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Turnaround Letter
Out-of-Favor Stocks with Real Value

December 30, 2022

This week there were no earnings reports or ratings changes, so this note covers relevant news on our recommended companies. We also include the Catalyst Report and a summary of the January edition of the Cabot Turnaround Letter, which was published on Wednesday. Due to our travel schedule, there is no podcast this week.

We encourage you to look through the Catalyst Report. This report is a listing of all of the companies that have reported a catalyst in the past month. These catalysts include new CEOs, activist activity, spin-offs and other possible game-changers. We source many of our feature recommendations from this list. You will find it nowhere else on Wall Street.

In the January edition of the Cabot Turnaround Letter, we discuss our Top Five Stocks for 2023, which includes Duluth Holdings (DLTH), Goodyear Tire & Rubber (GT), Nokia Corporation (NOK), Vodafone Group (VOD) and ZimVie Holdings (ZIMV). While we like all of our recommendations, these five have what we believe are the most favorable combinations of risk/return potential and timeliness.

We also review this past year’s capital markets and grade our 2022 outlook. We see 2022 as a bridge year between the over-stimulated pandemic era of free and unlimited money and the more normal post-pandemic period of higher-priced and tighter money. We also provide our outlook for 2023, acknowledging the wisdom of Yogi Berra’s advice that “predictions are difficult, especially about the future.”

Like nearly all asset classes, high-yield bonds had weak performance this past year. However, conditions are more favorable, so investors may want to nibble on new high-yield investments.

Our feature recommendation this month is one of the most disliked stocks in the market, social media company Meta Platforms (META). The company’s core fundamentals are relatively strong, including stable revenues, generous pre-metaverse spending free cash flow and a fortress balance sheet. But all this is being obscured by the immense waste of capital that is its metaverse investment. Any relenting on this mission could lead to an impressive turnaround of the company and its remarkably inexpensive stock.

Comments on our recommended companies:

  • General Electric (GE) – following its spin-off next week, GE Healthcare Technologies will join the S&P500 index.

Please know that I personally own shares of all Cabot Turnaround Letter recommended stocks, including the stocks mentioned in this note.

The Catalyst Report

December was an active month with nearly 40 catalysts. Deal activity was strong, while 12 companies replaced their CEO. Six Flags Entertainment, one of our recommended stocks, received fresh interest from a new activist with an intriguing idea for improving the share price.

The Catalyst Report is a proprietary monthly report that is unique on Wall Street. It is an extensive listing of companies that have experienced a recent strategic event, such as new leadership, a spin-off transaction, interest from an activist investor, emergence from bankruptcy, and others. An effective catalyst can jump-start a struggling company toward a more prosperous future.

This list is intended to be comprehensive. While not all catalysts are meaningful, some can bring much-needed positive changes to out-of-favor companies.

One highly effective way to use this tool is to pair the names with weak stocks. Combining these two traits can generate a short list of high-potential turnaround investment candidates. The spreadsheet indicates these companies with an asterisk (*), some of which are highlighted below. Market caps reflect current market prices.

You can access our Catalyst Report here.

The following catalyst-driven stocks look interesting:


Matthews International (MATW) $924 million market cap – This mini-conglomerate owns three completely unrelated businesses: gravestones and caskets, packaging and branding, and industrial warehouse technology. Its acquisition strategy has been a dismal failure, leaving its shares unchanged over the past 18 years. Activist investor Barrington Capital is pressing for major changes. Trading at 7.8x EBITDA, the shares probably have a lot of value to be unlocked.


Under Armor

Under Armour (UAA) $4.1 billion market cap – Shares of this iconic apparel maker have done a complete round-trip over the past decade and are down 80% from their peak in 2015. Mismanagement has been a chronic problem, as has an increasingly competitive apparel and distribution environment. However, a surprising new CEO selection, Stephanie Linnartz, current president of Marriott, will take the helm in February. While selling t-shirts is very different from running a hotel chain, Linnartz could bring the management skills, common sense and determination that Under Armour needs.

Market CapRecommendationSymbol



Price at





Rating and Price Target
Small capGannett CompanyGCIAug 20179.22 2.00 - Buy (9)
Small capDuluth HoldingsDLTHFeb 20208.68 6.06 - Buy (20)
Small capDril-QuipDRQMay 202128.28 27.13 - Buy (44)
Small capZimVieZIMVApr 202223.00 9.23 - Buy (32)
Mid capMattelMATMay 201528.43 18.01 - Buy (38)
Mid capConduentCNDTFeb 201714.96 4.11 - Buy (9)
Mid capAdient plcADNTOct 201839.77 35.21 - Buy (55)
Mid capXerox HoldingsXRXDec 202021.91 14.496.9%Buy (33)
Mid capIronwood PharmaceuticalsIRWDJan 202112.02 12.43 - Buy (19)
Mid capViatrisVTRSFeb 202117.43 11.134.3%Buy (26)
Mid capOrganon & Co.OGNJul 202130.19 28.184.0%Buy (46)
Mid capTreeHouse FoodsTHSOct 202139.43 48.90 - Buy (60)
Mid capKaman CorporationKAMNNov 202137.41 21.883.7%Buy (57)
Mid capThe Western Union Co.WUDec 202116.40 13.886.8%Buy (25)
Mid capBrookfield ReBNREJan 202261.32 31.991.8%Buy (93)
Mid capPolarisPIIFeb 2022105.78 100.54 - Buy (160)
Mid capGoodyear Tire & RubberGTMar 202216.01 10.24 - Buy (24.50)
Mid capM/I HomesMHOMay 202244.28 46.11 - Buy (67)
Mid capJanus Henderson GroupJHGJun 202227.17 23.946.5%Buy (67)
Mid capESAB CorpESABJul 202245.64 48.39 - Buy (68)
Mid capSix Flags EntertainmentSIXDec 202222.60 23.08 - Buy (35)
Large capGeneral ElectricGEJul 2007304.96 83.750.4%Buy (160)
Large capNokia CorporationNOKMar 20158.02 4.681.9%Buy (12)
Large capMacy’sMJul 201633.61 20.463.1%Buy (25)
Large capToshiba CorporationTOSYYNov 201714.49 17.525.9%Buy (28)
Large capHolcim Ltd.HCMLYApr 201810.92 10.294.3%Buy (16)
Large capNewell BrandsNWLJun 201824.78 13.147.0%Buy (39)
Large capVodafone Group plcVODDec 201821.24 10.2110.0%Buy (32)
Large capMolson CoorsTAPJul 201954.96 51.602.9%Buy (69)
Large capBerkshire HathawayBRK.BApr 2020183.18 309.06 - HOLD
Large capWells Fargo & CompanyWFCJun 202027.22 41.332.9%Buy (64)
Large capWestern Digital CorporationWDCOct 202038.47 31.57 - Buy (78)
Large capElanco Animal HealthELANApr 202127.85 12.12 - Buy (44)
Large capWalgreens Boots AllianceWBAAug 202146.53 37.475.1%Buy (70)
Large capVolkswagen AGVWAGYAug 202219.76 15.784.8%Buy (70)
Large capWarner Bros DiscoveryWBDSep 202213.13 9.43 - Buy (20)
Large capDowDOWOct 202243.90 50.655.5%Buy (60)
Large capCapital One FinancialCOFNov 202296.25 92.672.6%Buy (150)
Large capMeta PlatformsMETA Jan 2023118.04 120.26 - Buy (180)

Disclosure: The chief analyst of the Cabot Turnaround Letter personally holds shares of every Rated recommendation. The chief analyst may purchase securities discussed in the “Purchase Recommendation” section or sell securities discussed in the “Sell Recommendation” section but not before the fourth day after the recommendation has been emailed to subscribers. However, the chief analyst may purchase or sell securities mentioned in other parts of the Cabot Turnaround Letter at any time.Please feel free to share your ideas and suggestions for the podcast and the letter with an email to either me at or to our friendly customer support team at 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.

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.