A variety of companies with heavy debt loads face significant debt maturities in 2015 and early 2016. If volatility continues in the credit markets, these companies may not be able to refinance the debt when it comes due, and they will be forced to file for Chapter 11 bankruptcy.
This value stock pick is a perfect contrarian’s trifecta: It is a post-bankruptcy stock in a very out-of-favor industry with a stock price well down from its summer public offering—and it's likely to be subject to year-end selling pressure.
Looking to cash in on timely tax loss selling and portfolio window dressing? These 10 year-end bounce stock picks represent the worst performers in the S&P 500 during calendar 2014, adjusted somewhat so that there is good diversification by industry group.
Auto suppliers have not fully recovered from the early-October stock market decline. Many of these value investing stock picks are still recovering from the 2008-2009 downturn, and several are also post bankruptcy stocks.
Because the crystal ball on all of this is still pretty hazy, I am once again suggesting that you focus on the larger players with the stronger balance sheets. Many of the smaller, more leveraged miners and metals producers may not survive if commodity prices stay low for a prolonged period.
Turnaround Stock Strategies
George Putnam has always followed the same straight-forward and highly-profitable investment philosophy. He published his first Turnaround Letter issue back in 1986, and readers have seen extraordinary long-term stock profit ever since.
In fact, 12 of 2014's 13 closed-out purchase recommendations saw gains--with five of those enjoying total returns greater than 100%. The Turnaround Letter's average return for 2014's stock picks is +82%: