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Bankruptcy Update


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Bankruptcy Update

Bankruptcy filings in 2012 looked a lot like 2011. The total number of public companies filing for Chapter 11 through December 21, 2012 was just a hair below the total for 2011, and there will probably be a few more filings by year end. The total assets going into Chapter 11 in 2012 fell somewhat below the 2011 totals, both including and excluding financial companies. (We usually exclude financial companies from the asset totals because they always show very large asset numbers on their balance sheets, which skews the asset totals in certain years. For example, in 2008 the total asset figure reported by just one financial company, Lehman, was more than ten times the total assets for all 125 non-financial bankruptcies that year.)

The biggest bankruptcy filers of 2012 come from a wide variety of industries. There were several large financial companies entering Chapter 11 once again this past year as that sector is still sorting itself out after its upheavals in 2008. The only other common theme among the largest bankruptcies in 2012 was energy.  Four of the ten largest Chapter 11 filings this year were related to energy in some way: Edison Mission (power generation), Overseas Shipholding (petroleum shipping), Patriot Coal (coal production) and ATP Oil & Gas (oil and gas production). The low price of natural gas, mentioned in the first article, probably played at least some role in all four of these filings.

We expect an increase in large bankruptcy filings in 2013. Read the full, subscriber-restricted article to find out why--and to determine if there are bankruptcy investing opportunities to be found in the current crop of bankruptcies.



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Is there value in bankrupt PG&E’s stock?

In nearly every case, the shares of a company in bankruptcy become worthless. In very rare cases, however, they can become great investments. W.R. Grace (NYSE:GRA) shares produced a 75-fold return, as an example. With California utility PG&E (NYSE:PCG) now in bankruptcy, the range of possible outcomes for its equity is wide.

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

In reading recent editions of The Turnaround Letter, you have probably noticed that we are increasingly using EV/EBITDA as a valuation measure, rather than the better-known price/earnings multiple.  We thought it might be useful to describe this measure and why we like it.

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Turnaround Letter Stock Pick Named Top Performer of 2017


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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."