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.

Fifth Anniversary of 2008-09 Stock Market Low: Looking for Laggards Poised to Rebound

Excerpted from March 2014 Issue

March 9, 2014 was the fifth anniversary of the low point in the 2008-09 stock market meltdown. The S&P 500 stock index closed on that day at 676.53, and since then it has risen by 172% (not including dividends). Of course, some stocks have risen even further than the index, and others have performed less well.

Being contrarians, we are not inclined to chase the winners. Instead we like to sift through the losers, looking for stocks that have been left behind but still represent good value. In that spirit we combed through the stocks in the S&P 500 that have performed the worst since the market bottomed out on March 9, 2009. The nine value stock picks revealed in our contrarian newsletter represent a diversified group of businesses with solid rebound & profit potential. Learn more about these bull market dregs seeking to turnaround.

Speaking of anniversaries, MarketWatch also recognized this 5-year marker of the Bull Market--reminding investors that a reliable advisor is more important than ever in these turbulent times. In "Celebrating Bulls Lose Sight of Bearish Picture," Mark Hulbert notes, "Assuming the next decade will not be materially different than the last 14 years, it will be more important than ever to follow a good adviser. Handsome returns in the stock market will be achievable--but they will be harder to come by, since the market itself will not be providing as hospitable an environment as was the case for most of the last century. " Hulbert article also cites The Turnaround Letter's top performer rating--with 13.1% annualized returns since March 2000, noting "...the news isn’t all bad. Some of the advisers monitored by the Hulbert Financial Digest have done very well, thank you, despite the mediocre environment over the last 14 years." View MarketWatch's full stock advice article here.

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Tupperware: Not a Good Fit as a Turnaround Stock

At first glance, the shares have decent appeal as a turnaround investment. Looking deeper, however, the fundamentals are not as strong and stable as they appear. Surplus cash flow is tight, a key driver is weakening, it is increasingly reliant on China and has other nagging issues. We don’t see the new CEO as a catalyst for change. Despite the “first glance appeal”, Tupperware isn’t a good fit as a turnaround stock. 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."