Issues
For much of the last four years, the “friendly skies” have been anything but for the airline industry and its customers. The restrictive measures of the Covid era put the entire $1.2 trillion air travel industry into a tailspin, causing massive financial losses and layoffs for the major carriers, not to mention major headaches for travelers.
The problems began in March 2020 and continued through that year, but by the start of 2021, industry-wide losses totaled over $35 billion, with no fewer than 64 airlines around the world ceasing operations. By the time Covid restrictions were lifted in 2023 (in the words of a contemporary CNN report), “A handful [of airlines] have revived after announcing bankruptcy, or changed names, but the vast majority are gone for good.”
The problems began in March 2020 and continued through that year, but by the start of 2021, industry-wide losses totaled over $35 billion, with no fewer than 64 airlines around the world ceasing operations. By the time Covid restrictions were lifted in 2023 (in the words of a contemporary CNN report), “A handful [of airlines] have revived after announcing bankruptcy, or changed names, but the vast majority are gone for good.”
For much of the last two years, the white-hot semiconductor space was the industry group least likely to yield any meaningful turnaround candidates. But that dynamic changed following this summer’s tech sector sell-off, which brought many of the previously high-flying chip stocks back to earth (or at least further away from the firmament).
After the tumultuous sell-off in the broad equity market last month, the S&P 500 Index is back to within a few points of its all-time high as of this writing in what has been one of the fastest comebacks in recent memory.
As I mentioned in my first installment of the Cabot Turnaround Letter, the most valuable lesson I have learned in my professional career as a price forecaster is that the rate of change – of just about any metric – tells us everything we need to know about the immediate future. When the rate of change accelerates, it tends to continue accelerating. When it decelerates, it tends to continue decelerating. And the resulting push and pull is a large part of what comprises the business cycle.
In this month’s issue of Cabot Turnaround Letter, I recommend a company I’ve been fond of all the way back to 7th grade. It’s a household name, but one that’s perhaps been forgotten on Wall Street in recent years. But now, it looks primed for a turnaround.
Details inside.
Details inside.
Sizing up a merger arb opportunity requires more than just garden variety equity analysis. In his famous letter to Berkshire Hathaway shareholders in 1988, Warren Buffett laid out four questions to answer regarding arbitrage situations:
- How likely is it that the promised event will indeed occur?
- How long will your money be tied up?
- What chance is there that something still better will transpire – a competing takeover bid, for example?
- What will happen if the event does not take place because of anti-trust action, financing glitches, etc.?
In twenty years of price forecasting, the most valuable lesson I have learned is that the rate of change tells us everything we need to know about the immediate future. When it accelerates, it tends to continue accelerating. When it decelerates, it tends to continue decelerating. And surprisingly, this tends to be the case no matter what metric we choose to examine.
Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the April 2024 issue.
In this issue, we discuss the most effective and often the only way to reverse the fortunes of a struggling company: a change in leadership. We offer our views on four new CEO situations that are currently attractive and three that are not quite ready yet.
This month’s Buy recommendation, Barnes Group (B), is an aerospace and industrial components maker that is stepping up its efforts to become more valuable, helped by a new CEO and urged on by pressure from a credible activist investor that recently gained several board seats.
In this issue, we discuss the most effective and often the only way to reverse the fortunes of a struggling company: a change in leadership. We offer our views on four new CEO situations that are currently attractive and three that are not quite ready yet.
This month’s Buy recommendation, Barnes Group (B), is an aerospace and industrial components maker that is stepping up its efforts to become more valuable, helped by a new CEO and urged on by pressure from a credible activist investor that recently gained several board seats.
Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the March 2024 issue.
In this issue we look into the bear case for the energy sector and discuss why energy stocks might provide some tonic for sober investors in an otherwise tech-intoxicated stock market. We highlight a selection of six energy stocks worthy of at least a sip.
This month’s Buy recommendation, VF Corporation (VFC), is a major apparel and footwear maker whose shares have collapsed 83% and now trade at their 2006 price. The new CEO, an unusual selection from outside the industry, is undertaking a complete overhaul of the company, with some early signs of progress.
In this issue we look into the bear case for the energy sector and discuss why energy stocks might provide some tonic for sober investors in an otherwise tech-intoxicated stock market. We highlight a selection of six energy stocks worthy of at least a sip.
This month’s Buy recommendation, VF Corporation (VFC), is a major apparel and footwear maker whose shares have collapsed 83% and now trade at their 2006 price. The new CEO, an unusual selection from outside the industry, is undertaking a complete overhaul of the company, with some early signs of progress.
Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the February 2024 issue.
This issue focuses exclusively on spin-offs and discusses seven attractive and relatively recently spun-off companies.
This month’s Buy recommendation, Baxter International (BAX), a major producer of medical equipment and hospital supplies, is involved in a spin-off. In this case, it is the parent company of an upcoming spin-off. The transaction, along with fundamental improvements and a long-time low share valuation, makes Baxter shares attractive.
This issue focuses exclusively on spin-offs and discusses seven attractive and relatively recently spun-off companies.
This month’s Buy recommendation, Baxter International (BAX), a major producer of medical equipment and hospital supplies, is involved in a spin-off. In this case, it is the parent company of an upcoming spin-off. The transaction, along with fundamental improvements and a long-time low share valuation, makes Baxter shares attractive.
Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the January 2024 issue.
In this issue, we discuss our Top Five Stocks for 2024. We also dissect and review what happened in the capital markets in 2023 and offer our outlook for the coming year.
This month’s Buy recommendation, Mohawk Industries (MHK), is a major global flooring manufacturer whose shares are deeply out of favor. We discuss three key questions when considering an investment in a cyclical company and describe how Mohawk passes all three with flying colors.
In this issue, we discuss our Top Five Stocks for 2024. We also dissect and review what happened in the capital markets in 2023 and offer our outlook for the coming year.
This month’s Buy recommendation, Mohawk Industries (MHK), is a major global flooring manufacturer whose shares are deeply out of favor. We discuss three key questions when considering an investment in a cyclical company and describe how Mohawk passes all three with flying colors.
Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the December 2023 issue.
Every investor has loser stocks. We discuss two ways to convert this year’s losers into assets and winners, including tax loss selling and buying shares that others have discarded for artificial reasons. Last year’s crop of bounce stocks performed exceptionally well. We discuss five for this year that look promising.
One of our more productive methods for sourcing new ideas is to see what other like-minded investors are buying. We discuss how to refine the vast data in 13F filings and review four from the most recent batch of filings that look attractive.
This month’s Buy recommendation, Fidelity National Information Services (FIS), was used in a February 2023 article about how we evaluate candidates. It was too expensive then, but its recent 26% share price slide and encouraging fundamentals make it attractive to buy now.
Every investor has loser stocks. We discuss two ways to convert this year’s losers into assets and winners, including tax loss selling and buying shares that others have discarded for artificial reasons. Last year’s crop of bounce stocks performed exceptionally well. We discuss five for this year that look promising.
One of our more productive methods for sourcing new ideas is to see what other like-minded investors are buying. We discuss how to refine the vast data in 13F filings and review four from the most recent batch of filings that look attractive.
This month’s Buy recommendation, Fidelity National Information Services (FIS), was used in a February 2023 article about how we evaluate candidates. It was too expensive then, but its recent 26% share price slide and encouraging fundamentals make it attractive to buy now.
Updates
In today’s note, we discuss a number of earnings results and new developments for several of our portfolio positions, including Barrick Gold (GOLD), Centuri Holdings (CTRI), Intel (INTC), Pan American Silver (PAAS) and Super Hi International Holding (HDL).
The favorable liquidity backdrop should continue for the rest of Q4, which is ideal for initiating new turnaround trading positions.
The favorable liquidity backdrop should continue for the rest of Q4, which is ideal for initiating new turnaround trading positions.
In today’s note, we discuss a number of earnings results and new developments for several of our portfolio positions, including Alcoa (AA), Atlassian (TEAM), Barrick Gold (GOLD), Viatris (VTRS), and Pan American Silver (PAAS).
Continued strong earnings reactions this week bode well for several of our recent portfolio additions.
Continued strong earnings reactions this week bode well for several of our recent portfolio additions.
In today’s note, we discuss a flurry of key news developments for several of our portfolio positions, including Agnico Eagle Mines (AEM), Atlassian (TEAM), Intel (INTC) and Janus Henderson Group (JHG).
Two strong earnings reactions after Thursday’s market close bode well for two of our recent portfolio additions.
Two strong earnings reactions after Thursday’s market close bode well for two of our recent portfolio additions.
In today’s note, we discuss a flurry of key news developments for several of our portfolio positions, including Baxter International (BAX), B2Gold (BTG), Intel (INTC), Polaris (PII), Solventum (SOLV), Viatris (VTRS) and Vodaphone (VOD).
We’re adding two new stocks to the portfolio, providing us with exposure to the white-hot silver mining sector as well as the seasonally strong food services industry.
We’ll also discuss some catalysts for the under-the-radar restaurant group, including three very attractive potential turnaround plays.
We’re adding two new stocks to the portfolio, providing us with exposure to the white-hot silver mining sector as well as the seasonally strong food services industry.
We’ll also discuss some catalysts for the under-the-radar restaurant group, including three very attractive potential turnaround plays.
In today’s note, we discuss the reasons why it’s a good time to exit our (mostly) profitable holdings in Alibaba Group Holding (BABA), Nokia (NOK), Tyson Foods (TSN) and Zillow (Z).
We’re adding two new stocks to the portfolio, providing us with exposure to the booming software and utilities sectors.
We’ll also discuss some catalysts for three stocks across three different sectors in what look to be powerful intermediate-term turnarounds.
We’re adding two new stocks to the portfolio, providing us with exposure to the booming software and utilities sectors.
We’ll also discuss some catalysts for three stocks across three different sectors in what look to be powerful intermediate-term turnarounds.
In today’s note, we discuss the acceleration—and potential for overcrowding—of the China stock momentum trend, specifically how it relates to our position in Alibaba Group Holding (BABA).
In today’s note, we discuss the recent developments concerning Barrick Gold (GOLD) and V.F. Corp. (VFC), while taking a nice profit in the latter stock.
In today’s note, we discuss the recent developments concerning Tyson Foods (TSN) and Alibaba Group Holding (BABA), with a particular emphasis on exit strategies for both stocks.
In today’s note, we discuss the recent developments concerning Duluth Holdings (DLTH), Gannett (GCI) and Zillow (Z), with a particular emphasis on the latter due to recent interest rate-related strength.
Despite our focus on primarily mid-stage turnarounds with exceptional momentum potential in recent weeks, I’m looking for potential opportunities in early-stage candidates due to the additional improvement in the market’s intermediate-term outlook, thanks to the Fed’s latest rate cut.
Despite our focus on primarily mid-stage turnarounds with exceptional momentum potential in recent weeks, I’m looking for potential opportunities in early-stage candidates due to the additional improvement in the market’s intermediate-term outlook, thanks to the Fed’s latest rate cut.
In today’s note, we discuss the recent news developments concerning Nokia (NOK), Vodaphone (VOD), Janus Henderson Group (JHG), Fidelity National (FIS) and B2GOLD (BTG), with a particular emphasis on the latter due to recent precious metal market strength.
In today’s note, we discuss the recent news developments concerning Nokia (NOK), Tyson Foods (TSN), Baxter International (BAX), Gannett (GCI), and Alibaba Holdings (BABA). We also discuss the latest nationwide headline development that could have a material impact on AMMO Inc. (POWW).
In today’s note, we discuss the recent earnings reports from Foot Locker (FL), along with our decision to completely exit our position in the stock and take profits. We also discuss the latest addition to the portfolio in the form of Zillow (Z).
Alerts
I’m recommending that we sell our position in Solventum (SOLV). I’m recommending that we sell our position in Baxter International (BAX).
I’m recommending that we take a one-quarter profit in our position in real estate fintech Zillow (Z).
Solventum (SOLV), a spinoff of 3M’s healthcare business, was mentioned in last week’s CTL podcast.