Other than the buyout of Kaman (KAMN), it’s been a relatively quiet week for company-specific news.
Regarding Kaman, the company announced that it will be taken private for $1.8 billion, or $46/share, a huge 100%-plus premium over the prior day’s closing price. The market has had little confidence in Kaman’s turnaround, despite what we saw as evidence that impressive changes are underway, led by its capable new CEO. The huge premium is at a discount to our $57 price target, but we’re fine with the deal as it produces a reasonable return, in cash, today, compared to a slog for a year or more while the turnaround plays out.
The buyer, private equity firm Arcline Investment Management, is credible and offering cash. While it is always possible, we see little chance of an overbid by another buyer. As such, we are moving shares of Kaman from BUY to SELL.
Next week, Nokia (NOK), General Electric (GE), Capital One Financial (COF), Polaris (PII) and Xerox Holdings (XRX) are slated to report earnings. Please know that some of these dates are estimates based on the companies’ reporting history, others are confirmed dates. As always, it’s likely that some companies will report next week that aren’t confirmed or estimated to report.
Friday, January 19, 2024, Subscribers-Only Podcast:
Covering recent news and analysis for our portfolio companies and other topics relevant to value/contrarian investors.
Today’s podcast is about 7 minutes and covers:
- Changes in Ratings
- Kaman (KAMN) – Moving shares from Buy to Sell
- Comments on recommended companies
- Berkshire Hathaway (BRK/B) – Settled Pilot Travel dispute and purchased remaining 20% stake.
- Bayer AG (BAYRY) – Will fix its troubled businesses before offloading them.
- Goodyear Tire (GT) – New CEO is Mark Stewart, a highly capable operations-driven leader.
- Macy’s (M) – Cutting 2,350 back-office jobs in advance of start of new CEO.
- Elsewhere in the markets
- CEO turnover reaches a record high in 2023.
| Market Cap | Recommendation | Symbol | Rec. Issue | Price at Rec. | Current Price * | Current Yield | Rating and Price Target |
| Small cap | Gannett Company | GCI | Aug 2017 | 9.22 | 2.27 | - | Buy (9) |
| Small cap | Duluth Holdings | DLTH | Feb 2020 | 8.68 | 5.07 | - | Buy (20) |
| Small cap | Dril-Quip | DRQ | May 2021 | 28.28 | 21.09 | - | Buy (44) |
| Small cap | L.B. Foster | FSTR | Jul 2023 | 13.60 | 22.94 | - | Buy (44) |
| Small cap | Kopin Corp | KOPN | Aug 2023 | 2.03 | 2.07 | - | Buy (5) |
| Small cap | Ammo, Inc. | POWW | Oct 2023 | 1.99 | 2.02 | - | Buy (3.50) |
| Mid cap | Mattel | MAT | May 2015 | 28.43 | 17.67 | - | Buy (38) |
| Mid cap | Adient plc | ADNT | Oct 2018 | 39.77 | 32.79 | - | Buy (55) |
| Mid cap | Xerox Holdings | XRX | Dec 2020 | 21.91 | 15.84 | 6.3% | Buy (33) |
| Mid cap | Viatris | VTRS | Feb 2021 | 17.43 | 11.27 | 4.3% | Buy (26) |
| Mid cap | TreeHouse Foods | THS | Oct 2021 | 39.43 | 41.03 | - | Buy (60) |
| Mid cap | Kaman Corporation | KAMN | Nov 2021 | 37.41 | 22.43 | 3.6% | SELL |
| Mid cap | The Western Union Co. | WU | Dec 2021 | 16.40 | 11.96 | 7.9% | Buy (25) |
| Mid cap | Brookfield Re | BNRE | Jan 2022 | 61.32 | 38.75 | 0.7% | Buy (93) |
| Mid cap | Polaris | PII | Feb 2022 | 105.78 | 90.96 | 2.9% | Buy (160) |
| Mid cap | Goodyear Tire & Rubber | GT | Mar 2022 | 16.01 | 13.93 | - | Buy (24.50) |
| Mid cap | Janus Henderson Group | JHG | Jun 2022 | 27.17 | 28.69 | 5.4% | Buy (67) |
| Mid cap | Six Flags Entertainment | SIX | Dec 2022 | 22.60 | 24.40 | - | Buy (35) |
| Mid cap | Kohl’s Corporation | KSS | Mar 2023 | 32.43 | 24.59 | 8.1% | Buy (50) |
| Mid cap | Frontier Group Holdings | ULCC | Apr 2023 | 9.49 | 4.69 | - | Buy (15) |
| Mid cap | Advance Auto Parts | AAP | Sep 2023 | 64.08 | 62.17 | 1.6% | Buy (98) |
| Mid cap | Mohawk Industries | MHK | Jan 2024 | 103.11 | 100.26 | - | Buy (165) |
| Large cap | General Electric | GE | Jul 2007 | 304.96 | 128.55 | 0.2% | Buy (160) |
| Large cap | Nokia Corporation | NOK | Mar 2015 | 8.02 | 3.47 | 3.5% | Buy (12) |
| Large cap | Macy’s | M | Jul 2016 | 33.61 | 17.93 | 3.7% | Buy (25) |
| Large cap | Newell Brands | NWL | Jun 2018 | 24.78 | 8.03 | 3.5% | Buy (39) |
| Large cap | Vodafone Group plc | VOD | Dec 2018 | 21.24 | 8.45 | 12.1% | Buy (32) |
| Large cap | Berkshire Hathaway | BRK.B | Apr 2020 | 183.18 | 362.38 | - | HOLD |
| Large cap | Wells Fargo & Company | WFC | Jun 2020 | 27.22 | 46.44 | 3.0% | Buy (64) |
| Large cap | Western Digital Corporation | WDC | Oct 2020 | 38.47 | 53.55 | - | Buy (78) |
| Large cap | Elanco Animal Health | ELAN | Apr 2021 | 27.85 | 14.80 | - | Buy (44) |
| Large cap | Walgreens Boots Alliance | WBA | Aug 2021 | 46.53 | 22.15 | 4.5% | Buy (70) |
| Large cap | Volkswagen AG | VWAGY | Aug 2022 | 19.76 | 12.75 | 7.2% | Buy (70) |
| Large cap | Warner Bros Discovery | WBD | Sep 2022 | 13.13 | 10.28 | - | Buy (20) |
| Large cap | Capital One Financial | COF | Nov 2022 | 96.25 | 124.92 | 1.9% | Buy (150) |
| Large cap | Bayer AG | BAYRY | Feb 2023 | 15.41 | 8.91 | 6.1% | Buy (24) |
| Large cap | Tyson Foods | TSN | Jun 2023 | 52.01 | 53.57 | 3.7% | Buy (78) |
| Large cap | Agnico Eagle Mines | AEM | Nov 2023 | 49.80 | 49.15 | 3.3% | Buy (75) |
| Large cap | Fidelity Natl Info Services | FIS | Dec 2023 | 55.50 | 59.01 | 3.5% | Buy (85) |
Disclosure: The chief analyst of the Cabot Turnaround Letter personally holds shares of every Rated recommendation. The chief analyst may purchase securities discussed in the “Purchase Recommendation” section or sell securities discussed in the “Sell Recommendation” section but not before the fourth day after the recommendation has been emailed to subscribers. However, the chief analyst may purchase or sell securities mentioned in other parts of the Cabot Turnaround Letter at any time. Please feel free to share your ideas and suggestions for the podcast and the letter with an email to either me at bruce@cabotwealth.com or to our friendly customer support team at support@cabotwealth.com. Due to the time and space limits we may not be able to cover every topic, but we will work to cover as much as possible or respond by email.
