Turnaround stock
From Wikipedia, the free encyclopedia
Different investors have given various definitions of a turn around stock. Peter Lynch famously classifies turnarounds as one of his main six stock categories. Lynch defines turnarounds as stock that have been battered and depressed for a period of time yet have the potential to grow significantly and very quickly.[3] He views these stocks as high-risk, high-reward.
These stocks typically have low P/Es or P/Bs making them potentially undervalued.[citation needed] Many turnaround companies are in serious debt and on the brink of bankruptcy.[2] Catalysts for recovery often include new management, debt restructuring, and improving macroeconomic factors among others.[1]
