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Stocks Under $10 with 50-100% upside potential - 14 days FREE!

4 Turnaround Stocks With Major Upside

Sandridge Energy

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For much of the past half decade, CEO Tom Ward has been accused of treating this oil and gas driller as his own personal sandbox, cutting himself in on some lucrative side deals that would have otherwise benefited the comapny. Frustrated shareholders grew irate, and a pair of activist hedge funds eventually succeeded in wrestling control of Sandridge (SD) away from Ward this past month.

>>5 Hated Earnings Stocks That Deserve Your Love

They're moving quickly to help stabilize operations, as a new COO was recently hired. The new COO's first order of business: to look into Ward's self-dealings to see if any assets or profits need to be returned to the company. His second order of business: to take a closer look at capital spending plans before they exhaust all of the company's resources.

Sandridge owns vast swaths of shale acreage and could eventually produce prodigious cash flow if natural gas prices are able to sustain their recent rebound. The activist shareholders believed that Ward was being too aggressive with regard to drilling plans when gas prices were low, and they may look to pursue selected asset sales to help shore up Sandridge's cash balances. That way, the company can maximize cash flow over the coming years. When it is time to step on the gas in terms of production.

This stock has fallen from $60 in early 2008 to a recent $5, and time will tell of the new management team's more sober approach to capital spending and cash flow will win back the hearts of investors.

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