Crocs has been a strong performer, but from the nadir it took several years and a few new CEO's to finally get the turnaround right.
New CEOs & Turnarounds: Patience Often Required
Investing when an outsider arrives as the new CEO of a struggling company can be quite rewarding. It's one of our favorite catalysts--few changes bring as much potential improvement as the fresh perspective and energy that new leadership provides. However, bringing in an outsider isn't necessarily a sure path to an immediate turnaround. This article details four turnaround situations where a new CEO's arrival hasn't yet produced much in the way of stock performance, but which have promising prospects once the company moves beyond transitional issues.Stocks That Pay Dividends
Identify & Profit from Distressed Investing
Turnaround Investing Blog
At first glance, the shares have decent appeal as a turnaround investment. Looking deeper, however, the fundamentals are not as strong and stable as they appear. Surplus cash flow is tight, a key driver is weakening, it is increasingly reliant on China and has other nagging issues. We don’t see the new CEO as a catalyst for change. Despite the “first glance appeal”, Tupperware isn’t a good fit as a turnaround stock.
Comparing Stocks Vs. Bonds
While the common stock of a turnaround candidate usually has the greatest upside potential, other classes of securities, such as bonds or preferred stock, may offer attractive profit possibilities with less risk. Many turnaround companies have only one class of securities available to investors but where there are different classes to choose from, it can pay to do a little extra analysis of the various options.
Turnaround Letter Stock Pick Named Top Performer of 2017
What Last Year's Top Stock Pickers Are Buying in 2018
This Forbes write-up follows up on the recent Top Stock Tips report--naming The Turnaround Letter's Crocs recommendation the top performer of 2017: With 90% gains, CROX beat out 100 other investment ideas included in the report; and the stock continues to have value investing appeal, according to Putnam.
George notes, "We see additional upside for the stock in 2018 as management's efforts continue to bear fruit, though the gains will likely be more muted than we saw in 2017."
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