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Remember fintech? It was one of the biggest buzzwords on Wall Street a couple years ago until AI came in and gobbled up all investors’ attention. But the nascent sector never stopped growing, and now share prices are well below their apex as investors have largely ignored the sector the last couple years. In fact, this month’s new fintech addition to the Cabot Value Investor portfolio has almost never been cheaper since coming public in 2020. And yet, the company is still expanding both sales and earnings by more than 25% annually.

It’s a classic growth-at-value-prices story. And we think it has 45% upside in the short-to-intermediate term. Details inside.

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.

Current Market Outlook


The selling in growth stocks spread to the rest of the market last week, with most major indexes finishing lower, led again by growth-y indexes and funds. The good news is that, for now, the worst-case scenario has been avoided—many growth stocks tested key support in recent days (50-day lines, etc.) and almost all held up, with Friday and today seeing some solid bounces. Cyclical stocks have done a similar dance, with many pulling in, but few really cracking, and now the bounce is underway. Ideally, this rebound will develop some power—strong bounces off support often provide low-risk entry points—but, while we won’t wait weeks to see how it plays out, it’s too soon to conclude the recent selling wave is over. We remain more optimistic than not, and the past couple of days are certainly encouraging, but let’s see if some new and potential leaders lift off in classic fashion.

This week’s list is a mix of various different stocks, including a number of names we haven’t written up before. Our Top Pick is Chart Industries (GTLS), an under-the-radar name that’s set to see earnings soar as demand for its various energy infrastructure items (including many that play into the clean energy space) takes off.

Stock Name	Price	Buy Range	Loss Limit
Axon Enterprise, Inc. (AXON)	187	183-188	168-171
Builders FirstSource (BLDR)	50	49-51	44-45.5
Chart Industries (GTLS)	178	173-178	154-157
Elastic (ESTC)	157	153-158	135-138
PKI (PKI)	182	178-183	161-164
Rapid7 (RPD)	113	109-113	99-102
Regeneron Pharmaceuticals (REGN)	667	630-650	575-585
UPST (UPST)	203	185-195	157-162
WK (WK)	137	130-134	117-119
Zscaler (ZS)	251	240-247	220-225

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.

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.

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

Eventually, when real estate prices fall low enough, the patient value-oriented souls who’ve been waiting for bargains will come out of the woodwork and start buying. They’ll buy individual houses, apartment buildings, entire condominium projects and more. Downtrends will end. The recession will end. And the U.S. of A. will return to its pattern of slow growth. But should you wait until then before you invest? No, as I explain in the next section.

In today’s note, we discuss the recent developments concerning Barrick Gold (GOLD) and V.F. Corp. (VFC), while taking a nice profit in the latter stock.

The market bounced back last week in a significant way. For the week the S&P 500 added 2.57%, the Dow gained 3.37%, and the Nasdaq advanced by 2.23%.

After rising 25% from its December low to its May high, the S&P 500 index is finally taking a breather. I don’t expect a shocking price drop like we saw in December. Rather, I anticipate the S&P 500 receding to 2,750, which would be down 200 points from the recent high, or even 2,650. Pullbacks aren’t any fun, but they are normal, and they provide opportunities for investors to buy stocks while they’re on sale.

The past week was one of the most fun in a while! But you can’t rest on your laurels in this business; just when you start to congratulate yourself is when the market comes around to slap you down. Today I’m dialing back the risk a bit with a conservative growth stock that you almost certainly know, and which is at a decent buying point.

Facing the first sustained market downturn in their lifetimes, millennial investors have pulled back from investing and stopped “buying the dip.”

Despite all the current issues, the market is doing gangbusters.

The S&P 500 is up over 12% YTD. And the year isn’t even half over. The index has also rallied more than 20% from the bear market low in October. That’s the definition of a bull market.

But things aren’t as rosy as they seem. This is the thinnest rally I’ve ever seen. Just ten stocks account for the entire YTD rise in the S&P 500 index. The other 490 stocks have collectively gone nowhere.

Alibaba will be making its much-heralded entrance into the U.S. market later this summer.

With no steady paycheck, investing after retirement can be daunting. Here are a couple key strategies to make your money last.

What a month! Markets have had some pretty wild moves since last month, gyrating with significant volatility, and that looks like it may continue for a while. But that’s OK as the volatility is now serving up some pretty exciting discounted opportunities for investing.

Economically speaking, inflation abated somewhat, with core inflation falling to 3.2% for August, its lowest point in three years. And that sets the stage for an estimated 25 basis point reduction in interest rates when the Federal Reserve meets next week, according to the latest economist polls. The rate gurus now think that we may see a total of three rate cuts before the end of the year.

Every year, as October and November roll around, Cabot’s analysts start to get requests from all over for their picks for the next year’s “Stock of the Year.” And that’s a tough thing to pick.

The rise and fall of the oil industry indicates that Green stocks are a great place to invest.

The market has gotten a little jumpy given the potential impacts of a broader coronavirus outbreak and the trickle of earnings-related announcements, which have the grounding effect of telling us what’s actually going on inside companies these days.