The Turnaround Letter

September 2017

Volume: 32
Edition: 3

Stock Pick & Stock Sales

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The shipping business has become increasingly difficult to evaluate.

Sale Recommendation - September 2017

We recommend taking advantage of the recent strength in this stock and selling it now.
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We think this value stock’s future is bright.

Purchase Recommendation - September 2017

This mid-cap post-bankruptcy stock’s outlook is much more favorable than the market’s view. The company is now solidly profitable; and its new leadership team and board of directors is focusing on reducing its already low cost structure, improving its mine quality, repaying debt and returning capital to shareholders. As an added bonus, its regulatory burden is unlikely to increase under the Trump administration, and management is working to present a considerably more environmentally-friendly face to the public.
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Turnaround Investing Articles

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Each of these companies has definite turnaround appeal and is among the top 10 highest-yielding S&P 500 stocks.

High Yielding Turnarounds in the S&P 500

Whenever we are looking for good turnaround stocks, one feature that piques our interest is a high dividend yield. A substantial dividend compensates you even if you have to wait for the turnaround to take effect and push the stock price up. Moreover, after the stock does begin to move up, the yield will boost your total return. With this in mind, we sifted through the stocks in the S&P 500 Index to find seven companies with high dividend yields that hold promise for turnarounds and a reasonable likelihood of sustaining their dividends.
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We are increasingly using EV/EBITDA as a valuation measure.

EV/EBITDA: What Is It & Why Are We Using It More?

Determining what EV/EBITDA multiple makes a stock attractive, just as with a P/E multiple, is admittedly a form of art. We uncovered four companies that have low EV/EBITDA multiples but noticeably higher P/E multiples that might be worth a closer look.
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Learn & Avoid These 10 Common Mistakes

Free Report: Turnaround Investing Mistakes

Turnaround Investing Blog

Turnaround Investing Blog

A Closer Look At Two Activist Campaigns

Watch to see if ADP’s CEO Carlos Rodriguez inadvertently helps Pershing, and his aggressive and sometimes personal stance against Ackman could backfire. Overall, because of the stock’s strong returns and Ackman’s weak credibility, we would give this activist campaign a low chance of making ADP a successful turnaround investment. For turnaround investors, the Trian campaign appears to have a win-win opportunity for investors--either Peltz joins the board and learns enough to re-invigorate P&G, or loses and management must either execute (boosting earnings and the shares) or they will face a more drastic proxy campaign with higher odds of success down the road. We think the P&G campaign could turn out well for shareholders.  Read More.

Warrants: A Solid Investment Opportunity

Warrants provide a valuable tool for the savvy investor. When selected and implemented well, they can be a smart addition to a diversified investor’s portfolio. Like options, warrants are not equity. They only convey the right to buy equity. As such, neither holder is entitled to dividend rights, pre-emptive rights, proxy voting or any share of any liquidation.


Value Investing


Warrants' return potential can be very high, but they also carry significant risks. Learn what they are, how they work, strategies to minimize risk and find profit with warrants.

Here's Why You Should Invest in Asset Managers


stock market advicex


This Forbes article cites a recent MoneyShow write-up that recommends investors take advantage of the strong stock market and potential interest rate hike by "putting some of your investment assets into the shares of asset management stocks."


The article praises The Turnaround Letter's OAK purchase recommendation and quotes George Putnam: "As the corporate debt binge that we’ve experienced since 2009 comes to an end, Oaktree will benefit from a growing number of restructurings and bankruptcies."  


Learn more about Putnam's investing success with turnaround stocks.