Turnaround investing can be very profitable, but how do contrarians go about selecting the most potentially lucrative opportunities? One proven technique is to watch for management changes. Just as real estate experts say there are three keys to success in real estate, we believe there are three keys to success in turnarounds: management, management, management. Read More
Excerpted from the June 2016 Issue
For what seems like the umpteenth time over the last several years, investors – in both stocks and bonds – are once again focused on the questions of “Will the Fed raise interest rates? When? And by how much?” The stock and bond markets often react quite sharply to whatever the “expert” view is on any given day.Read More
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. Read More
Sometimes a company will struggle because of an isolated problem that is not related to its core business prospects. Litigation is a common example. When an otherwise healthy company becomes encumbered with a potentially major liability, management gets distracted and investors flee. A mighty battleship can’t escape its anchor. However, if the company can resolve this problem its stock and bonds may advance sharply and present a potentially lucrative turnaround investing opportunity.
Year after year, many of the biggest winners on Wall Street are struggling companies that turn themselves around and return to favor with investors, but not every laggard is going to turn into a success story. You can improve your chances of spotting a successful opportunity by following some basic rules that apply to almost all turnarounds.Read More
Excerpted from the April 2016 Issue
Our answer is “No, at least not for many decades,” but many investors appear to disagree. When some retailers posted disappointing results last autumn, many retail stocks dropped 40-50% from highs set only a few months earlier. Read More
Excerpted from the March 2016 Issue
The key to deciding where to invest in a company’s capital structure--as with any investment decision--is evaluating risk and potential reward. Unfortunately, however, one of the fundamental rules of investing is that bigger rewards (higher returns) almost always come with higher risks...and vice versa. This is key for anyone deciding the most prudent investment strategy when it comes to distressed securities.Read More
Excerpted from the February 2016 Issue
January was a tough month for most investors. Where does the market go from here? Of course, we don’t know for sure; but we do think the gloom and doom is overdone.Read More
Looking back at 2015, research reveals a 14% decline in overall business bankruptcies but a 46% uptick in public company Chapter 11 filings—with a striking 51% of those filings coming from the battered Oil & Gas/Mining sectors. Economic indicators point to further increases in corporate bankruptcy, in general, and Energy-related filings, in particular. Just a few days into 2016, this viewpoint has already been validated by Arch Coal's long-awaited $8 billion Chapter 11 filing—and continuing oil price plummets severe enough that OPEC will likely convene an emergency meeting to address "shattered" economies.Read More
MarketWatch's Mark Hulbert recently tapped George's distressed investing expertise to determine the fate of the junk-bond market and what its nearly three-year decline likely means for your portfolio.Read More
Identify & Profit from Distressed Investing
Turnaround Investing Blog
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Harnessing Activists to Help Find Turnaround Stocks
Activist investors often produce attractive returns for their clients; and you can still use their influence to help your position as a turnaround investor in two ways: Buy a position in a stock with the expectation that an activist will soon follow or buy after an activist takes a stake.
While one of the many dozens of activist funds might find their way to selecting your particular stock, this approach is likely to be frustrating and unrewarding. A better approach is to buy after the activist makes their move. Once an activist takes a stake in a company, how do you evaluate whether it is worthwhile to follow on? Admittedly, this is a bit of an art... Learn how you can harness the power of activist investors to find market-beating turnaround stocks.
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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