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7 Stock Turnaround Champions

By U.S. News & World Report

Buy them low and hold.

Aside from being a billionaire, Warren Buffett is a pretty colorful character whose stock-turnaround viewpoint owes as much to Will Rogers as investment guru Benjamin Graham. Consider how he explains “buy low, sell high” theory: “When hamburgers go down in price, we sing the ‘Hallelujah Chorus’ in the Buffett household.” And here’s how he views potential company comebacks: “The best thing that happens to us is when a great company gets into temporary trouble: We want to buy them when they’re on the operating table.” Which stocks have exited Wall Street’s ER to regain health, as in healthy investor returns? These seven have pulled off just such a financial feat.

Bank of America Corp. (ticker: BAC)

The Great Recession hit big banks like a wrecking ball, and BAC was no exception. The roller coaster began at a $40 per share and plunged to less than $4 by early 2009. “But by looking at the banks that had strong fundamentals, investors could’ve done extremely well,” says Brent M. Wilsey, owner of San Diego-based Wilsey Asset Management. So it was with Bank of America, which now trades at just under $23 — close to six times its recession-driven bottom.

Citigroup (C)

On April 5, 2009, Citigroup’s price hit 97 cents per share. By way of Buffett’s metaphor, that’s no operating table: It’s a near flat line. “After the recession many of the large banks were quickly blamed and fell out of favor,” Wilsey says. For Citigroup, lack of investor confidence proved punishing. But with operations in 100-plus countries, and $45 billion in government stimulus, it roared back — and could’ve made you very rich: It now trades at a robust $63-plus.

Facebook (FB)

Facebook stumbled after its 2012 IPO and skeptics wondered whether Mark Zuckerberg was better at riding his skateboard around the office than leading a social media giant. Bowing at $38, it cellar-dwelled for more than a year in the $25 range. “Then the stock became the No. 1 platform for digital and social ads,” says Evan Tarver, investments analyst for FitSmallBusiness.com. “While investors were concerned, Facebook plugged away on its Ads Manager tool.” Today FB fetches $155 per share.

McDonald’s Corp. (MCD)

Imagine Ronald McDonald pulling out his neon-red hair after CEO Don Thompson — a fast food flop — overstuffed the chain’s menu to the bafflement of loyal customers. Installed in 2012, Thompson was out less than three years later. Under his watch the stock took a McBeating, falling more than 10 percent. And since? New CEO Steve Easterbrook stripped back and souped up the menu like never before. MCD trades at $155, up 63 percent since Thompson took his order to go.

GGP (GGP)

Call this turnaround a doorbuster. A Chicago-based equity real estate investment trust, the company formerly known as General Growth Properties owns, manages, leases and redevelops regional malls. “At the height of the financial crisis, on March 9, 2009, GGP sold for 29 cents,” says Bob Johnson, president and CEO of the American College of Financial Services in Bryn Mawr, Pennsylvania. Now it has a dividend yield of 3.64 percent and fetches $23.63 per share. Says Johnson: “That represents a holding period return of 8,048 percent.”

Pfizer (PFE)

Longtime investors needed a tranquilizer after this pharmaceutical titan — which soared more than nine times between 1994 and 1999 — shed 75 percent in a downward spiral that lasted 10 years. But after Pfizer pleaded guilty in 2009 to illegally marketing the arthritis drug Bextra, it began a comeback and hasn’t looked back. As the marketer of Viagra, Pfizer has enjoyed the investment equivalent, with its stock gaining 177 percent over the last eight years to trade at $34.

Volkswagen AG

While this comeback remains a work in progress, it’s beginning to prove road worthy. In September 2015, VW admitted that it rigged 11 million cars with software to deceive diesel emissions testing. That led to terrible publicity, record-setting penalties and the ouster of CEO Martin Winterkorn. Despite a U.S. judge handing down a $2.8 billion criminal fine in April, investors seem to believe the worst is in the rearview mirror. Since the crisis, VW is up 48 percent.

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7 Stock Turnaround Champions originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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