A New Burst Of Life
This nutrition company was the focus of an epic battle of two investment titans. Since that dispute ended, shares have been up and down – now creating an opportunity to buy the company’s bond at a very large discount.
bonds
Distressed Bonds Outpaced S&P 500 In 2024
The total return of the average distressed bond exceeded 30% in 2024, beating the S&P 500 Index’s total return, which was well above its own historical average, at 25%. Still, with many big losers in that average, picking the right bonds is essential with distressed investing.
A Nail-Biting Sequel
High-yield bonds often predict the direction of their companies’ associated stocks a few months in advance. We’ve taken advantage of this phenomenon with three bond recommendations followed by the same companies’ shares. And in this issue, we’re doing the same thing…
Rising From The Ashes
First a supply-chain bottleneck, then a warehouse fire, sent this hugely popular, non-brick-and-mortar company’s revenue plunging. It has fought its way back and now finds itself on solid ground once again.
Distressed Bonds Go Their Own Way; Plus a Sell
When interest rates go up, bond prices go down. Most segments obey that rule, by falling in price, as the benchmark 10-year Treasury yield rose. But not distressed bonds.
Be Careful of Averages When It Comes to Distressed Debt
When investing in distressed debt, be very selective about which distressed bonds you buy. Buying a market basket of assets – a quick, efficient way of adding to equity holdings – is not a smart alternative with distressed debt.
Distressed Debt and the Presidential Election
The media likes to guess how the outcome of the U.S. presidential election will play out in the financial markets. Here, Marty Fridson analyzes past distressed-debt data to discover if it actually matters who wins on November 5: Donald Trump or Kamala Harris.
Breaking Out of the Pack
Within the junk heap of distressed debt are bonds of companies that turn themselves around and get out of distress. Those bonds re-enter the non-distressed ranks, rewarding holders with big price gains on top of the super-high yields earned along the way.
When Personalities Trump the Numbers
When the King of Bankruptcy Wilbur Ross and Donald Trump negotiated the terms of a distressed-bond settlement, Ross’ knowledge of the casino operator’s ability to pay helped him win the deal.
This Is Your Brain on AI
Artificial intelligence has caused this company’s revenues to plummet – the price of its bonds to fall. Now, it’s fighting back, by flipping the story and using AI to create a better product. Whether or not it succeeds, investors will very likely get paid anyway.