Nokia Corporation (ADR) (NOK), Hewlett-Packard Company (HPQ), Apple Inc. (AAPL): The Turnaround Portfolio For Young Investors (Part I)

5. Sony Corporation (ADR) (NYSE:SNE): The company that produced some of the most popular household electronics in the 80s and 90s has been burning through cash for the last few years. As a result, the company has lost nearly 60% of its value in the last 5 years, despite a rally it’s been enjoying in the last few months, which added 75% to the share price since November. There is still a lot of room for this company to appreciate if the turnaround efforts are successful. The company can easily double in a matter of few years if it becomes profitable again, and this is becoming more possible as the Japanese currency gets cheaper.

Keep in mind that while some of these companies have already made a lot of progress in their efforts of recovery, some are just in the beginning of recovery. Buying companies that are in the middle of a restructuring is a dangerous game and it involves more risk than usual, which explains the potential for high rewards. This is why younger investors that have more time until their retirement should be the ones to adopt a portfolio like this. Over time, I will watch the performance of this portfolio and provide a quarterly report on it when I can. We will see how this portfolio performs.

Note: This is just an experimental simulation I am running. I am not actually building this portfolio, even though I own shares of some of the companies mentioned here.

The article The Turnaround Portfolio For Young Investors (Part I) originally appeared on Fool.com and is written by Jacob Steinberg.

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