The Biggest Turnaround Stocks of 2010

12/15/2010 12:01 am EST

Focus: STOCKS

All in all, 2010 has been a pretty good year, seeing a pretty fair share of Wall Street winners. But there were also plenty of disappointments, with a number of companies ending the year in the red. These downtrodden stocks may not look so hot to investors right now, but don't be so quick to count them out.

Time after time, companies have risen from the ashes to stage dramatic rebounds. Just look at footwear maker Steven Madden (SHOO), which bounced back from a securities fraud scandal to see profits increase by over 20% in each of the past nine quarters. Or automaker General Motors (GM), which has pulled a complete 180 from where it was circa the 2009 bailout. Investors who bought these stocks cheap were able to reap tremendous rewards.

The gain potential in an underdog is great, but only if the stock makes a comeback. And there's always a good chance that an ailing stock will never fully recover. While there are no guarantees, there are a few things you can look for in a company profile, including efforts to makeover its brand(s), the introduction of quality products, lower expenses, and decision-making restructuring.

And if their stocks are already starting to see a turnaround, it might be a good sign of things to come. 

Here's a list of stocks that had negative returns over the last year, but saw sharp rebounds over the last six months. These are the rebound kids of 2010…will these companies continue their rallies in 2011?



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By Eben Esterhuizen and Alicia Sellitti of Kapitall.com

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