October 31, 2025

November Historically Good, but Sentiment is “Bad”

It’s not always that the market outperforms in October, but this year’s “jinx month” came and went on a positive note (albeit with a minor setback earlier in the month).

Granted, there was some volatility on the political front, but as far as the equity market was concerned, it wasn’t too bad. The S&P 500 index stood at a record high as recently as Wednesday, and Wall Street’s favorite stocks and ETFs are mainly trending higher as we exit the month.

However, some near-term cracks are beginning to show up heading into November. I’ve noticed, for instance, that the number of NYSE-listed issues hitting new 52-week lows is beginning to exceed “normal” levels and has even entered triple digits in recent days. We’ve seen this phenomenon come and go in the last few months, so I’m not overly worried, but it’s still something that’s worth monitoring in the near term.

The Investors Intelligence Bull/Bear ratio came in this week at 4.27, which is considered abnormally bullish—and therefore a sign that the market is vulnerable to selling pressure. Commenting on this, a Cabot colleague quipped, “Above 4 is America’s pastime,” to which another responded, “Sentiment indicators are not excellent timing tools, but sooner or later they win.”

Now, the Cabot Turnaround Letter isn’t focused on short-term market timing, so I won’t belabor the point. I only mention it because, confessedly, I had a hard time trying to decide how to begin this week’s update, a problem I rarely experience. And while I still can’t quite put my finger on it, I suspect it’s because there’s a growing dearth of buying opportunities right now.

Indeed, when I survey the various sector and industry indexes, continuing down to the individual stock level, I’m finding it harder and harder to get excited about what I’m seeing—particularly when it comes to value-oriented plays or potential turnarounds. And while this problem (at least in my estimation) has been building for a while, I didn’t consider it a serious issue even a couple of weeks ago.

Again, I don’t wish to sound a note of gloom-and-doom. If anything, the major indicators are still mostly bullish and liquidity seems to be fairly ample. And on that score, the latest blog post by Jeff Hirsch of Stock Trader’s Almanac is worth mentioning. He notes that November is the best month of the year historically for the Dow 30 and the S&P 500, “with a string of six [bullish days] in a row starting on its first trading day.” (He cautioned, however, that “November does have weak points.”)

Friday, October 31, 2025 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 11 minutes and covers:

• The stock market is looking increasingly “frothy” and may need a rest period.
• November is typically the year’s best month, however, so we’re still bullish.
• Two former Cabot Turnaround Letter portfolio members are back in the spotlight in our latest Catalyst Report.
• Final note
  
  • AEM and SIRI benefited from their respective quarterly earnings reports this week, which highlighted the progress made by both companies.

Portfolio Comments

Agnico Eagle Mines (AEM) released Q3 earnings this week, which included record revenue of $3.1 billion that increased 42% year-on-year, earnings of $2.16 that beat estimates by 23 cents and record adjusted EBITDA of $2.1 billion.

On the earnings call, CEO Ammar Al-Joundi spotlighted “record financial results, driven by, of course, record gold prices, but coupled with strong and consistent operational performance.” Further highlights included Agnico delivering 867,000 ounces in gold production for the quarter, achieving 77% of the full-year guidance and selling gold at an average price of $3,476 per ounce, which was noted as a company record.

Al-Joundi also drew attention to the company’s ability to maintain cost controls, stating, “Our Q3 cash costs would have been $933 an ounce, well below the midpoint of our cost guidance range,” excluding higher royalties tied to gold prices, and further emphasizing that Agnico is “in the strongest financial position in the company’s history.” He further noted the firm’s ongoing investments in five key pipeline projects and an “exceptional exploration program.”

Concerning its Canadian and European mining activities, the firm drew attention to ongoing productivity and technology improvements, noting a 13% increase in tons mined per day at its Kittila property in Finland, plus a 4% decrease in euro-per-ton cost.

Other highlights including the company repaying $400 million in debt during Q3, returning $350 million to shareholders and increasing its net cash position to $2.2 billion while receiving a credit rating upgrade.

Looking ahead, the top brass affirmed confidence in achieving the midpoint of the full-year production guidance range of 3.4 million ounces and still expects to be at or near the top end of its cash cost guidance range of $965 per ounce for 2025.

Agnico also said it continues to prioritize shareholder returns, capital discipline and reinvestment in high-return organic growth projects, while reiterating its strategic focus on the firm’s five key pipeline projects, which collectively represent around 1.5 million ounces of potential production.

AEM maintains a Hold rating in the portfolio.

****

It was announced this week that Korean Air will purchase 103 Boeing (BA) aircrafts valued at $36 billion, which analysts have described as the centerpiece of a series of U.S. export deals secured during President Donald Trump’s visit to the Republic of Korea.

The agreement will support an estimated 135,000 American jobs and anchor more than $52 billion in total deals signed during the president’s Indo-Pacific tour, the White House said Wednesday.

Complementing the aircraft purchase, GE Aerospace (GE) secured a $13.7 billion agreement to supply state-of-the-art jet engines for Korean Air’s new fleet. The engines are part of GE’s latest generation of fuel-efficient models, designed to lower emissions and operating costs.

GE maintains a Hold rating in the portfolio.

****

Intel (INTC) announced this week a collaboration with Supermicro (SMCI) to build a new system that set records for the STAC-M3, a benchmark suite for testing the performance of high-speed analytics on time-series market data, specifically for financial services applications.

In other company news, Intel said Thursday that it’s in early discussions to purchase AI chip startup SambaNova Systems Inc., which has been using bankers to gauge interest from possible buyers, according to a Bloomberg report. The report indicated there’s no certainty that a deal will be reached, and another buyer could also emerge.

Any transaction will likely value SambaNova at less than the $5 billion it was valued at in a funding round in 2021, according to the report.

INTC maintains a Hold rating in the portfolio.

****

A key part of the turnaround story for Newell Brands (NWL) is the revitalization taking place in its Sharpie marker brand. (The Learnings & Development segment that Sharpie occupies currently accounts for around 23% of the firm’s total annual revenue, with Sharpie estimated to account for a sizable portion of this total.)

The iconic American writing pen is focused not only on strengthening its domestic footprint and expanding its product line (which includes a current lineup of 93 different colored inks), but also on enhancing its already fanatic following among millions of Sharpie enthusiasts.

In fact, Newell has publicly identified Sharpie as one of its priority brands in its turnaround strategy, with one Wall Street analyst commenting: “By consolidating its brand portfolio…and prioritizing high‐performing names like Rubbermaid, Sharpie and Coleman, the company has streamlined operations and improved gross margins.”

Earlier this month, The Wall Street Journal ran a feature story on how Sharpie has found a way to manufacture its writing instruments more cheaply in the U.S. than it did abroad. It noted that of the six components that go into the average Sharpie pen (of which half a billion are produced each year), only the felt tip is manufactured overseas.

To that end, Sharpie just announced the relaunch of its Extra Fine Permanent Marker after nearly a decade. Its return was driven by an “outpouring of consumer demand—from online reviews to social threads to resale sites—all pointing to one clear message: people wanted it back,” according to Newell.

The fan favorite returned this month exclusively to Walmart shelves and is expected to help generate continued momentum for both the brand and the company.

Newell is set to announce Q3 earnings results before the market opens on Friday, with estimated revenue of $1.9 billion expected to decline 3% year-on-year and consensus earnings of 18 cents a share predicted to increase 13%. Seeking Alpha notes that the company’s revenue estimates have beaten estimates just 38% of the time, while earnings have beaten EPS estimates 100% of the time.

My expectations are low for the Q3 report, but I remain confident in the company’s ability to execute on its strategic initiatives over the long-term.

NWL maintains a Buy rating in the portfolio.

****

Sirius XM Holdings (SIRI) released Q3 results on Thursday that were mostly pleasing to Wall Street, resulting in a 10% rally for the stock.

Revenue of $2.2 billion was flat from a year ago, with earnings of 84 cents a share beating estimates by six cents. However, what really caught investors’ attention was the firm’s full-year guidance, which included a $25 million increase across total revenue of $8.5 billion, adjusted EBITDA of $2.6 billion and free cash flow of $1.2 billion.

Sirius further expressed confidence that ongoing business improvements will drive growth in free cash flow toward the target of $1.5 billion by 2027, with CEO Jennifer Witz revealing that Sirius XM is “actively exploring ways to unlock the long-term strategic value of our spectrum assets.”

On the earnings call, she further highlighted “solid momentum in our new SiriusXM acquisition initiatives with ongoing expansion of our three-year automotive dealer subscription program and our Podcasts+ offering as well as continued strength in retention.”

She also noted that retention remained strong in the quarter, despite a pullback in streaming marketing spend, while underlining Sirius’s efforts to include more content across package tiers, stating that this is providing “even more value to our dedicated subscribers.”

Among the highlights for the quarter were a more than 50% increase in NFL and MLB play-by-play listeners, a near-tripling in usage of the firm’s artist-seated stations, advancements in programming—including exclusive events and partnerships (such as the return of Channel 13 to celebrate Taylor Swift’s new album)—and the rollout of a new identity framework shifting subscriptions from vehicle-based to customer-based models, aiming to “drive stronger customer acquisition, higher retention and sustained revenue growth,” according to Witz.

Sirius also made progress within its pricing and packaging, its low-cost, ad-supported subscription tier, and also from the limited targeted marketing efforts it has rolled out in tandem with its latest launch.

Finally, Sirius XM Media now reaches more than 170 million listeners a month, which the company called a “major milestone,” while its podcast network is now the largest in the nation, according to Edison Research.

SIRI maintains a Buy rating in the portfolio.

****

SLB Ltd. (SLB) said Thursday it was awarded two “sizable” engineering, procurement and construction contracts by PTT Exploration and Production to its OneSubsea joint venture, building on a 20-year collaboration between the two companies and covering the expansion of two fields off the shore of Malaysia.

As part of the EPC contracts, SLB said it will deliver comprehensive subsea production systems for the Alum, Bemban, and Permai deepwater gas fields located in Block H and the Kikeh field, Malaysia’s first deepwater oil project.

The scope of work includes horizontal subsea trees, umbilicals, control systems and associated services, the company said.

The Block H gas development began producing natural gas from the Rotan and Buluh fields in 2021, and the Kikeh oil and gas field has been in production since 2007; the fields have water depths in the 1,100-1,300 meter range, and SLB said OneSubsea’s experience in developing and deploying technology in complex deepwater environments will further extend the life of the two fields.

SLB maintains a Buy rating in the portfolio.

****

RATINGS CHANGES: None.

NEW POSITIONS: We added PepsiCo (PEP) to the portfolio this week with an upside target of 200. BUY

Catalyst Report

When making my decision for which stock to include in the monthly edition of the newsletter, after going through countless numbers of stocks with varying degrees of turnaround potential, I typically assemble a final top 10 list. Naturally, the number-one stock on the list is normally the one I end up choosing to highlight for the latest month, with PepsiCo (PEP) being this month’s choice.

The stocks that didn’t quite make the cut are the ones I usually highlight in the Catalyst Report. And while it doesn’t always happen, I find it both amusing and, at times, annoying that my second- and third-place choices are often the ones that end up outperforming my top pick (at least on a short-term basis).

That said, in view of its conservative nature, established position and excellent catalysts, I feel confident that PepsiCo was a worthy choice for the portfolio—regardless of how it performs in the near term. And while I didn’t feel quite as strongly about most of the other stocks on my list this time around, a couple of them gave (in my view at least) PepsiCo a run for its money. Perhaps not surprisingly, both of them are former portfolio members from a year or two ago.

The first is Viatris (VTRS), a global pharmaceutical company formed in 2020 by the merger of Mylan and Upjohn, a former division of Pfizer (PFE). The company provides a wide range of therapies, including branded and generic drugs, OTC products, biosimilars and other medicines across more than 10 therapeutic areas like cardiovascular, oncology and infectious diseases.

The turnaround at Viatris is no longer in its early stage, but can now be classified as mid-to-late-stage, as the company is transitioning away from a period of consolidation and divestitures toward one focused on new product growth and overall expansion.

On the latter score, the firm is actively acquiring companies and products that will expand its footprint in its key markets, including the recently acquired Aculys Pharma, which includes rights to sell Pitolisant (brand name Wakix, a prescription medication used to treat narcolepsy) in Japan.

Viatris is also still working on restructuring and cost reduction, while working to offset a decline in its established products and managing its debt. However, the pipeline is advancing toward commercialization, including several positive Phase III trial readouts throughout 2025 and is targeting New Drug Applications (NDA) for several key products by year-end. Analysts are optimistic on that front and see significant product launches and potential growth drivers heading into 2026.

Challenges remain; for instance, the company was still managing and, by its own estimate, “more than halfway through” its remediation efforts for an FDA warning letter and import alert at its Indore, India facility, which had a negative financial impact throughout 2025 (a common challenge for firms in the mid-stage of a complex turnaround).

But the top brass believes its mantra heading into this year is still true, namely, “consolidate in 2025, win in 2026,” which positions the coming year as a pivot point where the groundwork for sustainable growth is thoroughly established.

Viatris said it will provide a major update on its company-wide strategic review during the upcoming Q3 earnings call (scheduled for November 6), which suggests the planning phase for its next stage of growth is nearing completion.

For Q3, Wall Street has set a low bar, with revenue expected to decline 4% year-on-year and earnings forecast to be 18% lower. However, the consensus expects 2026 to indeed be a turning point for sales and earnings, with several years of growth anticipated to follow. And while the second phase of the turnaround for Viatris is maturing, I think the stock is still valued attractively enough to be worthy of consideration for long-term-focused investors.

The second stock I see as a worthy candidate for this month’s Catalyst Report is V.F. Corp. (VFC), a global apparel and footwear company that owns a portfolio of popular brands, including The North Face, Vans, Timberland and (formerly) Dickies (which it’s in the process of selling).

V.F. Corp. is one of the stocks I kicked out of the portfolio for underperformance last year. (If memory serves, it initially performed well when first selected by one of my predecessors, but eventually came under heavy selling pressure.)

Sentiment on Wall Street toward the V.F. turnaround remains mixed, with analysts publishing what seems to be almost daily conviction notes that vary wildly in outlook from bullish to bearish to neutral. The turbulent sentiment toward the company is perhaps best encapsulated by the about-face on V.F. by the popular financial pundit Jim Cramer, who only a few months ago described V.F. as “one of my favorite turnarounds” while commenting that the CEO is “starting to pull it off.” However, Cramer has since changed his tune on the company, recently calling its guidance “shockingly dismal” after the company beat earnings expectations for fiscal Q2 (ended September) but gave a poor outlook for the holiday quarter.

On the earnings call earlier this week, however, management expressed the view that the turnaround is progressing, with revenue rising on a sequential basis and operating income of $330 million well above the mid-point guidance of $275 million. The CEO further said:

“Last quarter, I highlighted that 60% of our business by revenue was growing, up from just 10% in the prior year. In Q2, so this quarter, that figure expanded to over 65%. And if you took out Dickies, that would be almost 70%.”

On that score, the company announced last month a planned sale of the Dickies brand for $600 million, with proceeds intended for debt reduction. The CEO said, “This allows us to accelerate our path towards our medium-term leverage target of 2.5x or below.”

Going forward, V.F. sees progress being made toward its medium-term targets of $500 million to $600 million of operating income expansion in fiscal 2028 and the above-mentioned leverage ratio of 2.5x or below by that same year.

The company is fairly valued with strong upside potential as margins and earnings improve, and while tariff risks remain, the ongoing strength in core brands like The North Face and Timberland should carry the company through to better days in the next couple of years.

Please feel free to share your ideas and suggestions for the podcast and the letter with an email to either me at cdroke@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.

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.

Portfolio

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