Introducing the Turnaround Stock Portfolio...

Jacob Harper  |

The S&P 500 has raced to near all-time highs in the last couple of weeks. And companies like Tesla, Netflix and Best Buy are enjoying banner years. But of course, the rest of the stock market has not necessarily followed suit, and in the midst of this generally bullish market we’ve seen several notable corporations sink to near-catastrophic depths.

With that in mind, we decided it might interesting to track a diversified set of 10 stocks that have hit a particularly rough patch. We’ve assembled a portfolio before as an experiment, in which we designed a diversified fund made up entirely of stocks with funny or clever ticker symbols. But this time, instead of looking at a superficial like the company’s ticker symbol, we designed this portfolio around by looking at the company’s past performance – in this case, their awful performance.

TURNAROUND STOCK METHODOLOGY

To design our Turnaround Stock Portfolio, we looked for stocks that have had a negative return on the year or have at least lost significant value in the last two years. They also possess the fundamentals to potentially regain their lost value, and are either actively engaged in or are in dire need of a radical turnaround.

To diversify the portfolio, we picked one stock apiece from every sector, and tried to distribute our picks between micro, small, mid and large cap companies.

OUR PICKS ARE NOT OUR “PICKS”

We make no assumptions about what may or may not happen to this portfolio going forward, nor do we advocate investing or not investing in these stocks. Our interest is purely academic, as was our creation of the funny ticker symbol portfolio.

But if anyone out there does happen to be keeping score concerning our portfolios, that funny ticker symbol fund, the FUNY Index, is nearly tripling the return of the S&P 500.

Just saying.

WITH THAT OUT OF THE WAY, HERE ARE OUR PICKS

So without further ado, here it is our Turnaround Stock Portfolio:

So here they are. All have had a negative return save Zynga, who have lost 60 percent of their value since mid-2011, and Synergy, who have gained a scant two percent on the year.

Of particular note to the beginning of our portfolio is the simply awful day JC Penney Company Inc. (JCP) had on Sept. 25. Rough start, but what are you going to do?

Going Forward

As we periodically check back in with the Turnaround Portfolio, we’ll be highlighting a particular stock from it, to see both why it has tanked this year, and why it might be able to right itself. And we’ll be comparing our portfolio’s performance to that of the S&P 500, a standard metric by which funds judge their performance.

Again, we make no claims about what will happen. But now, let’s see what does happen.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
AA Alcoa Corporation 29.27 -0.32 -1.08 6,601,167 Trade
S Sprint Corporation 6.07 0.06 1.00 8,620,239 Trade
ZNGA Zynga Inc. 4.26 -0.02 -0.47 17,572,586 Trade
AT Atlantic Power Corporation (Canada) 2.54 0.03 1.20 545,818 Trade
CLF Cleveland-Cliffs Inc. 9.01 -0.04 -0.44 9,298,096 Trade
JCP J.C. Penney Company Inc. 1.32 -0.03 -2.22 4,627,620 Trade
SGYP Synergy Pharmaceuticals Inc. 0.28 -0.01 -2.21 7,416,382 Trade
LOQPF LO-Q Plc 18.80 0.00 0.00 0

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