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.

Post-Bankruptcy Stocks / Transportation

DAL Stock Pick Yields 227% Returns

Making Delta the Newest Member of “200 Club”

The Turnaround Letter recently suggested investors lock in stock profit and unload Delta Air Lines (DAL)—resulting in a 227% increase from its price at the time of our October 2011 purchase recommendation. We advised Delta’s sale after the Company reported good numbers and saw a nice rise in stock price. Although we’ve been enjoying this very good gain with DAL’s stock--and there’s always a temptation to ride all the way to the top--I wanted to follow my own contrarian investing advice offered in the November 2013 article “Sell When They Want to Buy; Buy When They Want to Sell.”

As our distressed investing blog explains, The Turnaround Letter often recommends selling stocks that are performing very well--like DAL. One of the keys to making money in the stock market is being content with taking solid profits and leaving the pigs to fight over the last few points. I’m very content with Delta’s impressive returns, which made this company the newest member of our esteemed “200 Club.”

Of course, not all purchase recommendations perform so well, but the list below reflects our value investing stock picks that have achieved returns of 200%—or better:

  Turnaround Letter 200 Club:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* As of publication date, Bristow Group remains an active purchase recommendation, and the 11,020% returns reported above reflects the stock’s closing price as of 11/18/13.

 

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IBM: Not Yet Time to Swing at this Pitch

IBM’s stock underperformance since IBM’s current CEO took the helm in 2012 has been stark, with the shares declining 23% while the S&P500 Index has more than doubled. One big problem: revenue growth rate is zero, at best. Without revenue growth, what’s left to entice investors? The real driver of value at IBM – free cash flow that is used to repurchase shares. Can IBM borrow its way to shareholder prosperity as its cash flows shrink? What to do with IBM shares? Wait for a better pitch in the form of a catalyst or much lower valuation. Read More.

Comparing Stocks Vs. Bonds

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. Many turnaround companies have only one class of securities available to investors but where there are different classes to choose from, it can pay to do a little extra analysis of the various options.

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."