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Metal Turnaround Stocks: From Laggards to Leaders Preview

 

Want to know what George Putnam is recommending to readers of his Turnaround Letter? The articles previewed below offer you a sneak peak of the quality content and sound investment guidance you can trust. To view his most recent recommendations click here.

 

 

Metal Turnaround Stocks: From Laggards to Leaders?

In 2012 most asset classes (such as stocks and bonds) performed well, but a noticeable laggard was commodities and commodity-related investments. Among other things, that asset class was hurt by concerns about the downturn in the European economies and a possible slowdown in China. As a result, the steel and aluminum stocks were among the worst performers in the global stock markets.

This grabbed our attention for two reasons, one technical and the other fundamental. On the technical side, investor views can change rapidly, and we’ve often seen one year’s losers become the next year’s winners.

On the fundamental side, there are several economic factors that could work to the benefit of the metals producers. Over the last decade or so, there has been steady consolidation in the sector. Large producers have gobbled up smaller producers around the globe, thereby reducing competition. Low energy prices in North America will help the U.S. metals companies. There are signs of a nascent rebound in construction in the U.S.--homebuilding is already on the mend, and commercial construction usually follows. There are also signs that the slowdown in China may not be as great as many investors feared.

Put all these things together and it makes the steel and aluminum stocks look like very attractive turnaround investment candidates. The stocks detailed and recommended in the February 2013 Turnaround Letter are all large, global producers that would benefit greatly from a rebound in the sector.

 

 

Read your free preview of The Turnaround Letter's most recent recommendations now!

 

 


 

 

 

 


 

 

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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."