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Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the December 2023 issue.

Every investor has loser stocks. We discuss two ways to convert this year’s losers into assets and winners, including tax loss selling and buying shares that others have discarded for artificial reasons. Last year’s crop of bounce stocks performed exceptionally well. We discuss five for this year that look promising.

One of our more productive methods for sourcing new ideas is to see what other like-minded investors are buying. We discuss how to refine the vast data in 13F filings and review four from the most recent batch of filings that look attractive.

This month’s Buy recommendation, Fidelity National Information Services (FIS), was used in a February 2023 article about how we evaluate candidates. It was too expensive then, but its recent 26% share price slide and encouraging fundamentals make it attractive to buy now.

We summarize our recent monthly edition of the Cabot Turnaround Letter as well as the Catalyst Report,
provide comments on our companies that reported earnings or had other meaningful news. Also, some thoughts on the war in Europe.

A Tale of Two Earnings Reports: Atlassian (TEAM) and Vestis (VSTS)

Small caps paused this week to digest a few wild weeks. The S&P 600 Small Cap Index is essentially unchanged since I last wrote, which I think is a victory at this point.

The market’s intermediate-trend has turned decidedly down, so taking steps to minimize the risk from your most aggressive stocks is critical. But don’t throw the baby out with the bathwater! The market’s long-term trend is still up, and I’m confident there is still more upside potential for a well-diversified portfolio of carefully-chosen stocks.

A quick note: we have several stocks that are near our stops, or broke below them last week as the market quickly fell 10% following the tariff announcements. For now, I am going to give these trades a bit more time, though if conditions worsen again, we will be exiting these trades very quickly.

It was a historic week for the market, and not for any positive reasons as the S&P 500 fell 9.1%, the Dow lost 7.9% and the Nasdaq declined by 10%. Perhaps the weekend gave traders a bit of time to better digest the tariff news and the market will stabilize this week after an up-and-down Monday (futures are up big on Tuesday, but that can change quickly in these tariff times). It’s also possible that the uncertainty is just too much for traders to digest.

In today’s note, we discuss pertinent developments for several of the stocks in the portfolio, including Agnico Eagle Mines (AEM), Alcoa (AA), Atlassian (TEAM), GE Aerospace (GE), Paramount Global (PARA), SLB Ltd. (SLB) and Starbucks (SBUX).


Gold and silver continue to benefit from safe-haven buying, boosting our holding of Agnico Eagle Mines (AEM).

In today’s note, we discuss a number of earnings results and new developments for several of our portfolio positions, including Alcoa (AA), Atlassian (TEAM), Barrick Gold (GOLD), Viatris (VTRS), and Pan American Silver (PAAS).

Continued strong earnings reactions this week bode well for several of our recent portfolio additions.

Tech stocks are having a tough week as interest rates and inflation fears creep up. This is uncomfortable for many because five companies, Microsoft, Apple, Amazon, Alphabet and Facebook, make up almost 25% of the market value of the S&P 500. My view is that this pullback is providing new entry points for some tech stocks that have been on a good run. For perspective, most non-tech stocks are weathering the increase in bond yields quite well.

Today, we’re selling two profitable ideas that have lost some momentum, and our new Explorer recommendation centers on turbulence on the high seas.

After a better than 30% plunge at record speed, the market has staged an epic rally from the bottom. The S&P 500 has moved more than 20% higher from the lows in late March. It is likely sensing an end to the economic shutdown sooner rather than later.
That’s good news, and the market usually gets it right. But even if the economy opens back up in May and June, there is a good chance of more trouble ahead. Terrible earnings and economic reports will come and consumers will be wounded for a while.


While I believe the economy and the markets will recover, there is a good chance of another down leg in the market. In this issue, I seek to take advantage of that possibility by targeting great companies to buy and below current prices. These are fantastic companies to own that are only ever cheap in bear markets like this.


The market will come back, but probably not yet. Taking advantage of another down move is a fantastic way to profit from the market’s eventual recovery.

In today’s note, we discuss a number of earnings results and new developments for several of our portfolio positions, including Barrick Gold (GOLD), Centuri Holdings (CTRI), Intel (INTC), Pan American Silver (PAAS) and Super Hi International Holding (HDL).

The favorable liquidity backdrop should continue for the rest of Q4, which is ideal for initiating new turnaround trading positions.

Coal is dead; renewable energy is the future. And the best renewable energy stocks are worth your consideration. Here are two that stand out.

It goes without saying that a big part of being a turnaround investor is having a contrarian bent. Let’s face it, we’re a hardy bunch who typically shun the crowd and buy what are, in most cases, stocks that are completely out of vogue with the typical market participant.

Today’s recommendation is a chain restaurant—a chain I’d never even heard of—but the company is growing fast and the chart is very constructive.

This week’s Friday Update includes our comments on earnings from eight companies. Also, Toshiba (TOSYY) reported earnings this morning, along with its plan to split into three companies.

Housing loans and U.S. debt are creeping back toward pre-recession highs, and one mortgage insurance stock is up more than 1,000% in four years as a result.

A new hedge fund will trade based on the frequency of opinion tweets on stocks and the markets.

Today’s featured stocks include two new additions to the portfolios and a stock that has ostensibly become a takeover target.