March 30, 2022

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the April 2022 issue.

All companies are collections of assets. When companies are struggling, a new CEO can redirect how those assets are utilized – a valuable catalyst for a turnaround. We highlight three recent CEO changes and how they might help drive up the value of their companies.

While we have been slow and perhaps reluctant to consider cannabis companies, we find that the time has arrived to look more closely. We summarize our deep-dive into this emerging industry and its major participants, and suggest six companies with impressive growth yet trade at surprisingly low valuations.

Our featured recommendation this month is ZimVie (ZIMV), a company that was recently spun off from medical technology giant Zimmer Biomet. Its shares have been summarily sold by the market, creating what we believe is an attractive turnaround situation.

We note our second price target increase for Marathon Oil (MRO) and our move to sell shares of Baker Hughes (BKR).

Attractive Turnaround Stocks

New CEOs at Struggling Companies
All companies are collections of assets. These assets include the company’s brands, intellectual property, production facilities, contracts, real estate and cash. Yet the most valuable assets are the people that work for the company to develop and monetize all of the other assets. And, these employees take their directions from the CEO, who guides the company’s strategy, sets priorities for how resources are allocated, provides motivation and develops the company’s culture.

For companies that are struggling, a change in senior management can be a valuable catalyst for a turnaround. It indicates that the board of directors recognizes that the company is headed down the wrong path – the first and most critical step. A new chief executive officer can bring a new skillset tailored to address the company’s specific problems. The change often sends a signal that “business as usual” will be replaced with a new sense of urgency and frugality. This signal alone can redirect employees’ priorities and unleash productive new ideas.

Finally, a new CEO can free the company to meaningfully shift its strategic priorities, including how it allocates its capital, approaches its customers and operates its businesses. Outsiders in particular can be valuable, as they usually have a clear mandate from the board, bring a fresh perspective to identifying and solving the company’s problems, and are unhindered by previously sacred cows.

The announcement of a new leader is not always a sign that investors should immediately buy the company’s stock. Even the best chief executives may take time to revive a company, sometimes measured in years rather than quarters, and more bad news may emerge before any good news. Yet, a change at the top is a powerful catalyst (our favorite) and well-worth searching for.

Listed below are three struggling companies that have recently replaced their CEOs. No fewer than 17, or half, of currently recommended Cabot Turnaround Letter companies have new leadership as key aspects of their turnarounds.

Closing prices on March 25, 2022.
* EV/EBITDA is Enterprise value to Earnings before interest, taxes, depreciation and amortization. EBITDA is a proxy for cash operating earnings. Valuations based on calendar years ending in December 2022 except MNRO which ends in March 2023.
Sources: Company releases, Sentieo, S&P Capital IQ and Cabot Turnaround Letter analysis.

El Pollo Loco Holdings (LOCO) – Based in Los Angeles, this company is the nation’s leading fire-grilled chicken quick-service restaurant chain, with 189 company-owned and 291 franchised locations in the western United States. It is recognized as the #1 quick service Mexican restaurant among national Mexican QSR and fast casual chains. LOCO shares have fallen by 45% from their post-pandemic peak and now trade unchanged from their late- 2016 price. Investors worry that rising labor, food and other costs, as well as slowing same- store sales growth, will weigh on near-term results. A related concern is the sluggish pace of new franchise additions. Yet, the company appears to be in strong hands, led by the recent promotion of the former CFO to the CEO seat. Following the unexpected departure of the former CEO last autumn, CFO

Munro (MNRO) – This company is a leading chain of automobile tire and service shops that provide brake, steering, suspension and other repairs. Munro has over 1,300 company-owned locations and 80 franchise stores across 32 states, with a major presence in the northeast. The company’s shares have stumbled 50% from their mid-2019 peak and currently trade near their nine-year lows. Pressuring the stock are costs from hiring new technicians as well as wage increases and other employee retention measures. We think more is going on: that the company was not well managed by its former CEO, leading to an accumulation of many small missteps that, over time, weakened the business’ performance. This erosion is being reversed by a new CEO, Michael Broderick, who joined Munro a year ago from Advance Auto Parts, a company that itself underwent an impressive turnaround (and was a highly successful Cabot Turnaround Letter recommendation). Broderick is a capable in-the-trenches veteran of the auto parts and service industry. His priorities include sensible but often ignored improvements in customer service, improving the product and service offerings, attracting and retaining more customers, modernizing labor productivity practices and trimming overhead costs. While near-term profits may be weaker, longer-term profits are likely to be much stronger. Supporting the turnaround is considerable free cash flow, helping Munro to fund its steady acquisition program, capital spending initiatives and dividend without burdening its low-debt balance sheet. The aging national car fleet as well as the return of commuters to the roads provide additional tailwinds. Munro shares trade at a surprisingly low valuation, which may invite private equity interest, and offer interesting turnaround potential.

Smith+Nephew Group (SNN) – This British company is a global medical technology company that designs and produces hip and knee implants as well as robotics-based surgical tools, soft tissue products and tools, and advanced wound management treatments. Over the past two years, the pandemic weighed on Smith+Nephew as hospitals prioritized care for Covid and other maladies over orthopedic procedures. Longer term, the company has struggled to generate growth despite its reputation for innovative and effective new implants, as surgeons are highly reluctant to change suppliers. Ongoing pressure by hospitals to consolidate their vendor purchases could leave #3 market share holder Smith+Nephew out in the cold, while pricing pressure in China may weigh on margins. While its newer segments offer growth, they may not have as favorable economics as its orthopedic products. Turnover in the executive suite, including the recent departure of the head of the orthopedics unit and yet another CEO, has worried investors. However, with the shares trading near eight-year lows and having an unchallenging valuation, this might be the time to accumulate SNN shares. The incoming CEO, Dr Deepak Nath, brings strong industry experience with a fresh perspective – likely much needed at Smith+Nephew. Most recently, he led successful initiatives to accelerate revenue growth and margin improvement at Siemens’ spin-off Healthineers. Nath’s efforts will be supported by stable albeit slow revenue growth, margins that should fully recover from pandemic-driven weakness by 2024, generous free cash flow and a balance sheet that carries only modest debt. The company may be pinning its final hopes on Nath, as a lack of meaningful progress may result in a sale of the company as the industry consolidates.

Cannabis Companies: Time to Plant Some Seeds
Several months ago, in our October 2021 edition, we took an initial look at the cannabis industry. This month, we take a closer look and recommend that investors consider accumulating starter positions in one or several cannabis stocks. Many companies have continued to grow rapidly, generate large profits and have bright futures. Yet, while federal legalization appears inevitable, it is now more likely to be years away rather than imminent, which has led to a collapse in cannabis companies’ shares. This creates our opportunity to participate, as value investors, in an emerging growth industry that doesn’t involve murky technologies of loss-producing companies that trade at eye-watering valuations. We accept and understand that many investors avoid cannabis stocks for ethical reasons. The Cabot Turnaround Letter itself has been slow and reluctant to consider these companies.

However, times have changed. Many mainstream brokerage firms now provide research coverage, and the larger, exchange-listed stocks have meaningful ownership by traditional investment management firms. Recent and credible surveys suggest that 93% of Americans support patient access to medical-use cannabis and 68% of Americans support full legalization of cannabis. Currently, 37 states and Washington D.C. allow medical use of cannabis, while 18 states and Washington D.C. allow recreational use. The march toward widespread legalization at the state level continues. New York State recently approved cannabis, and other states are expected to follow.

In the United States, the key market, legalization has occurred only at the state level, with each state having its own regulatory, licensing and tax regimes. At the federal level, cannabis remains a controlled substance, meaning that its production, possession, distribution and use is largely illegal. As such, cannabis companies have limited access to the banking and insurance systems, curtailed tax deductions and essentially no trademark protections. As long as companies respect federal (and state) laws, government officials have mostly, but not entirely, turned a blind eye. An alphabet soup of federal legalization proposals, including the MORE Act, the SAFE Act and the CLAIM Act, remain mired in Congress and appear to have limited support by the president. Reasonable estimates point to federal legalization occurring in perhaps three to five years.

The industry’s structure is driven by this legal patchwork. Transporting raw materials and products across state lines is illegal. As such, each company needs its own cultivation, processing and packaging operations for each state where it operates. This vertical integration is capital-intensive and inefficient. The transport problem, along with differing rules regarding allowable production processes, also means successful products in one state can’t be shipped to another state, constraining growth opportunities. To capture available growth and prepare for eventual full legalization, major cannabis companies have opened independent operations in many states and are called multi-state operators, or MSOs. Growth comes from same-store and new store growth within each licensed state, from acquisitions of other MSOs or single-state operators, and from expanding into newly legalized states. Given their current and potential future growth, our interest is primarily in the MSOs.

It’s easy to see the value of further state legalization, as it would open new markets for the MSOs. The biggest gains, however, would come from federal legalization, this would accelerate the industry’s growth and profitability immensely. Revenues would clearly benefit, particularly as identical products could be marketed and sold on a nationwide basis. Also, federal legalization would likely incentivize most remaining hold-out states to legalize. Profit growth would surge on the higher revenues but also as production, operating, financing, legal and other costs fall sharply. Full legalization would likely bring in a major new source of demand for shares – by institutional investors who generally avoid the group today.

One additional major benefit from federal legalization: the removal of the risk premium due to the potential for federal prosecution.

Hopes for quick and full national legalization drove cannabis company shares up as much as 20x in the 2016-2019 period. Yet, as these hopes were dashed, shares across the board collapsed. Stocks of companies with speculative business models, including Aurora Cannabis (ACB) and Canopy Growth (CGC), fell 95% or more.

Despite the one-state-at-a-time legalization, the industry continues to grow. In 2021, the domestic industry grew at an estimated 40% pace to reach $25 billion in size and is estimated to continue to expand at a 12-15% pace, reaching $47 billion by 2026. MSO companies are best positioned to capture this growth.

As with any emerging industry, risks are abundant. The timing and degree of state and federal legalization is unknown, competition from legal and black-market operators could squeeze profits, and consumer demand is not fully understood. And, no one knows what a fully legal national market will look like in terms of industry structure, revenue growth, pricing, brand value vs commodity pricing, margin structure or taxation. New entrants or other unanticipated production or distribution changes may threaten the incumbents.

Also, near-term company results will likely be weak, as revenue growth appears to be slower, likely due to the end of generous stimulus payments and the start of return-to-office. Also, over-production in some markets, including California and Pennsylvania, may compress pricing and profit margins.

Listed below are six companies that look best positioned for the future and trade at attractive valuations. Due to federal laws, shares of most of these companies are legally registered in Canada and thus have five-letter ticker symbols. These stocks trade on the OTC market yet have plenty of trading liquidity for most investors. Our valuations are based on estimated 2023 results, which more fully capture the low valuations relative to the companies’ annual profit growth prospects which in some cases exceed 30% or more.

Closing prices on March 25, 2022.
* EV/EBITDA is Enterprise value to Earnings before interest, taxes, depreciation and amortization. EBITDA is a proxy for cash operating earnings. Valuations based on fiscal years ending in December 2023.
Sources: Company releases, Sentieo, S&P Capital IQ and Cabot Turnaround Letter analysis.

Cresco Labs, Inc. (CRLBF) – Based in Chicago, Cresco will become the largest MSO by revenues in the United States following its recently announced $2 billion all-stock acquisition of Columbia Care. The combined company is on track to generate over $1.4 billion in sales from its operations that include 130 retail locations in 18 states. Cresco operates in what generally are considered the most attractive and fastest-growing states, is the leader in many of its markets, and boasts nearly $2.8 million in revenue per average store – the highest in the industry. Cresco takes a consumer packaging goods approach, much like a food producer, and prioritizes wholesale distribution to reach as many consumers as possible, although about 62% of its revenues will be generated at its own retail stores after the merger. Cresco’s leadership team is impressive: The CEO is an attorney who also is an adjunct professor at the prestigious Northwestern University law school. The board chairman, Tom Manning, is a Stanford MBA graduate and was previously chairman and CEO of Dun & Bradstreet, a long-serving top executive at the highly regarded Cerberus private equity firm and former CEO of Ernst & Young’s Asia operations. Other board members and senior executives have impressive, mainstream professional backgrounds, as well. Cresco shares trade at 6.1x estimated 2023 EBITDA. The post-merger balance sheet will carry reasonable debt with about half that balance offset by cash.

Cronos Group (CRON) – This company is a small, $125 million in revenues company based in Toronto. It has no retail locations – rather, it emphasizes cannabis and hemp research which it seeks to develop into innovative cannabis products and brands for production and global distribution. Its current markets include the United States (hemp only), Canada, Australia, Germany and Israel. Cronos is clearly struggling with this strategy, as it continues to generate large losses. Efforts to rethink and improve its operations and strategy have so far been unconvincing, hurt in part by a shortfall in the transparency that institutional investors demand. However, the shares offer an interesting, although high-risk, turnaround opportunity. The CEO was recently fired and replaced by Mike Gorenstein, a respected former Google executive, top M&A lawyer and Wharton MBA graduate who led Cronos until 2020. Under new leadership, Cronos will likely improve its profitability and strategic positioning. Potential upside also comes from Altria’s 45% stake, which the tobacco giant might use to expand Cronos’ business. Altria could take control of another 10% through its warrants that have a C$19 exercise price – if exercised, CRON shares would likely surge toward that price. Further, the shares offer considerable optionality: if Cronos were to deploy some of its enormous $1 billion cash hoard (no debt) to enter the United States, investors would likely drive the shares sharply higher. This is by far the riskiest cannabis name in our selection.

Curaleaf Holdings, Inc. (CURLF) – This company, based in Wakefield, Massachusetts, will be the second-largest MSO, slipping behind Cresco after its Columbia Care acquisition. Following a year of significant expansion, Curaleaf operates in 17 states, with 117 retail locations and 25 cultivation sites that have 4.4 million square feet of capacity. Its revenue mix is 71% retail, 29% wholesale. Sales grew 93% in 2021, with 58% growth from organic (non-acquired) sources, including a meaningful contribution from newly introduced products. Adjusted EBITDA grew 107% last year, with the margin expanding to 25% from 23%. The company’s pioneering acquisition of EMMAC provides it with access to the nascent cannabis opportunity in Europe. Management appears capable, with the two co-founders having plenty of motivation as they are the top shareholders with a combined 40% stake. One possible blemish is the unexpected departure of the CFO. Another is the recent but unsubstantiated concern that Curaleaf’s two co-founders, who are U.S. citizens, may have connections with Russia – which would risk controversy and sanctions due to the Ukraine invasion. Curaleaf has a solid balance sheet with limited debt that is nearly fully offset by cash.

Innovative Industrial Properties (IIPR) – This real estate investment company (REIT) specializes in cannabis cultivation, processing and retail properties. The company was founded in 2016 by the co-founder (Alan Gold) of BioMed Realty Trust, a high-quality REIT that was acquired by Blackstone earlier that year. Previously, Gold co-founded and led Alexandria Real Estate Equities, another high-quality REIT. Innovative Industrial serves a significant need – providing financing to cannabis producers and retailers in the United States, as these customers are generally unable to secure financing though traditional or low-cost sources. Its triple-net leases, with capital spending and maintenance funded by tenants, provides IIPR with highly attractive ownership contracts that carry generous yields and annual escalations. Its portfolio is diversified among 105 properties occupied by 27 tenants across 19 states, limiting its exposure to any one company or geography. This stock will benefit from further legalization at the state level, as this would expand its potential market. However, full legalization at the federal level would be a risk, as it would allow cannabis companies to obtain cheaper conventional financing, potentially crimping IIP’s currently attractive terms or allowing companies to bypass it entirely. IIPR shares offer an appealing and historically rising dividend (up 33% since a year ago). The company’s balance sheet carries appropriate leverage as well as considerable cash to facilitate its steady cadence of property acquisitions.

Trulieve Cannabis Corp (TCNNF) – Florida-based Trulieve is by far the dominant operator in its home state, with 100 retail locations. It is also one of the largest MSOs, with operations in a total of 11 states that include 161 owned or affiliated stores and 3.5 million square feet of cultivating and processing space. Trulieve is on track to generate $1.5 billion in revenues this year (+53%) and $540 million in EBITDA (+40%). Its profit margin is among the highest in the industry. Like its peers, Trulieve continues to expand, most recently seen in its huge October 2021 acquisition of Harvest Heath & Recreation for $2.1 billion in stock. The company is led by its founder, Kim Rivers, who is chairman and CEO as well as a 9% shareholder, is backed by a capable management team (many of whom joined with the Harvest deal) and a well-qualified board of directors. The company’s financial condition is sturdy, with its $267 million cash balance exceeding its debt balance. The shares could be volatile following its fourth quarter earnings report on March 30.

Verano Holdings (VRNOF) – Chicago-based Verano is the #5 MSO, with 112 retail locations and 15 cultivation and production facilities across 18 states. The company has among the industry’s widest EBITDA profit margins, which exceeded 50% in an unusually profitable third quarter. It also carries modest debt and is nearly free cash flow positive. Verano has grown through an aggressive acquisition strategy – revenues of $1.1 billion this year will be nearly 18x its 2019 revenues –including the recently completed $413 million deal for Goodness Growth. While this deal’s transaction price was high, at 16x EBITDA, the multiple excludes likely high growth from New York state, as well as appealing opportunities in Minnesota where it now holds one of only two licenses. This acquisition pace adds some risk, as does the company’s more limited disclosures. However, if Verano can continue to execute, its current 5.7x EBITDA share valuation will have been a bargain.

New Recommendations, Updates and Performance

RecommendationS

Purchase Recommendation: ZimVie, Inc (ZIMV)

ZimVie, Inc (ZIMV) 10225 Westmoor Drive Westminster, Colorado 80021 (303) 443-7500 www.zimvie.com

Symbol: ZIMV Market Cap: $635 million Category: Small Cap Business: Medical Products Revenues (2021e): $1.0 Billion Earnings (2021e): $61 Million 2/18/22 Price: 23.00 52-Week Range: 21.52-50.40 Dividend Yield: 0% Price target: 32

Background
ZimVie is a $1 billion (revenues) medical technology company that produces spinal and dental implants. Sales are roughly evenly split between the two segments, and about 30% of revenues are generated outside of the United States. Based near Denver, Colorado, the company has its roots within Zimmer Biomet Holdings, which developed and acquired a range of spinal and dental products since 1988. In February 2022, ZimVie was spun off from Zimmer Biomet, with the former parent retaining a 19.7% stake that will likely be fully divested over time.

After an initial surge of enthusiasm, which drove the shares into the $40-50 range, investors have since aggressively sold ZIMV shares, which now trade at $23. One factor likely contributing to the sell-off is common among spin-offs: holders of large-cap ($26 billion) Zimmer Biomet likely have little interest in small-cap ZimVie.

A major fundamental concern is that ZimVie has only the #5 market share in dental implants and #6 market share in spinal implants. Investors worry that as a smaller-scale producer, particularly in the spinal implant segment, the company will struggle to maintain its market share as it may lack the ability to innovate at the pace of its larger competitors and may not be able to attract and retain the highest-producing sales representatives that are vital to long-term growth. Under Zimmer Biomet’s ownership, these issues led to uninspiring growth and mediocre profitability.

Investors may also have doubts about the management team. ZimVie’s CEO isn’t a high-profile executive with public-company leadership experience, and the leadership team only started working together less than a year ago.

Analysis
ZimVie shares look appealing on several measures. First, at 8.5x EV/EBITDA, the stock trades at a sizeable discount to its small and mid-cap peers which trade at an 11.5x average multiple. This low valuation provides a valuable margin of safety should the company fail to deliver on its promises, while offering considerable upside potential if it is successful.

ZimVie’s dental business (46% of total sales) has a solid franchise that likely can produce 4-6% annual revenue growth and incrementally increase its market share. Over the past few years, acquisitions and internal development have helped build the company’s product offerings, especially in the faster-growth digital solutions segment. Its strong #2 market share position in biomaterials, which augment implants, should help drive faster growth, as well. The segment head successfully led the group’s own turnaround over the past five years as a rising star withing Zimmer Biomet.

In its struggling spinal segment (54% of total sales), ZimVie is concentrating on stabilizing its market share and profits, with the goal of restoring growth in three years. One source of improvement is the needed pruning and refreshing of its product portfolio. The company plans to pare down several product lines that have low, commodity-like profit margins, as well as exit unprofitable geographies, particularly overseas. Critically, ZimVie has several products, including its Mobi-C and Tether offerings, with competitive advantages in faster-growing segments, providing a foundation for new growth. The increased attention on the portfolio is likely to boost longer-term growth and profits, although it will weigh on near-term revenues. Another source of improvement comes from initiatives to re-energize the commercial sales organization, which is critical to revenue production but which has been neglected in recent years. Importantly, the head of the segment is new to the role, bringing a much-needed fresh perspective. Like the head of Dental, the Spinal group head appears to have been a rising star as a six-year Zimmer veteran.

All-in, we are modeling a conservative flat revenue outlook over the next few years. This is more conservative than management’s guidance and assumes no tailwind from a likely recovery in medical procedures following considerable Covid-related deferrals.

ZimVie’s cost structure is another source of improvement. Now independent, ZimVie has the opportunity to streamline its manufacturing footprint and overhead costs. Combined with the benefits of its product initiatives, we anticipate that the company can boost its EBITDA margin from about 13% this year to perhaps 14-15% over the next three years. We view this as conservative relative to management’s targeted 17% margin level.

The company’s CEO appears fully capable. Vafa Jamali, who joined Zimmer in 2021 to become ZimVie’s CEO, brings considerable medical technology senior leadership experience at smaller companies and major firms including Medtronic and Covidien. We acknowledge his lack of public-company CEO experience, which may lead to messaging missteps, and the brief tenure of the executive suite as a single team.

ZimVie’s balance sheet carries a modestly elevated debt burden of $561 million, or about 4.7x EBITDA. Partly offsetting this is a cash balance of about $70 million. We expect the company to generate about $50-60 million of annual free cash flow, more than enough to service and reduce its debt over the next few years. Importantly and favorably, this debt constraint will likely force the company to focus on basic execution rather than rely on acquisitions to turn around its business.

With low investor expectations, a strong dental segment and a pending turnaround in its spine segment, ZimVie shares have strong upside potential with relatively limited downside.

We recommend the purchase of ZimVie (ZIMV) shares with a $32 price target.

Ratings and Price Target Changes
On March 16, we moved shares of Baker Hughes (BKR) from Buy to Sell. The shares surged above our previously raised 31 price target (originally 23). Using optimistic yet realistic assumptions, we are hard-pressed to justify a BKR share price meaningfully above the current price. And, given the highly cyclical nature of commodity-driven companies, and the general lack of secular growth prospects, we see an unfavorable balance of upside potential versus downside risk.

Predicting commodity prices is a low-success-rate endeavor. It does appear, however, that the recent spike to $130+/barrel oil sets the high end of a reasonable price range. New supply, a slowing global economy as interest rates rise, and other balancing pressures are likely to keep oil and domestic natural gas somewhat below their recent peaks. This will, in turn, likely keep demand for Baker Hughes’ products and services somewhat constrained. In addition, we are not inclined to retain Baker shares on the hopes that capacity constraints will foster meaningfully higher pricing by the company or its two major competitors, Schlumberger and Halliburton.

The BKR recommendation produced an approximately 140% total return since our initial recommendation at 14.53 in our September 2020 edition of the Cabot Turnaround Letter.

On March 25, with shares of Marathon Oil (MRO) crossing our recently raised $24 price target (up from the original $18 target at our initial Buy recommendation in August 2021), we are moving the price target to $30.

Assuming about $90 for oil and $3.00 for natural gas, Marathon shares currently trade at an EBITDAX multiple of about 4.4x. This valuation is roughly in line with its historical average and is in line with Street estimates for commodity prices. In this sense, the shares could be seen as fairly valued.

However, oil is currently trading at close to $110/barrel while natural gas is trading around $5.57/mmBTU. At these prices, MRO shares are trading at about 3.4x EBITDAX (EBITDA with exploration expenses added back) – clearly putting the shares in the attractive valuation range. Furthermore, historical valuations assume an eventual and generally sooner-rather-than-later fall-off in commodity prices. To the extent that investors believe, and that facts will support it, this current cycle, which follows years of severe underinvestment in energy infrastructure, constrained future investment (driven by investor pressure, government regulations and ESG considerations) and the Ukraine war sanctions on Russia, commodity prices may not fall back much below $100/barrel and $4.00/mmBTU for years. If this were true, MRO shares would offer an exceptional bargain, not least of which would be supported by the immense free cash flow that the company has committed to paying out to investors. For reference, at $110/$5 oil/gas, the shares are valued at a 25% free cash flow yield.

We are not in the business of predicting commodity prices, and fully appreciate that such predictions make for a low-success-rate endeavor. What we like, however, is the attractive valuation on current commodity prices, and the potential upside should commodity prices stay elevated. We of course reserve the right to exit our position if any of these assumptions appear to be unraveling.

Disclosure: The chief analyst of the Cabot Turnaround Letter personally holds shares of every company on the Current Recommendations List. 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.

Performance

The following tables show the performance of all our currently active recommendations, plus recently closed out recommendations.

Large Cap¹ (over $10 billion) Current Recommendations

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

Small Cap¹ (under $1 billion) Current Recommendations

Most Recent Closed-Out Recommendations

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.
4. SP - Given the higher risk, we consider these shares to be speculative.
5. * - 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 May 4, 2022.