The ultimate goal in evaluating a distressed security is answering this question: is there anything here worth investing in? If not (perhaps the company has so little value that even the most senior traded bond would not have much recovery), then it’s time to move on. But if there is meaningful value, then it’s time to look deeper.Read More
George Putnam continues his series on investing in distressed securities--this time focusing on how to find publicly traded distressed securities that might be promising investment candidates.Read More
Although George hates to choose favorites among his stock picks, this free e-report details The Turnaround Letter's Top Five Turnaround Stocks for 2017--including a diverse selection with several post-bankruptcy value stocks poised for a rebound. This is the perfect tool to grow your turnaround investing portfolio and lock in stock profit in a potentially turbulent stock market.Read More
BankruptcyData's Energy Sector Bankruptcies report anticipates that overall Chapter 11 activity will remain at a high level for the foreseeable future. Energy company filings have probably peaked and will gradually decline over the next 12 to 18 months, so the flow of bankruptcies will likely shift toward a more diverse group of industries. In time, this could contribute to an opportunity-rich market for distressed debt and post-reorganization stocks.Read More
Excerpted from the February 2017 Issue
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 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.Read More
Each year MoneyShow selects a "Top Pick" for the coming year based on its potential performance and profits in the new year. This year, George Putnam was selected to make the Top Pick for 2017: Oaktree Capital Group (OAK).Read More
Distressed bonds can be priced below their fair value when the supply of distressed securities overwhelms the demand, creating higher returns for buyers if the company recovers. To astute investors, these extra discounts can tilt the game to their favor.Read More
Excerpted from the January 2017 Issue
While we believe that overall bankruptcy activity will remain at a high level for the foreseeable future, we think that filings in the energy sector may have peaked. We are optimistic that the increasing bankruptcy activity will provide some very attractive opportunities for turnaround investors.Read More
With U.S. stocks well into their eighth year of a bull market and the economy showing increasing signs of strength, finding ideal turnaround stocks--those with all three ingredients--can be a needle-in-the-haystack project at best. What is an investor to do in a seemingly barren value stock landscape?Read More
Excerpted from the January 2017 Issue
The market’s previous assumptions about the U.S. economy--sluggish growth, rising government regulation, near-zero interest rates--seem to have reversed overnight with the election of Donald Trump. We think the changes run deeper. Households and companies are starting to move past the financial crisis, which peaked eight years ago. Demand is picking up. With it, there is a good chance that the deflationary environment is shifting back toward inflation. Trump’s election could further boost growth through more government spending and fewer regulations. Risks to the markets may increase in 2017, and investors prepared for volatility can better hold firm when it arrives.Read More
Identify & Profit from Distressed Investing
Turnaround Investing Blog
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.
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.
Turnaround Letter Stock Pick Named Top Performer of 2017
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."
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