Currency Trading Information Channel
Discovering Turnaround Candidates
There are many types of investment methodology out there. All of them has their own merits. I for one, personally like to invest in turnaround stocks. What is turnaround stocks? They are normally companies that are experiencing problems (hopefully short-term), and a lot of people are not willing to wait for those companies to recover.
I personally like turnaround stocks for two main reasons; First, turnaround stocks have problems in the open. The problem has been disclosed and our task as investor is to figure out how much the company is worth should the problem persists or when the problem goes away. Granted, there might be more problems discovered along the way. But at the very least, some of the problems has come out and the share price generally has dropped because of that.
Secondly, expectation is low for turnaround investment. Share price is already depressed due to known problems. The company does not have to 'beat expectation' every time it reports earning. All it has to do is clear out the problems that causes its stock price to drop on the first place.
How should one find a potential turnaround candidates for their portfolio? The one thing that I found useful is to read the financial news. Companies that are in trouble can be easily spotted in the news. For example, this week brought news from Pier 1 Imports Inc. (PIR) and Doral Financial (DRL). Are these companies in trouble? Sure. Are they turnaround candidates? Possibly.
Another good source would be the list of stocks that are touching 52 week low. Most of these lists would be companies that are experiencing problems and hence has the potential of turning around. For example ATI Technologies Inc. (ATYT) trade closes to its 52 week low of $ 11.20.
What to avoid when sifting through lists of potential turnaround investment? I would avoid company that is getting hammered due to the delay in its financial reporting. No matter how low the share price is, investors do not and should not invest in companies that has some trust issues.
Once we identify our target, we can then do some analysis to determine the fair value of the stock. There are chances that some companies may never recover. So, we have to take that into accounts when doing fair value calculation. Calculating fair value is a whole brand new topic and I won't get into the details here. But obviously, a stock will have a higher fair value if it can recover from current problems than a stock that cannot overcome its current problems.
Hari Wibowo manages a small finance website aiming to help new investors getting started. Curious? You can find his other writings at http://www.noviceinvesting.com
MORE RESOURCES updated Sat. January / 23 / 2021
The 6 Best Online Forex Trading Classes of 2021 Investopedia
A beginner's guide to Forex trading BusinessMole
What Are the Best Forex Trading Platforms? Market Realist
Injective Protocol Launches Decentralized Forex Futures Trading - Product Release & Updates - Altcoin Buzz
Injective Protocol Launches Decentralized Forex Futures Trading - Product Release & Updates Altcoin Buzz
What is OTC? Definition, where and how to invest over-the-counter - Business Insider - Business Insider
What is OTC? Definition, where and how to invest over-the-counter - Business Insider Business Insider
XRP Climbs 10.42% In Bullish Trade Investing.com India
How does forex trading work? | MyWalletHero Motley Fool UK
Virtual Currencies Comparative Guide - Technology - Taiwan Mondaq News Alerts
EUR/GBP to move back to 0.87 by late-2021 –... Forex Crunch
Bitcoin on track for biggest weekly fall since September as Janet Yellen and 'double spend' spook traders - Business Insider
Bitcoin on track for biggest weekly fall since September as Janet Yellen and 'double spend' spook traders Business Insider
What Is Forex Trading? Forbes
EUR/USD defies gravity, ready to challenge strong... Forex Crunch
Virtual Currencies Comparative Guide - Technology - Guatemala Mondaq News Alerts
5 Things to Know Before You Start Forex Trading Soko Directory Team
GBP/USD Forex Signal: Very Bullish Above 1.3710 DailyForex.com
Asian shares rise on optimism for more stimulus from Biden Alton Telegraph
Kiwi Boosted as CPI Calms RBNZ Rate Cut Bets Currency Live
EUR/USD advances above 1.21 ahead of ECB Currency Live
BTC/USD Forex Signal: Bull Traders Take Profit DailyForex.com
USD/PKR: Rupee Extends Losses As Risk Sentiment Falters Currency Live
Forex Brokers: Are They a Scam? | Investing | US News U.S News & World Report Money
What You Need To Know Before Starting A Forex Trading Business NuWire Investor
Forex Trading Terms You Need to Know Before Trading North Forty News
A Forex Trading Guide For Beginners | Sponsored | state-journal.com State-Journal.com
Inside the weird new world of social ‘forex’ trading—where you sign up friends, and some report risky red flags for investors - Fortune
Inside the weird new world of social ‘forex’ trading—where you sign up friends, and some report risky red flags for investors Fortune
The FINANCIAL - Making Money By Forex Trading The FINANCIAL
Everything To Know About Getting Into Forex Trading GQ Australia
FOREX-Dollar gains after three-day fall as risk rally takes a breather Investing.com India
How Forex Trading Works Market Realist
Facts You Need To Know About Forex Trading Forbes India
Forex Market: Unlocking Opportunities for Investors Visual Capitalist
AUD/USD bulls look to retake 0.7800 Currency Live
A guide to forex trading instruments - Boca Raton's Most Reliable News Source - The Boca Raton Tribune
A guide to forex trading instruments - Boca Raton's Most Reliable News Source The Boca Raton Tribune
The Future of Securities Trading - Thought Leaders Securities.io
Forex vs. Cryptocurrency Trading, Explained Cointelegraph
What You Should Know About Forex Trading Signals Robotics and Automation News
AUD/USD slides to daily low 0.7740 Currency Live
Forex: best currency pairs to trade at night Capital.com
What is Forex Trading And Is It Right For Me? Your Money Geek
Timing Entry And Exit When Forex Trading - NuWireInvestor NuWire Investor
Forex Today: Stocks Soar as President Biden Takes Office DailyForex.com
Dispute brews between EU and currency traders on Mifid reform Financial Times