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



October 13, 2017 Price: $22.98

Market Cap: $199.6 billion


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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Is there value in bankrupt PG&E’s stock?

In nearly every case, the shares of a company in bankruptcy become worthless. In very rare cases, however, they can become great investments. W.R. Grace (NYSE:GRA) shares produced a 75-fold return, as an example. With California utility PG&E (NYSE:PCG) now in bankruptcy, the range of possible outcomes for its equity is wide.

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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.

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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."