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Turnaround Letter
Out-of-Favor Stocks with Real Value

Cabot Turnaround Letter 921

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the September 2021 issue.

While the stock market continues to set new record highs, oil and gas exploration and production (E&P) companies have been left behind. Yet, at current commodity prices, which we believe are sustainable, several companies have shares that trade at surprisingly high free cash flow yields, some as high as 24%. We make our case for five stocks.

Related to this, our featured recommendation is Marathon Oil Company (MRO), a mid-cap oil-focused E&P company. Its strong fundamentals, including a high-quality asset base, strong free cash flow and a solid balance sheet, make it particularly attractive.

We highlight three former Cabot Turnaround Letter winners whose shares have retreated since our exit. These now look interesting once again.
In this issue we also discuss three one-off contrarian ideas that have considerable appeal.

During the month, we had a few ratings changes: we moved Berkshire Hathaway (BRK/B) to a Hold, and moved Albertsons (ACI) and Oaktree Specialty Lending (OCSL) from Buy to Sell.

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 I’ll do my best to respond as quickly as possible.

Cabot Turnaround Letter 921

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Oil E&Ps – Time to Buy
While the stock market continues to set new record highs, investors continue to bypass the energy sector. One indicator: the sector’s weight within the S&P 500 has collapsed from nearly 16% in 2009 to only 2.4% today, making it the smallest in the index. Within the energy sector, the exploration and production (E&P) companies – the ones that search for and pump oil and natural gas – look particularly out of favor, as many E&P shares remain below their year-end 2019 prices despite oil trading nearly 10% higher and approaching $70/barrel. This dichotomy highlights one of the more contrarian opportunities in the market.

Weak investor interest appears to center on four issues. First, heightened emphasis by institutional investors on climate-friendly investments reduces the appeal of E&P stocks. This is a non-economic motivation that provides more opportunity to profit-motivated investors.

Second, oil prices are volatile and unpredictable. Instead of accepting the risk of sharp losses in E&P stocks, investors generally prefer more stable growth companies. Yet, while acknowledging the commodity price risk, we believe that oil prices have a reasonably strong chance of remaining in the $70 range for years.

Supporting oil prices is resilient demand, which has nearly fully recovered from the pandemic and looks poised to grow further. The U.S. Energy Information Association (EIA) estimates that in 2022, global oil demand will reach 101 million barrels/day, exceeding the 2019 pace. Driving oil consumption higher is the continued underlying growth in emerging markets, as well as the post-pandemic economic rebound (partly delayed by the Delta and other variants) across most countries. Despite urgent calls for alternative fuels to help mitigate climate change, the challenges to reducing the reliance on carbon-based energy remain daunting, with a wholesale shift likely to be slow-moving and measured in decades.

Subdued oil supply growth should also support oil prices. Major global energy companies are under increasing pressure to reduce their production to help fight climate change. And, following years of aggressive drilling in the U.S., shale oil’s most productive days may be in the past. If so, domestic production, now running about 15% below 2019 levels, may be permanently lower.

A third concern is that company managements may lose their newfound discipline, leading to aggressive (and likely wasteful) spending. Not only would this divert funds from shareholders’ pockets but it would also potentially lead to lower oil prices as new supply hits the market.

Yet, after decades of soured returns, investors appear steeled to deter this behavior, and managements have finally gotten the message. Managements now emphasize restrained spending, with clearly-stated commitments to allocate surplus cash to shareholders. Reverting back to old, free-spending habits would likely result in severe share price penalties.

A major issue is the behavior of OPEC (or, OPEC+ if Russia is included). Their recent agreement to gradually increase production hangs over the market, and future discipline is unknowable. Yet, with global demand rising and non-OPEC supply potentially falling, more of the world’s oil would need to come from OPEC. This would put more pricing power into OPEC’s hands, almost certainly leading to higher prices. And the Middle East, home to most of OPEC, seems as unsettled as ever. Following the U.S. exits from Afghanistan and Iraq, new risks are emerging. Will Iran become more aggressive, threatening its neighbors’ production? Will other unrest disrupt output or shipping? Perhaps Iran will build a pipeline through Afghanistan directly into China, risking new sanctions.

As investors avoid E&P shares even as the companies generate vast free cash flow, the stocks now offer very appealing free cash flow yields, in some cases as high as 24%. Below are five independent E&P companies that look attractive, in addition to this month’s featured recommendation, Marathon Oil Company (MRO). Other Cabot Turnaround Letter recommended energy stocks include Royal Dutch Shell (RDS.B), Dril-Quip (DRQ) and Baker Hughes (BKR), which also have strong upside potential at current commodity prices.

APA Corporation (APA) – The formerly-named Apache Corporation produces about 70% of its output from the highly prolific and low-cost Permian Basin and other areas of Texas. The balance comes from Egypt (18%) and the North Sea (12%). About 75% of its output is oil and very little of its production is hedged. Apache holds a 79% stake in Altus Midstream, which owns pipeline assets. While the U.S. segment provides a solid base, the Egypt operations (67% owned by Apache, 33% owned by Sinopec) offer a source of upside. Apache is close to receiving final approval to update its long-standing agreement with the Egyptian government, which should improve results there. Another source of potential upside comes from Apache’s early success in Suriname, just north of Brazil, where newfound oil could generate considerable new profits starting in about five years. Little value is being assigned by investors to the Suriname opportunity despite its sizeable potential. One other source of potential value is the Altus Midstream business.

APA Corporation is on track to generate $1.6 billion in free cash flow this year, which is about 24% of its market cap. The company’s priority for its cash is to reduce its $6.8 billion in net debt until it is investment grade, then return cash to shareholders. Free cash flow may be lower next year as the company will likely increase its spending in Egypt and Suriname, but these projects appear well worth the incremental costs.

ConocoPhillips (COP) – Conoco is the world’s largest independent E&P company, following its 2012 divestiture of the Phillips 66 refining operations. About half of its production is from the Permian Basin, with the remaining production coming from the Bakken region (which it may be divesting), Alaska, Canada, Australia and Africa. Its low output decline rate allows it to spend less to keep production flat. Although its balance sheet is already investment grade, Conoco will continue to trim its debt by $5 billion over the next five years. The management has committed to limiting its capital spending to 50% of its annual cash flow, while paying out at least 30%. This year it has already returned $6 billion to shareholders with potentially an equal amount coming in the second half. Every $1 increase in oil prices yields $300 million in incremental free cash flow.

While the management is considered to be high quality, it has a penchant for acquisitions, reflected in its recent $13.3 billion purchase of Concho Resources. Investors wonder if its growing cash hoard (now at $9 billion) will be spent on another major purchase. However, the Concho integration appears to be going well, and competition for major deals (like Shell’s potential Permian divestiture) may be limited, allowing for a bargain-ish price. COP’s free cash flow yield is approximately 11%.

Diamondback Energy (FANG) – Diamond-back is a relatively new company that was launched in 2007. The shares are down 50% from the mid-2018 high. Following the pending sale of its Williston assets, all of its production will come from the prolific West Texas region. Diamondback is considered well managed and is among the industry’s most efficient operations. This year, the company is dedicating most of its cash flow to reducing debt from spending $3.0 billion (total) to acquire QEP Resources and Guidon Operating LLC. Next year, it will start dedicating 50% of its free cash flow to debt repayment and shareholders, with a bias toward share repurchases after funding its recently-raised dividend. The company is generating close to $600 million per quarter in free cash flow, yet this should increase next year after most of its hedges roll off. Diamondback’s free cash flow yield is 16%.

Oasis Petroleum (OAS) – Oasis emerged from bankruptcy in November 2020 with new management, a new board of directors and nearly all of its debt eliminated. Since then, it has divested all of its Permian Basin assets, using proceeds to acquire assets that build upon its focus in the Williston Basin of Montana and North Dakota. The new strategy strongly emphasizes generating free cash flow, helped by low interest costs and tax offsets that should largely eliminate cash income taxes for years. It also benefits from its stake in Oasis Midstream Partners. Oasis is raising its annualized dividend to $2/share, paid a $4/share special dividend in July and announced a $100 million share repurchase program. While its low debt and recent comments suggest that the company will make additional acquisitions, we would expect these to be sensible as the new management will want to preserve its credibility. Despite the shares’ recent surge, they remain inexpensive and trade at a 19% free cash flow yield.

Ovintiv (OVV) – Previously named Encana Corporation until 2019 when it relocated to Denver from Canada, this company is one of the oldest E&Ps in North America. Its assets are primarily in the Permian and Anadarko basins in the U.S. and the Montney Basin in Canada. About half of its production is oil and related liquids, with most of its 2021 production hedged.

Due to the controversial relocation, excessive executive pay and weak governance, Ovintiv was subjected to a withering campaign by Kimmeridge, a respected energy industry activist investor. In response, Ovintiv now has a new CEO (an Encana/Ovintiv veteran, so perhaps some risk here), a refreshed board and better pay and governance structures. It is also divesting $1.1 billion in non-core assets. The company has committed to reducing its $5.2 billion in net debt to $3 billion by year-end 2023 and recently raised its dividend by 50%. Once its debt is trimmed to the target, Ovintiv will likely pay out substantial cash to shareholders. OVV shares trade at a 23% free cash flow yield.

Oil E&Ps - Time To Buy
% Chg Vs Yr-End 2019Market
Cap $Bil.
Yield (%)
APA CorporationAPA18.74-
Diamondback EnergyFANG76.65-1713.95.52.4
Oasis PetroleumOAS88.06na1.82.62.3

Closing prices on April 27, 2021.
* EV/EBITDAX is Enterprise value to Earnings before interest, taxes, depreciation, amortization and exploration spending. This is a proxy for cash earnings as it excludes exploration costs that run through the income statement. It also equalizes differences that can arise between companies using full-cost accounting and those using successful efforts accounting. Multiple is based on consensus estimates for fiscal years ending in 2021.
Sources: Company releases, Sentieo, S&P Capital IQ and Cabot Turnaround Letter analysis.

Former Winners, Now Bargains Again
As value-oriented investors, we buy when a company’s share valuation is attractive and sell when the valuation becomes unattractive. Since company fundamentals tend to change slowly, this discipline correctly implies that we change our recommendations primarily based on changes in the share price. If we do this right (easier said than done), we will sell a stock for a large profit yet remain interested in repurchasing the shares if they fall significantly from our exit price.

Listed below are three stocks that we sold when they reached our price target yet now sell at lower prices. The companies’ fundamentals remain at least as strong as when we exited our positions. While the upside potentials aren’t large enough to warrant returning them to Buy ratings, the lower prices nevertheless offer attractive re-entry points.

Barrick Gold (GOLD) – After generating a sharp 105% gain, we sold the stock in early November 2020 at 26.46. Since then, the market has lost interest in gold stocks, sending Barrick’s shares down 24%. Investors now seem only moderately worried about inflation, and interest rates may tick up as the Fed appears poised to gradually reduce its easy monetary policy. Also weighing on Barrick’s shares are concerns that local governments are becoming interested in claiming more of the profits that gold mines generate.

Yet, Barrick continues to prosper under its talented leadership, which has proven adept at operating its mines efficiently while also negotiating effectively with local governments to forestall confiscations. At current gold prices, we see the shares as having $27 in value (down from our former $30 target due to expropriation and other concerns). Also, the company’s balance sheet has improved to essentially zero debt net of cash balances. The company is in the midst of paying $0.42/share in special dividends on top of its $0.09/quarter recurring dividend.

Valero Energy (VLO) – Valero produced one of our fastest profits, returning 93% in less than five months. With the shares now at 67.11, down 15% from our 79.03 exit price in March 2021 (and below our former 70 price target), the stock is worth another look. Its strong Gulf of Mexico position should help it continue to generate large (and probably higher) profits on healthy volumes and robust refining margins. Its Diamond Green Diesel (renewable diesel) joint venture provides a source of rapidly-growing, environmentally-friendly profits.

Valero has been a disciplined allocator of its free cash flow and a reliable payer of its generous dividend to which it remains committed. In the most recent quarter, the company generated enough cash to cover its dividend, a turning point in its financial health after using its balance sheet to fund its dividends during the recession. While we would like to see the shares fall further, the current price offers an interesting re-entry point, especially with the 6% dividend yield.

ViacomCBS (VIAC) – ViacomCBS shares have retreated 36% since our sale in February 2021 at 64.37, which generated a 16% profit. Our sale was motivated by the price spike from aggressive speculation by Archegos Capital, which ultimately drove the price to over 100 before collapsing a few days later. ViacomCBS’ core fundamentals continue to grind forward against secular advertising and cable subscription headwinds and subdued movie revenues.

Moreover, its newer services, including the rapidly-growing Paramount+ streaming service (with over 42 million subscribers), surprisingly strong Pluto TV and the emerging Showtime OTT business, offer considerable promise. The balance sheet has improved since year end, with net debt down $4.4 billion, or about 26%, thanks to free cash flow and a well-timed $3 billion equity offering on very attractive terms during the Archegos spike. The shares trade for an attractive 8.0x estimated 2022 EBITDA and are undervalued compared to our previous 65 price target.

Former Winners, Now Bargains Again
% Chg vs Exit PriceMarket
Cap $Bil.
Yield (%)
Barrick GoldGOLD20.24-2436.06.31.8*
Valero EnergyVLO67.11-1527.46.36.0

EV/EBITDA is enterprise value to earnings before interest, taxes, depreciation and amortization. EBITDA is a measure of cash operating profits. Data is based on consensus estimates for fiscal years ending in 2022.
* Barrick dividend yield is based only on the $0.09/share recurring quarterly dividend.
Closing prices on August 27, 2021.
Sources: Company releases, Sentieo, S&P Capital IQ and Cabot Turnaround Letter analysis.

One-Off Contrarian Ideas
While we generally look for a theme for our articles, in the current market there are few broad groups that are out of favor (with, of course, the exception of oil E&P companies discussed earlier). However, there are always some one-off stories that look attractive, and we are including three of them here:

Big 5 Sporting Goods (BGFV) – Based in greater Los Angeles, this company is a major off-price sporting goods retailer, with 429 stores across the western United States. Big 5 was started in 1955, and a founder’s son currently serves as chairman and CEO. The founding family still holds a 4% stake. Several activist campaigns in recent years have exerted pressure on Big 5 to more aggressively respond to competitive challenges and to boost its ailing share price, but these efforts were largely unsuccessful. However, the pandemic (and the vast stimulus programs) has led to surging profits, which pushed the company’s shares to record highs.

The issue now: If sales and profit trends continue, the shares are remarkably inexpensive, but if these trends are mostly a one-time boost then the shares look precarious. Big 5 has a debt-free balance sheet with cash equal to about 22% of its market cap, and its shares offer an attractive 4.2% dividend yield.

Brookfield Reinsurance Partners (BAMR) – Created this past June by noted Canadian investment firm Brookfield Asset Management, this new company is positioned to benefit as traditional insurance and other companies increasingly offload their annuity and pension risks to specialized companies. Its August acquisition of publicly-traded American National Group for $5.1 billion marks its opening move. Investors may want to look into Brookfield Re, as it has solid management, is well-capitalized and offers interesting long-term potential.

Tenneco (TEN) – Tenneco produces suspensions, powertrains, emission controls and a variety of aftermarket parts for the automobile and truck industry. Tenneco’s shares reached nearly 70 only four years ago, yet its early 2018 overpriced deal to acquire Federal-Mogul from Carl Icahn started a downward spiral. The company was to split in two, but the pandemic has prevented this, leaving Tenneco with a broken strategy and heavily in debt. Recent results have been mildly encouraging, and the company is focusing on generating free cash flow to cut its debt. Carl Icahn holds a 5% stake, down from 15% earlier this year.

One-Off Contrarian Ideas
% Chg vs 5-Yr HighMarket
Cap $Mil.
Yield (%)
Big 5 Sporting GoodsBGFV23.79-375302.84.2*
Brookfield ReinsuranceBAMR62.58na700 na0.8
Tenneco, IncTEN16.50-761,3004.40.0

Closing prices on August 27, 2021.
* Big 5 dividend yield is based only on the $0.25/share recurring quarterly dividend.
EV/EBITDA is enterprise value to earnings before interest, taxes, depreciation and amortization. EBITDA is a measure of cash operating profits. Data is based on consensus estimates for fiscal years ending in 2022.
Sources: Company releases, Sentieo, S&P Capital IQ and Cabot Turnaround Letter analysis.


Purchase Recommendation: Marathon Oil Corporation (MRO)

Marathon Oil Corporation (MRO)
5555 San Felipe Street
Houston, Texas 77056
(713) 629-6600

Symbol: MRO
Market Cap: $9.5 Billion
Category: Mid Cap
Business: Oil and Gas
Revenues (2021e):$4.9 Billion
Earnings (2021e):$820 Million
8/27/21 Price:12.01
52-Week Range: 3.73-14.33
Dividend Yield: 1.8%
Price target: 18


Marathon Oil is an oil and gas exploration and production (E&P) company. Founded as The Ohio Oil Company in 1887, Marathon was once owned by the Standard Oil Trust and, later, by U.S. Steel. In 2011, it separated from its Marathon Petroleum refining operations. Today, the company focuses exclusively on E&P operations, producing about 72% of its output from the Bakken, Eagle Ford and Oklahoma basins, with the balance from other regions including a small oil and gas joint venture in Equatorial Guinea (Africa). About 81% of its commodity revenues come from crude oil and condensate sales, while natural gas and natural gas liquids comprise the remaining 19%.
MRO shares are out of favor. Even though the stock has rebounded from its March 2020 lows, it remains below its year-end 2019 price despite higher commodity prices, and has been left behind in the surging stock market. Investors worry about the sustainability of oil prices (currently at $69 for WTI) and natural gas prices (currently at $4.30), as well as management’s capital spending discipline. Also, many investors are selecting investments based on climate-friendly criteria which generally exclude fossil fuel producers like Marathon.

Our interest in MRO shares stems from several appealing attributes. First, the company is fundamentally strong. Its resource base is high-quality, requiring only moderate amounts of capital spending to maintain its production volumes. Its acreage in the Permian region remains under-developed and offers additional production potential. Marathon continues to improve upon its already-efficient drilling operations. These traits translate into immense free cash flow, likely to exceed $2 billion this year. The company is supported by its sturdy balance sheet – its $3.9 billion in debt net of cash is only about 1x annual EBITDAX1.

Second, the shares are trading at a low valuation. On estimated 2021 results using current commodity prices, the stock trades at 4.1x EV/EBITDAX and at a free cash flow yield2 of nearly 21%. At this pace, the company could return its entire market value to shareholders in five years. While this full return of capital is unlikely, the analysis illustrates the deep value offered by the shares.

Regarding oil prices, we believe there are structural forces that will keep these at least at the current level for many years. We see continued growth in global oil demand, particularly as more economies recover from the pandemic, and as the transition to alternative energy sources will likely take decades. We also see a low likelihood that non-OPEC supply will increase meaningfully. Investor pressure to curtail wasteful capital spending and to reduce climate impacts will weigh on the output of publicly-traded oil producers of all sizes. These supply/demand dynamics imply more reliance on OPEC production – which historically has been bullish for oil prices. For more of our thoughts regarding oil supply and demand, see our earlier section in this issue, “Oil E&Ps – Time to Buy.” Our MRO thesis assumes flat commodity prices. Marathon’s production is essentially unhedged.

Important to our view is that Marathon’s management has made public commitments to return a large and defined portion of its cash flow to investors. In its most recent presentation, the company said that at $60 oil it will return at least 40% of its cash flow from operations (before capital spending) to shareholders, raised from a 30% rate, likely starting in the fourth quarter after it has reached its debt reduction target. This annual cash return could total as much as $1.2 billion, or $1.50/share. Given these public commitments, backed by updated management compensation incentives, we see only a limited chance that the management slips backward on their promises to shareholders.

While we acknowledge the climate-related concerns, and respect that many investors avoid fossil fuel companies, our investment focus is purely economic. As such, we see ESG-driven selling as an opportunity for elevated investment returns. Nevertheless, we are reasonably impressed with Marathon’s efforts to reduce its environmental impact.

Marathon shares carry risks, of course. Commodity prices could retreat, the company may need/choose to raise its capital spending or make acquisitions, and regulatory costs could increase (including a possible shut-down of the Dakota Access Pipeline which would reduce Marathon’s commodity selling prices). But in a stock market that has largely ignored this undervalued cash flow engine, MRO shares look highly attractive. Our 18 price target assumes that the company retains all of its free cash flow, but more realistically much of this will be paid out to investors.

We recommend the purchase of Marathon Oil shares (MRO) shares with an 18 price target.

  1. EBITDAX is Earnings before interest, taxes, depreciation, amortization and exploration spending. This is a proxy for cash earnings as it excludes exploration costs that run through the income statement. It also equalizes differences that can arise between companies using full-cost accounting and those using successful efforts accounting.
  2. Free cash flow yield is the company’s cash flow from operations less capital spending, divided by its market capitalization. It is a measure of how much free cash flow is at the company’s disposal after it maintains its business, which can then be used to pay down debt, pay recurring or special dividends and/or repurchase shares.

Ratings Changes and Sell Recommendations
On August 13, we moved shares of Berkshire Hathaway (BRK/B) from BUY to HOLD. Berkshire shares traded above our 285 price target, and are now valued at about 1.4x book value per share of $206. Given the company’s exceptional leadership and business array, as well as the likely higher break-up value, we can’t reasonably justify moving the shares to a Sell. However, it would similarly seem unreasonable to raise our price target, thus justify buying more shares, when Warren Buffett seems increasingly reluctant to do so himself.

On August 5, we moved Oaktree Specialty Lending Corporation (OCSL) from BUY to SELL. The company’s turnaround is complete, both fundamentally and from a valuation perspective as its shares reached our 7.00 price target. Its portfolio has been fully restructured and now features loans to higher quality companies on more favorable terms (to Oaktree). Its balance sheet is conservatively financed and low-cost. Why not raise our price target? We are getting a sense, both from the numbers and from management’s commentary, that the lending market has become exceptionally frothy (and thus unattractive to the highly disciplined management team), so the risk/return trade-off has moved into unfavorable territory. OCSL shares produced a 69% total return since our July 2018 recommendation.

On August 11, we moved Albertsons (ACI) from BUY to SELL. Albertsons shares surged past our 23 price target, reaching over 28. Driving the shares was the news that highly-regarded executive Sharon McCollam will be joining the company as president and chief financial officer. Also boosting the shares was the strong earnings report that points to more build-up of excess cash, a Covid resurgence that will send consumers back to grocery stores, and encouraging news that removes much of the pension overhang.

Yet in our optimistic valuation scenario looking out three years, we can justify only an incrementally higher share price. We recognize the value that McCollam brings as well as the other fundamental improvements underway – but these are mostly factored into the stock price. Albertsons shares produced a 94% return since our August 2020 recommendation.

Wells Fargo & Company (WFC) and Signet Jewelers Ltd (SIG) have reached our price targets and are under review.

You can find more details by visiting our website at

Disclosure: The chief analyst of the Cabot Turnaround Letter personally holds shares of every “Buy” 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.


The following tables show the performance of all our currently active recommendations, plus recently closed out recommendations. For additional details, please visit

Large Cap1 (over $10 billion) Current Recommendations

Price at
Return (3)
Status (2)
General ElectricGEJul 2007304.96106.09-410.3%Buy (160)
General MotorsGMMay 201132.0949.80+830.0%Buy (69)
Royal Dutch Shell plcRDS/BJan 201569.9539.85-124.8%Buy (53)
Nokia CorporationNOKMar 20158.026.03-130.0%Buy (12)
Macy’sMJul 201633.6122.99-150.0%HOLD
Credit Suisse Group AGCSJun 201714.4810.66-202.0%Buy (24)
Toshiba CorporationTOSYYNov 201714.4921.75+582.9%Buy (28)
Holcim Ltd.HCMLYApr 201810.9211.53+213.8%Buy (16)
Newell BrandsNWLJun 201824.7825.54+143.6%Buy (39)
Vodafone Group plcVODDec 201821.2417.23-76.4%Buy (32)
Kraft HeinzKHCJun 201928.6836.38+394.4%Buy (45)
Molson CoorsTAPJul 201954.9647.51-92.9%Buy (69)
Berkshire HathawayBRK/BApr 2020183.18286.60+560.0%HOLD
Wells Fargo & CompanyWFCJun 202027.2249.81+851.6%Buy (49)
Baker Hughes CompanyBKRSep 202014.5323.07+653.1%Buy (26)
Western Digital CorporationWDCOct 202038.4763.24+640.0%Buy (78)
Altria GroupMOMar 202143.8049.53+176.9%Buy (66)
Elanco Animal HealthELANApr 202127.8533.31+200.0%Buy (44)
Walgreens Boots AllianceWBAAug 202146.5348.48+43.9%Buy (70)

Mid Cap1 ($1 billion - $10 billion) Current Recommendations

Price at
Return (3)
Status (2)
MattelMATMay 201528.4322.02-100.0%Buy (38)
ConduentCNDTFeb 201714.967.12-520.0%Buy (9)
Adient plcADNTOct 201839.7741.92+60.0%Buy (55)
Meredith CorporationMDPJan 202033.0142.03+290.0%Buy (52)
Lamb Weston HoldingsLWMay 202061.3665.56+91.4%Buy (85)
GCP Applied TechnologiesGCPJul 202017.9624.17+350.0%Buy (28)
AlbertsonsACIAug 202014.9528.56+941.4%SELL
Xerox HoldingsXRXDec 202021.9122.84+84.4%Buy (33)
Ironwood PharmaceuticalsIRWDJan 202112.0213.22+100.0%Buy (19)
ViatrisVTRSFeb 202117.4314.37-173.1%Buy (26)
Vistra CorporationVSTJun 202116.6818.68+133.2%Buy (25)
Organon & Co.OGNJul 202130.1934.25+143.3%Buy (46)

Small Cap1 (under $1 billion) Current Recommendations

Price at
Return (3)
Status (2)
Gannett CompanyGCIAug 20179.226.56+240.0%Buy (9)
Oaktree Specialty Lending Corp.OCSLAug 20184.917.09+697.3%SELL
Signet Jewelers LimitedSIGOct 201917.4780.29+3650.9%Buy (80)
Duluth HoldingsDLTHFeb 20208.6816.07+850.0%Buy (20)
Dril-QuipDRQMay 202128.2824.74-130.0%Buy (44)

Most Recent Closed-Out Recommendations

At Buy
At Sell
DuPont de NemoursDDLargeMar 202045.07*Jan 202183.49+87
ViacomCBSVIACLargeJan 201759.57*Mar 202164.37+16
Trinity IndustriesTRNLargeSep 201917.47*Mar 202132.35+92
Valero EnergyVLOLargeNov 202041.97*Apr 202179.03+93
Volkswagen AGVWAGYLargeMay 201715.91*Apr 202142.33+182
Mohawk IndustriesMHKLargeMar 2019138.60*June 2021209.49+51
Jeld-Wen HoldingsJELDMidNov 201816.20*Jul 202127.45+69
BiogenBIIBLargeAug 2019241.51*Jul 2021395.85+64
BorgWarnerBWAMidAug 201633.18*Jul 202153.11+70
The Mosaic CompanyMOSLargeSep 201540.55*Jul 202135.92-4

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, with adjustments as necessary for stock splits and mergers.
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.

The next Cabot Turnaround Letter will be published on September 29, 2021.

Cabot Wealth Network
Publishing independent investment advice since 1970.

President & CEO: Ed Coburn
Chief Investment Strategist: Timothy Lutts
Cabot Heritage Corporation, doing business as Cabot Wealth Network
176 North Street, PO Box 2049, Salem, MA 01970 USA
800-326-8826 | |

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