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What is Distressed Investing?
In simple terms, a distressed company is one showing one or several tell-tale signs of financial strain. There are many possible indicators here--most obviously, bankruptcy or the risk thereof, audit concerns reported within an annual financial report, a lowered credit rating, etc. The Turnaround Letter has been monitoring and analyzing the many indicators of financial distress for the past 30 years. Spotting a distressed company is the relatively easy part, but what should you do with that information?
“Bargain Hunters who like out of favor stocks with good prospects should look at The Turnaround Letter.”
When a company is experiencing financial distress, its stocks, bonds and other securities typically experience a significant price drop. This sharp decline happens because most investors, including many “sophisticated” institutions, are afraid of turnaround situations. In their haste to unload distressed securities, shareholders often fail to consider their valuation and other indicators that will reveal a company’s true potential and future prospects. This panic often causes investors to sell a potential turnaround stock too quickly. Contrarian investors knows that when the herd bails out, that is often the perfect time to buy in!
As others clamor for the exit,
contrarian investors look for potential investment opportunity.
Due to their reduction in value, distressed securities present a unique opportunity for savvy investors to buy in at bargain prices. You'll see a long-term history of market beating results from our closed-out purchase recommendations. Now, take a look at the jaw-dropping results distressed investing can offer. This list reflects just a few of the Turnaround Letter purchase recommendations that have realized a return rate of 200% or better:
Obviously, not every distressed investing situation is going to result in this kind of profit. Some will liquidate or be acquired, while others can languish with depressed stock prices for years. Like all stock market activity, contrarian investing comes with a certain degree of risk. That's why you need trustworthy stock advice.
“The only thing more expensive than education is ignorance.”
- Benjamin Franklin
Many distressed companies even end up filing for bankruptcy protection. Contrary to common perceptions, however, there are significant investing opportunities still to be had even within the bankruptcy niche. Once again though, you need the right guide to navigate that minefield and identify the most prudent investment options for every scenario. There's no doubt about it: the stock market has risks, but George Putnam’s prudent investment strategy has minimized those risks and maximized financial reward for nearly three decades. The Turnaround Letter has the longevity and proven track record to help you lock in distressed investing stock profit.