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.

Watch Headlines for Turnaround Stock Opportunities

Every year, many of the biggest winners on Wall Street are companies that have been troubled but resolved their problems and surfaced once again as some of the year’s greatest success stories. However, this doesn’t happen by magic. It takes thorough and skillful study of any turnaround stock candidate’s fundamentals to be able to select those candidates with the greatest profit potential. The Turnaround Letter has assembled a comprehensive list of basic strategies to employ to pick the most promising contrarian investing opportunities. Recently, we have been profiling these common-sense strategies and now have one more to add to the list: watch media headlines.

Negative media headlines can be a great source of turnaround ideas. Stories about struggling companies, management turmoil, failed strategies, large financial losses, industrial accidents, lawsuits and the like can drive a stock to well-below reasonable levels and may provide a buying opportunity. Like all Wall Street axioms, however, “buy on bad news” must be accompanied by careful analysis to evaluate the potential for turnaround success.

Another Wall Street axiom notes, “there is no such thing as only one cockroach.” Translated into regular English, this means that one bad headline is usually followed by a long stream of bad news. So when an appropriate negative news story appears put that company on your list of possible turnarounds--but wait for more signs before rating it a probable turnaround investment opportunity.

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Books we Recommend for the Holidays

Looking for a stocking-stuffer for the investor or businessperson in your life, or perhaps for yourself? Don’t have a lot of time to stroll through a brick-n-mortar bookstore or wonder which books among Amazon’s endless inventory are actually worth buying? Our list, assembled by George Putnam and Bruce Kaser, includes some fascinating new titles as well as several timeless classics about successful investing and leadership. All are valuable reads which any recipient will be thrilled to dive into. 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."