The corner of the private equity sector focused on distressed investment opportunities has a considerable amount of cash on the sidelines. Distressed debt funds lead the private equity industry in terms of dry powder, followed by special situation and turnaround funds, according to alternative investment research firm Preqin.

Though global dry powder has fallen from its worldwide high of $59.9 billion in December 2007, its January 2010 level of $42.5 billion is still far above the $18.7 billion reached in December 2004. This does represent a decline of 29% from the 2007 peak, but the dry powder levels remain robust.

Continue reading Private Equity Dry Powder Off by a Third, Distressed Debt Leads

Private Equity Dry Powder Off by a Third, Distressed Debt Leads originally appeared on BloggingStocks on Mon, 15 Feb 2010 13:30:00 EST. Please see our terms for use of feeds.

"Global Crossing (NASDAQ: GLBC) was started in 1997 to build a worldwide fiber optic cable network, with the strategy, 'if you build it, they will come'," says George Putnam, adding, "But as the telecom bubble burst around 2000, nobody came."

Now, in his always-excellent The Turnaround Letter, the advisor suggests, "We think the current stock price gives you the opportunity to buy into a very valuable communications network at a tiny fraction of its original cost."

"The new stock went as high as 36 shortly after it began trading after its bankruptcy. When it later dropped in price, several high-profile investors accumulated sizable positions.

Continue reading Turnaround expert eyes Global Crossing (GLBC)

Turnaround expert eyes Global Crossing (GLBC) originally appeared on BloggingStocks on Tue, 29 Sep 2009 10:30:00 EST. Please see our terms for use of feeds.

"Many experts believe that oil prices are at unsustainably low prices now, and they expect a sharp rise in the commodity price as supply and demand come back into line again," says turnaround expert George Putnam.

In The Turnaround Letter, he suggests, "If oil does begin to rise again, the oilfield service stocks could rebound sharply." Here, he takes a look at large cap plays on a rebound within the oilfield services sector.

"We all know that oil prices have fallen dramatically from their highs in the summer of 2008. But different types of oil-related stocks have reacted quite differently to the price change in the underlying commodity.

"For example, while oil itself has dropped nearly 70% from its 12-month high, the stock of the largest integrated oil company, Exxon-Mobil (NYSE: XOM), is down only 26%, less than the stock market as a whole.

Continue reading Oilfield services: Four favorite turnarounds

Oilfield services: Four favorite turnarounds originally appeared on BloggingStocks on Tue, 24 Mar 2009 13:30:00 EST. Please see our terms for use of feeds.

Intel margin warning hits flash memory stocks originally appeared on BloggingStocks on Mon, 03 Mar 2008 19:41:00 EST. Please see our terms for use of feeds.

It is an odd company that says its turnaround is "on track" when market share in its home company and largest market is falling like a rock. But, so say Ford Motor Co. (NYSE: F) management.

"The closures and the employment reductions to size the capacity to the real demand -- we're a little bit ahead," Ford's CEO told reporters. "But generally (we're) on plan."

Ford has a couple of other cards in the hole. It will probably improve its balance sheet by several billion if it can sell its Jaguar and Land Rover units. And, upcoming UAW contract negotiations may give Ford the chance to beg off pension and benefits cost cuts. But, the point will come when Ford's recovery is measured by a need to spend more money to help improve production for rising sales.

But, a turnaround is not a turnaround without some stability in revenue, and Ford has been unable to show that. Its most profitable vehicles are its SUVs and pick-ups, and the sales of those are running down by double digits most months.

Measuring progress by cost cutting is generally a Faustian bargain. The Devil eventually comes for the whole company.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Ford's view of "on target" originally appeared on BloggingStocks on Sun, 24 Jun 2007 10:10:00 EST. Please see our terms for use of feeds.

"Investors have shied away from the big telcos in recent years because of concerns that their traditional businesses were shrinking," notes George Putnam III, an expert in uncovering turnarounds.

But now, he explains, "After years of concern about the cable companies invading their turf, the big telecoms are now well positioned to fight back."

In his The Turnaround Letter, the advisor looks at seven leaders in the global telecom space, all of which he says represent global leaders, with dominant positions in their local markets and the "potential to grow steadily by expanding the services they offer."

AT&T (NYSE: T) Putnam notes, gained control of Cingular Wireless due to its merger with Bellsouth. The renamed AT&T Wireless, he says, will account for about 35% of AT&T's revenues.

The advisor observes, "In addition to a strong wireless presence, AT&T is rolling out fiber-based landline services. With revenues expected to be north of $120 billion in 2007 and substantial operating cash flow, AT&T is a force to be reckoned with." Further, he notes, the dividend was just raised for the 22nd consecutive year, and the company is expected to repurchase roughly $7 billion worth of stock in 2007.

Continue reading Telecom turnarounds: Putnam's 7 global favorites

Telecom turnarounds: Putnam's 7 global favorites originally appeared on BloggingStocks on Fri, 01 Jun 2007 09:30:00 EST. Please see our terms for use of feeds.

Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.

Western Union (NYSE: WU) is the top conservative pick for 2007 from Cory Janssen. In the Investopedia Advisor, he explains, "Spun off from First Data Corp. in October, Western Union is an outstanding company to own as a long-term holding.

"Its powerful brand recognition gives it a critical advantage in an industry where customer trust is of such high importance. As well, the company's enviable distribution network leaves it very well-positioned to capitalize on the ongoing growth in international money transfers.

"The business does face some short-term risks. Recent political debate surrounding U.S. immigration policy has prompted a decline in the frequency of money transfers from the U.S. to Mexico, and this has weighed on the company's recent quarterly numbers. We feel that this is a temporary blip.

Continue reading Top Picks 2007: Janssen likes Western Union's wide moat

Top Picks 2007: Janssen likes Western Union's wide moat originally appeared on BloggingStocks on Tue, 26 Dec 2006 08:30:00 EST. Please see our terms for use of feeds.