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Strategies & Market Trends : Turnarund Investing -- Ignore unavailable to you. Want to Upgrade?

To: batman10023 who wrote (364)	4/24/2012 11:51:52 PM
From: batman10023	3 Recommendations Respond to of 1876

if you are talking micro cap turnarunds i don't think they should be a big portion of the portfolio unless you know the company cold and there are catalysts. we had about 4% of the portfolio in GSIG in 2010 which was a funky bankruptcy play that we knew really well and spent 100% of my time on the name for a few weeks and then probably 10% of my time for the next few months. i thought it had perhaps 10% of downside and 100-150% of upside (turns out i was being too conservative on the upside case) and that's why i was willing to make it that size position (and i had a strong feeling a rights offering was a solution so my 4% could turn into having to put another 4-6% into the name or get diluted. that's probably as big as i would make things of that risk - maybe another percent or two max - but given the market cap probably not much more. CIT debt converting to equity went in at 10% straight away. HPQ went in at 8% (yuck). GM bonds went in at 4 or 5%.

To: batman10023 who wrote (364)	4/25/2012 12:13:38 AM
From: Good Fundamentals	Read Replies (1) \| Respond to of 1876

"are you looking for turnarunds? they are getting harder and harder to find... one could argue PEP and NWL and K are interesting turnarunds in the consumer staples space. You could argue KSS in the retail space you could argue cvc and chtr in the cable space. lots of potential names in the auto/financial space." Thanks Batty :) PEP is looks good. I bought some YUM (PEP spinoff I believe) a year ago and its up 50% NWL is tricky - used to be good for the dividend but the business is constantly assaulted by other plastic companies. I owned some NWL over 10 years ago. Looking back at it, I'm probably lucky I got out long ago. K - looks decent - not exactly a turnaround but still decent. KSS looks pretty good - nice P/E of 11 and JCP (some of the last competition left) is still deteriorating. KSS's products have improved in quality so folks actually like to shop their. The K-mart bankruptcy was a givaway to Sears - all that land - all those stores. The annual losses towards the end amounted to about 1% of gross sales - from what I could tell. I used to sell shoes there 30 years ago. The most expensive workboot was about $60 in 1982. In 2002, the same basic model of boot was still $60 K-mart - low prices and crappy service. They outdid themselves trying to keep up with WMT and gave up service. All the K-mart employees with their stock plan got screwed and the land got handed over to Sears. CVC looks good. CHTR looks fishy - I'd have to dig real hard on that one.