With today’s note, we offer more clarity on last week’s earnings report from Wells Fargo & Company (WFC) and provide updates on several recommended stocks.
This week, none of our companies reported earnings. Next week, four companies are reporting, including General Electric (GE), Xerox Holdings (XRX), Nokia (NOK) and Dow (DOW). The following week will see reports from Vodafone (VOD), Polaris Industries (PII), M/I Homes (MHO), Meta Platforms (META), Western Digital (WDC) and Janus Henderson Group (JHG).
Update on an earnings report from last week:
Wells Fargo & Co. (WFC) – Last week, Wells reported what we believed were reasonable fourth-quarter results. As our analysis showed, most commentators had the story wrong, saying that Wells missed the consensus estimate. In reality, the bank had a respectable earnings “beat” by producing about $1.28/share in earnings compared to the consensus of $1.10.
All this is somewhat academic, as the bank is making progress with its turnaround and the shares are considerably undervalued, as we wrote last week. But, it’s important to have the facts, even if they are academic.
Friday, January 20, 2023, 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 8 minutes and covers:
- Earnings
- Wells Fargo & Company (WFC) – more color on last week’s report.
- Comments on other recommended companies:
- Capital One (COF) – staff reductions and credit quality.
- Macy’s (M) and Duluth Holdings (DLTH) – retail industry sales slipped 1.1% in December and some wonky details.
- Warner Bros Discovery (WBD) – Win rights to 2032 Olympics.
| Market Cap | Recommendation | Symbol | Rec. Issue | Price at Rec. | 1/19/23 | Current Yield | Rating and Price Target |
| Small cap | Gannett Company | GCI | Aug 2017 | 9.22 | 2.00 | - | Buy (9) |
| Small cap | Duluth Holdings | DLTH | Feb 2020 | 8.68 | 5.95 | - | Buy (20) |
| Small cap | Dril-Quip | DRQ | May 2021 | 28.28 | 27.45 | - | Buy (44) |
| Small cap | ZimVie | ZIMV | Apr 2022 | 23.00 | 8.30 | - | Buy (32) |
| Mid cap | Mattel | MAT | May 2015 | 28.43 | 19.25 | - | Buy (38) |
| Mid cap | Conduent | CNDT | Feb 2017 | 14.96 | 4.61 | - | Buy (9) |
| Mid cap | Adient plc | ADNT | Oct 2018 | 39.77 | 42.41 | - | Buy (55) |
| Mid cap | Xerox Holdings | XRX | Dec 2020 | 21.91 | 16.54 | 6.0% | Buy (33) |
| Mid cap | Ironwood Pharmaceuticals | IRWD | Jan 2021 | 12.02 | 11.28 | - | Buy (19) |
| Mid cap | Viatris | VTRS | Feb 2021 | 17.43 | 11.52 | 4.2% | Buy (26) |
| Mid cap | Organon & Co. | OGN | Jul 2021 | 30.19 | 31.41 | 3.6% | Buy (46) |
| Mid cap | TreeHouse Foods | THS | Oct 2021 | 39.43 | 46.41 | - | Buy (60) |
| Mid cap | Kaman Corporation | KAMN | Nov 2021 | 37.41 | 22.54 | 3.5% | Buy (57) |
| Mid cap | The Western Union Co. | WU | Dec 2021 | 16.40 | 13.94 | 6.7% | Buy (25) |
| Mid cap | Brookfield Re | BNRE | Jan 2022 | 61.32 | 35.61 | 1.6% | Buy (93) |
| Mid cap | Brookfield Asset Mgt | BAM | Spin-off | na | 31.40 | - | Unrated |
| Mid cap | Polaris | PII | Feb 2022 | 105.78 | 102.07 | - | Buy (160) |
| Mid cap | Goodyear Tire & Rubber | GT | Mar 2022 | 16.01 | 11.11 | - | Buy (24.50) |
| Mid cap | M/I Homes | MHO | May 2022 | 44.28 | 53.14 | - | Buy (67) |
| Mid cap | Janus Henderson Group | JHG | Jun 2022 | 27.17 | 25.51 | 6.1% | Buy (67) |
| Mid cap | ESAB Corp | ESAB | Jul 2022 | 45.64 | 52.61 | - | Buy (68) |
| Mid cap | Six Flags Entertainment | SIX | Dec 2022 | 22.60 | 25.50 | - | Buy (35) |
| Large cap | General Electric | GE | Jul 2007 | 304.96 | 76.86 | 0.4% | Buy (160) |
| Large cap | Nokia Corporation | NOK | Mar 2015 | 8.02 | 4.68 | 1.9% | Buy (12) |
| Large cap | Macy’s | M | Jul 2016 | 33.61 | 22.78 | 2.8% | Buy (25) |
| Large cap | Toshiba Corporation | TOSYY | Nov 2017 | 14.49 | 17.62 | 5.9% | Buy (28) |
| Large cap | Holcim Ltd. | HCMLY | Apr 2018 | 10.92 | 11.29 | 3.9% | Buy (16) |
| Large cap | Newell Brands | NWL | Jun 2018 | 24.78 | 14.83 | 6.2% | Buy (39) |
| Large cap | Vodafone Group plc | VOD | Dec 2018 | 21.24 | 11.21 | 9.1% | Buy (32) |
| Large cap | Molson Coors | TAP | Jul 2019 | 54.96 | 49.59 | 3.1% | Buy (69) |
| Large cap | Berkshire Hathaway | BRK.B | Apr 2020 | 183.18 | 305.23 | - | HOLD |
| Large cap | Wells Fargo & Company | WFC | Jun 2020 | 27.22 | 42.95 | 2.8% | Buy (64) |
| Large cap | Western Digital Corporation | WDC | Oct 2020 | 38.47 | 37.55 | - | Buy (78) |
| Large cap | Elanco Animal Health | ELAN | Apr 2021 | 27.85 | 12.94 | - | Buy (44) |
| Large cap | Walgreens Boots Alliance | WBA | Aug 2021 | 46.53 | 35.41 | 5.4% | Buy (70) |
| Large cap | Volkswagen AG | VWAGY | Aug 2022 | 19.76 | 17.06 | 4.5% | Buy (70) |
| Large cap | Warner Bros Discovery | WBD | Sep 2022 | 13.13 | 12.47 | - | Buy (20) |
| Large cap | Dow | DOW | Oct 2022 | 43.90 | 56.60 | 4.9% | Buy (60) |
| Large cap | Capital One Financial | COF | Nov 2022 | 96.25 | 97.91 | 2.5% | Buy (150) |
| Large cap | Meta Platforms | META | Jan 2023 | 118.04 | 136.15 | - | Buy (180) |
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.
