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.

Large Cap / Stocks That Pay Dividends

Turnaround Letter is Bullish on GE Stock

 

NYSE: GE

October 13, 2017 Price: $22.98

Market Cap: $199.6 billion

Overview

Shareholders of industrial giant General Electric have accelerated their rush for the exits, pushing the shares down 14% since the company’s July 20th earnings release. Not only are GE shares down 27% year-to-date, they now trade at the same $23 price they were at in 1997.

After 16 years of downsizing and asset shuffling, GE now appears to be in disarray, with abrupt changes in the board and at the top levels of management. Fears of a dividend cut, a potentially disappointing (at best) earnings report later this week on October 20 and a possible downward re-set of expectations at the upcoming November 13th analyst meeting provide convincing evidence of disarray and a grim future for GE appears compelling.

We believe, however, that the recent drama is the natural byproduct of the speed and boldness of a new CEO who is determined to toss overboard a failed strategy and improve GE’s operating performance, which should ultimately boost its share performance.

Long ago, the company’s advertising slogan was, “GE, we bring good things to life.” With the new CEO, a better strategy and better execution, we think GE shares could now bring good things to shareholders. For more analysis on GE's value investing appeal, subscribe to The Turnaround Letter.

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Identify & Profit from Distressed Investing

Free Report: Distressed Investing

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Free Turnaround Letter Research Report: Bioverativ (NYSE: BIVV)

We're sharing this complimentary copy of our full Research Report for Bioverativ (NYSE: BIVV)—20+ pages of financial analysis, investment philosophy and straightforward explanation. BIVV, our most recent closed out purchase recommendation, brought Turnaround Letter readers 95% stock profit in seven short months. Read More.

Harnessing Activists to Help Find Turnaround Stocks

Activist investors often produce attractive returns for their clients; and you can still use their influence to help your position as a turnaround investor in two ways: Buy a position in a stock with the expectation that an activist will soon follow or buy after an activist takes a stake.

 

Value Investing

 

While one of the many dozens of activist funds might find their way to selecting your particular stock, this approach is likely to be frustrating and unrewarding. A better approach is to buy after the activist makes their move. Once an activist takes a stake in a company, how do you evaluate whether it is worthwhile to follow on? Admittedly, this is a bit of an art... Learn how you can harness the power of activist investors to find market-beating turnaround stocks.

Turnaround Letter Stock Pick Named Top Performer of 2017

 

stock market advicex

 

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."