For Immediate Release
Chicago, IL – December 14, 2018 – Zacks Market Edge is a podcast hosted weekly by cks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here:
Top Tips for Finding the Best Turnaround Stocks in 2019
Welcome to Episode #121 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio service, shares some of her top value investing tips and stock picks.
This week, she tackles the turnaround stock.
How do you find them?
How do you separate the good ones from the bad ones?
In late 2017, Tracey had to pick a stock for the InvestorPlace 10 Best Stocks for 2018.
She picked Etsy (ETSY - Free Report) which was in the midst of a major turnaround.
The company had laid off 22% of its employees over the summer of 2017, changed CEOs and had instituted a turnaround plan in order to take on Amazon’s Handmade marketplace.
It appears to be working.
By the third quarter of 2018, Esty’s revenue had popped 41.3% year-over-year and the company announced a $200 million stock repurchase program.
Etsy’s shares have soared, in a year when most growth stocks have faltered. It looks like Tracey is going to win the contest this year.
4 Tips to Finding the Best Turnaround Stocks
1. You have to find the stocks. A good place to look for ideas is in the Zacks Rank #5 (Strong Sell) stocks because the estimates are likely being cut for most turnaround stocks. General Electric (GE - Free Report) , for example, is currently a #5. Is it a turnaround candidate?
2. Look for a change in management. In January 2018, Papa John’s (PZZA - Free Report) changed CEOs. By May 2018, he was outlining his 5 steps to revive the brand.
3. The company should have a strong brand. Lululemon (LULU - Free Report) has been through turbulent times the past few years and got another new CEO in July 2018. But the strength of the Lululemon brand among consumers has never faltered.
4. Look for a clearly laid out turnaround strategy. Ascena Retail Group (ASNA - Free Report) , the holding company of apparel brands like Ann Taylor and Loft, has articulated its turnaround strategy for each of the company’s three main segments on its conference call. It has reported on what is working and what is not. Ascena just reported fiscal first quarter 2019 same-store-sales growth of 3%.
What else should you know about finding the best turnaround stocks?
Looking for Stocks with Skyrocketing Upside?
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See the pot trades we're targeting>>
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