The Turnaround Letter

October 2018

Volume: 33
Edition: 4

Stock Pick & Stock Sales

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Purchase Recommendation - October 2018

This month's purchase recommendation is an industrial company that has fallen out-of-favor with investors due primarily to operational problems, along with some macro concerns. The company has the leading market share in its industry, along with assets which have considerable but obscured value. A well-chosen new CEO appears highly capable of solving its operational issues and leading the company.
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Turnaround Investing Articles

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Turnarounds In Japan

Continuing with our theme of turnarounds outside the United States, this month we look at Japan. One of the more fascinating markets over the past 40 years, the Japanese stock market, as measured by the Nikkei 225 index, nearly quadrupled leading up to its bubble-like peak in 1989 (a decade before the U.S. tech stock bubble). Its subsequent 75% collapse was followed by more than a decade of flat performance. In the past five years, the index has doubled, yet it remains at only half its 1989 level even as the S&P500 index has increased tenfold.
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Spin-Off Turnarounds: Finding Value In Corporate Castoffs

An enduring source of good investment ideas is corporate spin-offs. In these transactions, a company divests one of its businesses by distributing it to shareholders. Following are six post-spin-off stocks that are out-of-favor yet have changes underway or potential catalysts that could produce interesting turnarounds.
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Identify & Profit from Distressed Investing

Free Report: Turnaround Investing Mistakes

Turnaround Investing Blog

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."