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.

Heavy Construction Stocks: Digging Out of a Hole?

Excerpted from July 2013 Issue

While the rest of the market has been on a tear for the first part of the year, one sector that has particularly underperformed has been heavy construction companies. As contrarian investors that translates to stock profit opportunity, and we've identified several appealing purchase options.

The heavy construction sector, as a whole, is slightly underwater for the year to date, and the stocks below are down an average of ten percent. Part of this underperformance may be related to the weakness in the metals stocks that we discussed in February and in the mining stocks discussed in May. Among other things, all of these sectors appear to be weighed down by concerns about a near-term slowdown in China.

Longer-term, the fundamentals for this sector look pretty favorable. In the U.S., the real estate markets appear to be recovering, and in the public sector there is growing awareness of our need to rebuild our infrastructure. Globally, all of the emerging markets are likely to need extensive heavy construction in the years to come.

The stocks profiled in our July 2013 article are in different aspects heavy of heavy construction or machinery.. They have all been under pressure recently, but have good long-term prospects. Click here to learn about nine stock profit opportunities within the heavy construction sector.

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Amazon = US GDP 1970

Amazon joined Apple in reaching a $1 trillion market capitalization. $1 trillion is about the same as the total value of New York City property and the total value of loans at JP Morgan, the nation’s largest bank in terms of assets. Jeff Bezos’ $160 billion stake would place him (personally) as the #33 largest company in the S&P 500 in terms of market cap, next to Coca-Cola, Disney and Netflix. We aren’t bold enough to predict whether the shares will continue upwards or if they are in a bubble reaching maximum inflation. Setting aside for a moment their investment prospects, let’s admire the truly remarkable milestone that these two companies have reached. Read More.

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.

Read More.

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."