Choose "turnaround stocks" when rates rise: Barron's

|By:, SA News Editor

So-called "turnaround" stocks are where you want to be when bond yields start to rise, Jack Hough writes, citing a study by Credit Suisse.

According to Barron's summary of the investment bank's analysis, companies with "a history of subpar returns" on invested capital that are currently seen as "turning things around," tend to outperform when yields rise on two-year government paper.

Why is this the case? Because periods of rising rates "often feature an improving economy, which can help a restructuring succeed."

Among Barron's picks: Delta Airlines (DAL), GM, Hewlett-Packard (HPQ), and Safeway (SWY).