It was a quiet week, with no companies reporting earnings (no earnings reports scheduled for the rest of the year, in fact) and no changes in ratings. We had three price target increases, for Trinity Industries (TRN), Adient (ADNT) and DuPont (DD), noted below.
Friday, December 18, 2020 Subscribers-Only Podcast
Covering recent news and analysis for our portfolio companies and other topics relevant to value investors.
Today’s podcast is about 8½ minutes and covers:
- Brief updates on:
- Trinity Industries (TRN) - Raising our price target to 30 from 26. The stock has reached our 26 price target, yet the positive changes underway and the still-depressed industry conditions, plus a still-attractive valuation, warrant the increase.
- Adient (ADNT) – Raising our price target to 42 from 35. The turnaround is coming together and we think the market continues to underestimate the positive changes at Adient.
- DuPont (DD) – Raising our price target to 75 from 70. DuPont’s cyclical strength, plus the value created from its upcoming Nutrition & Biosciences transaction, continue to make the shares appealing.
- Baker Hughes (BKR) has pulled back from its price target in the past week, so we will wait on making any changes to this rating or price target.
- Volkswagen (VWAGY) – Leadership, ownership and labor unions are back on the same page, helping clarify VW’s strategy and buttress its EV initiatives.
- Credit Suisse (CS) – Will focus more heavily on wealth management and less on investment banking. A solid decision, in our view.
- General Motors (GM) – Reached a tentative agreement with South Korean labor unions.
- Elsewhere in the market:
- Yet another electric vehicle company will be coming public. Most EV companies will fail, but Tesla will likely be a survivor, particularly as it has quietly raised $12 billion in cash from equity offerings this year.
- Anti-trust is coming for Facebook, Google, Amazon and maybe Apple and Microsoft. Will it matter?
- Is the market entering a Bizarro World, where cash has negative value, earnings have negative value, and things that don’t actually exist have the highest value?
Please feel free to share your ideas and suggestions for the podcast 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 limit we may not be able to cover every topic each week, but we will work to cover as much as possible or respond by email.
Look for the regular monthly issue of the Cabot Turnaround Letter on Wednesday, December 23, just before Christmas and a week earlier than our typical end-of-month schedule. This issue will include our annual year-end review and outlook as well as our Top Five Stocks for 2021.