3 turnaround stocks for 2014

2013 has been a good year for investors who held Australian shares. The S&P/ASX200 Index (ASX: XJO) (^AXJO) is up 14.5% plus dividends.

However looking back over the year, not every stock pick was a winner. Mining services stocks got pummelled because of a massive pull back in mining investment.

Another major theme was the rise of technology stocks and the slow demise of everything that the internet looks set to replace. For example, newspapers and retail stores face an uncertain future and many investors have been reluctant to make an investment in the sector.

However, when stocks are beaten down it can be a great time to search for bargains. Although not technically a mining services stock (although they do have a substantial amount of mining related work), Leighton Holdings (ASX: LEI) has suffered numerous blows to its reputation this year after a number of media articles alleged former employees had allegedly engaged in corruption and bribery.

Subsequently its share price fell and it now trades cheap. However, in my opinion, Leighton is a premier construction company with a strong history of success. It has over $40 billion of work in the pipeline and 400 projects currently being undertaken. I believe it will still be here in 10 years with higher earnings and dividends.

In the retail space, Cash Converters (ASX: CCV) was hit hard by changes to consumer lending laws in Australia. However since dropping to around $0.77 the stock has risen over 10% and is on the rebound. Today it announced it will acquire 25% in its namesake New Zealand master franchisor for $5 million. This acquisition is just one of many growth prospects for the company.

Lastly Fairfax Media (ASX: FXJ) shareholders have had a rocky 2013 but have been encouraged by positive signs in the transition from print to digital media. Fairfax is definitely worthy of a spot on the watch list in 2014.

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Motley Fool Contributor Owen Raszkiewicz owns shares in Leighton Holdings and Cash Converters. 

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