Mutual Funds

Mutual Fund Turnaround Investing Opportunities: This Year's Crop


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Mutual Fund Turnaround Investing: This Year's Crop

In addition to advising against market timing, we always strongly recommend diversification as the best way for investors to reduce risk.  For that reason, we believe that mutual funds are very appropriate for many investors because they provide ready-made diversification.  However, given our contrarian bent, we don’t like just any mutual funds; rather we like funds that either focus on turnaround investing as part of their strategy (see the article in the October 2012 issue) or are themselves something of a turnaround.  This latter category usually means funds with good long-term track records that have stumbled for a year or two.

Last year around this time (see the March 2012 issue), we looked at nine funds that fit in this rebound category.  They had underperformed significantly in 2011 despite strong long-term records.  As a group, they definitely lived up to our expectation that they would turn around: the average return (net of fees) for the nine funds for 2012 was just shy of 20%, almost four percentage points better than the S&P 500.

The stock market was less volatile in 2012 than it was in 2011, but nonetheless a number of funds with good long-term records stumbled last year.  We’ve highlighted several of them below that we expect to revert to their winning ways before long.  Subscribe now to find out which seven mutual funds George Putnam recommends for prudent contrarian and value investing.



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Turnaround Investing Blog

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


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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."