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.

2015 Sale Recommendations Gain 69%

Dow Jones' Hulbert Financial Digest (HFD), which monitors the performance of nearly 200 investment newsletters, recently reported that as of June 30, 2015, our 15-year annualized return was 12.3%--making The Turnaround Letter the #1 performing newsletter for that period with gains more than 5X higher than the S&P's 2.2%. The Turnaround Letter's consistent performance rankings are particularly gratifying given the longevity of our turnaround investing advice. HFD's Mark Hulbert notes, "...[T]he large majority of the newsletters we were tracking in 1980 are no longer even published." 

Returning our focus to the here and now, this year's closed-out purchase recommendations offer a more current illustration of the extraordinary profit potential to be found with The Turnaround Letter's approach. As the chart below reflects, 10 of 2015's 12 sale recommendations have seen profits. Four of those stocks--GLW, WEN, FCH and BLDR--enjoyed total returns of 100% or higher, and our readers locked in an average gain of 69% with this year's closed out stock picks.

2015 Sale Recommendations

2015 stock profit


It is also of interest to note that 2015's closed out stocks were held for an average of 4-1/2 years, which is consistent with The Turnaround Letter's tried-and-true strategy. Because genuine turnarounds often take longer than you might expect, patience is especially important in this type of investing. The reason for this is simple: When a company is experiencing financial distress, its stocks, bonds and other securities typically experience a significant price drop. HFD discusses this very phenomena: "That's because almost all investors pull money out of the market--and invest money back in the market--at inopportune times. This simply is a function of human nature...."

Of course, we contrarians know that when the herd bails out, that is often the perfect time to buy in! The Turnaround Letter's nearly 30-year track record of market-beating results demonstrates the validity of this strategy. Learn more about our contrarian investment philosophy and The Turnaround Letter's closed out purchase recommendations.

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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."