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CABOT EVENTS
Cabot Weekly Review (Video)
In today’s Weekly Video, Tyler Laundon runs through the market-moving news of the week, with a focus on inflation, employment and retail data. While the data dump wasn’t ideal the market remains focused on the big picture and powerful tailwinds continue to overpower the occasional concerns. With some areas of the market looking bubbly, Tyler touches on some historical figures then points toward his favorite asset class - small cap stocks - as overlooked (but maybe not for much longer). Tyler wraps things up by reviewing a number of stocks moving on earnings reports.
Stocks Discussed: AMAT, COIN, HOOD, CROX, ABNB, TOST, LDOS, CW, TATT, APP, TTD, IBB, AVTR, SWAV, NVDA
Cabot Street Check (Podcast)
This week on Street Check, Chris and Brad break down the latest inflation print(s) and talk Bitcoin before discussing whether they’re counter-indicators for cannabis stocks and whether there’s been a change in character for marijuana investors. Then, they dive into the trendy consumer stocks of the past few years that should make us all wonder, “What were we thinking?” and they debate the lessons we can learn from the likes of OTLY, PTON, BYND and other flash-in-the-pan stocks that briefly dominated the market.
Cabot Webinar
2024 Stock Market Outlook: Secrets to Success in a New Bull 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 February 8: The market’s primary evidence remains in good shape, and that’s especially true for leading growth stocks continue to act very well, and after two-plus years in the wilderness, we’re optimistic that the best names can continue to do well. That said, near-term, risks are rising for some sort of change in character (pullback, rotation, etc.) as there’s a growing divergence and some of the action out there is frothy. Because of that, we’re mostly riding our winners, but we sold a couple of laggards earlier this week and--for now--are holding about 30% in cash.
All that said, stay tuned: We could put some money back to work in the days ahead as earnings season continues to roll on, but for now, we’ll stay a bit closer to shore than we have been and see how things play out.
Bi-weekly Update February 14: WHAT TO DO NOW: Hold your strong stocks, but near-term, it’s OK to sit on your hands a bit and see how things shake out. The overall evidence remains bullish, but there have been some yellow flags of late and yesterday’s broad, sharp decline is likely to have some near-term reverberations. We took partial profits in Arista (ANET) yesterday, selling one-third of our shares, and placed Pulte (PHM) on Hold, leaving us with around 33% in cash—and some great performers. We’ll stand pat tonight, though if things settle down for a couple of days, we could put some of our cash back to work.
Cabot Top Ten Trader
Weekly Issue February 12: The story remains the same as it has for a couple of weeks now: The trends of the indexes remain up and the action of leading stocks (especially leading growth stocks) remains excellent, but most of the market has just sat around since the start of the year (though we are seeing some broadening out of buying pressures the past couple of days) and, for some of the tech/AI names, the action is definitely short-term frothy. We’re leaving our Market Monitor at a level 7, holding our winners but also a little cash, while focusing on fresher names (both inside and outside of tech) that are emerging with some power.
This week’s list has a bunch of fresh ideas in a variety of areas—dips in many of them would be tempting. For our Top Pick we’re going to go with a zinger in the AI space—a liquid name with a great, leading position that’s just gotten going on earnings. If you enter, use a loose leash, as the stock is bound to be super volatile.
Movers & Shakers February 15: The market had accumulated some short-term yellow flags of late, some of them simply due to the market’s success (big, prolonged run), but also due to the relative narrowness of the advance (even the equal-weight S&P 500 is unchanged during the past two months, net-net) and a bit of frothiness that popped up (some AI names are acting like meme stocks). That led into Tuesday’s worse-than-expected inflation report and a broad (something like 90% to 95% of all volume traded in stocks that fell on the day), across-the-board decline.
Cabot Value Investor
Monthly Issue February 6: Thank you for subscribing to the Cabot Value Investor. We hope you enjoy reading the February 2024 issue.
Spin-offs should be in every value investor’s toolkit. In this issue, we are adding a spin-off, Worthington Enterprises (WOR), to our Buy recommendations roster.
We comment on recent earnings from Comcast (CMCSA) and provide updates on our other recommended stocks.
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 February 13: The world of major pharmaceuticals stocks can be split into two camps: winners and laggards.
Eli Lilly (LLY) is a clear winner, with its successful roll-outs of new treatments led by the immense promise of weight-control drugs like Mounjaro and Zepbound. Lilly’s shares have surged 545% (up 5.5x) in the past five years and are increasingly mentioned as a replacement for Tesla in the “Magnificent Seven.” The shares trade at 47x estimated 2024 EBITDA.
Merck (MRK) is a modest winner. Its shares have climbed about 65% over the past five years, helped by its powerful Keytruda franchise, and trade at 11.7x estimated 2024 EBITDA.
Cabot Dividend Investor
Monthly Issue February 14: A year from now we could be in a raging bull market or bounding toward a recession. Interest rates could be high or much lower. And we have to see what will happen with these wars and who will be elected president in November. Nobody knows the answers to these questions.
But a year from now there is at least one thing we can bank on: The population is already older than ever before in history and will continue to get still older at warp speed. Between 2011 and 2029, about 76 million boomers born in the U.S. between 1946 and 1964 will turn 65. That’s about 3.6 million per year. There will be tens of millions more older people running around in the years ahead.
The inescapable fact about older people is that they spend much more than any other segment of the population on healthcare. That’s just how we’re built. Boomers control about 70% of this nation’s wealth and the aging population has enormous implications for businesses and markets.
Certain healthcare companies and stocks are positioned ahead of a megatrend and a massive wave of spending. In this issue, I highlight two “BUY”-rated portfolio healthcare stocks. If you don’t own them already, they are well worth considering.
Weekly Update February 7: The market seems to be trying to find itself and looking for a reason to rally. Earnings have been pretty good so far. But not enough to drive the overall market higher, at least not yet.
Cabot Early Opportunities
Monthly Issue January 17: In the January issue of Cabot Early Opportunities, we take a look at updates within our portfolio then dive into five stocks from markets ranging from defense to cybersecurity to the blooming IT infrastructure market.
As always, there’s something for everybody!
Cabot Income Advisor
Monthly Issue January 23: I believe the good news will prevail in 2024. But you never know. Forget about trying to predict the direction of the overall market. However, certain aspects of the current environment and established trends are much more bankable.
For example, it is highly likely that interest rates have peaked. Sure, rates could bounce higher than they are now. But that 5% peak level on the 10-year Treasury is unlikely to be eclipsed, at least in this cycle. Artificial intelligence is here to stay. Businesses must spend on it not only for competitive advantage but as a matter of survival. The new technology will continue to be a strong growth catalyst for technology stocks.
In this issue, I highlight a fantastic dividend stock whose long record of strong performance has been interrupted these last two years because of rising interest rates. It’s also a company that focuses on technology and will surely benefit from the proliferation of AI in the years ahead. The timing for this stock should be outstanding.
Weekly Update February 13: The market looks strong right now. The S&P 500 just made a new all-time high in a young bull market and the index is up 5.38% in just the first five weeks of this year.
Inflation is way down. The Fed is done hiking rates. The economy is still strong. And earnings are solid. That’s a good macroeconomic background for stocks. But how long will this good news last?
Cabot Turnaround Letter
Monthly Issue January 31: This issue focuses exclusively on spin-offs and discusses seven attractive and relatively recently spun-off companies.
This month’s Buy recommendation, Baxter International (BAX), a major producer of medical equipment and hospital supplies, is involved in a spin-off. In this case, it is the parent company of an upcoming spin-off. The transaction, along with fundamental improvements and a long-time low share valuation, makes Baxter shares attractive.
Weekly Update February 16: This week, we review earnings reports from Agnico Eagle Mines (AEM), Goodyear Tire & Rubber (GT) and TreeHouse Foods (THS).
Next week, we anticipate earnings from Elanco Animal Health (ELAN), Macy’s (M), Gannett (GCI), Dril-Quip (DRQ), Vodafone (VOD) and Warner Bros Discovery (WBD).
Cabot Money Club
Monthly Magazine February: From stamps and coins to art, cards, cars and even wine, collectibles have been rapidly growing their share of the global financial markets. And while some portfolio managers may position them as “alternative assets,” are collectibles even really investments? More importantly, are they worth your hard-earned money? This month, let’s look at the trends of the booming (and busting) collectibles market.
Stock of the Month February 8: The markets have continued their bullish momentum so far in 2024, with growth stocks continuing to lead the way—especially large caps, which are up 32.94% so far this year.
Sector-wise, Communication Services (up 9.74%), Technology (up 5.07%), and Healthcare (up 4.11%) are the winners so far, with Real Estate (down 4.37%), Utilities (-2.91%), and Consumer Discretionary (-0/83%) the losing sectors.
ASK THE EXPERTS
Prime Question for Jacob: I wanted to get your advice on Super Micro Computer (SMCI). I own 100 shares at 664 and was looking to capture some premium since the option market is insane. I was looking at 870 for $13 expiring this Friday. Any thoughts? Would drive my price basis down by $13 and, worst case, I sell at $100 above the current trading price.
Jacob: You would think that is a stone-cold lock, no-brainer, of a good trade.
That being said, the stock is up a million bucks in the last two weeks, so sure it could go up another $100.
Big picture, I like the trade, and worst-case scenario you make another $10,000. (Note: the stock continued to go way higher, and even traded over 1,000 a share on Friday!)