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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.
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.
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