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A bond is a security that evidences a debt of the company. Typically a bond obligates the issuer to repay the principal amount borrowed at a certain date in the future (the “maturity” date) and to make periodic payments of interest prior to maturity. The amount or rate of these periodic interest payments is sometimes referred to as the “coupon” because originally all bonds were paper instruments with actual interest coupons attached. Every time an interest payment was due, the holder of the bond would clip off a coupon and submit it to the issuer of the bond for payment. Today, this almost always takes place electronically. Technically, a bond will mature ten years or more from its date of issuance versus a "note," which has a maturity of less than ten years. However, the term bond is often used to refer to any kind of debt instrument.
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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