For our recommended stocks, earnings season starts next week, led off by Walgreens Boots Alliance (WBA) on Thursday, October 13 and Wells Fargo (WFC) on Friday, October 14. The following week Mattel (MAT) and Nokia (NOK) report earnings. The earnings deluge for our companies starts the following week on October 24.
Earnings season, of course, includes thousands of companies and we will be watching their reports and commentaries for updates on revenue and profit conditions across the economy. As we mentioned last week, there appears to be a massive inventory cycle underway across many industries, so we want to look through dire comments about demand, especially those in the semiconductor industry, to evaluate how much is truly a recession-like decline and how much is simply customers working down bloated inventories.
Ratings Change
Macy’s (M) – raising our rating from Hold to Buy, with a 20 price target. Investor worries about rising interest rates and a slowing economy are pushing the price of Macy’s shares down past what we would see as reasonable adjustments to the new reality. Macy’s is arguably a better company today than it was a year ago when we downgraded it.
Friday, October 7, 2022 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 7 minutes and covers:
- Comments on other recommended companies:
- Kaman (KAMN) – Still struggling with delays at Boeing.
- Shell plc (SHEL) – Third-quarter earnings will be hurt by narrowing refining margins and other disruptions from volatile energy prices.
- Macy’s (M) – Inventory is in good shape, especially compared to competitors.
- Elsewhere in the markets:
- Time for investors sitting on excess cash to nibble on overly discounted shares.
- Final Note
- Annual trip to shopping mall finds immense discounts but also a lot of unmerchantable goods.
Please know that I personally own shares of all Cabot Turnaround Letter recommended stocks, including the stocks mentioned in this note.
| Market Cap | Recommendation | Symbol | Rec. Issue | Price at Rec. | 10/6/22 | Current Yield | Rating and Price Target |
| Small cap | Gannett Company | GCI | Aug-17 | 9.22 | 1.52 | – | Buy (9) |
| Small cap | Duluth Holdings | DLTH | Feb-20 | 8.68 | 7.39 | – | Buy (20) |
| Small cap | Dril-Quip | DRQ | May-21 | 28.28 | 22.00 | – | Buy (44) |
| Small cap | ZimVie | ZIMV | Apr-22 | 23 | 10.41 | – | Buy (32) |
| Mid cap | Mattel | MAT | May-15 | 28.43 | 19.48 | – | Buy (38) |
| Mid cap | Conduent | CNDT | Feb-17 | 14.96 | 3.47 | – | Buy (9) |
| Mid cap | Adient plc | ADNT | Oct-18 | 39.77 | 31.10 | – | Buy (55) |
| Mid cap | Xerox Holdings | XRX | Dec-20 | 21.91 | 14.70 | 6.80% | Buy (33) |
| Mid cap | Ironwood Pharmaceuticals | IRWD | Jan-21 | 12.02 | 10.15 | – | Buy (19) |
| Mid cap | Viatris | VTRS | Feb-21 | 17.43 | 8.94 | 5.40% | Buy (26) |
| Mid cap | Organon & Co. | OGN | Jul-21 | 30.19 | 24.76 | 4.50% | Buy (46) |
| Mid cap | TreeHouse Foods | THS | Oct-21 | 39.43 | 45.62 | – | Buy (60) |
| Mid cap | Kaman Corporation | KAMN | Nov-21 | 37.41 | 29.31 | 2.70% | Buy (57) |
| Mid cap | The Western Union Co. | WU | Dec-21 | 16.4 | 13.84 | 6.80% | Buy (25) |
| Mid cap | Brookfield Re | BAMR | Jan-22 | 61.32 | 42.01 | 1.30% | Buy (93) |
| Mid cap | Polaris | PII | Feb-22 | 105.78 | 99.19 | – | Buy (160) |
| Mid cap | Goodyear Tire & Rubber | GT | Mar-22 | 16.01 | 11.22 | – | Buy (24.50) |
| Mid cap | M/I Homes | MHO | May-22 | 44.28 | 41.27 | – | Buy (67) |
| Mid cap | Janus Henderson Group | JHG | Jun-22 | 27.17 | 20.97 | 7.40% | Buy (67) |
| Mid cap | ESAB Corp | ESAB | Jul-22 | 45.64 | 35.20 | – | Buy (68) |
| Large cap | General Electric | GE | Jul-07 | 304.96 | 66.22 | 0.50% | Buy (160) |
| Large cap | Shell plc | SHEL | Jan-15 | 69.95 | 51.67 | 3.90% | Buy (60) |
| Large cap | Nokia Corporation | NOK | Mar-15 | 8.02 | 4.51 | 2.00% | Buy (12) |
| Large cap | Macy’s | M | Jul-16 | 33.61 | 17.53 | 3.60% | Buy (20) |
| Large cap | Toshiba Corporation | TOSYY | Nov-17 | 14.49 | 17.38 | 3.70% | Buy (28) |
| Large cap | Holcim Ltd. | HCMLY | Apr-18 | 10.92 | 8.37 | 5.30% | Buy (16) |
| Large cap | Newell Brands | NWL | Jun-18 | 24.78 | 14.38 | 6.40% | Buy (39) |
| Large cap | Vodafone Group plc | VOD | Dec-18 | 21.24 | 11.40 | 8.90% | Buy (32) |
| Large cap | Kraft Heinz | KHC | Jun-19 | 28.68 | 33.42 | 4.80% | Buy (45) |
| Large cap | Molson Coors | TAP | Jul-19 | 54.96 | 47.73 | 3.20% | Buy (69) |
| Large cap | Berkshire Hathaway | BRK.B | Apr-20 | 183.18 | 276.31 | – | HOLD |
| Large cap | Wells Fargo & Company | WFC | Jun-20 | 27.22 | 42.24 | 2.80% | Buy (64) |
| Large cap | Western Digital Corporation | WDC | Oct-20 | 38.47 | 37.06 | – | Buy (78) |
| Large cap | Elanco Animal Health | ELAN | Apr-21 | 27.85 | 12.65 | – | Buy (44) |
| Large cap | Walgreens Boots Alliance | WBA | Aug-21 | 46.53 | 32.25 | 5.90% | Buy (70) |
| Large cap | Volkswagen AG | VWAGY | Aug-22 | 19.76 | 17.10 | 4.40% | Buy (70) |
| Large cap | Warner Bros Discovery | WBD | Sep-22 | 13.13 | 12.49 | – | Buy (20) |
| Large cap | Dow | DOW | Oct-22 | 43.9 | 45.52 | 6.20% | Buy (60) |
