Turnaround Investing Blog

George Putnam, one of the country's leading turnaround and distressed investing professionals, shares his timely insight on the economy and turnaround investing opportunities.

Bonds / Banks

A Reader Asks, "Are there any industries in which you won't invest in a turnaround situation?"

The short answer is “no.” However, I am always very cautious about turnarounds in heavily regulated industries such as banking and insurance. That is because when a company gets very troubled and the regulators step in, their last concern is for the investors in the company. Instead, they are focused on protecting depositors or policyholders, and by the time they finish protecting those constituencies there often aren’t any assets left over for bondholders or stockholders. Those risks notwithstanding, there may be times when troubled companies in regulated industries have so much gain potential that it is worth taking on the risk of being wiped out by the regulators. This was the case with many financial stocks and bonds in late 2008 and early 2009. 

(Question submitted by Richard B.)

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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


stock market advicex


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."