Cabot Weekly Review (Video)
In this week’s video, Mike Cintolo has seen a few short-term yellow flags that he talks about, but overall, there aren’t many arrows to sling at the intermediate-term evidence, with the trends up, with more stocks participating and with a continued string of earnings gaps. So while he’s moving gradually, he continues to steadily put money to work as opportunities arise. Stocks Discussed: DT, ITB/TOL, IOT, PATH, SNOW, CRM, PINS, HWM, MSTR, GTLB eps, MDB eps, MLM/URI, NET, TWLO, and NVDA,
Cabot Street Check (Podcast)
This week on Street Check, Chris and Brad discuss the November market rally and whether a broadening rally could come at the expense of the Magnificent Seven mega-cap tech stocks while potentially leaving the S&P 500 little worse for wear. Then, they check in on resurgent meme stocks, and what signals (if any) they may be sending before taking a few minutes to discuss the legacy of Charlie Munger, the former vice chair of Berkshire Hathaway, and the lessons he’s left behind for all investors. Finally, they welcome on Mary Ellen McGonagle of MEM Investment Research to talk about the technical and fundamental criteria she uses for identifying promising growth stocks and opportunities she sees in overlooked sectors and other areas of the market. Data discussed in this week’s “Defend the Take” is available at Yardeni Research, here.
Save the Date: Thursday, December 14 at 2:00 PM ET
#1 Investment Strategy for 2024: Your Key to Outperformance in Today’s Market
Quarterly Cabot Analyst Meeting
The recording of the Cabot Prime Members Meeting with the Analysts from October 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 Core 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 November 30: From an intermediate-term perspective, the pieces continue to fall into place for the bulls--recently, our Two-Second Indicator has joined our trend-following indicator on the bullish side of the fence, while things like our Aggression Index and the trend in interest rates remain encouraging. Short-term, we are finally seeing some signs of churning in extended leaders, so we’re continuing to move gradually, picking our stocks and spots carefully. Last week, we did a little more buying in DUOL and started a position in ANET, and today we’re starting one more half-sized stake that will diversify the portfolio a bit.
Bi-weekly Update November 22: WHAT TO DO NOW: Continue to put money to work, albeit in a step-by-step fashion. From a top-down perspective, our market timing indicators continue to improve, with all three of our key measures (Trend Lines, Tides, Two-Second) now positive. Individual growth stocks are acting well, though many are still repairing the damage of the past few months. Thus, we’re optimistic, but want to see continued improvement to pull us into a heavily invested position. In the Model Portfolio today, we’re going to buy a half-sized position in Arista Networks (ANET) and add another 3% stake to Duolingo (DUOL), leaving us with around 44% in cash.
Cabot Top Ten Trader
Weekly Issue November 20: This week’s list has another crop of super-strong charts, and from a variety of industries, too. Our Top Pick isn’t a lightning-fast mover, but it looks like the leader in a group that’s shown exceptional strength off the lows and has a history of trending nicely when conditions are favorable.
Movers & Shakers December 1: The major indexes have been muted this week, with most right around unchanged on the week. Overall, that’s kept the top-down evidence pointed higher—the intermediate-term trend of the major indexes is up, the same goes with many growth-oriented funds, and we’ve even seen continued improvement in the broad market, with the number of new lows consistently coming in at tame levels.
Cabot Value Investor
Monthly Issue November 7: We discuss recent earnings from our companies and move shares of Sensata Technologies (ST) from Buy to Hold given the company’s lower overall quality compared to our initial understanding.
We also include some thoughts on the current stock market and how rising interest rates and other factors have led investors to unload shares of most companies and riskier companies in particular.
Weekly Update November 28: The best poker players usually are stone-faced. That means that they show no emotions, make no unusual or unplanned moves, and most important, have no “tells.” A “tell” is any change in a player’s behavior, attitude or other actions that indicate the strength of the cards they hold in their hand. Common tells are changes in their chatter, eye contact, twitches and frequency of checking their hole cards.
Cabot Dividend Investor
Monthly Issue November 8: The market has been highly unpredictable over the last several years. Things are too uncertain to make bets on the current outlook. Timing the market and betting on sector rotation is a riverboat gamble. I’d rather bank on prevailing trends that will transcend short-term market gyrations.
There is a strong prevailing positive trend in the energy industry, particularly American energy.
Clean energy is the future, but not the near future. The world will continue to rely overwhelmingly on fossil fuels for at least the rest of this decade and probably much longer. But the world has underinvested in oil and gas exploration and production over the last decade and a half. Global supplies are straining to meet growing demand. The dynamic will last for some time.
Investors are realizing the value of companies and stocks in a sector that had been neglected for many years until recently. While commodity prices will go up and down based on several circumstances, energy companies should benefit over time going forward.
In this issue, I highlight the largest American oil refiner. The stock has been a stellar performer. And the company will continue to benefit from cheaper American oil and a reduced number of refineries.
Weekly Update November 29: The strong November rally has sputtered out with the S&P 500 up 8.7% for the month so far. Is that the end of this upside leg?
The month started with a bang after the Fed indicated it was done hiking rates, and jobs and inflation numbers seemed to confirm Wall Street’s opinion that interest rates have peaked. The benchmark ten-year Treasury tumbled all the way from 5% at the end of October to 4.34% at midday on Tuesday.
Cabot Early Opportunities
Monthly Issue November 15: In the November Issue of Cabot Early Opportunities we lean into the strengthening market with a group of companies doing everything from providing security for new AI applications to paving roads in the Sun Belt to making packaged foods for health-conscious consumers, and more.
Cabot Income Advisor
Monthly Issue November 21: There has been a dramatic turnaround in the market this month. After falling for three straight months, the S&P 500 has rallied 7.6% in the first three weeks of November. The main reason for the turnaround is interest rates. If the current Wall Street expectation that the benchmark 10-year Treasury rate peaked at 5% is true, it should be positive for stocks, or at least eliminate a big negative.
Weekly Update November 28: The strong November rally slowed down last week but it’s still very much alive. The S&P 500 closed last week up 8.7% for the month and the good times might continue.
The current belief in peak interest rates and a “soft landing” has investors still in an optimistic mood. The VIX, known as the market’s fear gauge, hit the lowest level since January 2020 last week. Any piece of good news could ignite a further rally with the current kindling.
Cabot Turnaround Letter
Monthly Issue November 29: 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.
Weekly Update December 1: In today’s note, we discuss the recent earnings reports from Duluth Holdings (DLTH) and Kohl’s (KSS). Our note also includes the monthly Catalyst Report and a summary of the December edition of the Cabot Turnaround Letter, which was published on Wednesday.
Cabot Money Club
Monthly Magazine December: The end of the year is a time for friends, family, holidays, and celebrations of all stripes. It’s also (unfortunately) a time to do some year-end clean up of your portfolio, harvest some tax losses, and get started on planning for 2024. So, to give you a head start before you have to meet your accountant, this month we’re exploring tax credits, including some you may have never heard of, and the most important numbers you need to know when planning for the year ahead. Plus, we’ll highlight some tax-efficient investments to save you money next year.
Stock of the Month November 9: The markets had a very good week, and so far, we are also seeing momentum in the first couple of trading days this week. These upward moves have taken the Dow Jones Industrial Average to just about where we started at the beginning of 2023.
Last month, inflation edged up to 3.7%, from 3.67%, and the unemployment rate also slightly increased, to 3.9%. The Federal Reserve—for two continuous decisions—kept the Fed Funds rate steady.
ASK THE EXPERTS
Prime Question for Jacob: Jacob, I just wanted to thank you for the grand slam I was rewarded with today. On 8/30/23, you sent the following daily trader watch list: Buyer of 2,000 ImmunoGen (IMGN) January 16 Calls for $2.80 – Stock at 15.75
Today’s announcement of AbbVie (ABBV) acquiring IMGN saw the stock pop 80%. It’s an all cash deal for $31.26/share and has board approval on both sides. Still needs shareholder and regulatory approval but closing is expected in mid-2024. If it was a stock deal, I’d sell today, but since the cash offer price is still a few percent higher than it’s currently trading, do you think it makes sense to hold it a bit longer, or not be greedy and sell my shares and move on?
Jacob: That is AWESOME! In terms of holding the trade ... it’s totally your call. There is no right or wrong way to play this. I will tell you it will take time for IMGN stock to reach its takeover price. With that in mind, if it were me, I might sell half today, lock in a monster gain, and then hold the balance looking to squeeze out a bit more profit as the stock slowly drifts towards the takeover price.
Again, amazing trade! Don’t forget to buy the wife/significant other something nice for Christmas/Hanukkah with these profits!