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2013 Stock Picks: Small Caps with Big Rebound Potential


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.



2013 Stock Picks: Small Caps with Big Rebound Potential

While much of the stock market is quite efficient--meaning information is well distributed, and so it is hard to get an edge and outperform--there are certain niches that are less efficient. As we’ve often said, turnaround stocks represent one of those inefficient niches because they require a mindset that most mainstream analysts don’t have. Small capitalization stocks can also be less efficient. Their small size and lower levels of trading liquidity make them impractical for large investment funds to own, and so there are fewer analysts following them.

If you combine these two sources of inefficiency, it stands to reason that small-cap turnaround stocks should be particularly inefficiently priced. Since inefficiency usually equates to abnormally high return potential, that makes these stocks particularly interesting. 

The January 2013 issue of The Turnaround Letter details eight 2013 stock picks culled from the worst performers in the S&P SmallCap 600 this past year. These turnaround investment opportunities all offer solid businesses, decent balance sheets and good rebound potential. Access the full subscriber-restricted version now.



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









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IBM: Not Yet Time to Swing at this Pitch

IBM’s stock underperformance since IBM’s current CEO took the helm in 2012 has been stark, with the shares declining 23% while the S&P500 Index has more than doubled. One big problem: revenue growth rate is zero, at best. Without revenue growth, what’s left to entice investors? The real driver of value at IBM – free cash flow that is used to repurchase shares. Can IBM borrow its way to shareholder prosperity as its cash flows shrink? What to do with IBM shares? Wait for a better pitch in the form of a catalyst or much lower valuation. Read More.

Comparing Stocks Vs. Bonds

While the common stock of a turnaround candidate usually has the greatest upside potential, other classes of securities, such as bonds or preferred stock, may offer attractive profit possibilities with less risk. Many turnaround companies have only one class of securities available to investors but where there are different classes to choose from, it can pay to do a little extra analysis of the various options.

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."