Turnaround Stock Portfolio Weeks #10, #11, #12, #13: Slow and Steady Wins the Race

Michael Teague |

For those investors who love a good comeback story, the recent performance of the Equities.com Turnaround Portfolio may be just the right news item, at least if you have a little bit of faith to spare.

On September 25, we began tracking a portfolio comprised of one struggling company from each sector of the market. Our losers, each and every one of them badly in need of a turnaround, were taking it on the chin for a while, until the last time we checked in with them on November 21 when the total return of the portfolio crawled into the positive, up just shy of one percentage point.

Collectively, the subsequent performance of our losers hasn’t provided a cheerful story, but it hasn’t been disastrous either. Since our last check-in, the portfolio has more or less dipped its pinky-toe back into the red, with some notable gains and losses. Here’s a rundown of the most significant price movements.

The Winning Losers

The proudest of our little companies that could are to be found in tech and basic materials sectors. Quicksilver Resources (KWK) , the independent oil and gas firm, whose stock was trading for $1.91 when the portfolio was first introduced, has since added nearly 43 percent to Monday’s closing price of $2.61. The company has trimmed its 2013 losses to just around -5 percent, and has added about 13 percent over the last month.

The performance of Sprint Nextel Corp. (S) has been at least as impressive. The stock has been unequivocally on the rise after the conclusion of the Clearwire/Softbank battle in which Dish TV (DISH) lost big in a screaming fit of xenophobic propaganda and fear-mongering the Chinese were infiltrating the US. Sprint is up nearly 40 percent on the year, and about 17 percent since our last check-in a month ago, with shares trading at $8.64 as of Monday’s close. When we began the turnaround portfolio, Sprint was trading at $6.19 per share, after having almost dipped under $5 in August. Investors can expect more from the Sprint turnaround story, especially as rumours have been circulating that the company is now attempting to purchase T-Mobile US (TMUS) , though the deal may not pass antitrust restrictions.

The Losing Losers

Property and casualty insurance company Tower Group Inc. (TWGP) is still the worst performer since Sep 25, having lost some 53 percent of its share price. Only a day after our last check-in, the company finally released its earnings statement from the second quarter that had been put on hold repeatedly in the wake of the devastation caused by Hurricane Sandy. The news wasn’t anywhere near as bad as had been expected by investors, as can be seen by the fact that over the past month, the stock has dropped less than one percent, to its current trading price of $3.88.

Atlantic Power (AT) , the regional utility company, still continues to hold back the group however. Since a late-October surge, shares have dropped once again to new lows just above $3, and have shed nearly 10 percent over the past month. This may change if this winter turns out to be a particularly harsh one, but the stock is for the time being underperforming and its turnaround is in doubt.

Turnaround Portfolio Check-In:

As of Monday’s close, the portfolio is up slightly over 1 percent. Going forward, however, there is considerable promise from consistent but gradual price gains for steel giant Alcoa Inc. (AA) , JC Penney (JCP) , and Cliff’s Natural Resources (CLF) . Stay tuned!

 

 

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
DISH DISH Network Corporation 55.55 -0.67 -1.19 2,062,612
AA Alcoa Inc. 29.04 0.16 0.55 3,870,822
S Sprint Corporation 7.98 0.04 0.50 8,775,180
TMUS T-Mobile US Inc. 54.44 0.18 0.33 3,087,884
AT Atlantic Power Corporation (Canada) 2.60 0.00 0.00 186,358
CLF Cliffs Natural Resources Inc 9.56 0.32 3.46 11,757,387
JCP J.C. Penney Company Inc. Holding Company 9.81 0.28 2.94 20,255,533
SEEK Thedirectory.Com Inc 0.00 -0.00 -99.00 14,929,887

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