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5 Top Turnaround Stocks

These former flops have seen great gains this year

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E-Trade NASDAQ:ETFCIndustry: Financial Services
Year-to-Date Returns: 85%

The story of the stock market crash is painfully evident in E*Trade (ETFC) stock. In fact, it has actually accelerated and amplified thanks to the business model of this online stock broker.

About halfway through 2007, as the market hit its apex and the broader economy started to show signs of distress in preface to the financial crisis, capital markets began to slow and ultimately stalled out together, and E*Trade fell off a cliff.

It didn’t help that the company also had branched out from mainly an online stock broker into more consumer lending that included mortgages and home equity loans.

But while E*Trade remains significantly below those levels and endured some brutal losses in the intervening years, ETFC has nearly doubled in 2013 as the company’s long slog back to profitability has finally paid off.

Admittedly, the top line is pretty stagnant and trading activity is still pretty weak, thanks both to lingering uncertainty and the low-cost, index fund revolution. And E*Trade may never return to its pre-crisis levels. But fiscal 2014 will usher in the first year since 2007 where the company turns a profit every quarter.

And given the turnaround in the stock market and slow mending of the broader economy, the return of more investors could mean more customers — and thus continued success for E*Trade — in 2014 and beyond.

Article printed from InvestorPlace Media, http://investorplace.com/2013/10/5-top-turnaround-stocks/.

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