The Turnaround Letter

October 2017

Volume: 32
Edition: 4

Stock Pick & Stock Sales

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The turnaround’s complexity means that it won’t be linear, and investors should expect it to take a few years.

Purchase Recommendation - October 2017

Investors’ lack of patience with this stock pick reminds us of the chef who gets frustrated that his cake, which requires an hour to properly bake, looks awful after 20 minutes. This mid-cap's problems are deep, so fixing them will take some time. We look at this investor impatience as providing an opportunity to buy into the turnaround at an even better price, and despite the market’s pessimistic view new management is making progress already.
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This stock moved up pretty steadily over the past year.

Sale Recommendation - October 2017

We are recommending Turnaround Letter readers sell this mid-cap to reflect full valuation and completion of the turnaround.
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Turnaround Investing Articles

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Here are our top-five bargain-bin stocks.

Stocks On "Sale" At Discounts Of Up To 70% From Their Highs

As Warren Buffett points out, “price is what you pay; value is what you get.” With that thought in mind, we sifted through a list of stocks with market caps over $1 billion that are selling at huge discounts to their 52-week highs. We found a handful that have real value that the market appears to be missing. 
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Better showing ahead for these six theater stocks?

Secular vs. Cyclical: What Movie Theater Stocks Are Showing

The movie theater industry presents a very timely example of the cyclical versus secular dilemma. The stocks of the theater operators have been among the worst performers this year. While the broad market has gained nearly 13%, many stocks in the theater industry have declined by 20-50%. Are the problems secular or cyclical?  The right diagnosis could mean a huge difference in returns.
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Turnaround News & Updates

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Buy limit raised for two stocks and reduced for one--yet another moved to hold.

News Notes & Updates - October 2017

Turnaround Letter readers should note these four important updates to our current portfolio.
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Identify & Profit from Distressed Investing

Free Report: Turnaround Investing Mistakes

Turnaround Investing Blog

Turnaround Investing Blog

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.

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Turnaround Letter Stock Pick Named Top Performer of 2017

 

stock market advicex

 

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."