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CABOT EVENTS
Cabot Weekly Review (Video)
In this week’s video, Tyler Laundon touches on the economic data from the past week and the puts and takes between inflation easing, the FOMC March meeting minutes and earnings expectations for Q1 and the rest of 2023. His takeaway is that earnings trends in the short-term don’t look great but with the market tending to look forward and the Fed about done with hikes there’s potential for a “bad to better” scenario to keep the market acting well and potentially moving higher. Tyler also jumps into a handful of stocks with recent news that has moved shares higher.
Stocks Discussed: IHI, IBB, SHOP, INMD, FLYW, HURN, ISEE, PINS, SWAV
Cabot Webinar
2 Major Catalysts for an Impending Cannabis Rebound – and 3 Ways to Play It
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Quarterly Cabot Analyst Meeting
The recording of the Cabot Prime Members Meeting with the Analysts from January 18, 2023 is now available for you to listen to at your convenience—click here for access. This private call with our analysts is one of your exclusive Cabot Prime Pro member benefits.
RECENT BUY AND SELL ACTIVITY
This table lists stocks bought or sold in the most recent Issues or Updates.
Portfolio Updates This Week
Cabot Growth Investor
Bi-weekly Issue May 4: The market remains in a rough spot, with a hawkish Fed that continues to raise rates into what’s become a rolling bank crisis, with some big names going under and others walking the plank. Far more important to us than the news is the market’s reaction to the news--and it remains mixed when it comes to the indexes (intermediate-term trend neutral), but growth stocks remain iffy at best, with many good-looking setups falling apart on earnings of late, and with relatively few really powering ahead. All of this can change in a hurry, but until it does, we continue to think growth investors should remain generally cautious and flexible as we wait for a more certain environment that will entice big investors to pile in.
Bi-weekly Update May 11: WHAT TO DO NOW: It remains a mixed environment, with a few mega-cap names doing well but most of the broad market under pressure—and for potential leaders, there remain a good number acting OK but the repeated air pockets make it challenging to make progress. After this week’s sale of Axon (AXON), our cash position is a bit over two-thirds of the Model Portfolio; we could add a couple of small positions if names on our expanding watch list remain intact—but tonight, we’ll stand pat to see if more strength can develop.
Cabot Top Ten Trader
Weekly Issue May 8: We don’t want to write the same thing week after week, but the story remains mostly the same as it has for the past two months: There are definitely some positives out there, including a good number of setups, some positive earnings reactions and a resilient set of major indexes, especially given the banking worries—but the broad market is mostly iffy while we continue to see repeated air pockets and selling on strength. We still think there’s lots of bullish dry tinder that could spark if things go right, but until it happens, we think it’s best to remain cautious. This week’s list sports more than a few recent earnings winners, as well as a few tight setups. Our Top Pick is a growth name that’s getting costs under control—combined with its cookie-cutter story, that could produce reliable bottom-line growth soon. Try to buy on dips.
Movers & Shakers May 12: The story remains mostly the same once again—coming into today, the big-cap indexes are relatively flat, but anything with exposure to names outside of a few mega-caps is down in the 1.5% range. (Even within the S&P 500, the index is down 0.14% coming into Friday, while the equal-weight S&P 500 is down 1.12%.)
Cabot Value Investor
Monthly Issue May 2: Thank you for subscribing to the Cabot Value Investor. The new name for the former Cabot Undervalued Stocks Advisor more clearly and broadly describes our mission to serve value-oriented investors. We hope you enjoy reading the May 2023 issue. Fitting for a value investment newsletter, your chief analyst will be making the pilgrimage to the Berkshire Hathaway Annual Shareholders Meeting this coming weekend. In this month’s letter, we include our recent new Buy recommendation: NOV, Inc. (NOV). This high quality mid-cap company ($7.3 billion market cap) appears to be in front of an upshift in demand for sophisticated drilling equipment even as its shares trade at a modest valuation. We also cover earnings reports and provide other relevant updates on our recommended companies. Please feel free to send me your questions and comments. This newsletter is written for you and the best way to get more out of the letter is to let me know what you are looking for.
Weekly Update March 28: This past week, among the 1,000 largest companies by market cap, the average percentage share price change was zero. Half of the stocks had moves of no more than +/- 1%. And, only 14 stocks had share price movements of +/- 10% or greater.
Cabot Dividend Investor
Monthly Issue May 10: Energy stocks have been by far the best-performing market sector over the last couple of years. They went from worst to first in dramatic fashion. And the good times may be just beginning. The industry has had very low capital spending and expansion in recent years. Crude oil inventories have fallen below the five-year average and are likely headed far lower. OPEC has pledged dramatic production cuts to push prices higher. There is also a high degree of geopolitical risk. In fact, Goldman Sachs analysts are forecasting oil prices to get back to $95 per barrel before the end of this year.
Weekly Update May 3: A big week in the market has started badly. The failure of First Republic Bank (FRC) and fears of further fallout have sent stocks reeling ahead of more news the market may not like later this week. The market moved on from the banking crisis. But it is rearing its ugly head again. There is now worry of more bank failures and an escalating crisis. More small regional banks could fail. But the situation is still unlikely to devolve into a major crisis, at least at this point.
Cabot Early Opportunities
Monthly Issue April 19: In the April issue of Cabot Early Opportunities, we take a quick look at what to expect from portfolio positions set to report in the coming weeks and dive into fresh opportunities that are shaping up nicely now. At the top of the buy list is a software name we just added to our Watch List last month. We also take a position in a cosmetics stock that looks superb, pull back the curtain on a rising biotech star, tour an enterprise software name based in Canada and revisit a MedTech stock that’s finally getting some respect from the Centers for Medicare and Medicaid Services (CMS).
Cabot Income Advisor
Monthly Issue April 25: In the middle of an earnings recession and a slowing economy, defensive stocks are probably the best places to be. These companies can maintain earnings growth while most companies are sliding and remain consistent even as the economy deteriorates further. Defense is king right now. But defensive stocks are even better when they offer growth as well. In such uncertain times, it makes sense to bank on things that are more certain. Stocks poised in front of a megatrend are the best bet. A megatrend acts as a powerful tailwind for a stock that can make a mediocre pick very good and a good pick great. In this issue, I highlight a defensive stock that is also one of the world’s largest producers of alternative energy. At the same time, it is also one of the best traditional regulated utilities in the country. It offers defense as well as growth and can thrive in any kind of market.
Weekly Update May 9: As I mentioned in the last update, last week was a big week for the market. Important earnings, the Fed meeting, and the jobs report all had implications for the near-term direction of the market. The market survived and came away about even for the week. Now what? Earnings were generally positive. The Fed did what was expected by raising 0.25%, and the statements afterward were ambiguous. The employment report was solid as many more jobs were created. Also, the last two months of jobs figures were lowered. The readjustment quelled inflation fears while the current jobs report indicated no recession in sight.
Cabot Turnaround Letter
Monthly Issue May 3: We highlight three cash-rich companies that have real products and services whose shares are out-of-favor. We also discuss six additional companies that have both promising turnarounds ahead yet also discounted share prices. Our feature recommendation this month is Frontier Group Holdings (ULCC), a major ultra-low-cost airline focused on leisure travel. Its shares have fallen 50% from its IPO price due to investor concerns about demand, pricing and costs. We think these worries are overblown, leaving ULCC shares ready for take-off.
Weekly Update May 12: This week’s note includes our comments on Goodyear Tire (GT), Warner Bros Discovery (WBD) and Berkshire Hathaway (BRK/B), which reported late last week. It also includes comments on the 12 companies that reported earnings this week: Bayer AG (BAYRY), Brookfield Reinsurance Ltd (BNRE), Dril-Quip (DRQ), Elanco Animal Health (ELAN), Goodyear Tire & Rubber Company (GT), TreeHouse Foods (THS), Six Flags Entertainment (SIX), Viatris (VTRS), Toshiba (TOSYY), Volkswagen AG (VWAGY), Warner Bros Discovery (WBD) and Western Digital (WDC).
Cabot Money Club
Monthly Magazine May: Online scams are already more common than ever and unlikely to slow down anytime soon. Let’s look at the most common types of scams, red flags to avoid, steps to take if you’re worried you’ve been a target or victim, and what you can do to help keep your friends and relatives safe online.
Stock of the Month May 11: The markets traded sideways through most of April. But since then, the choppiness has returned—along with worries about the uncertainty regarding the debt ceiling, the expiration of the immigration-limiting legislation, and ongoing debate about the possibility of a recession. Yet, economically speaking, the trends are still healthy. Manufacturing has held up, employment continues to rise, and job openings are still underutilized (as you can tell if you’ve been in a restaurant lately!).
ASK THE EXPERTS
Prime Question for Chris: Chris, I am curious, we have a nice couple of big winners on the growth side of the spectrum of the (Stock of the Week) newsletter. Are we going to start cashing in on these, or do you think that the market will go higher? It would hurt me to give up a nice winner.
Chris: I do think the market will go higher between now and the end of the year. The next 2-3 months? Maybe not. If you’re nervous about a pullback eroding gains in some of our bigger winners (XPOF, ULTA, NVO, etc.), then it might make sense to take partial profits by selling a quarter, a third or so of your position – in fact, I advised doing just that with XPOF (last) week now that we’re up more than 80% on it. However, I do not plan on selling completely out of any of our biggest winners – I like letting winners ride too, even if there may be some short-term pain ahead.