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.

Stocks That Pay Dividends

These Hotel Stock Picks Have Room for More Gains

Excerpted from November 2013 Issue

The hotel and motel sector offers an appealing contrarian investing opportunity with strong fundamentals and value stock designation. While the group has performed decently, current industry conditions are very favorable and suggest more gains are ahead.

Like most sectors, the key drivers of performance in the hotel/motel are supply and demand. Demand comes from travelers, particularly business travelers, and this has been growing nicely over the last couple of years. Supply comes from the construction of new hotel rooms, and that is lagging well below historical averages because it is still difficult to get financing.

Growing demand and static supply means that hoteliers should be able to continue to raise room prices, which is great for the bottom line. Moreover, because most of these companies are structured as real estate investment trusts (REIT’s), increasing profits will mean growing dividends. Read the full article, which details 7 lodging industry turnaround stock picks.

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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."