The “Top Up” Strategy For Forgotten Stocks
An Exclusive Presentation From Distressed Investing Legend Marty Fridson
This is Porter & Co.’s The Big Secret On Wall Street, our flagship publication that we publish every Thursday at 4 pm ET. Once a month, we provide to our paid-up subscribers a full report on a stock recommendation, and also a monthly extensive review of the current portfolio.
Every week in The Big Secret, we provide analysis for non-paid subscribers. If you’re not yet a paid subscriber, to access the full paid issue, the portfolio, and all of our Big Secret insights and recommendations, please click here… At the end of this week’s issue, paid-up subscribers can find our Top 3 Best Buys, three current portfolio picks that are at an attractive buy price.
We’re bringing Big Secret readers a special treat this week – an exclusive presentation by our colleague Marty Fridson, senior analyst of Porter & Co.’s Distressed Investing.
Most people know Marty Fridson as the distressed-bond expert – aka the “Dean of High Yield Debt.” He’s regarded by Investor’s Digest as “the most well-known figure in the high-yield world.” He was ranked #1 in high-yield strategy by the Institutional Investor All American Survey for nine consecutive years. And he was the youngest person ever to be inducted into the Fixed Income Analysts Society Hall of Fame.
Marty’s bond-market expertise has paid off handsomely for his Distressed Investing subscribers… His distressed-bond recommendations have generated an equity-like average annualized total return of 34.5% since inception, with far less risk than owning stocks.
But Marty’s investment prowess isn’t limited to bonds. He’s also a fantastic stock picker – he authored the 2023 book The Little Book Of Picking Top Stocks – as evidenced by the extraordinary performance of the 10 companies whose shares Marty has recommended in Distressed Investing to date. These stocks have returned an average of 51.3% (40.6% annualized).
One of the ways Marty has helped his readers capture these returns is via a strategy he calls “topping off” – that is, buying a position in a distressed company’s shares after its bonds have begun to improve, like when a waitress tops off your coffee for no charge at the local diner.
You see, when a distressed company begins to right itself, the prices of its bonds typically follow suit and move up in price. However, it often takes the stock market far longer to take notice of these improvements, creating a window of opportunity for savvy investors.
In the following presentation – given live on stage for attendees of our Porter & Co. Annual Conference last month – Marty explains how this strategy works in detail, and shares three companies investors could consider applying this strategy to today.
As we noted above, Marty’s bond recommendations alone have generated an average annualized total return of nearly 35% since we launched his Distressed Investing advisory a little less than three years ago.
This is an extraordinary return that rivals those of the equity markets over this time… yet Distressed Investing subscribers were able to benefit from these results while taking substantially less risk than investing in equities.
But what’s even more impressive is that Marty achieved this feat during a particularly difficult time to be a distressed-debt investor. The relentless “everything” rally of the past few years has meant there has been a dearth of low-risk, high-reward opportunities in the high-yield bond market.
However, that may not be the case much longer. We’re already seeing signs that the big bull market in stocks is faltering… and when “boom” inevitably turns to “bust,” Marty believes Distressed Investing subscribers will have the chance to earn potentially life-changing returns in high-yield bonds while most other assets melt down.
Porter & Co.
Stevenson, Maryland
