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There are no rating changes in today’s weekly update.

Two years after the yield curve inverted, there’s still no U.S. recession in sight. As a result, financials – beaten to a pulp during the double whammy of the 2022 bear market and the March 2023 bank collapse – have become the fastest-growing non-tech sector of the market. It’s also one of the most undervalued. So in this month’s issue, we add a very recognizable big bank that does a little bit of everything – and seems to be everywhere. It’s growing at a healthy clip and yet is cheaper than even the average financial at the moment.

Details inside.

A year ago, college kids laid out the case for a Trump’s victory. And they did it with a mess of disparate data in just 20 hours, using a data prep platform by the little-known company that I’m recommending today.

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the November issue.

This month we look at the oil refining industry. Unlike many technology stocks, this group is the opposite of “priced for perfection.” The industry’s products will remain relevant for a long time, despite investors’ enthusiasm for a shift to electric-powered vehicles. Also, the pandemic will eventually pass and demand for refined products (gasoline, diesel, heating oil and jet fuel) will return, lifting these company’s earnings and stock prices. We acknowledge the tax and regulatory risks but see real value in the higher quality and better-financed refinery companies.



We also look at technology turnarounds. Successful tech turnarounds are rare, so our discussion briefly explores why this is the case and identifies six that have interesting turnaround potential.



Our feature recommendation is the oil refining company Valero Energy (VLO), offering what we see as the best risk/reward traits among a group with strong cyclical turnaround potential.



The letter also includes a summary of our recent sale of Amplify Energy (AMPY) and our change to a Sell rating on Consolidated Communications (CNSL), as well as the full roster of our current recommendations.



Please feel free to send me your questions and comments. This newsletter is written for you. A great way to get more out of your letter is to let me know what you are looking for.



I’m best reachable at Bruce@CabotWealth.com. I’ll do my best to respond as quickly as possible.

In today’s issue, I dig into the reasons behind this painful correction, finding an aggravating Chinese government regulatory shift that can account for a large part. Despite the turmoil, the Cabot Emerging Market Timer is still positive, and I have a fresh, young Chinese tech stock that has enormous potential as the development of the Chinese cloud continues.

Japan is back as a place to invest some capital for a number of reasons.

Japanese retail investors have cash positions above 50% versus about 15% for Americans.

Japanese corporates have long been criticized for hoarding cash on their balance sheets and low capital expenditures due to cross-shareholdings with sister companies. But over the past 12 months, share buybacks are on track to increase 96% year-over-year, and the reduction in cross-shareholdings has increased by 75% in the last fiscal year.

All this leads us to consider today a second Japanese stock as an Explorer recommendation.

In part 3 of my series on the top-performing stocks of 2016, here are six more that managed to more than triple their share price last year.

Today, savvy investors are working to find “the next Apple” because that’s where the real growth potential lies.

Investing in revolutionary companies isn’t about finding bargains; it’s about getting on board the rocket ship before the masses.

Today’s investment idea is in the biotech field. I’m stuck on these stocks for several reasons. One, they’re strong. Two, many actually boast growing earnings trends. Three, the group has failed many times in past decades to put together a lasting advance, so maybe now is the time. Four, there will be tremendous demand for health-improving products as baby-boomers age; biotechnology offers the best chance we have to stay healthy.

How often do you trade your stocks during a year? Do you turn over your portfolio an average of once a year, twice a year or a dozen times a year? In this age of super-fast computers that are programmed to trade in nanoseconds, should we trade more often to keep up with the ever-changing stock market? My opinion is no.

The International Energy Agency issued a report earlier this month predicting that a “golden age of gas” could be coming.

The Canadian government announced tha trusts will lose their tax-favored status in January.

The big picture this week is much the same as last week. In fact, the S&P 600 Small Cap Index closed today just a fraction off where it closed last Thursday. The same applies to the Nasdaq, while the S&P 500 is up modestly.

The S&P 500 is now within 1% of the all time high. It could even make a new high today. The index has rallied 54% since the lows of March. What pandemic?

Emerging markets got a boost this week as it appears that there will be a high level meeting between the U.S. and China at the upcoming G-20 meeting.