Wells Fargo (WFC) kicked off the Cabot Turnaround Letter earnings season today, showing EPS of $1.26/share, which exceeded estimates by 17 cents. WFC also beat top-line revenue estimates by $710M, coming in at $20.86B. Despite the comfortable beats, WFC shares are essentially flat for the day.
Friday, April 12, 2024 Subscribers-Only Podcast:
Covering recent news and analysis for our portfolio companies and other topics relevant to value/contrarian investors.
Today’s podcast is about 10 minutes long and covers:
- Initial note
- Introduction – a quick look at Wells Fargo earnings and some thoughts on insider transactions.
- Comments on recommended companies
- Dril-Quip (DRQ) CEO Jeffrey Bird sold 7,500 shares of the company according to a recent SEC filing. While insider sales often stir up questions about management’s commitment to the company, shares are usually just part of normal compensation. We believe that to be the case here.
- Adient (ADNT) announced they will release earnings on Friday, May 3.
- Xerox (XRX) announced the nomination of seven new candidates for election to its Board of Directors. The election will be held at the Annual Shareholder Meeting on May 22.
- Treehouse Foods (THS) announced they will release earnings Monday, May 6.
- Western Union (WU) announced they will release earnings Wednesday, April 24.
- JanusHenderson Group (JHG) announced they will release earnings Thursday, May 2.
- Advance Auto Parts (AAP) director Brent Windom bought more than $800k worth of company stock recently. Unlike sales – which are often completely uncorrelated to the company itself – purchases do at least tend to convey positive sentiment around valuation. That said, they are not very predictive, which I discuss a bit in today’s podcast.
- Mohawk Industries (MHK) announced they will release earnings Friday, April 26.
- Barnes Group (B) subdivision Barnes Aerospace announced the completion of its expanded Maintenance, Repair, and Overhaul (MRO) facility in East Granby, CT.
- Macy’s (M) ended its proxy battle with Arkhouse Management and Brigade Capital Management after rejecting their takeover bids. The company will, however, add two directors nominated by Arkhouse.
- Newell Brands (NWL) announced they will release earnings Friday, April 26.
- Volkswagen (VWAGY) unveiled plans to invest US$2.68B in China to help expand its production/innovation hub in Hefei, Anhui Province.
- Bayer AG (BAYRY) had the US$1.56B verdict against its Roundup weed killer cut to US$611M by a Missouri judge last week.
Please know that while I don’t yet personally own shares of all Cabot Turnaround Letter recommended stocks – including the stocks mentioned in this note – that will materially change over time.
Please feel free to share your ideas and suggestions for the podcast and the letter with an email to either me at mwarder@cabotwealth.com or to our friendly customer support team at support@cabotwealth.com. Due to the time and space limits we may not be able to cover every topic, but we will work to cover as much as possible or respond by email.
Portfolio
| Market Cap | Recommendation | Symbol | Rec. Issue | Price at Rec. | Current Price * | Current Yield | Rating and Price Target |
| Small cap | Gannett Company | GCI | Aug 2017 | 9.22 | 2.34 | - | Buy (9) |
| Small cap | Duluth Holdings | DLTH | Feb 2020 | 8.68 | 4.88 | - | Buy (20) |
| Small cap | Dril-Quip | DRQ | May 2021 | 28.28 | 23.20 | - | Buy (44) |
| Small cap | L.B. Foster | FSTR | Jul 2023 | 13.60 | 27.17 | - | SELL |
| Small cap | Kopin Corp | KOPN | Aug 2023 | 2.03 | 1.64 | - | Buy (5) |
| Small cap | Ammo, Inc. | POWW | Oct 2023 | 1.99 | 2.66 | - | Buy (3.50) |
| Mid cap | Mattel | MAT | May 2015 | 28.43 | 19.31 | - | Buy (38) |
| Mid cap | Adient plc | ADNT | Oct 2018 | 39.77 | 31.15 | - | Buy (55) |
| Mid cap | Xerox Holdings | XRX | Dec 2020 | 21.91 | 17.28 | 5.6% | Buy (33) |
| Mid cap | Viatris | VTRS | Feb 2021 | 17.43 | 11.80 | 4.1% | Buy (26) |
| Mid cap | TreeHouse Foods | THS | Oct 2021 | 39.43 | 37.48 | - | Buy (60) |
| Mid cap | The Western Union Co. | WU | Dec 2021 | 16.40 | 13.50 | 6.9% | Buy (25) |
| Mid cap | Brookfield Re | BNRE | Jan 2022 | 61.32 | 40.35 | 0.8% | Buy (93) |
| Mid cap | Polaris | PII | Feb 2022 | 105.78 | 97.27 | 2.7% | Buy (160) |
| Mid cap | Goodyear Tire & Rubber | GT | Mar 2022 | 16.01 | 12.95 | - | Buy (24.50) |
| Mid cap | Janus Henderson Group | JHG | Jun 2022 | 27.17 | 32.51 | 4.7% | Buy (67) |
| Mid cap | Six Flags Entertainment | SIX | Dec 2022 | 22.60 | 25.32 | - | Buy (35) |
| Mid cap | Kohl’s Corporation | KSS | Mar 2023 | 32.43 | 25.50 | 7.0% | Buy (50) |
| Mid cap | Frontier Group Holdings | ULCC | Apr 2023 | 9.49 | 7.13 | - | Buy (15) |
| Mid cap | Advance Auto Parts | AAP | Sep 2023 | 64.08 | 77.34 | 1.2% | Buy (98) |
| Mid cap | Mohawk Industries | MHK | Jan 2024 | 103.11 | 122.36 | - | Buy (165) |
| Mid cap | VF Corporation | VFC | Mar 2024 | 16.24 | 13.76 | 2.4% | Buy (25) |
| Mid cap | Barnes Group | B | Apr 2024 | 36.55 | 35.83 | 1.7% | Buy (55) |
| Large cap | General Electric | GE | Jul 2007 | 304.96 | 156.30 | 0.2% | Buy (160) |
| Large cap | Nokia Corporation | NOK | Mar 2015 | 8.02 | 3.49 | 3.3% | Buy (12) |
| Large cap | Macy’s | M | Jul 2016 | 33.61 | 18.58 | 3.5% | Buy (25) |
| Large cap | Newell Brands | NWL | Jun 2018 | 24.78 | 7.23 | 3.6% | Buy (39) |
| Large cap | Vodafone Group plc | VOD | Dec 2018 | 21.24 | 68.58 | 11.6% | Buy (32) |
| Large cap | Berkshire Hathaway | BRK.B | Apr 2020 | 183.18 | 418.62 | - | HOLD |
| Large cap | Wells Fargo & Company | WFC | Jun 2020 | 27.22 | 57.40 | 2.4% | Buy (64) |
| Large cap | Western Digital Corporation | WDC | Oct 2020 | 38.47 | 73.11 | - | Buy (78) |
| Large cap | Elanco Animal Health | ELAN | Apr 2021 | 27.85 | 15.56 | - | Buy (44) |
| Large cap | Walgreens Boots Alliance | WBA | Aug 2021 | 46.53 | 19.13 | 4.8% | Buy (70) |
| Large cap | Volkswagen AG | VWAGY | Aug 2022 | 19.76 | 16.03 | 6.1% | Buy (70) |
| Large cap | Warner Bros Discovery | WBD | Sep 2022 | 13.13 | 8.32 | - | Buy (20) |
| Large cap | Capital One Financial | COF | Nov 2022 | 96.25 | 143.52 | 1.7% | Buy (150) |
| Large cap | Bayer AG | BAYRY | Feb 2023 | 15.41 | 7.55 | 7.0% | Buy (24) |
| Large cap | Tyson Foods | TSN | Jun 2023 | 52.01 | 59.05 | 3.3% | Buy (78) |
| Large cap | Agnico Eagle Mines | AEM | Nov 2023 | 49.80 | 62.00 | 2.8% | Buy (75) |
| Large cap | Fidelity Natl Info Services | FIS | Dec 2023 | 55.50 | 0.08 | 2.0% | Buy (85) |
| Large cap | Baxter International | BAX | Feb 2024 | 38.79 | 42.62 | 2.7% | Buy (60) |
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