Cabot Weekly Review (Video)
In this week’s video, Mike Cintolo says not much has changed with the market -- he’s bullish, riding most of his winners higher, but also aware of the market’s growing divergence and some frothiness, which makes the short-term a bit more iffy. Even so, Mike is seeing many potential opportunities outside of the AI/chip boom, with a lot of setups that could hatch during the next couple of weeks.
Stocks Discussed: AMD, FOUR, NET, ASO, PLAY, BOOT, ITCI, TSM, APPF, SNOW, IOT, AXON, HUBS, PCOR, ABNB
Cabot Street Check (Podcast)
This week on Street Check, Chris and Brad discuss the evolving narrative of the Magnificent Seven stocks, the latest high-profile regional bank blow-up and this weekend’s “Big Game” and which sports betting stocks look investable right now. Then, they welcome on Cabot Cannabis Investor’s Chief Analyst Michael Brush to discuss the recent rally in cannabis names, how he’s managed to consistently outperform the marijuana indexes, and how he expects rescheduling and SAFE Banking legislation to play out in the months ahead. To learn more about Cabot Cannabis Investor, click here.
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 1: WHAT TO DO NOW: Remain bullish, though we are seeing more crosscurrents pop up. The big-picture evidence remains positive, so we’re holding most of our winners, but we’re also comfortable holding some cash as earnings season progresses. We’re watching a few of our names closely (as well as many names on our watch list), but tonight we’ll hold our 23% cash position and have no changes.
Cabot Top Ten Trader
Weekly Issue February 5: The primary evidence remains bullish, so we’re still thinking mostly positive, especially when looking at the big picture. But there’s no question things are getting more and more divergent: The broad market and even most big-cap stocks are flat to down so far this year, and more recently, as interest rates have backed up and financial stocks get hit, we’re seeing selling pressures start to spread. That doesn’t necessarily portend doom, but coming on the heels of a multi-month advance, this kind of action does raise the risk of a change in character; we’re going to pull our Market Monitor down a notch to level 7—still bullish, but holding a little cash, booking some partial profits on the way up and being more discerning on the buy side makes sense.
This week’s list has its share of hot stocks, and we’re impressed that we’re still seeing some strong earnings winners that are moving on very, very strong volume. For our Top Pick, we’ll go outside the tech space with a name that just lifted out of a multi-month base on earnings and could be leading a new group move. Try to buy on dips.
Movers & Shakers February 9: Whereas last week was driven more by macro factors, the focus this week was on the earnings deluge, with tons of leaders and potential leaders reporting. As we roll into Super Bowl weekend, most indexes are up modestly (0.5% to 1.5%) on the week, led by the Nasdaq, with the broader indexes again lagging a bit.
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 January 30: Last week, we wrote about how rising debt and rising interest rates are increasingly weighing on the Federal budget. Our rough math points to interest costs consuming as much as 21% of Federal revenues by 2025. We also added that “This math seems awful. Realistically, how likely is this to play out and what can investors do to mitigate, or even benefit?”
Our risk management process involves considering a wide range of possible macro scenarios. We are terrible at predictions, so we don’t make them. But, by accepting that the world is not risk-free and by recognizing risks early, we are better prepared to deal with them if they do materialize later.
Cabot Dividend Investor
Monthly Issue January 10: Things look good for 2024. Inflation is down, interest rates have likely peaked, and there is no sign of recession. But you never know. It’s a tough game to predict the future of the market. However, certain trends are likely to persist.
It’s a good bet that interest rates have peaked. Sure, they could edge higher from here. But they are unlikely to soar to new highs past 5% for the 10-year Treasury. The situation would have to completely reverse for that to happen. Meanwhile, stocks that have been dragged lower by rising interest rates have come alive again.
These stocks, which have strong track records of market outperformance, are at historically cheap valuations, have established upward momentum, and are positioned ahead of a likely slowing economy.
Also, 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. And the trend will continue regardless of what the Fed does, or the state of the economy, or who is elected president.
In this issue, I highlight a fantastic dividend stock whose long record of strong performance has been interrupted these last two years. 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 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 6: Wow! The economy is red hot! Both GDP and Jobs numbers came in much stronger than expected. But good news can also be bad news in the demented view of many Wall Street professionals.
Inflation is way down. The Fed is still unlikely to raise the Fed Funds rate again. The economy is surging despite the highest interest rates in decades. Ultimately, the economy is the most important driver of overall stock market performance. The economy isn’t weakening but strengthening after the recent malaise. And it’s a new bull market.
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 9: We review earnings reports from Adient (ADNT), Ammo (POWW), Baxter International (BAX), Brookfield Re (BNRE), Frontier Group Holdings (ULCC), Mattel (MAT), Newell Brands (NWL), Tyson Foods (TSN) and Western Union (WU). Updates on Warner Bros Discovery (WBD), Kopin Corp (KOPN), Elanco Animal Health (ELAN) and Walgreens Boots Alliance (WBA). The Super Bowl and kudos to Las Vegas.
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 Mike: With the market stretched and narrow, any rules on taking partial profits or are you happy to ride out any correction? Also, any thoughts about Nvidia (NVDA)? Sell some now, or wait for earnings on 2/21?
Mike: Well, I don’t have any “rules” per se, but yes, I’m fine ringing the register on some names, including something like NVDA. There’s judgment involved, but I don’t see any huge problem in selling a third of some very extended stocks in time and price, and holding the rest sort of thing. Of course, you could always be “wrong,” but the worst that happens is the remaining position goes higher – not the worst.
To be clear, I wouldn’t sell wholesale, taking one-third off of everything, but some stuff here and there, yes.