Bruce Kaser - Photo

Bruce Kaser

Chief Analyst, Cabot Turnaround Letter and Cabot Undervalued Stocks Advisor

Bruce Kaser has more than 25 years of value investing experience in managing institutional portfolios, mutual funds and private client accounts. He has led two successful investment platform turnarounds, co-founded an investment management firm, and was principal of a $3 billion (AUM) employee-owned investment management company.

Previously, he led the event-driven small/midcap strategy for Ironwood Investment Management and was Senior Portfolio Manager with RBC Global Asset Management where he co-managed the $1 billion value/core equity platform for over a decade. He earned his MBA degree in finance and international business from the University of Chicago and earned a Bachelor of Science in finance, with honors, from Miami University (Ohio).

From this author

Cabot Turnaround Letter

Cabot Turnaround Letter Issue: March 29, 2023

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the April 2023 issue.

This issue focuses exclusively on the banking industry. Given the recent turmoil and the second- and third-largest bank failures in U.S. history, we examine the question on the minds of value and contrarian investors: is it time to jump back into bank stocks?

Our feature recommendation this month is First Horizon Corp (FHN), a relatively plain mid-sized regional bank that provides an appealing way to exploit the bank sell-off: merger arbitrage. Due to regulatory delays, the bank’s shares trade at a 33% discount to the $25/share all-cash offer from TD Bank Group, a large and well-capitalized Canadian bank. We believe that the deal will close at the $25 price, providing an attractive return, even as the shares’ discounted valuation offers considerable downside protection.

March 29, 2023

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Cabot Undervalued Stocks Advisor

March 28, 2023

Last Thursday evening, I was a guest at a friend’s regular poker game. It seemed friendly enough – the regulars were average players (like myself), pleasant to spend time with (no jerks), and the evening included a tasty dinner. Also, favorably to me as the newbie, the stakes were modest.

The games were straightforward: 5-card draw, 7-card stud high-low, while a few others included a small field of common cards similar to Texas Hold’em. Betting was reasonable, with limits on both the size and number of raises. So far, so good.

March 28, 2023

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Cabot Turnaround Letter

March 24, 2023

This week, amidst the fireworks in banks, the Fed and more market volatility, there were no earnings reports and we had no changes in ratings on our recommended stocks.

Next Wednesday, we publish the April edition of the Cabot Turnaround Letter. We’ll tip our hand on the first article – which will be on possible bargains in the banking industry.

March 24, 2023

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Cabot Undervalued Stocks Advisor

March 21, 2023

Last Thursday evening, I was a guest at a friend’s regular poker game. It seemed friendly enough – the regulars were average players (like myself), pleasant to spend time with (no jerks), and the evening included a tasty dinner. Also, favorably to me as the newbie, the stakes were modest.

The games were straightforward: 5-card draw, 7-card stud high-low, while a few others included a small field of common cards similar to Texas Hold’em. Betting was reasonable, with limits on both the size and number of raises. So far, so good.

March 21, 2023

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Cabot Turnaround Letter

March 17, 2023

This week, we comment on the full earnings report from Volkswagen, which wraps up this earnings season. Walgreens Boots Alliance (WBA) is an off-cycle company and reports on March 28.

March 17, 2023

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Stock Market

Can You Trust the Trust Banks?

We’ve just witnessed two of the largest bank failures in U.S. history, which has some investors and depositors wondering, can you trust the trust banks?

March 17, 2023

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Value Stocks

Football Games, Year-To-Date Performance and Value Investing

Treating year-to-date performance as if the calendar is the kickoff to a football game is a mistake. For value investors, there’s a better way.

March 15, 2023

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Cabot Undervalued Stocks Advisor

March 14, 2023

Last night at Hollywood’s Academy Awards, the movie “Everything Everywhere All at Once” won the award for best picture, long considered the top prize of the event. It also won six other coveted Oscars. The movie, ostensibly, is a science fiction film about alternative realities and an everyday laundromat owner.

For investors, the movie is immediately elevated to mandatory viewing – the title applies directly to what is going on in “this here” in “this now” in today’s capital markets.

March 14, 2023

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Cabot Turnaround Letter

March 10, 2023

This week, we comment on earnings from ESAB (ESAB), Duluth Holdings (DLTH) and preliminary results from Volkswagen AG (VWAGY). Next week, Volkswagen reports its full results – we’ll include more comments as needed. That should wrap up this earnings season. Walgreens Boots Alliance (WBA) is an off-cycle company and reports on March 28.

March 10, 2023

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Value Stocks

Why Value Investing Should Beat Growth Investing in the Next Decade

Growth stocks have outpaced value stocks over the last decade. But performance is cyclical - and value investing should soon win out.

March 8, 2023

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Cabot Turnaround Letter

March 7, 2023

Moving Brookfield Asset Management (BAM) to Sell

March 7, 2023

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Cabot Turnaround Letter

March 7, 2023

Moving Organon (OGN) to Sell

March 7, 2023

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Cabot Undervalued Stocks Advisor

Cabot Undervalued Stocks Advisor Issue: March 7, 2023

Thank you for subscribing to the Cabot Undervalued Stocks Advisor. We hope you enjoy reading the March 2023 issue.

We discuss how the post-Cold War peace dividend is shifting to a war tax.

We provide updates on earnings and change our rating on Organon (OGN) from Buy to Sell. The company is spending more to generate sales growth even as that growth is becoming more difficult. Our thesis is broken, but fortunately, we exit with only a small (~6%) loss.

Please feel free to send me your questions and comments. This newsletter is written for you and the best way to get more out of the letter is to let me know what you are looking for.

March 7, 2023

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Cabot Turnaround Letter

March 3, 2023

This week, we comment on earnings from Bayer AG (BAYRY), Berkshire Hathaway (BRK/B), Dril-Quip (DRQ), Holcim (HCMLY), Kohl’s Corporation (KSS), Macy’s (M), Six Flags Entertainment (SIX), Viatris (VTRS), Volkswagen AG (VWAGY) and ZimVie Holdings (ZIMV).

Next week, we provide an update on earnings from ESAB (ESAB) and Duluth Holdings (DLTH), which should wrap up this earnings season.

March 3, 2023

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Cabot Undervalued Stocks Advisor

February 28, 2023

A few weeks ago, we introduced the Gartner Hype Cycle, which traces the path that all tech companies follow in what essentially is an immutable law of tech investing. Currently, tech stocks have passed the Peak of Inflated Expectations and are sliding down to the Trough of Disillusionment. A few will ascend back to prosperity along the “Slope of Enlightenment” if they maintain both their relevance and their competitive edge. But most will lose one or both of these traits and thus continue downward in what could be labeled the “Decline into Oblivion.”

The chart below follows the same pattern as the Tech Hype Cycle chart while it more specifically traces the pattern of revenues and profits. The peak of the Hype Cycle corresponds, of course, to the peak of the Sales cycle in the Maturity Stage. Most tech companies follow the Decline Stage line into oblivion.

February 28, 2023

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Cabot Turnaround Letter

February 24, 2023

This week, we comment on earnings from Elanco Animal Health (ELAN), Gannett (GCI), Kaman Corporation (KAMN) and Warner Bros Discovery (WBD).

We also include the Catalyst Report and a summary of the March edition of the Cabot Turnaround Letter, which was published on Wednesday.

February 24, 2023

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Value Stocks Investing

This Little-Known Catalyst Could Spark a Disney Stock Revival

If you’re like three-quarters of shareholders, your annual proxy materials likely go straight into the trash. But a brewing proxy fight could spark a turnaround at Disney.

February 24, 2023

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Cabot Undervalued Stocks Advisor

February 22, 2023

We’ll continue our mini-series on the Tech Hype Cycle next week, as we thought some brief comments on the war in Ukraine might be timely roughly one year after Russia’s invasion.

Clearly, the war is an awful situation for all involved, certainly on a humanitarian level but also on an economic level. While the conflict has degenerated into a World War I-style artillery battle between two entrenched forces, we anticipate that spring will bring more mobile hostilities.

Part of our risk management process is to identify risks, then gauge whether those risks are increasing, or decreasing. This simple directional metric avoids the impossible task of predicting the future yet provides an effective way to understand risks.

February 22, 2023

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Cabot Turnaround Letter

Cabot Turnaround Letter Issue: February 22, 2023

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the March 2023 issue.

While large restaurant companies cruised through the pandemic, smaller companies struggled. Some, however, are now undertaking promising turnarounds. We highlight four new ideas and provide updates on two previously discussed small-cap restaurants.

For struggling companies, free cash flow is their lifeblood. By using free cash flow yield, we can identify undervalued companies with plenty of cash flow that provides a margin of safety. We discuss three interesting stocks.

Our feature recommendation this month is a high free cash flow yield situation. Retailer Kohl’s (KSS) is viewed by investors as a broken company left behind by time, trends and technology, with unsettled leadership, further pressured by bloated inventory, a possible recession, and rising labor and goods costs. We see a company with a history of stable revenues and cash flows, that now has a highly capable operator at the helm, whose shares have a free cash flow yield of 13%. The generous dividend pays out close to half of this cash flow, producing a 6.2% dividend yield.

February 22, 2023

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Cabot Turnaround Letter

February 17, 2023

This week, we comment on earnings from Conduent (CNDT), Ironwood Pharmaceuticals (IRWD), Organon (OGN), Toshiba (TOSYY) and TreeHouse Foods (THS).

February 17, 2023

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Cabot Turnaround Letter

February 16, 2023

Moving Conduent (CNDT) to Sell

February 16, 2023

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Value Stocks

Vodafone: An Attractive Turnaround Stock

Vodafone stock is deeply out of favor, but a recent leadership change could be a turnaround catalyst for the telecom stock.

February 15, 2023

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Cabot Undervalued Stocks Advisor

February 14, 2023

A few weeks ago, we introduced the Gartner Hype Cycle, which traces the path that all tech companies follow in what essentially is an immutable law of tech investing. Currently, tech stocks have passed the Peak of Inflated Expectations and are sliding down to the Trough of Disillusionment. A few will ascend back to prosperity along the “Slope of Enlightenment” if they maintain both their relevance and their competitive edge. But most will lose one or both of these traits and thus continue downward in what could be labeled the “Decline into Oblivion.”

February 14, 2023

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Cabot Turnaround Letter

February 10, 2023

This week, we comment on earnings from Adient (ADNT), Brookfield Re (BANR), Brookfield Asset Management (BAM), Goodyear Tire (GT), Mattel (MAT), Newell Brands (NWL) and Western Union (WU).

Next week, Toshiba (TOSYY), TreeHouse Foods (THS), Conduent (CNDT), Ironwood Pharmaceuticals (IRWD) and Organon (OGN) report earnings.

February 10, 2023

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Stock Market

Investing Books for Your Contrarian Valentine

Need help getting through these topsy-turvy times for the stock market? Try these classic investing books. I’ve read them all!

February 8, 2023

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Cabot Undervalued Stocks Advisor

Cabot Undervalued Stocks Advisor Issue: February 7, 2023

Thank you for subscribing to the Cabot Undervalued Stocks Advisor. We hope you enjoy reading the February 7, 2023, issue.

We continue our mini-series on the Tech Hype Cycle and Value Investing with a look at what happens to companies after they tumble into the “Trough of Disillusionment.” We also include our perspective on the favorable earnings update from Sensata Technologies (ST).

This week, we changed our rating on State Street Corp. (STT) from Hold to Sell, and our rating on Dow (DOW) from Buy to Sell. Both are quality companies, but their shares have reached our price targets and we see no compelling reason to raise these targets.

Please feel free to send me your questions and comments. This newsletter is written for you and the best way to get more out of the letter is to let me know what you are looking for.

February 7, 2023

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Cabot Turnaround Letter

February 6, 2023

Moving Kraft Heinz (KHC) to Sell

February 6, 2023

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Cabot Turnaround Letter

February 3, 2023

This week, we comment on earnings from Janus Henderson Group (JHG), Meta Platforms (META), M/I Homes (MHO), Polaris Industries (PII), Vodafone (VOD) and Western Digital (WDC).

Next week brings earnings from Western Union (WU), Mattel (MAT), Brookfield Re (BANR), Goodyear Tire (GT) and Newell Brands (NWL).

February 3, 2023

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Cabot Undervalued Stocks Advisor

January 31, 2023

One of the immutable laws of technology investing is that all tech stocks go through the Hype Cycle. Well over a century ago, leading-edge tech stars like railroads went through their boom-and-bust phases. The 20^th century included the notable enthusiasm-and-disillusionment in radio, television, automobiles, copy machine and IBM (its own industry for years) stocks, ending with the exceptional dot-com bubble.

Highly regarded technology research and consulting firm Gartner plots this hype arc in their chart, below. While the rise and fall, and time length, are different for each stock and industry, the chart effectively captures the changes in investor mindset through the cycle. Changes in the investor mindset invariably drive changes in tech stock prices.

January 31, 2023

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Cabot Turnaround Letter

January 27, 2023

This week, we comment on earnings from Dow (DOW), General Electric (GE), Nokia (NOK) and Xerox Holdings (XRX). Next week brings reports from Vodafone (VOD), Polaris Industries (PII), M/I Homes (MHO), Meta Platforms (META), Western Digital (WDC) and Janus Henderson Group (JHG).

We also include the Catalyst Report and a summary of the February edition of the Cabot Turnaround Letter, which was published on Wednesday.

January 27, 2023

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