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MAJOR PUBLICATION REMAINS BULLISH

"We steadfastly maintain that it does not pay to try to predict future movements in the stock market," states The Turnaround Letter self-effacingly. "Nevertheless, every year we go ahead and make a few predictions anyway."

The Turnaround Letter has earned its right to its predictions. Since 1986, its "conservative/income" stock picks have appreciated an average 15 percent apiece, while its "moderate risk" selections have churned out 34 percent average individual gains. For the more venturesome among its subscribers, its "aggressive" recommendations have produced 46 percent average profits.In October 1990, when many fainthearted investors were bailing out of stocks in the face of the Mideast standoff, The Turnaround Letter was courageously and correctly urging its readers to hang in there.

The Turnaround Letter is still bullish on the general market. And it's even more optimistic about prospects for the sort of distressed and oversold stocks it specializes in.

"Turnaround stocks should also continue to perform well as a general group. Moreover, if the economy begins to pick up steam, certain stocks and industries that have been laggards for the last few years will become star performers."

The Turnaround Letter regularly sifts through all the public companies that have been experiencing financial troubles, and whose stock prices are reflecting those difficulties. It then tries to figure out which are most likely to "turn around" with a matching, and often dramatic, rebound in share prices. Because of the risks inherent in such companies, investing in them isn't for everyone.

With that caveat in mind, here are the specific distressed stocks The Turnaround Letter recently rated as buys in its three risk categories.

CONSERVATIVE/INCOME: Varity Pfd., Continental Bank, Oshkosh Truck, Black & Decker, Armco, Fedders, U.S. Air Group, Affiliated Publications.

MODERATE RISK: Campbell Resources, Collins Industries, Data Switch, AMC Entertainment, Anacomp, GenRad, Applied Magnetics, Bolt Beranek, Mesa L.P., Matlack Systems, Republic Gypsum, Seagate Technologies, Western Co.

AGGRESSIVE: A.M. International, Navistar "C" warrant, Wang Labs "B," Comstock Res., Energy Services, Grossman's, Oak Industries, Southland.

Here are some of the more relevant details on the three latest buys in each category.

AFFILIATED PUBLICATIONS owns The Boston Globe and several national magazines, which would be worth at least three times the stock's recent price if they were sold off separately, says The Turnaround Letter.

REPUBLIC GYPSUM is in two businesses that have been severely hurt by the recession: paper and wallboard. But The Turnaround Letter calls the company "a healthy, efficient, low-cost operator with absolutely no debt and substantial rebound possibilities in a recovering economy."

SOUTHLAND operates 13,000 7-Eleven stores in the United States. The Turnaround Letter believes its restructuring will help it emerge from bankruptcy successfully.

(The Turnaround Letter, 225 Friend St., Boston, Mass. 02114; monthly, $195 annually.)