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

Dow Hits 20,000, But These Dogs Are Still Sitting On The Porch

Excerpted from the February 2017 Issue

It finally happened: After taunting investors with several near-misses, the Dow Jones Industrial Average closed above 20,000 for the first time late this past month. It has been a good run – since the end of 2013, the Dow has gained 21%, about the same as the much broader S&P 500 Index. So with the Average closing at a record high, all of the 30 member stocks must have produced good returns, right?  Not exactly.  Many stocks in the Dow have performed exceptionally well: Home Depot shares rose 68%, Microsoft shares gained 76% and UnitedHealth Group surged over 116%. Yet there are several stocks that have been complete “dogs.” 

There is a well-known investing theory called “The Dogs of the Dow,” which focuses on the component stocks in the Dow that have the highest dividend yields. We created a different version of the Dogs of the Dow: we selected the seven stocks that have completely missed the rally over the past three years. If these lazy dogs get off the porch, they could have a market-beating run. All seven are solid, well-run companies with healthy balance sheets. Many offer attractive dividend yields. Some offer defensive traits should the stock market or oil prices turn downward.  Others have unique company-specific aspects that could bring them back to life.

Get all the details on these timely value stock opoortunities.

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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."