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Technology Turnarounds, Parts I and II

 

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.

 

 

Looking for Technology Turnarounds, Part I: Opportunity in Dividend Payers?

Technology stocks have been weak in recent weeks.Even the two tech darlings, Apple and Google, have fallen more than 10% from their September highs. Is this a good time to buy and lock in tech stock profit?

Maybe. Technology stocks are notoriously volatile. One minute investors love them; the next minute they hate them. If you are interested in this space, we recommend avoiding the high-flyers. Rather, we suggest two more contrarian investing approaches. One approach, is to look at recent (and some not-so-recent) high-flyers that have come down to earth.

Our preferred approach is to focus on well-established tech companies that pay solid dividends. They may be less sexy than the latest darlings, but their stockholders get paid even if the sector remains in the doldrums for some time. In the complete version of this article, available only to Turnaround Letter subscribers, we discusseight companies that all have solid market positions and their stocks yield more than three percent.

Yes, we know Apple pays a dividend. But we are not willing to recommend it around $600 a share because we think the stock will be in for a bumpy ride if the company can’t keep coming up with blockbuster products. (For the record, we did like it once. We recommended Apple stock in November 2002 at 7.80 per share, split adjusted. Of course we sold it too soon, but the purchase recommendation was still a good call.) This full article--and George's 8 related stock pick recommendations--are available exclusively to subscribers. 

Looking for Technology Turnarounds, Part II: Former Internet High-Flyers

While  technology turnaround stocks that pay dividends may be safer than some other technology investments, they probably do not have as much juice in them as some of the former Internet high-flyers that have come rudely back to earth. If these companies can turn around either their results or investor perceptions--or better still, both--the stocks could move up dramatically.

The companies discussed in our subscriber-only version of this article all have large markets and the potential to generate significant profits if they can figure out how to make money in those markets. Moreover, most of them have little or no debt, and so they are somewhat like long-term options.

Like options, they have significant upside, but some of them also have the potential to be worthless, or nearly so, if they can’t come up with a profitable business model before they run out of money. Subscribe now to see which Internet high-flyers have strong growth potential.

 

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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.

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."