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Turnaround stocks (stocks that have fallen but may be ready to start rising again) are a good way for investors to profit by buying stocks on sale. This is also risky, because one might pick a falling stock which appears to be turning around but then keeps falling. Thus, technical and fundamental analysis is often required to pick a turnaround stock. On the technical side, many days of upward movement on average volume or a spike on heavy volume could do it. On the fundamental side, a sign that assets are worth more than the stock value is a good start. Also, changes in trends that favor higher sales will intimately move the stock.

Uranium sector - The entire uranium sector has been crumbling ever since the 2011 Japanese earthquake and tsunami caused a nuclear meltdown (although if authorities had injected seawater into the reactor, they may have been able to prevent this). This crisis led many countries to question the safety of nuclear energy. Germany exacerbated the problem by saying they will be nuclear free 20 years from now. But with the first nuclear reactor in Japan restarting, plus still plenty on demand from China to increase the number of nuclear reactors, all this will keep demand strong. Plus, has anybody realized the reactor that melted down in Japan was rather outdated? Current reactors are much safer.

USEC (USU) - Although Cameco (NYSE:CCJ), as the world's largest pure-play uranium miner, seems at first glance the safer bet to play the mineral's comeback, the declining volume as the stock has risen over the past few weeks doesn't make it a favorable turnaround stock. But in the long run, this stock may prove a good investment. Denson Mines (NYSEMKT:DNN), a junior minor with assets in Canada and the United States, also seems a decent comeback player. But again, low volume over the past few weeks seem like this stock might be a sleeper.

Instead, I picked USU over the other two miners almost solely because that it is one of the main suppliers to the Department of Energy. On June 13th, it received a $280 million investment from the DOE. This news caused the stock to spike up on very heavy volume. After the spike, it pulled back to consolidate. But then it rose again, and spiked on June 27th, when it said it expects to make $1.9 billion in revenue for the year. On the fundamental side, that is far more than the $106 million in market cap it currently has. If the June 30th cash balance reaches $200 million as expected, they will have almost twice as much cash as market cap, meaning the stock should theoretically be worth about twice its current value or more. On the technical side, the spike-pullback (consolidation)-spike on heavy volume likely scared many short sellers to cover and bears to run away.

YRC Worldwide (NASDAQ:YRCW) - The former largest trucker in the United States employs 32,000 workers, and one of its units is planning to hire an additional 450 workers. To me, if they are hiring, business must be picking up for them. Also, they must be confidant enough that they can pay for the extra workers. Rising rates could also bring in more revenue for the troubled company. And the sighting of more and more Yellow Roadway trucks where I live makes me confidant that they are still in business. Its stock has been on the rise recently, having risen almost 22% in the last month. Interestingly, volume has increased as the stock rose but fell when the stock went down. This could be an indication that bulls are buying up shares and selling pressure is waning. Shares have a trailing PE of 0.02 and it is well off its split-adjusted all-time high of $18,800.

Penn Virginia (NYSE:PVA) - The natural gas producer was a high-flying darling back in 2008, reaching almost $80 a share. As natural gas tanked, so did the stock. But with healthy assets in the Eagle Ford and Marcellus Shale, one must ask, "Isn't this worth more?" As of December 31, 2011, it had proved natural gas and oil reserves of approximately 883 billion cubic feet of natural gas equivalent. Dividend yield is currently at 3.6%, giving investors a little cushion. Natural gas prices have seemed to have found a floor, so the stock should be on the uptrend from here. And actually that has already happened, with shares having risen from $4 to $7.34 if the past three months on rising volume. But even current price is far off its 2008 high.

Source: 3 (Or 5) Possible Turnaround Stocks To Watch

Additional disclosure: I may initiate a long position in PVA over the next 72 hours.