April 19, 2024

Nokia (NOK) missed on revenue but beat on earnings yesterday, reporting EPS of $0.10/share, which exceeded estimates by over 50%. CEO Pekka Lundmark noted that 2024 will probably remain a weak year for the mobile RAN (radio access network) market, but reiterated expectations that it will likely pick up over the final two quarters. Declining demand for 5G equipment in the U.S./Canada, and a significant slowdown in China (also notably affecting AAPL) are the root cause, but economic data has only recently started to inflect.

Friday, April 19, 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 11 minutes long and covers:

• Initial note
  
  • Introduction – a quick look at Nokia (NOK) earnings and some thoughts on gold and our position in Agnico Eagle Mines (AEM).
• Comments on recommended companies
  
  • Six Flags (SIX) announced the issuance and pricing of $850M in 6.625% Senior Secured Notes on Thursday, the net proceeds of which will be applied toward its term loan and revolving credit facilities and a portion of the outstanding 7% Senior Secured Notes due July 1, 2025. Any remaining proceeds will be put toward general corporate purposes including the special dividend in connection to the company’s merger of equals with fellow Amusement Park operator CedarFair.
  • Frontier Group Holdings (ULCC) announced they will release earnings on Thursday, May 2^nd.
  • Berkshire Hathaway (BRK.B) priced ¥263.3 billion ($1.71 billion) of bonds in the firm’s largest yen debt deal in 5 years, raising suspicions that the holding company may increase holdings of Japanese stocks.
  • Western Digital (WDC) was in the news this week as NAND memory company Kioxia Holdings announced plans to go public on the Tokyo Stock Exchange, fueling rumors they may seek to revive merger talks with WDC.
  • Volkswagen (VWAGY) is waiting on the results of a recent union vote at its only U.S. operation in Chattanooga, Tennessee. The UAW has tried for years to organize the facility, but right-to-work labor laws have made it challenging thus far. Results are expected soon.

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.

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