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A "special situation" is more or less what it sounds like - an "atypical" event that brings with it the potential to alter a company's financial destiny, for better or worse.

I'm talking about buyback programs, mergers, takeovers, bankruptcies, leadership shakeups, even scandals - it doesn't necessarily have to be "good" news to boost your bottom line.

Frankly, I'm surprised more attention isn't paid to special situations because, like the definition suggests, they can alter your financial future, as a shareholder, too.

I am a huge fan of special situation stocks. I love to own companies that buy back enormous amounts of stock regularly. I'm all about companies with consistent and aggressive insider buying. Insiders sell stock for a lot of reasons, but they only buy for one reason: They expect that stock to go up.

I absolutely love owning a copy where at least one, preferably more, of my fellow owners is an activist investor - your Carl Icahns, your Paul Singers, your T. Boone Pickenses. I'm talking about investors with a ton of capital, who want to grow that capital, and who don't mind throwing their weight around to force profitable changes. Love that.

The spin-off can be an extremely profitable special situation; research and experience tell me that they can outperform the market by huge margins. C-suite shakeups can often lead to positive results and even complete turnarounds. Who doesn't love it when a bad stock turns good? The market certainly loves it, and serious gains can accrue to those shares.

Any company going through any of these kinds of special situations, is, at minimum, worth a good, hard second look.

Now, it's rare that a stock comes along and ticks every single one of the "boxes" I just described, but that's what I've got for you today.

It's a special situation play that has the real potential to deliver five or even 10 times your initial investment. Here's everything you need to know...

This Stock Is a Massive Turnaround Opportunity

1847 Goedeker Inc. (GOED) was spun off from 1847 Holdings Inc. (EFSH) in October of 2020.

Goedeker is an online retailer of appliances and furniture. In July of 2021, they acquired Appliance Connection - a company six times the size of Goedeker. Existing shareholders were pretty upset by the move as Goedecker did an offering of new stock and warrants that was massively dilutive.

But that reaction, it turns out, was a little short-sighted.

Management set a target of $1 billion in sales by 2024, and they're well on the way to hitting that mark.

The Appliance Connection deal gave Goedeker a much larger product line that included appliances at all price points, from basic core appliances to high-end luxury brands. The deal also added furniture products and expanded Goedeker's range of home goods, as well.

There were leadership changes, too - believe me.

Appliance Connection honcho Albert Fouerti stayed on as president of Goedeker, but he was recently elevated to chief executive officer (CEO). You guessed it, former CEO Doug Moore was pretty much pushed out the door by the Board of Directors.

Powerful investors with proven track records of activism are getting involved, too. And everyone likes what they see...

Insiders and Activists Are Just as Bullish as I Am

Activist investor David Kanen, of Kanen Wealth Management LLC, owns more than 5% of the stock. Kanen has fought his way onto the board, convincing management to grant his representatives two seats on the board. Activist investor Carlo Cannell, of Cannell Capital LLC, increased his position in the stock back in December and now owns almost 10% of the company.

Shannon Kizer, one of the largest landowners in the United States, owns over 9% of the Goedeker. After meeting with the new CEO, she sent a letter to fellow shareholders affirming her belief that the right management team and board are in place.

It looks even better when you take a hard look at who's buying the stock. Insiders, including new CEO Fouerti, have been buying massive amounts of stock in the open market all year long.

Institutions and hedge funds were enthusiastic buyers of the stock in the third quarter of 2021. I fully expect to see similar results when the fourth quarter institutional ownership reports are filed with the U.S. Securities and Exchange Commission.

As icing on the cake, the board of Goedeker announced in late December that they were going to buy back up to $25 million of shares in the open market. At the stock's current price, that would be more than 10% of the company.

GOED Could Ultimately 10X Your Money

The stock has been pretty much flat-lined in the $2 to $2.30 range for several months now. If management can continue to execute as well as it has since closing the Appliance Connection deal, this stock could be a massive winner.

And, again, you don't have to take my word for it: Insiders seem to think big gains are ahead. Since September, they've bought over 500,000 shares of stock. Institutions and hedge funds are looking for big gains as they increased their position in the stock by 44% in the third quarter of 2021.

As I said, it's all about execution, and I like what I see.

The Appliance Connection acquisition made Goedeker a much larger company, sure, but it also gave it the instant capability to remove whatever equipment it replaced. That extra service, small on paper, gave Goedeker a significant edge over other online appliance retailers. It's spent wisely on its technology and logistics infrastructure, and made investments in the all-important customer support arena, as well.

This has paid off. In its third quarter earnings, Goedeker turned in much stronger performance than anyone expected. Gross profit margins fattened up, as did cash flow. Revenue soared 32%. More or less every last dime of short-term debt was repaid, while long-term debt was refinanced at much lower rates.

If you've been with me for a while, it should come as no surprise that GOED shares are cheap in two senses of the word, both in real dollar terms and in price/earnings ratio: The stock is trading at just nine times earnings right now, nearly four times cheaper than the S&P 500 as a whole.

A small bet on Goedeker now could reap enormous profits for patient, aggressive investors. After all, good things come to the patient.