Turnaround stocks can generate some of the most exciting profits you’ll ever earn in the stock market. When a business that has run into problems begins to straighten them out, it’s possible for the company’s share price to double or triple in the space of a year. Hundreds of stocks (think of the banks and insurers) have done just that since their March 2009 or October 2008 lows.

As the economy improves, investors start to discriminate between companies that just barely survived the last calamity — and those with real long-term growth prospects. I’m focusing on the latter group because they tend to be larger outfits, with well-entrenched business franchises and plenty of financial muscle. Management may have committed a few miscues in 2008 or 2009, but has since taken clear and sensible remedial steps.

Here are four turnaround stocks that, with a little help from a gently up-trending market, should rack up a total return (price gain plus dividends) of at least 30% in the year ahead, and one or two of them could even notch a profit of 50% or more.

Turnaround Stock #1 – Apollo Group (APOL)

The nation’s largest for-profit educator, Apollo Group (APOL) operates the University of Phoenix (UOP), which offers degree programs in campus settings as well as online. In recent years, the for-profit education industry has been dogged by regulatory and accounting questions, but APOL appears to have put the major issues behind it. (In November, the U.S. Department of Education, in a key decision, recertified UOP for another three years, allowing students to participate in federal financial aid programs.) At 10X projected earnings for the next 12 months, the stock is trading at less than half its average valuation of the past five years.

Turnaround Stock #2 – Barrick Gold (ABX)

For years, goldbugs have railed at stodgy Barrick Gold (ABX) for hedging its mine output in the futures market. (Hedging reduces profits when the gold price is rising.) Finally, ABX announced on December 1 that it’s eliminating all its hedges. That won’t help, of course, if bullion plunges. Assuming a steady to somewhat-higher gold price, though, we can now look for investors to place a higher value on Barrick’s (unhedged) earnings.

Turnaround Stock #3 – ING Group (ING)

The Dutch banking and insurance conglomerate ING Group (ING) stumbled badly when it ventured into subprime and Alt-A U.S. mortgages. In December, though, ING raised 7.5 billion euros of new equity to pay off half of a bailout loan from the Dutch government. The company expects to pay off the balance shortly by selling its insurance unit. When all the transactions are done, the remaining ING Bank will be one of the world’s strongest. Meanwhile, the stock is trading at a 50% discount to its 2009 high, and an 80% discount to its all-time (2007) peak.

Turnaround Stock #4 – Research In Motion (RIMM)

All the buzz is about Apple’s iPhone, but Research In Motion (RIMM) is quietly expanding the market for its BlackBerry mobile Internet device. In early December, for example, RIMM struck a deal with China Mobile (CHL) to offer BlackBerries in China at a price that substantially undercuts the iPhone. The stock also trades at a drastic discount to Apple: 14X estimated 2010 earnings for RIMM, versus 24X for AAPL. Watch for debt-free, underappreciated RIMM to deliver a pleasant surprise for shareowners in coming months.

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