2 Turnaround Stocks to Consider; 1 to Avoid

NEW YORK (TheStreet) -- It's difficult to say too many nice things about the turnaround they pulled off at Domino's Pizza(DPZ) . It doesn't get enough press. Never did.

That's understandable. People, particularly investors, cannot live in the past. Domino's weaved a spiffy, but speculative narrative. If you were lucky enough to read it right, you profited from the stock's subsequent explosion.

The big challenge: Vision the next great turnaround, while staying away from dead money.

Best Buy(BBY)

Over the last several months, there was not a better stock to be bearish on than BBY. In desperate need of a transformation, the company laid out a feeble non-plan that contained little more than cosmetic changes.

Reducing square footage is very 2005. That's not a plan; it's something investors should have expected and demanded some time ago.

But, now, signs exist that the Best Buy board of directors found a clue and took control of the situation.

It could have very easily slapped former CEO Brian Dunn on the wrist for apparent inappropriate conduct with a female underling. Instead, the board blew him out. Maybe they did it because of his transgression, but I've got a feeling his hire was a quick and errant fix. When the opportunity presented itself to rectify that mistake, Best Buy seized it.

Now, Best Buy looks prepared to move away from the days of hiring tired, old retail slugs --company lifers like Dunn. As I noted last week, Best Buy May Have Already Found Its New CEO.

Even if it errs and does not promote the sub-40 year old Stephen Gillett from Starbucks(SBUX) digital fame to CEO, Best Buy rides the right track by populating its executive office with people straight out of Silicon Valley, not big-box retail.

If Gillett or somebody like him gets the CEO gig (and he can bring in more fresh, young and innovative blood), Best Buy's turnaround stands a fighting chance. And that might make the stock a buy.

J. C. Penney(JCP)

Hedge fund manager Bill Ackman told CNBC he thinks JCP has hit bottom. He has confidence that CEO Ron Johnson's pricing strategy will work out. That's akin to a loyal general manager giving the head coach a vote of confidence months before firing him.