Latest Summary
CABOT EVENTS
Cabot Weekly Review (Video)
In this week’s video, Mike Cintolo says the story remains the same in the market, with strong big-cap indexes and middling performance from the rest of the market. That said, Mike is starting to see some encouraging signs, including more and tighter setups from some growth stocks as we head into earnings season -- including one growth sector that’s roaring back after lagging for a while.
Stocks Discussed: NOW, MNDY, DDOG, APP, ASML, TER, RDDT, NBIX, GE, FANG, AEM, NEM, KEX
Cabot Street Check (Podcast)
In Case You Missed It! Last week on Street Check, Chris and Brad debate whether investors have begun rotating out of the AI theme after months of dominant performance. Then, they discuss Warren Buffett’s big bet on oil and a catastrophic year for Walgreens (WBA) that’s seen them cut the dividend, explore store closures, and has dragged share prices down by more than 50%. For the main segment, they each make 3 predictions for the rest of the year about everything from AI and interest rates to gold and new all-time highs for the market.
Cabot Webinar
July 18, 2024 Webinar
2 Cyclical Stocks Poised for a MAJOR Turnaround
Join investing expert Matt Warder, Chief Analyst of Cabot Turnaround Letter, for this exclusive live event.
Quarterly Cabot Analyst Meeting
The recording of the Cabot Prime Members Meeting with the Analysts 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 June 27: Outside of a few mega-cap names, the market remains stuck in neutral, with the vast majority of stocks (including growth stocks), sectors and indexes meandering sideways, resulting in plenty of trendless, tedious action. Of course, many areas are within shouting distance of new high ground, so we’re not negative--but while we’d love to put some money to work (a couple of names on our watch list are fairly enticing), we think less is essentially more, at least until the market shows its hand. We’re again standing pat tonight, though remaining flexible for what may come.
Long-term, the market’s picture remains bright, with our most reliable indicator (Cabot Trend Lines) firmly positive, which we write more about in today’s issue, as well as one name that’s probably at the very top of our watch list. All in all, we’re ready to make some moves, but right now, patience is the best course.
Bi-weekly Update June 20: WHAT TO DO NOW: Today is an ugly day for growth stocks, with sellers driving many stocks lower as the Nasdaq and some mega-cap winners wobbled. That said, the evidence is basically the same—very mixed and divergent on an intermediate-term basis, with some names doing well but much of the market chopping sideways. We think holding a good-sized chunk of cash makes sense given that risk is elevated, but we’re also holding on to our stocks and giving them some room to wiggle around. In the Model Portfolio, we’re watching things closely, but will sit tight tonight, holding our 30% cash position.
Cabot Top Ten Trader
Weekly Issue July 1: If you’ve been with us for a while you might remember that we frequently write that January can be a tricky month, since, as the calendar flips, tax-related moves (profit taking) can occur and big investors will often reposition their portfolios, creating lots of crosscurrents. July is not the same thing, but we wouldn’t be shocked to see some repositioning and volatile action in the days ahead given how many investors are rowing in different directions already. Our point: Don’t fight the evidence, which continues to tell us things remain choppy and narrow, but also stay flexible in case the market flashes some change in character. Right now, we’ll once again leave our Market Monitor at a level 7, taking things on a stock-by-stock basis.
This week’s list has a ton of setups, with many stocks rounding out launching pads that could get going if all goes well. Our Top Pick is part of a strengthening sector, has terrific growth numbers and is under strong accumulation. Try to start a position on dips, with the idea of adding more of a decisive breakout.
Movers & Shakers July 5: It’s been more of the same in this holiday-shortened week, with the Nasdaq up a couple of percent, the S&P also sporting gains, but most of the rest of what we look at is flat to down on the week.
Cabot Value Investor
Monthly Issue June 6: Renewable energy stocks have never lived up to their considerable promise, having peaked more than 16 years ago. And yet, there’s rarely been a bigger gap between the stocks’ value and the industry’s growth in the wake of the Inflation Reduction Act. Renewable energy projects – solar in particular – have taken off since President Biden signed that bit of eco-friendly legislation, in August 2022. Most solar companies are reporting record revenues these days. But the stocks haven’t followed suit, trading at 2018 levels.
That seems like a pretty extreme divergence between the industry and its companies’ share prices. So in this month’s issue of Cabot Value Investor, we add a solar company that’s capitalizing on the global investment in alternative energy, but is still woefully undervalued, trading at a mere 0.18x record sales.
Details inside.
Weekly Update June 27: Editor’s Note: Due to the Fourth of July holiday next Thursday, your July issue of Cabot Value Investor will come out next Friday, July 5. Happy 4th!
Leveraging cyclicality is a good way to squeeze more profits out of value stocks.
That was an idea put forth by Matt Warder, the newest addition to the Cabot analyst team and the successor to Bruce Kaser in Cabot Value Investor’s “sister” value investing advisory, Cabot Turnaround Letter, on the latest edition of the Street Check podcast I host with my colleague Brad Simmerman.
Cabot Dividend Investor
Monthly Issue June 12: The market has been terrific. And it will probably finish the year higher than it is now. But there is reason for caution.
Because of sticky inflation, interest rates remain near the highest levels in 20 years and may continue to stay high or go higher, until they drive the economy down. A hugely contentious presidential election is about to take place. And there are two significant global wars going on.
Steep selloffs are common even in markets that rise over time. The S&P 500 doubled over the last five years. But it crashed 30% in record time at the onset of the pandemic in 2020. There was also a bear market in 2022 during which the S&P fell over 20% and the Nasdaq plunged well over 30%. Of course, most stocks were down a lot more than the indexes. If you targeted some of the very best stocks at fire sale prices you could have gotten amazing returns.
In this issue, I highlight a way to target the purchase of the very best stocks at fire sale prices amid market turmoil that may occur from the potentially market-roiling issues this year or next. Most investors don’t buy when the market is crashing because it’s natural not to want to try and catch a falling knife. But there’s a way to take emotion out of the equation and calmly plot a way to fantastic returns.
Weekly Update July 3: Well, the results are in for the first half of the year. And they’re very good. The S&P 500 soared an impressive 14.5% in the first six months of 2024. That’s a 29% annual pace. And it follows a 22% market return in 2023.
But I believe it is unlikely that the S&P will finish the year up 29%. That would be an epic year, but there are still a lot of challenges, like interest rates near the highest level in two decades. That means market returns must at least flatten out somewhat going forward. It’s also true that the technology rally has petered out in the last few weeks.
Cabot Early Opportunities
Monthly Issue June 20: In the June Issue of Cabot Early Opportunities, we continue to lean into AI themes while taking a swing at a speculative space communications company. We’re also trying to keep things real here on earth with a picks-and-shovels-type infrastructure play, and we pull back the curtain on a real rarity in 2024, a software stock with a nice chart!
As always, there should be something for everybody.
Cabot Income Advisor
Monthly Issue June 25: AI is the catalyst driving the technology sector, which is driving the market higher. Over the last month, the tech sector is up 10.42% while the S&P is up 2.95%. Seven of the 11 sectors are negative for the past month.
But technology stocks may be running out of gas. Without the heavy lifting from technology, it’s easy to see the overall market trending sideways or down, at least for a while.
Income is king in markets like this. The register still rings when the market stumbles. There’s also an opportunity right now. With the S&P and many stocks near their 52-week highs, it’s a good time to get high call premiums. Also, you can lock in strong total returns from these stocks if they are called.
Even the best bull markets have ups and downs. We can play the increased likelihood of a flat or down market by priming the income pump to pay us through the rough patch. In this issue, I target another covered call that will enhance the already exquisite income of a monthly dividend stock.
Weekly Update July 2: The market continues to hover near the all-time high. The S&P 500 finished the first half of the year up 14.5%. That’s a not-too-shabby 29% annual pace.
As I mentioned earlier, I believe it is unlikely that the S&P will finish the year up 29%. That means market returns must at least flatten out somewhat going forward. It’s also true that the technology rally has petered out in the last few weeks.
Cabot Turnaround Letter
Monthly Issue June 26: In this month’s issue of Cabot Turnaround Letter, I recommend a company I’ve been fond of all the way back to 7th grade. It’s a household name, but one that’s perhaps been forgotten on Wall Street in recent years. But now, it looks primed for a turnaround.
Weekly Update July 5: Earnings season is over, so there were no companies that reported earnings this past week. However, the next earnings season is just around the corner, starting with Mattel (MAT) on July 23rd.
Cabot Money Club
Monthly Magazine July: We may hate to talk (or even think) about it, but we all understand the importance of proper estate planning. And if you’ve spent a lifetime accumulating assets to pass down to those you love, the next best thing you can do is to make sure you’ve taken the right steps to avoid leaving your heirs with a headache on top of their inheritance. This month, let’s explore the steps you can take right now to help make sure your wishes are honored and that your family doesn’t spend months or even years duking it out in court.
Stock of the Month May 9: It was more of the same for the markets this past month—some momentum, but ultimately, we ended up in just about the same place.
Investors are a little gun-shy as most were expecting Fed rate cuts to begin in the latter half of the year. But as the inflation beast is proving harder to tame than expected, Fed Chair Powell has indicated it may take longer before we see a rate cut.
ASK THE EXPERTS
Prime Question for Chris: Canadian Solar (CSIQ): A $5 Drop in less than a month (since it was added to the Cabot Value Investor portfolio), and I cannot find any news. Have you seen anything or is this the way this stock is going to act?
Chris: There hasn’t been much news on CSIQ, or certainly nothing that would warrant a 25% drop in a month. Solar stocks as a group are down 15%, so I think it’s just being dragged down by sector weakness. As I wrote, this is the lowest renewable energy stocks have been (as measured by the PBW ETF) in seven years, and the lowest solar stocks have been (as measured by the TAN ETF) in four years. The pattern among both groups, historically, is that they don’t stay down long. Both are oversold and undervalued (especially solar stocks, given the growth), and I’d expect a bounce-back soon. So, while it’s been an ugly first month for CSIQ (though it did have a very good day on Wednesday, up more than 8%!), I think patience will pay off.