Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the February 2021 issue.
This month we look at energy pipeline stocks. These companies are heavily out of favor, yet a secular shift in their strategic priorities may finally restore their appeal. We list five that look attractive.
We also explore some bargains in the United Kingdom. This island nation is dually challenged by Brexit and the pandemic. We highlight seven stocks that have company-specific turnarounds that look promising.
Our feature recommendation is Viatris (VTRS). Created through the recent merger of Mylan and Pfizer’s Upjohn division, this company is now one of the world’s largest generic pharmaceutical manufacturers. Viatris should generate stable revenues and solid free cash flow, but investor skepticism is high. With the shares trading at a low 4.3x earnings, the step-up in leadership quality and transparency, and an attractive 5.2% dividend yield, the shares look poised for considerable gains.
We also include comments on recent price target and ratings changes, including our earlier sell recommendation on DuPont.
Please feel free to send me your questions and comments. This newsletter is written for you. 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.
Cabot Turnaround Letter 221
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Midstream Stocks: Pipeline to Value
While momentum-driven concept stocks make the headlines, stocks of companies that are firmly grounded in cash flows and tangible assets, like energy pipelines, remain out of favor. There may be an opportunity emerging in this group from their contrarian status and a favorable secular change.
Energy pipeline companies process and transport oil and natural gas from the wellhead to refineries, shipping ports and other major outlets. Given their placement between the upstream (producers) and downstream (users), they are often referred to as midstream companies. There are over a half million miles of midstream pipelines criss-crossing the United States, providing a critical conduit that can’t be replaced by trucks or railroads.
While seemingly similar, there can be considerable differences between midstream companies. Many are structured as master limited partnerships (MLPs), which are freed from paying federal income taxes, although they subject investors to K-1 statements and other potentially burdensome tax matters. MLPs may also have conflicts of interest with their sponsors.
Companies can emphasize different segments of the midstream. Gathering and processing (G&P) pipes collect and aggregate oil and natural gas from thousands of wellheads, remove impurities, and pump the products to intrastate and interstate transmission pipelines. Transmission pipelines transport large volumes of oil and natural gas across often-considerable distances. The controversial Dakota Access Pipeline and the just-cancelled Keystone XL pipeline are examples. Storage and terminals represent a third major segment.
Revenues are based on contracts, which may vary in sensitivity to commodity prices and volumes. G&P contracts often are based solely on volumes and prices. Take-or-pay contracts provide stable revenue regardless of conditions, and are more common in long-haul pipes.
Since oil prices peaked in mid-2014, midstream stocks have suffered losses averaging 70%. Part of the problem is that managements have continued to operate with a “growth company” mindset. This mindset has led to excessive capital spending, resulting in dilutive equity raises, over-leveraged balance sheets and disappointing payouts to shareholders. Cash-in-hand from high dividend yields was more than offset by steady share price declines, further alienating investors. Fearing more of the same, along with worries over increased federal regulations and an end to the era of gasoline-powered vehicles, investors have been reluctant to step back in.
Yet, steady shareholder pressure appears to be driving pipeline managements to change their priority from growth to free cash flow, not unlike the trends across the rest of the energy sector. This emerging secular shift could make these stocks more appealing. With lower capital spending plus determined cost-cutting, midstream companies could reduce their debts and pay out more cash to shareholders. Slower growth would generate greater investor confidence, and, ironically, drive the share prices higher from their currently depressed levels. In addition, rising commodity prices and more energy demand from the re-opening of the economy could add further appeal beyond the recent uplift from November’s vaccine announcement. Listed below is our selection of midstream companies that look attractive.
Enbridge (ENB) – Based in Canada, Enbridge is a well-managed midstream company that owns much of the backbone of the Canadian and U.S. long-distance oil transportation system. The company also has a large network of natural gas transmission and distribution pipelines. These high-quality assets, combined with new initiatives to boost its margins, provide the company with large, long-lived and stable cash flow, which allows it to be self-funding. Enbridge is among the vanguard in participating in the eventual transition to low-carbon energy sources. Its proposed Line 3 pipeline project may be denied regulatory approval, but a green light could boost the shares.
Energy Transfer, LP (ET) – This diversified midstream company, with its 90,000 miles of gathering and transport pipelines as well as extensive storage and terminal facilities, transports over 25% of the United States’ oil, natural gas and NGLs. It has assets in 38 states including all major supply basins. The company’s contracts are predominantly fee-based, providing relatively stable earnings. Investor frustration with its capital spending and elevated leverage has pushed down its valuation, as has its ownership stake in the Dakota Access Pipeline. Yet Energy Transfer may be changing its priorities, as it is sharply cutting its capital spending with a goal of becoming free cash flow positive after 2021. Its renewable energy initiatives may help improve its valuations, as well. If investors are convinced that the mindset change is real, the shares could see considerable appreciation.
Holly Energy Partners (HEP) – Holly is sponsored by HollyFrontier Corp, a major independent oil refining company based in Dallas, and as such its prosperity is linked to demand for gasoline, diesel and other refined products. In the past few years, the company raised equity yet also cut its distribution, and launched several expansion projects, all of which clouded its appeal. Another overhang was the uncertainty created when its sponsor announced that it would convert its Cheyenne, Wyoming refinery to a renewable diesel plant, threatening a revenue source. While the renegotiated contract terms weren’t ideal, Holly Energy Partners is now poised to generate strong free cash flows (as capital spending is declining rapidly), helped by a pending recovery in demand for refined fuels.
Magellan Midstream Partners (MMP) – Magellan is perhaps the highest quality company in the industry. It is highly regarded for its financial discipline, sturdy balance sheet, strong returns on invested capital and consistent payouts. Governance is favorable as it pays no incentive distribution rights (IDRs) and shareholders elect all board members. Supporting its stability is its concentration on transporting gasoline and diesel fuel from refineries and crude oil to refineries, backed by primarily fee-based contracts. Recent weakness resulted from lower volumes of refined products, but these should recover with the economy.
Rattler Midstream (RTLR) – This relatively small midstream company is a bit unique. It is closely tied to Diamondback Energy, a well-positioned oil producer that has a runway for production growth yet also generates positive free cash flow. Its 15-year, fixed-fee contracts with Diamondback provide a lower-risk revenue stream. Rattler’s leverage, cost structure and maintenance capital spending requirements are low, offering considerable financial strength. With its growth-capital spending surge winding down, Rattler looks poised to produce strong free cash flow starting this year, which, combined with cash retained from a dividend cut, will help fund its sizeable and accretive share repurchases.
Pipelines To Value | ||||||
Company | Symbol | Recent Price | % Chng vs Yr-End 2019 | Market Cap $Bil. | EV/ EBITDA* | Dividend Yield (%) |
Enbridge | ENB | 34.66 | -13 | 70.8 | 12.0 | 7.4 |
Energy Transfer LP | ET | 6.50 | -49 | 17.5 | 8.0 | 14.9 |
Holly Energy Partners LP | HEP | 15.12 | -32 | 1.6 | 9.3 | 9.3 |
Magellan Midstream Partners LP | MMP | 45.84 | -27 | 10.3 | 10.8 | 9.0 |
Rattler Midstream LP | RTLR | 9.73 | -45 | 1.5 | 8.2 | 10.4 |
Closing prices on January 22, 2021.
* Enterprise value/Earnings before interest, taxes, depreciation and amortization. Based on calendar year 2021 consensus estimates.
Sources: Company releases, Sentieo, S&P Capital IQ and Cabot Turnaround Letter analysis.
Turnarounds in the United Kingdom
While we concentrate on stocks in the United States, we occasionally look for bargains in other developed markets. One market that has many bargains is the United Kingdom, the island nation that includes Britain, Scotland, Northern Ireland and Wales.
The U.K. is facing two major challenges. First, on January 1, it fully departed the European Union following a long and winding Brexit negotiation. The exit leaves the country somewhat on its own, with likely slower growth and higher barriers to trade. One measure of Brexit’s scope: nearly 50% of the U.K.’s foreign trade is with EU members. Brexit will impact nearly every citizen’s daily life.
At the same time, the country is struggling with the Covid pandemic. Its per capita death rate is among the highest in the world and nearly twice that of the United States. And, a new, more aggressive variant is sweeping the country, threatening further economy-draining lockdowns and travel restrictions.
These issues have weighed down the benchmark FTSE 100 stock index. In the past twelve months, the index has declined 11.6%, well behind the 17.8% return of the S&P 500 and the 7.2% increase in the EAFE developed market index.
However, there may be a contrarian opportunity developing. The December 24, 2020 Brexit agreement proved less severe than feared, with an orderly transition that so far has prevented border chaos. London’s financial status as the EU’s largest capital market (by far) appears less threatened, as terms for these services were left alone, to be discussed down the road. And, the U.K.’s vaccine rate, among the fastest in the world, may lead to an earlier and more robust recovery than currently anticipated. Curiously, the British pound has been strengthening against the U.S. dollar and is holding its value against the euro.
United Kingdom stocks offer U.S. investors some defensiveness should the exuberant domestic stock market take a tumble and the dollar continue to weaken. Listed below are seven U.K.-based companies that are likely to participate in a U.K. recovery. Each has some company-specific turnaround traits and sells at a discount price. In addition to these stocks, investors may want to consider Cabot Turnaround Letter-recommended Vodafone (VOD), also based in the United Kingdom. The shares trade either as ADRs or regular shares on major United States’ exchanges and offer plenty of daily liquidity.
Aviva, PLC (AVIVY) – Aviva sells life insurance, savings and investment management products. Long a mediocre company, the frustrated board last July installed Amanda Blanc as the new CEO to fix the business. She is aggressively re-focusing the company on its core geographic markets (UK, Ireland, Canada), with its continental Europe and Asia operations potentially on the selling block. The turnaround also includes improving Aviva’s product competitiveness, rebuilding its financial strength and trimming its bloated costs. The dividend has been reduced, but to a level that will allow high confidence in its permanence and a modest but upward trajectory. The stock trades at 6.3x estimated 2021 earnings and only 80% of tangible book value, yet offers an appealing 6% dividend yield.
Imperial Brands (IMBBY) – Imperial is the world’s fourth-largest tobacco company outside of China, and produces about a quarter of its revenues in the United States. Its shares have steadily lost 60% of their value in the past five years, partly due to its weak roster of next generation products (NGPs), which include vaping, heat-not-burn and other tobacco products. Investors worry that Imperial’s flattish revenue growth will turn to declines as its competitiveness is at risk. Yet, the company appears to be waking up. Last July, the company hired a new CEO who brings considerable turnaround and consumer products experience. An impressive new board chair, Therese Esperdy, a former head of several of JPMorgan’s global investment banking operations, started in January 2021 to oversee the company’s turnaround. Change is coming to Imperial Brands, likely both in terms of new products as well as cost improvements, which investors can learn about at the January 27th investor day. The high dividend may be cut to help fund debt paydown or other initiatives. Trading at only 6.6x earnings, IMBBY shares assume an overly dour future.
Informa plc (IFJPY) – Pandemic-related travel restrictions have all but eliminated attendance at the otherwise well-attended trade events produced by Informa, dragging down first half 2020 revenues by 26%. While the shares recently jumped on the vaccine news, they remain 38% below their early 2020 level. However, physical events are re-starting in China and other parts of Asia, and are likely to fully recover by 2022 or 2023. As Informa generates much of its revenues from resilient academic and trade publications, intelligence and research subscriptions, it continues to produce positive free cash flow and has recently trimmed its debt. The company has cut its costs, and is benefitting from its digital transition. While there is the risk that the post-pandemic world needs fewer of what Informa provides, there is also the potential that its in-person events become even more valuable.
GlaxoSmithKline, plc (GSK) – With $47 billion in revenues, Glaxo is a pharmaceutical, vaccine and consumer healthcare products giant. Despite its healthy profits and robust balance sheet, the company’s shares remain 30% below their 2001 price and trade at a modest 12x estimated 2021 earnings. Its recent Covid vaccine efforts have been a disappointment, adding to Glaxo’s problems. To help reinvigorate growth, the company is combining its consumer products group with the recently acquired Pfizer consumer healthcare products group, which it will then spin off in 2022. Glaxo’s efforts to boost its new product development has the potential to generate a strong product pipeline, which in turn should produce faster revenue growth due to the company’s improving commercialization capabilities. Also, once the pandemic subsides, revenue should recover as patients return to doctors’ offices for the company’s shingles, meningitis and influenza vaccines. Risks include patent expiry for Advair and potentially higher competition from Gilead. This stock is worth a closer look.
NatWest Group (NWG) – Once the world’s largest bank, the then-named Royal Bank of Scotland was crippled by the global financial crisis a decade ago, saved only by the U.K. government taking a 62% stake, which it still holds. However, the bank hasn’t wasted the last decade, and is now in remarkably strong financial condition, with a high 18.2% capital ratio. While profits remain modest, hampered by low interest rates, weak fees and subdued lending profits as well as elevated credit and regulatory costs, new CEO (November 2019) Alison Rose is pressing for faster improvements as well as an upgrade of its digital banking capabilities. Its capital markets group is being slimmed down, as well. The bank has a solid retail franchise, and its mortgage lending business is performing well. NatWest will likely restore its robust dividend and repurchase the government’s stake, helping boost investor appeal of this discounted bank.
Pearson (PSO) – This publishing company, which focuses on educational, academic and other learning-based materials, has struggled as the world transitions to digital media. Its shares began a precipitous decline starting in 2015, eventually falling 75% to their nadir this past spring. To reverse Pearson’s decline, Andy Bird, a Pearson board member and the former head of Walt Disney International, took the reins as CEO this past October. His plans include simplifying the company, building its digital capabilities and strengthening its leveraged balance sheet. Early progress is encouraging, with organic revenues showing positive growth in the most recent quarter. The stock has responded favorably, yet more upside is likely as the turnaround continues.
Reckitt-Benckiser Group (RBGLY) – Reckitt-Benckiser is a major household goods producer with iconic and category-leading brands including Lysol, Mucinex, Woolite and Airwick. Its efforts to rejuvenate its growth, including the $17 billion acquisition of baby formula company Mead Johnson and its $4 billion divestiture of its food business to McCormick (both in 2017) were not productive. With its shares remaining flat for over six years, Reckitt hired Laxman Narasimhan, a highly-regarded PepsiCo executive, as the new CEO in September 2019. He is executing a plan to reinvigorate the company’s growth to the 5% range, partly by spending more on new product development and partly by upgrading its infrastructure, simplifying its operations and reducing its costs. If this strategy isn’t successful, we would not be surprised to see an activist investor get involved. RBGLY shares trade at a discounted 19.4x this year’s earnings.
Bargains in the United Kingdom | ||||||
Company | Symbol | Recent Price | 52-Week High-Low | Market Cap $Bil. | Price/ Earnings * | Dividend Yield (%) |
Aviva | AVVIY | 9.58 | 10.84 - 4.71 | 18.7 | 5.7 | 6.0 |
GlaxoSmithKline | GSK | 38.36 | 48.25 - 31.43 | 94.1 | 11.2 | 5.4 |
Imperial Brands | IMBBY | 22.64 | 26.05 - 14.42 | 21.1 | 6.2 | 9.1 |
Informa | IFJPY | 14.44 | 21.96 - 8.40 | 10.6 | 14.7 | - |
NatWest Group | NWG | 4.19 | 6.00 - 2.34 | 25.7 | 7.4 | - |
Pearson | PSO | 9.72 | 10.09 – 5.08 | 7.3 | 16.5 | 2.7 |
Reckitt-Benckiser Group | RBGLY | 17.46 | 21.00 - 12.76 | 61.1 | 20.2 | 2.7 |
Closing prices on January 22, 2021.
* Based on calendar year 2022 consensus estimates.
Sources: Company releases, Sentieo, S&P Capital IQ and Cabot Turnaround Letter analysis.
Recommendations
Purchase Recommendation: Viatris, Inc.
Viatris, Inc. 1000 Mylan Boulevard Canonsburg, Pennsylvania 15317 (724) 514-1800 viatris.com |
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Background
Viatris is one of the world’s largest manufacturers of generic pharmaceuticals. This new company was launched in November, 2020 through the merger of generics producer Mylan, N.V. and Pfizer’s Upjohn division. Mylan was founded in 1961 and expanded rapidly through new product development and acquisitions, becoming a driving force behind the growth of the generics industry.
Upjohn was home to Pfizer’s off-patent branded and generic medicines, including Viagra, Celebrex and Lipitor. Pfizer divested the Upjohn unit, and its consumer healthcare unit (to a joint venture with GlaxoSmithKline), to concentrate on patented treatments.
The market is showing little interest in VTRS shares, as they trade at a low 4.3x estimated 2021 earnings of $4.02 and 6.3x estimated EV/EBITDA.
One major concern is revenue growth: aggressive pricing and new product competition have led to flattish revenues for legacy Mylan and 20% declines for legacy Upjohn in recent years. This, plus limited visibility into its launch pipeline, has left investors wondering if Viatris is capable of delivering even flat revenues. Another issue is the sustainability and potential growth of the dividend, which is anticipated to provide an initial 5.2% yield. Other concerns include the company’s elevated debt burden, its controversial EpiPen, some production quality problems, a loss of exclusivity for Lyrica in Japan, and reforms to China’s volume-based procurement programs. Faced with this long list of doubts, particularly in a surging bull market, investors have turned their attention elsewhere.
Analysis
While the challenges facing Viatris are real, much of the problem seems to be that investors are put off by the company’s lack of transparency. Yet, while legacy Mylan frustrated investors due to its low quality and quantity of communications, much more highly regarded Pfizer executives now hold the key CEO and CFO positions at Viatris. In addition, with stronger leadership and its incorporation in Delaware (removing the governance cloud of legacy Mylan’s Dutch incorporation), investor confidence in the management team and its ability to execute on its goals should improve.
An upcoming transparency catalyst is the March 1st investor day, during which Viatris will describe more comprehensively its plans, targets and outlook, as well as directly address investor concerns, particularly regarding its revenues.
Fundamentally, we see the company maintaining generally flat revenues. The worst of generic pricing pressures seem to have passed, and the two legacy companies have different geographic concentrations, helping provide new markets for each other’s treatments. Viatris’s new product pipeline likely has under-appreciated revenue-buttressing potential, as well. Adding further appeal is that management has targeted $1 billion in cost-cutting opportunities by 2023, which would boost profits and cash flow.
Viatris is positioned to generate $3.6 billion a year in free cash flow, plenty to service its $24.5 billion in debt. After funding its dividend with 25% of its free cash flows, the company is prioritizing debt reduction, even though it currently has an investment grade credit rating. Reaching its 2.5x EBITDA target debt level, compared to about 3.5x today, would accrete value to equity investors as well as reduce the company’s risk.
With exceptionally low expectations, a step-up in leadership quality and transparency, solid free cash flow and an attractive dividend yield, VTRS shares look poised for considerable gains.
We recommend the purchase of Viatris, Inc. (VTRS) shares with a 26 price target.
Price Target Changes and Sell Recommendations
After the roller coaster ride surrounding its Alzheimer’s treatment, Biogen shares are now discounting an uninspiring future. There is little in the stock price for the Alzheimer’s treatment and expectations for its Tecfidera product are modest, given the arrival of heavy off-patent competition. However, while the odds are remote, there remains some potential for aducanumab (Biogen isn’t walking away from this) and a chance of a modestly favorable outcome to its Tecfidera patent appeal. Biogen currently trades at 11x estimated 2022 earnings and has considerable financial strength (only a modest amount of debt with cash offsetting nearly half of this). We are retaining our Buy rating and 360 price target.
On January 8th, we raised our price target on Signet Jewelers to 42 from 35, as there are more fundamental improvements ahead for the company. On January 15th, we raised our price target on Mohawk Industries to 180. We had previously reduced the price target to 147 from 220 when it looked like the pandemic would significantly weaken the company’s turnaround efforts. However, it appears that the construction and remodel industries will remain reasonably healthy.
On January 20th, we raised our price target on General Motors to 62, as the shares surged through our 49 price target. We wrote an extensive email note on our thinking. With the robust (perhaps exuberant) stock market, many of our stocks are hitting their price targets. What do we do in this situation? We could be dogmatic and sell our stocks when they hit their price targets, as there is nothing wrong with capturing some large gains. But, we might be missing something, especially in an economy where secular change is rapidly improving the opportunities for many companies. Some of our companies may be adapting pretty well to that secular change, and we don’t want to miss that, if there is real value there.
The turnaround at GM is one of the most impressive we’ve seen. Its conventional vehicle operations are a step-function better than they were at the “old GM”, and their electric vehicle operations position them well, with perhaps a North American duopoly with Tesla. We see little value in the self-driving or battery business currently. Clearly there are many risks in GM shares, which increase along with the price. Our detailed valuation model, which captures on a sum-of-the-parts basis a more wholistic view of GM’s future, leads us to raise our price target to 62. We are keeping the shares on a short leash.
We continue to like Royal Dutch Shell but are reducing our price target to 53 from 85 to reflect the lower oil price and refining margin environment. We have assumed some additional rebound in the energy markets, in effect pricing in some optionality on oil prices. The company’s profits are very sensitive to the energy markets. With what it can control, Shell is cutting costs and has slashed its dividend, both to help boost its annual cash flow to what appears to be a sustainable level. While too high, Shell’s debt is manageable and generally lower than most publicly-traded peers. Also worth watching is Shell’s growing base of renewable energy projects – these have an unclear outcome but should help position the company for a post-carbon world in the coming decades.
With the pending sale of its Nutrition & Biosciences (N&B) unit, DuPont shares surged past our 75 price target. We are moving DD shares to a Sell. The actual N&B transaction has complicated mechanics, including an exchange into N&B shares at a discounted and yet-to-be-determined exchange ratio, followed by their conversion into International Flavors & Fragrances (IFF) shares. The net effect is that DuPont retires a sizeable percentage of its shares and reduces its debt. However, the post-transaction valuation looks full and discounts a fairly prosperous future. DuPont shares produced an 87% total return since our March 2020 initial Buy recommendation.
You can find more details by visiting our website at cabotwealth.com.
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. | 1/22/21 Price | Total Return (3,4) | Current Yield | Current Status (2) |
Gannett Company | GCI | 17-Aug | 9.22 | 4.19 | +10 | 0% | Buy (9) |
Oaktree Specialty Lending Corp. | OCSL | 18-Aug | 4.91 | 5.74 | +37 | 7.70% | Buy (7) |
Signet Jewelers Limited | SIG | 19-Oct | 17.47 | 36.31 | +112 | 0% | Buy (42) |
Duluth Holdings | DLTH | 20-Feb | 8.68 | 12.31 | +42 | 0% | Buy (17.50) |
Mid Cap1 ($1 billion - $10 billion) Current Recommendations
Recommendation | Symbol | Rec. Issue | Price at Rec. | 1/22/21 Price | Total Return (3,4) | Current Yield | Current Status (2) |
Mattel, Inc. | MAT | 15-May | 28.43 | 18.37 | -23 | 0% | Buy (38) |
BorgWarner | BWA | 16-Aug | 33.18 | 42.8 | +38 | 1.60% | Buy (46) |
Conduent | CNDT | 17-Feb | 14.96 | 5.25 | -65 | 0% | Buy (6) |
Adient, plc | ADNT | 18-Oct | 39.77 | 35.36 | -10 | 0% | Buy (42) |
JELD-WEN | JELD | 18-Nov | 16.2 | 29.37 | +81 | 0% | Buy (28) |
Trinity Industries | TRN | 19-Sep | 17.47 | 28.06 | +67 | 3.00% | Buy (30) |
Meredith Corporation | MDP | 20-Jan | 33.01 | 19.25 | -40 | 0% | Buy (52) |
Lamb Weston Holdings | LW | 20-May | 61.36 | 78.15 | +28 | 1.20% | Buy (85) |
GCP Applied Technologies | GCP | 20-Jul | 17.96 | 24.8 | +38 | 0% | Buy (28) |
Albertsons, Inc. | ACI | 20-Aug | 14.95 | 17.5 | +18 | 2.30% | Buy (23) |
Xerox Holdings | XRX | 20-Dec | 21.91 | 21.07 | -3 | 4.70% | Buy (33) |
Ironwood Pharmaceuticals | IRWD | 21-Jan | 12.02 | 10.34 | -14 | 0% | Buy (19) |
Notes to ratings:
1. Based on market capitalization on the Recommendation date.
2. Price target in parentheses.
3. Total return includes price changes and dividends.
4. Prices and returns are adjusted for stock splits.
SP Given the higher risk, we consider these shares to be speculative.
* Indicates mid-month change in Recommendation rating. For Sells, price and returns are as-of the Sell date.
Large Cap1 (over $10 billion) Current Recommendations
Recommendation | Symbol | Rec. Issue | Price at Rec. | 1/22/21 Price | Total Return (3,4) | Current Yield | Current Status (2) |
General Electric | GE | 7-Jul | 38.12 | 11.11 | -47 | 0.40% | Buy (20) |
General Motors | GM | 11-May | 32.09 | 55.4 | +101 | 0% | Buy (62) |
Royal Dutch Shell plc | RDS/B | 15-Jan | 69.95 | 37.35 | -17 | 3.60% | Buy (53) |
Nokia Corporation | NOK | 15-Mar | 8.02 | 4.2 | -36 | 0% | Buy (12) |
The Mosaic Company | MOS | 15-Sep | 40.55 | 28.33 | -23 | 0.70% | Buy (27) |
Macy’s | M | 16-Jul | 33.61 | 12.88 | -45 | 0% | Buy (13) |
ViacomCBS | VIAC | 17-Jan | 59.57 | 45.58 | -15 | 2.10% | Buy (54) |
Volkswagen AG | VWAGY | 17-May | 15.91 | 21.9 | +44 | 2.50% | Buy (24.50) |
Credit Suisse Group AG | CS | 17-Jun | 14.48 | 13.73 | +8 | 1.70% | Buy (24) |
Toshiba Corporation | TOSYY | 17-Nov | 14.49 | 16.25 | +14 | 0.50% | Buy (28) |
LafargeHolcim Ltd. | HCMLY | 18-Apr | 10.92 | 11.32 | +14 | 3.90% | Buy (16) |
Newell Brands | NWL | 18-Jun | 24.78 | 24.8 | +9 | 3.70% | Buy (39) |
Vodafone Group plc | VOD | 18-Dec | 21.24 | 17.58 | -8 | 6.00% | Buy (32) |
Mohawk Industries | MHK | 19-Mar | 138.6 | 149.77 | +8 | 0% | Buy (180) |
Kraft Heinz | KHC | 19-Jun | 28.68 | 32.91 | +25 | 4.90% | Buy (45) |
Molson Coors | TAP | 19-Jul | 54.96 | 50.52 | -5 | 0% | Buy (59) |
Biogen | BIIB | 19-Aug | 241.51 | 269.44 | +12 | 0% | Buy (360) |
DuPont de Nemours | DD | 20-Mar | 45.07 | 83.49 | +87 | 1.40% | SELL * |
Berkshire Hathaway | BRK/B | 20-Apr | 183.18 | 232.92 | +27 | 0% | Buy (250) |
Wells Fargo & Company | WFC | 20-Jun | 27.22 | 31.9 | +18 | 1.30% | Buy (43) |
Baker Hughes Company | BKR | 20-Sep | 14.53 | 22.17 | +55 | 3.20% | Buy (23) |
Western Digital Corporation | WDC | 20-Oct | 38.47 | 50.17 | +32 | 0% | Buy (59) |
Valero Energy | VLO | 20-Nov | 41.97 | 59.45 | +44 | 6.60% | Buy (70) |
Most Recent Closed-Out Recommendations
Recommendation | Symbol | Category | Buy Issue | Price At Buy | Sell Issue | Price At Sell | Total Return(3,4) |
Weyerhaeuser Co | WY | Large | 12-Apr | 21.89 | *Nov 20 | 28.14 | +70 |
Barrick Gold | GOLD | Large | 19-Feb | 13.05 | *Nov 20 | 26.9 | +109 |
GameStop | GME | Mid | 19-Apr | 10.29 | *Nov 20 | 16.56 | +61 |
Freeport-McMoran | FCX | Large | 13-Aug | 28.21 | *Nov 20 | 23.39 | -8 |
The next Cabot Turnaround Letter will be published on February 24, 2021.
Cabot Wealth Network
Publishing independent investment advice since 1970.
President & CEO: Ed Coburn
Chairman & Chief Investment Strategist: Timothy Lutts
176 North Street, PO Box 2049, Salem, MA 01970 USA
800-326-8826 | support@cabotwealth.com | CabotWealth.com
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