or Slump Ahead? Don't Worry About It

Is the Trump Rally over; or does it still have legs? Market prognosticators seem keen on tracking the market’s streak of winning or losing days, worrying about whether the outcome of the recent healthcare vote will derail the new president’s agenda, debating if the market is fully valued and generally focusing on almost impossible-to-forecast traits. It fills the internet with impressive narratives--but what do we do with all this?
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The formula for a restaurant turnaround is generally straight-forward: Stop turning off your regular customers. 

Struggling Restaurants That May Serve Up Tasty Returns

Diners may seem like a fickle group: One day everyone flocks to Restaurant X as the place to eat, only to quickly replace it with the next fad, Restaurant Z. The reality is different, though. Most people like to go to their regular restaurant again and again, and it’s only when the restaurants basically tell their customers “please don’t come here anymore” by offering unappealing food, poor service, higher prices and tired surroundings that the customers look elsewhere. This article identifies several restaurant turnaround stocks with well-known franchises, reasonable balance sheets and attractive valuations. Several also have new management teams. With some patience, these stocks might serve up some tasty returns for investors.
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Focus on large, well-established companies when prospecting for international turnarounds.

Turnarounds Outside the United States: Opportunities Are Everywhere

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.
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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

Distressed Investing: Exploring "The Dark Side"...What To Do When Recovery Unravels

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.

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 2,320% gain is as of 4/11/17.

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.