The Cabot Turnaround Letter is back from our travels to Texas. On the trip, the airports and jets were looking more crowded, but were by no means full. The city centers in Dallas and Ft. Worth were remarkably devoid of pedestrians – maybe it is always this way, but even the parking lots seemed nearly empty. Streets and highways had what seemed like a lot of traffic, so maybe it’s just the high-rise office people who are working from home.
In some ways, it has been a quiet week, with no earnings or ratings changes, and not a lot of news on most our companies. But, the stock market has, at least for a few days, seen a sea-change in sentiment, with more clarity on the Fed’s policies and some resolution of the slow-motion but inevitable Evergrande collapse.
Capital market, economic, geo-political and societal changes are happening quickly. The fate of the controversial $3.5 trillion spending plan now winding its way through Congress, and how this is being discounted by stocks, could become clear in the coming weeks. Soon adding to the mix is earnings season, which kicks off in about two weeks. It sure looks like the fourth quarter could be very interesting.
Ratings Changes:
None
Friday, September 24th, 2021 Subscribers-Only Podcast:
Covering recent news and analysis for our portfolio companies and other topics relevant to value investors.
Today’s podcast is about 9 minutes and covers:
- Brief updates on:
- Meredith Corp (MDP) – Reported to be in talks to sell to IAC, driving the shares higher.
- Wells Fargo (WFC) – Possibly facing a loss on a $100 million loan to Trump Tower. Fed Chair Powell says that Wells won’t be released from its asset cap until its problems are solved.
- Royal Dutch Shell (RDS/B) – Selling its Texas assets to ConocoPhillips for $9.5 billion.
- General Motors (GM) – More downtime due to chip shortage. Will work directly with chip makers. Replacing defective batteries in Chevy Bolt but faces blight on its reputation. Regulators probe airbags. Favorably, is expanding its OnStar 911 service to homeowners though Amazon’s Alexa service.
- General Electric (GE) – Small deal for BK Medical implies big confidence in GE’s cash flow and future profits.
- Macy’s (M) – Credit rating upgraded to one notch below investment grade.
- Elsewhere in the Market:
- China bans cryptocurrencies, apparently worried about capital flight. Role for El Salvador?
- Final Note
- Cabot Turnaround Letter to be published next Wednesday.
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.