Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the September 30th issue.
This month we look at stocks that might benefit from the (eventual) arrival of a post-Covid world. Currently, the news seems uninspiring – new cases are accelerating in some regions that may foreshadow a return of economically-crippling lockdowns, and hopes are dimming for a vaccine in the near future.
Many stocks have surged already in anticipation of this yearned-for world, but many remain moribund. Some laggards are likely to be zombies – still alive but burdened with overwhelming debt loads. We avoided these, and instead found several that should prosper with the return of a fully-opened economy and also have more resilient capital structures to help them endure while we all wait.
We also looked at publicly-traded chicken processors and found that the sky is not actually falling, even if the shares seem to imply an atmospheric tumbling. Near-term wholesale chicken prices have become meaningfully but temporarily depressed, in our view. We highlight three stocks and discuss their risk/return nuances, along with a fourth intriguing commodity food company.
Our feature recommendation, Western Digital (WDC), trades at a depressed valuation but has major strategic changes underway.
The letter also includes a summary of our recent sale of Gilead Sciences (GILD) as well as the full roster of our current recommendations.
Please feel free to send me your questions and comments. This newsletter is written for you and a great way to get more out of your letter is to let me know what you are looking for.
I’m best reachable at Bruce@CabotWealth.com. I’ll do my best to respond as quickly as possible.
Thanks!
Cabot Turnaround Letter 1020
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Stocks for a Post-Covid World
It’s been nearly seven months since the Covid-19 pandemic up-ended daily life. Even if a sizeable portion of professional and administrative work has transitioned relatively smoothly to a work-from-home environment, most of the “in-person” economy remains encumbered by weak revenues, expensive safety protocols, supply chain complications and other disruptions.
And, nearly all leisure and entertainment activities (which constitute the “fun parts of the economy”), including dining out, traveling, going to sports events and shopping, involve being in close proximity to other people. These industries remain subdued compared to their pre-pandemic levels.
With new cases accelerating in some domestic and international regions, fresh discussions about a return to partial lockdowns, and perhaps dimming hopes for a vaccine or herd immunity in the near future, it can be increasingly difficult to see a post-pandemic world. However, it seems highly unlikely that in another two years we will still be struggling with the pandemic. At that point, economic activity will have fully resumed, possibly with an added boost from pent-up demand.
With this hope/belief in mind, we looked through the market to find companies that would benefit greatly from a post-Covid world yet still have weak stock prices. We bypassed companies with heavy debt burdens, like many cruise lines, airlines and other companies with permanently impaired value that may end up as “zombies.” Rather, we focused on those with reasonably healthy balance sheets to help them endure to the subsequent recovery. Listed below are seven stand-out stocks.
Fifth Third Bancorp (FITB) – Like most banks, Fifth Third would be a major beneficiary of a post-Covid environment. First, stronger business activity, particularly for small and medium businesses in which many regional banks like Fifth Third have heavy exposure, would greatly ease credit losses. Many banks have set aside large credit reserves – these could be reversed and new provisions would be lower, leading to higher earnings and possibly share repurchases. Also, a stronger economy might stoke some inflation that could generate profit-boosting increases in interest rates. Fifth Third already has strong credit reserves and has undergone aggressive cost-cutting, so it is ready for all but a severe recession. The shares sell for a discounted 90% of tangible book value and a low multiple of estimated 2022 earnings. The 5.3% dividend yield looks durable.
H&R Block (HRB) – This company is the largest tax assistance service in the country. Lockdowns and other precautions weakened their in-person business during the prime tax-filing season this year, with revenues in the February-April quarter falling 22%. Cash operating profits fell by more than 50%. Adding to investor worries is the risk that lower-priced online-based tax preparation will permanently erode H&R Block’s franchise. While recognizing this risk, we note that the business may be in better shape than perceived. In the May-July quarter, revenues were 4x their year-ago level, and the company produced a $196 million profit compared to a $147 million loss. It appears that filers mostly delayed completing their taxes, aided by the deadline extension, rather than shifted away from H&R Block. This is best seen by combining the two quarters, which show that sales and profits both fell only about 3% over the six-month period. Under the relatively new CEO (since 2017), the company is also expanding into related financial and payment technologies, which should help it retain its relevancy. The company’s balance sheet is relatively sturdy, with $2.6 billion in cash nearly offsetting its $3.5 billion in debt. Its generous dividend pays investors while they wait for the recovery, and at 6.2x earnings, the shares assume little recovery.
Liberty Braves (BATRK) – Liberty Braves shares reflect the ownership interests in Braves Holdings, which owns the Atlanta Braves major league baseball franchise, their baseball stadium, the surrounding Battery Atlanta real estate properties and other assets. Braves Holdings is wholly-owned by Liberty Media, the media empire led by the legendary magnate John Malone, so the shares track the value of Braves Holdings but have no direct ownership claim. Over the past seven years, the company has rebuilt its ailing baseball franchise into a top-performing team. Also, Braves Holdings has replaced the aging Turner Field with Truist Park (formerly SunTrust) – a beautiful landmark that will host the 2021 All-Star Game and many other entertainment events. And, the surrounding area is being developed with a full complement of office, residential and dining properties. Unfortunately, the pandemic has weighed heavily on profits, forcing the company to institute a round of lay-offs and possibly sell some of its adjacent land. Also, the balance sheet produces an elevated risk, but given its backing by Liberty Media we believe that it will avoid meaningful credit-related problems. In a post-Covid world, the company is probably worth a lot more than even the $30 year-end price. One major contributor is the recent news that the New York Mets were sold for $2.4 billion, indicating that the $1.8 billion value of the Braves, based on Forbes’ estimate, is likely too low. With a return of full in-person baseball games and all the related economic benefits, this stock should begin to reflect its much greater value.
Madison Square Garden Entertainment (MSGE) – MSG Entertainment is the remaining company after spinning off MSG Sports (see below) in April. The company is a venue owner, holding iconic properties like Madison Square Garden, Radio City Music Hall and the Chicago Theater, along with the TAO Group of dining and nightlife venues around the world. MSG Entertainment is building the highly-innovative “The Sphere” in Las Vegas, an enormous $1.6 billion spherical theater property that should be completed by 2023. Currently, the company is exceptionally well-capitalized, with $1.2 billion in cash and only $35 million in debt. Much of this cash will be applied to the now-slowed development of The Sphere and to cover about $25 million/month in operating losses inflicted by the lack of live audiences and customers. The return to live entertainment would provide a major boost to the company’s prospects and shares. MSGE shares remain weak following the spin-off, and trade at a valuation that doesn’t reflect its earning potential nor the value of its assets.
Madison Square Garden Sports (MSGS) – Spun off from MSG Entertainment in April, this company owns major sports teams including the New York Knicks, the New York Rangers, a roster of minor league teams and a controlling interest in e-sports giant Counter Logic Gaming. The full re-opening of the economy would clearly lift the company’s revenues and profits, while the e-sports segment provides considerable potential to participate in this fast-growing and young industry. The balance sheet is modestly leveraged with $350 million in debt although it carries larger lease liabilities. Since the April spin-off, the shares have had lackluster performance despite what we see as considerable undervaluation. MSG Sports’ shareholder base includes some notable investors, including the powerful and highly regarded private equity firm Silver Lake Management and two prominent activist hedge funds.
Molson Coors Beverage Company (TAP) – Investors can hardly sell the shares of this Turnaround Letter recommended company fast enough. The stock is down over 40% from its February high and trades at a highly-discounted multiple of 9.0x this year’s depressed earnings. This is several points below the next-lowest peer and is among the lowest in the consumer staples sector. A major concern is its revenues, yet in the most recent quarter, during the depths of the pandemic when restaurants, bars and sports venues were locked down, revenues fell only 15%, while cash operating profits actually increased. Investors also worry about the company’s lack of fast-growing hard ciders and other on-trend beverages, but given its sizeable free cash flow and investment grade balance sheet, Molson Coors has no need to show anything other than flattish overall revenue growth to outperform the low expectations. In a post-pandemic recovery, the shares should recover sharply. In the meantime, the new CEO is working to complete the cost-integration left undone from several mergers.
Southwest Airlines (LUV) – While the airline industry is suffering from low volumes, low prices and higher costs, combined with elevated debt to fund large operating losses, some airlines will escape the “zombie” fate to prosper once the pandemic has faded into memory. One such airline is Southwest, the one-time quirky challenger that has leveraged its successful business model to become a major carrier. Southwest is sure to survive, given its investment grade balance sheet ($14.5 billion in cash vs $9.7 billion in debt), low per-day cash operating losses and highly valuable route network. Estimates for Southwest’s 2022 earnings call for only a 27% decline from pre-pandemic 2019 levels, while most other airlines will likely see a 30-70% decline. The stock’s low valuation and large discount to its February 2020 level, plus a post-pandemic operating environment, would likely produce lofty returns.
Xerox (XRX) – We sold previously recommended Xerox for a sizeable gain (+53%) in November at 38.85. With the shares now trading at less than half this price, they are worth a fresh look. In short, Xerox is a higher-risk yet higher-potential-return post-Covid stock. The world clearly has changed since last November – with fewer people in offices there is much lower demand for printing. Work-from-home may accelerate a secular shift away from printing, a concern we readily acknowledge. Yet, revenues in the second quarter declined a respectable 35% and will likely improve in the third and fourth quarters as more office workers return. Similarly, profits were slim but the company produced positive free cash flow, and third and fourth quarter profits should improve, as well. The balance sheet carries $2.4 billion in cash, more than offsetting the $1.0 billion of corporate debt (Xerox has additional debt to finance its leasing assets). Xerox’s generous dividend, while carrying some risk of a cut, would clearly be sustainable in a recovery. Activist investor Carl Icahn owns 13% of the shares – likely keeping pressure on the relatively new CEO who is a former Icahn protégé.
| Stocks For a Post-Covid World | ||||||||||||
| Company | Symbol | Recent Price | Change YTD (%) | Market Cap $Bil. | Price/ EPS* | Dividend Yield (%) | ||||||
| Fifth Third Bancorp | FITB | 20.47 | -33 | 14.6 | 7.4 | 5.3 | ||||||
| H&R Block | HRB | 15.29 | -35 | 2.9 | 6.2 | 6.8 | ||||||
| Liberty Braves | BATRK | 20.29 | -31 | 21.0 | na | - | ||||||
| Molson Coors Beverage Co. | TAP** | 32.65 | -39 | 7.1 | 8.3 | - | ||||||
| MSG Entertainment | MSGE | 66.48 | na | 1.6 | 29.5 | - | ||||||
| MSG Sports | MSGS | 150.97 | -28 | 3.6 | na | - | ||||||
| Southwest Airlines | LUV | 37.10 | -31 | 21.9 | 11.2 | - | ||||||
| Xerox Corporation | XRX | 17.98 | -51 | 3.8 | 6.7 | 5.6 | ||||||
Closing prices on September 25, 2020. * Based on calendar years ending in 2022. ** Indicates a current Cabot Turnaround Letter recommended stock. Sources: Company releases, S&P Capital IQ and Cabot Turnaround Letter analysis.
Chicken Companies – The Sky is Probably Not Falling
Along with nearly all industries, the poultry producing industry has seen its profits weakened by the pandemic. Industry supply has continued to increase (albeit modestly), overwhelming the market and depressing prices. While demand from at-home consumption has strengthened, demand from the food-service channel, which includes restaurants, bars and other away-from-home locations, has dropped dramatically, as much as 30% by some estimates. Similarly, export demand to Mexico, China and Japan, which provide a sizeable outlet for domestic production, has declined sharply, further pressuring domestic pricing. For example, prices of chicken legs and quarters, which are the primary export products, have dropped as much as 39% from a year ago. Many other chicken prices have declined to the low end of decade-long ranges. Conditions in the U.S. and major export markets will likely remain weak through the rest of the year and into early 2021.
Making matters worse, production costs have increased. Production facilities require expensive but necessary Covid safety protections. Also, different packaging and logistics for grocery purchases compared to food service purchases have pushed up costs, and worker pay has been increased. Weaker corn and soybean feed costs have only modestly helped support profits.
While the current outlook is humbling, we anticipate that conditions will improve, even without the clearly beneficial effects of a (yet-to-be-found) Covid vaccine. Chicken placements, an early indicator of supply, appear to be slowing. Low prices should help bolster at-home consumption. While food-service volumes will likely weaken in the winter months, next spring should bring a strong uplift as pent-up demand, combined with updated precautionary techniques, boosts restaurant demand.
Another potential tailwind: as much as a third of the industry’s producers are unprofitable. In a commodity industry where the top 10 companies hold an 82% market share, smaller producers unable to raise funding could force some capacity to permanently close. Even if only incrementally, this would help tighten supplies and prices. Chicken prices won’t remain at long-time lows forever.
Listed below are the three publicly-traded poultry producers in the United States. We also include Seaboard – while only tangentially in the poultry business (as a major turkey producer), it has some appeal as a legendary commodity food company with an old-school business model that may be changing.
Pilgrim’s Pride Corporation (PPC) – This company is the second largest chicken producer in the U.S. with a 17% market share. It also is the second largest poultry producer in Mexico. Pilgrim’s Pride has had its difficulties. In 2008, it filed for bankruptcy after mis-managing its costs and balance sheet. It emerged with significant financial support of Brazilian firm JBS S.A., which still holds an 80% stake. The company just installed its third CEO in two years, partly due to a price-fixing scandal now working its way through the courts. And, it has struggled perhaps more than others with pandemic-related safety problems. Recent results were dismal, with cash operating profits falling 64%. Performance in Mexico, providing about 10% of sales, was particularly weak. Pilgrim Pride’s debt is moderately elevated at about 3.5x EBITDA, although its liquidity appears healthy. While investor confidence in the company is understandably limited, its valuation discount to its peers largely reflects this. With the shares trading near seven-year lows, it looks like an appealing risk/return.
Sanderson Farms (SAFM) – Generally considered to be the class-act among its publicly-traded peers, Sanderson is the third largest poultry producer in the United States. It holds a 10% market share, with total sales of $3.4 billion and has produced healthy organic volume growth of about 8% over the past 25 years. Exports comprise about 8% of sales, with about half of those in Mexico. However, like its peers, the weak chicken market has hurt its results, with third quarter operating profits falling 42% from a year ago. However, Sanderson remains confident about its future, reflected in the 38% dividend increase announced last week. The balance sheet carries a small $95 million in debt which is almost fully offset by $66 million in cash. Joe Sanderson, the long-serving chairman and CEO, and grandson of the founder, provides steady and skilled leadership. While the share valuation is higher than its peers, much of this is deserved, even as the shares have fallen sharply this year. Sanderson is a lower-risk way to participate in an industry upturn.
Seaboard Corporation (SEB) – Family-controlled Seaboard is run like an old-school private company. It is also secretive, with essentially no Wall Street coverage. The company is a major pork producer and is a 50% owner of the Butterball turkey business, yet more than half of its revenues come from its global Commodities Trading and Milling segment. Seaboard keeps in-house many of the operations that its peers long-ago outsourced or sold including cargo shipping and grain processing. Similarly old-school, the company keeps a collection of remotely-related operations: it owns one of the largest sugar mills in Argentina and runs a free-floating power generating barge in the Dominican Republic. What is appealing is that its share price has fallen precipitously this year, largely due to the pandemic, offering a window of opportunity to invest in this conservatively-financed and stable company. While the chairman/CEO and grandson of the founder suddenly passed away this past summer, and his replacement is the first non-Bresky family member to hold the CEO post, the company is unlikely to change much. There is a possibility that Robert Steer, the new CEO, will bring his financial acumen as former CFO to guide the company to shed some ancillary and likely value-draining operations.
Tyson Foods (TSN) – Tyson is the largest chicken producer in the United States, with a 21% share of the market. About a third of its $42 billion in total revenues come from chicken sales. In addition, the company is a major beef (36% of sales) and pork (10%) producer. It has a growing and higher-margin prepared foods segment and is emphasizing global expansion to capture some of the growing appetite for protein. While second-quarter results were relatively strong compared to estimates, the company has work to do to convince investors that it can expand its margins. Change may be coming, as a new CEO, Dean Banks, starts on October 3. Banks joined Tyson as a board member in 2017, and as an employee in December from Alphabet (Google) where he ran their high-tech Incubator X operations. He replaces a 37-year Tyson veteran and two-year CEO, ideally to bring new innovations to Tyson. As someone with no industry experience, this is a bit of a risk but fresh ideas may reinvigorate the company. Tyson’s balance sheet carries a modestly elevated $12.6 billion in debt, about 3x its cash operating earnings, but looks readily serviceable and is partly offset by about $1.2 billion in cash. The 2.9% dividend yield looks sustainable.
| Chicken Processors - The Sky Is Probably Not Falling | ||||||||||||
| Company | Symbol | Recent Price | Change YTD (%) | Market Cap $Bil. | Price/ EPS* | Dividend Yield (%) | ||||||
| Pilgrim’s Pride | PPC | 14.77 | -55 | 3.6 | 8.3 | - | ||||||
| Sanderson Farms | SAFM | 118.01 | -33 | 2.6 | 21.5 | 1.1 | ||||||
| Seaboard Corp | SEB | 2834 | -33 | 3.3 | 11.8 | - | ||||||
| Tyson Farms | TSN | 59.18 | -35 | 21.6 | 10.1 | 2.9 | ||||||
Closing prices on September 25, 2020. * Based on calendar years ending in 2021. Sources: Company releases, S&P Capital IQ and Cabot Turnaround Letter analysis.
Recommendations
Purchase Recommendation: Western Digital Corporation
| Western Digital Corporation 5601 Great Oaks Parkway San Jose, California 95119 (408) 717-6000 westerndigital.com |
|
Background
Western Digital produces hard disk drives and flash memory storage for a wide range of uses, including mobile devices, desktop computers, gaming consoles and cloud-based servers. Founded in 1970, the company has led numerous innovations including the development of the solid-state drive. Historically, the hard disk drive industry had been plagued by aggressive price competition, but when Seagate acquired Maxtor in 2006 and Western Digital acquired Hitachi Global Storage Technologies in 2011 for $4.3 billion, the industry became more rational with only three competitors. Western Digital has a 36% market share, while Seagate (43%) and Toshiba (21%) hold the balance.
In 2016, Western Digital acquired SanDisk in a giant $19 billion deal following years of partnering on various initiatives. However, this acquisition is widely viewed as an expensive underperformer. The segment, which generates about half of Western Digital’s total revenues, has produced declining gross margins and lost meaningful market share. Much of SanDisk’s key talent has departed, including its founder and former chief executive who is now the CEO of competitor Micron Technology.
Adding to the chronic investor frustration is the company’s weak guidance for the upcoming quarter, ostensibly attributed to new industry supply growth but probably as much due to Western Digital’s competitiveness issues. The delay in the planned initial public offering of Kioxia, the joint venture partner (formerly-named Toshiba Memory) that supplies Western Digital with its flash memory chips, will likely weigh on Western Digital’s near-term valuation, particularly as Kioxia said that Chinese trade and competitive issues will weaken its profitability.
With on-going SanDisk issues, rising supply and competitive concerns and disappointing guidance, it perhaps is not surprising that WDC shares have severely lagged both the broad market and close peer Seagate. WDC stock now trades near the bottom of a wide range, with no net price improvement since 2008.
Analysis
Western Digital operates in a strong and rapidly growing industry. Its hard disk drive segment produces relatively steady revenues and profits. The new WDC 18 terabyte disk drive, leapfrogging Seagate to become the industry’s largest, points to reasonably healthy hard disk drive competitiveness.
Most of the company’s issues center around its weak flash memory execution and $11 billion in new debt related to the SanDisk deal. In March, acknowledging these problems, the company hired David Goeckeler, the former head of Cisco’s $34 billion (revenues) Networking and Security segment as its new CEO. He is wasting no time in making major changes: in May, he suspended the generous dividend, freeing up $600 million a year to help pay down the company’s elevated $9.7 billion in debt; announced last week that he is forming separate business units for its hard disk drive and flash business; and has already hired a former Cisco protégé as the head of the new Flash Products group. Goeckeler has a strong reputation as an execution-focused leader. He brings valuable capabilities for improving Western Digital’s efficiency and effectiveness, which should generate better revenue growth and higher margins. Critically, he is likely to re-invigorate Western Digital’s uninspired culture.
Buying the company valuable time is its free cash flow, which is more than adequate to service its elevated debt. Adding financial flexibility is the nearly three years remaining until its nearest major debt maturity in 2023, and its $3 billion in cash holdings.
While the company posts negative net income, this is due to the accounting treatment of its acquisitions, not due to unprofitable operations.
WDC shares trade at a low 5.8x estimated fiscal year 2021 cash operating profits. This is a low valuation on both an absolute level and relative to Seagate, against which WDC’s multiple is at a 26% discount. WDC shares trade at a sizeable discount to its break-up value, although we don’t anticipate any imminent divestitures or spin-offs. With better leadership and execution, Western Digital could be worth considerably more than the current $11.4 billion market value.
New investors may want to take a small starter position in WDC and add on any meaningful weakness. The shares are volatile and may be weak performers until the turnaround takes fuller effect. We recommend the purchase of Western Digital (WDC) shares with a 59 price target.
Sell Recommendation
On September 17, we moved Gilead Sciences (GILD) to a SELL, with an approximately 6% total return, due to the company’s announcement that it will acquire biotech firm Immunomedics (IMMU) in a $21 billion all-cash deal.
While Immunomedics’ Trodelvy, a high-potential cancer treatment, may prove to be a $3 billion in revenues franchise, the company comes at an incredibly steep price of nearly 7x those potential revenues. Raising the risks is that Trodelvy currently produces only perhaps $120 million in revenues as well as sizeable operating losses.
Gilead’s expensive, cash-funded deal changes the company from a cash-laden and cash-flow rich, undervalued company that could grind its way to better growth, with a 4% dividend yield, to a cash-poor and leveraged company pinning its hopes on early-stage and early-commercial products. While the company remains committed to the dividend, we wonder if even that would be sacrificed to fund future deals.
Performance
The following tables show the performance of all our currently active recommendations, plus recently closed out recommendations.
Small Cap1 (under $1 billion) Current Recommendations
| Recommendation | Symbol | Rec. Issue | Price at Rec. | 9/25/20 Price | Total % Return (3,4) | Current Yield | Current Status (2) | |||||||||
| Consolidated Communications | CNSL | July 11 | 12.90 | 5.61 | -33 | 0% | Buy (12) | |||||||||
| Gannett Company | GCI | Aug 17 | 9.22 | 1.26 | -7 | 0% | Buy (9) | |||||||||
| Amplify Energy | AMPY | Feb 18 | 16.88 | 0.79 | -92 | 0% | Hold | |||||||||
| Oaktree Specialty Lending Corp. | OCSL | Aug 18 | 4.91 | 4.74 | +14 | 8.9% | Buy (7) | |||||||||
| Signet Jewelers Limited | SIG | Oct 19 | 17.47 | 18.15 | +8 | 0% | Buy (35) | |||||||||
| Peabody Energy | BTU | Dec 19 | 9.82 | 3.05 | -69 | 0% | Buy (15) | |||||||||
| Duluth Holdings | DLTH | Feb 20 | 8.68 | 12.64 | +46 | 0% | Buy (15) | |||||||||
Mid Cap1 ($1 billion - $10 billion) Current Recommendations
| Recommendation | Symbol | Rec. Issue | Price at Rec. | 9/25/20 Price | Total % Return (3,4) | Current Yield | Current Status (2) | |||||||||
| Mattel, Inc. | MAT | May 15 | 28.43 | 11.33 | -48 | 0% | Buy (38) | |||||||||
| BorgWarner | BWA | Aug 16 | 33.18 | 36.81 | +19 | 1.8% | Buy (46) | |||||||||
| Conduent | CNDT | Feb 17 | 14.96 | 3.09 | -79 | 0% | Buy (6) | |||||||||
| Adient, plc | ADNT | Oct 18 | 39.77 | 16.07 | -59 | 0% | Buy (28) | |||||||||
| JELD-WEN | JELD | Nov 18 | 16.20 | 21.17 | +31 | 0% | Buy (25) | |||||||||
| GameStop Corp. | GME | Apr 19 | 10.29 | 10.02 | -3 | 0% | Buy (16) | |||||||||
| Trinity Industries | TRN | Sept 19 | 17.47 | 19.43 | +15 | 3.9% | Buy (26) | |||||||||
| Meredith Corporation | MDP | Jan 20 | 33.01 | 12.58 | -60 | 0% | Buy (52) | |||||||||
| Lamb Weston Holdings | LW | May 20 | 61.36 | 64.89 | +7 | 1.4% | Buy (85) | |||||||||
| GCP Applied Technologies | GCP | Jul 20 | 17.96 | 20.40 | +14 | 0% | Buy (28) | |||||||||
| Albertsons, Inc. | ACI | Aug 20 | 14.95 | 13.55 | -9 | 3.5% | Buy (23) | |||||||||
Large Cap1 (over $10 billion) Current Recommendations
| Recommendation | Symbol | Rec. Issue | Price at Rec. | 9/25/20 Price | Total % Return (3,4) | Current Yield | Current Status (2) | |||||||||
| General Electric | GE | July 07 | 38.12 | 6.11 | -60 | 0.7% | Buy (20) | |||||||||
| General Motors | GM | May 11 | 32.09 | 29.00 | +19 | 0% | Buy (45) | |||||||||
| Weyerhaeuser Company | WY | Apr 12 | 21.89 | 27.28 | +66 | 0% | Buy (40) | |||||||||
| Freeport-McMoRan | FCX | Aug 13 | 28.21 | 15.30 | -37 | 0% | Buy (20) | |||||||||
| Royal Dutch Shell plc | RDS-B | Jan 15 | 69.95 | 24.69 | -36 | 5.2% | Buy (85) | |||||||||
| Nokia Corporation | NOK | Mar 15 | 8.02 | 3.78 | -41 | 0% | Buy (12) | |||||||||
| The Mosaic Company | MOS | Sept 15 | 40.55 | 18.59 | -48 | 1.1% | Buy (27) | |||||||||
| Macy’s | M | July 16 | 33.61 | 6.03 | -65 | 0% | Buy (13) | |||||||||
| ViacomCBS | VIAC | Jan 17 | 59.57 | 29.53 | -43 | 3.3% | Buy (54) | |||||||||
| Volkswagen AG | VWAGY | May 17 | 15.91 | 17.03 | +15 | 3.2% | Buy (24.50) | |||||||||
| Credit Suisse Group AG | CS | June 17 | 14.48 | 9.48 | -26 | 2.7% | Buy (24) | |||||||||
| Toshiba Corporation | TOSYY | Nov 17 | 14.49 | 13.22 | -8 | 0.6% | Buy (28) | |||||||||
| LafargeHolcim Ltd. | HCMLY | Apr 18 | 10.92 | 8.89 | -8 | 4.4% | Buy (16) | |||||||||
| Newell Brands | NWL | June 18 | 24.78 | 16.74 | -24 | 5.5% | Buy (39) | |||||||||
| Vodafone Group plc | VOD | Dec 18 | 21.24 | 13.36 | -30 | 7.5% | Buy (32) | |||||||||
| Barrick Gold | GOLD | Feb 19 | 13.05 | 27.70 | +115 | 1.2% | Buy (30) | |||||||||
| Mohawk Industries | MHK | Mar 19 | 138.60 | 94.24 | -32 | 0% | Buy (147) | |||||||||
| Gilead Sciences | GILD | May 19 | 64.92 | *65.04 | +6 | 4.2% | SELL * | |||||||||
| Kraft Heinz | KHC | Jun 19 | 28.68 | 29.13 | +10 | 5.5% | Buy (45) | |||||||||
| Molson Coors | TAP | July 19 | 54.96 | 32.65 | -37 | 0% | Buy (59) | |||||||||
| Biogen | BIIB | Aug 19 | 241.51 | 273.28 | +13 | 0% | Buy (360) | |||||||||
| DuPont de Nemours | DD | Mar 20 | 45.07 | 55.04 | +23 | 2.2% | Buy (70) | |||||||||
| Berkshire Hathaway | BRK/B | Apr 20 | 183.18 | 210.45 | +15 | 0% | Buy (250) | |||||||||
| Wells Fargo & Company | WFC | Jun 20 | 27.22 | 23.64 | -13 | 1.7% | Buy (43) | |||||||||
| Baker Hughes Company | BKR | Sept 20 | 14.53 | 13.13 | -10 | 5.5% | Buy (23) | |||||||||
Most Recent Closed-Out Recommendations
| Recommendation | Symbol | Category | Buy Issue | Price at Buy | Sell Issue | Price at Sell | Total Return(3,4) | |||
| Brookdale Senior Living | BKD | Mid | Sept 18 | 9.74 | May 20 | 3.61 | -63 | |||
| Allscripts Healthcare | MDRX | Mid | Feb 14 | 16.43 | *May 20 | 6.40 | -61 | |||
| Thor Industries | THO | Mid | Nov 19 | 67.60 | *Jul 20 | 109.75 | +64 | |||
| Janus Henderson Group | JHG | Mid | Aug 05 | 32.36 | Jul 20 | 21.01 | -8 | |||
| BP plc | BP | Large | July 13 | 41.78 | Jul 20 | 23.48 | -4 | |||
| Rolls-Royce Holdings plc | RYCEY | Large | Mar 16 | 9.25 | *Aug 20 | 3.26 | -58 | |||
The next Cabot Turnaround Letter will be published on October 28, 2020.
Cabot Wealth Network
Publishing independent investment advice since 1970.
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