GEO Investing

Turnarounds as a Type of Special Situation Investment [GeoWire Weekly No. 73]

As far back as I can remember, I put an outsized focus on special situation stock investing because I knew that in some instances, the rewards I could reap from certain outlier circumstances would be worth the research. And it just made investing more fun than a standard value investing approach.

I originally used a written list that laid out a framework for what I was looking for on a daily basis across press releases and Security Exchange Commission (SEC) filings at SEC.gov. Yes, written… Remember I am old!

Later, when I started Geoinvesting, each member of my team had a physical printout of the list so it could be readily visible as an outsized 8.5 x 11 inch post-it note.

Regardless of what position one held at Geo, I made sure that each team member was exposed to the our research process to some degree, with the aid of checklists, even if the list became pinned underneath a paperweight, taped to one of the many whiteboards I had floating on each wall when we used to work in “offices”, or handed back and forth between my colleagues if one went missing prior to a new printout.

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Do Turnaround Specialists Have All The Right Stuff To Achieve Success? [GeoWire Weekly No. 72]

When you think of individuals such Carl Icahn, Ronald O. Perelman and Nelson Peltz, you might think of their knack for business acumen, successful fund management and even philanthropy. However, there is one aspect of these personalities’ exploits that might get overshadowed by the overarching themes of their achievements – a specialty in turning businesses around.  

The reason it is a specialty is because not everyone has the means or frankly, the guts, to put plans in place to take a failing company and turn it around. 

Last week’s foray into the world of executives and portfolio managers at activist fund 180 Degree Capital Corp. (NASDAQ:TURN), Kevin Rendino (CEO) and Daniel Wolfe (President), touched on the reasons why companies consider and ultimately agree to shift the innards of their businesses around. In the end, it really comes down to making them attractive enough for investors to put their money into. We’d suggest that you catch up with that column after reading what we have lined up today.

So, speaking of turnaround specialists, we wanted to bring attention to a few famous ones who excelled at buying or taking a stake in underperforming or struggling companies to help them achieve profitability in various ways. 

We’ll touch upon notable investments made by the turnaround specialist investors above.

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GeoWire Monthly, Vol. 3, Issue No. 2, February 2023

Having been through 3 bear and 2 bull markets, our history is rich.

We’ve accomplished quite a bit on both sides of the equation, recently experiencing the brighter side of things from March 23, 2020 (Covid trough) to January 3, 2022 before a microcap winter for many, including us.

During this period of nearly 21 months, we posted an average 134.96% rise in holdings that were initiated after December 31, 2016 and closed and/or still open by the time the bull market ended (a total of 67 unique model portfolio stocks).  Yes, while it’s true that the 2020 Covid bull run was a great outlier period when it was hard to lose money, we still managed to beat the S&P by 20%. Furthermore, the stats we highlight later will show that we had above-average returns well before this 2016 to 2021 timeframe. As an initial example, in each of the last 10 years going back to 2012 through the year 2021, we’ve logged at least 7 stocks per annum that have gone on to at least double during our holding period.

When 2022 came along, it created another challenging period for investors. Last year put into perspective just how unpredictable and frustrating investing can be, especially when you are dealing with a group of stocks that investors might tend to ignore or abandon, lending to thin trading and extended periods of price stagnation or decline. When some of 2021’s duds turned into 2022 duds, we knew we were in for a disappointing ride. But a little later, we’ll get into the strategies we are employing that are perfect for the next bull market, which we feel is right around the corner. Our goal is to even better the performance we logged in the prior bull markets.

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When Activism Intersects Turnarounds and The Microcap Investing Edge [GeoWire Weekly No. 71]

It’s true. There are a lot of investors and hedge fund managers in the realm of microcap investing that have breathlessly echoed what we have been saying about the advantages of investing in the space for some time. We’ve also been saying that the selloff in many microcap stocks is overdone and it’s time to really pay attention to where the growth and value are.

Investment ideas don’t have to be screaming in your face at close range. Sometimes it is nuanced, which is why we are so keyed in on deeper research, be it by virtue of idea generation or education, and connecting with the content of peer analysis and discoveries outside the walls of GeoInvesting.

So, for the third week in a row, and on the heels of last week’s highlight video reel of our conversation with Vittorio Bertolini, we are focusing on another professional who publishes third party content – Seeking Alpha Contributor, The Institute for Innovative Development (IID), who endeavors to be:

“…an educational and business development catalyst for growth-oriented financial advisors and progressive financial services executives who are determined to grow their firms in a business environment of accelerating business and cultural change.”

As you might expect and as conveyed by its business model, IID’s columns are intended to be learning fodder for professionals interested in the perspectives of those in networking and business activities to find commonalities across a spectrum of next-generation investment instruments.

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