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CABOT EVENTS
Cabot Weekly Review (Video)
In this week’s video, Mike Cintolo is back from his break but has a similar message -- he’s bullish and riding winners higher, but he’s also being selective on the buy side and isn’t shy about taking a partial profit here or there. That said, he has seen one very encouraging thing the past two weeks -- another rash of excellent earnings reactions, including many in fresher names. Mike says he’s likely to bite into some of those soon assuming the market remains in gear.
Stocks Discussed: FRPT, SG, CELH, H, DUOL, AXON, XPO, SWAV, PSTG, NTAP, LNW, AMZN, EDU
Cabot Street Check (Podcast)
This week on Street Check, Chris and Brad discuss Bitcoin’s furious rally towards all-time highs, Apple’s (AAPL) decision to shut down their EV program and whether their lack of innovation is a risk to shares, and what previously discussed Beyond Meat’s (BYND) pop on earnings signals about market sentiment. Then, they welcome on former Cabot analyst Rich Howe, of stockspinoffinvesting.com, to share his insights into micro-cap stocks, stock spin-offs and how to find growth at value prices.
Cabot Webinar
February 29, 2024 Webinar: 3 Ways to Profit from Declining Interest Rates
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 22: The market had an excellent snap back today, which was good to see, but we’re still playing things a bit near-term cautiously for now—many leaders have suffered some distribution after good runs (and after some yellow flags near the turn of the month). Tonight, we’re holding some strong names, but also about one-third in cash, waiting a couple more days to see if today really does put in a low for most leaders.
Big picture, though, we remain quite optimistic—we’re certainly not looking to raise more cash if we can help it (we do have three names reporting next week), and we could put some cash back to work very soon if things hold up. Stay tuned.
Bi-weekly Update February 29: WHAT TO DO NOW: Remain bullish, but continue to be selective on the buy side. The market continues to act well, and we’re encouraged by the snapback seen in many leading stocks of late, as well as a fresh barrage of positive earnings reactions in recent days. In the Model Portfolio, we’re happy to own some very strong actors, and tonight we’re going add one new half-sized stake (5% of the portfolio) in Applovin (APP), while also restoring our Buy rating on Nutanix (NTNX), which reacted well to earnings today. Our cash position will be around 28%.
Cabot Top Ten Trader
Weekly Issue February 26: One tool that we’ve long used is, after a big move (either up or down), if the market starts to get very volatile, it’s often a sign that the buyers and sellers are fighting it out—and could lead to a character change. That said, we’re mentioning that more as a heads up than as any major red flag—at day’s end, the trends of the major indexes and most leading stocks are up, and it’s possible that Nvidia’s (NVDA) quarterly report cleared the air last week. All told, we’re bullish but we also think the odds favor more tricky trading going ahead. We’ll leave our Market Monitor at a level 7 while keeping a close eye on the post-NVDA action.
This week’s list has some tech leaders, but it also has more than a few names outside of the AI field, both smaller and larger. For our Top Pick, we’re going with a liquid leader where we think investor perception has a lot farther to run on the upside.
Movers & Shakers March 1: It’s been another relatively quiet but positive week for the market, with most major indexes sporting gains in the 0.5% to 1% range, give or take, though growth-oriented funds were up more than that. Meanwhile, on the interest rate front, the 10-year Treasury yield is off a smidge.
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 27: We’ve all seen the data: Nvidia (NVDA) shares have jumped 59% in this still-young (37 trading days) year and 615% since touching $112 in October 2022. The 171x gain in the past decade – turning a $4,500 purchase into $800,000 – makes Nvidia’s price increase among the largest in market history over such a brief period, and certainly the largest for a company that began its 10-year run at a not-small $11.6 billion market value.
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 28: All is well with the market so far this year. The S&P is up 6.7% in less than two months. It’s a continuation of the 23% rally that started at the end of October and a more than 40% rise from the bear market low in late 2022.
But recent news may jeopardize the current market dynamic. January CPI was higher than expected and indicated that the current problematic inflation isn’t dead yet. Sure, it’s way down from the 9.1% peak in mid-2022 to 3.1%, but it has been rising for several months and is still well above the Fed’s 2% target.
Cabot Early Opportunities
Monthly Issue February 21: In the February issue of Cabot Early Opportunities, we take something of a barbell approach, reviewing a couple of phenomenal large-cap stocks poised for the next big chapter of their lives while also uncovering a handful of much smaller companies, one of which is just getting its business off the ground (literally)!
Cabot Income Advisor
Monthly Issue February 27: The Goldilocks scenario of falling inflation and a still-strong economy is unlikely to last. Interest rates will have to come down before long or the recession that the market is dismissing might be just a little further down the road. But recent higher-than-expected inflation is making lower rates less likely.
Sure, the rally could last for a while. The economy always seems to be more resilient than people expect. But the circumstances behind the rally since October are unlikely to last. This environment will change. For that reason, it doesn’t make sense to chase stocks that have been working so far this year. It’s better to position ahead of a new dynamic that is likely coming.
Change creates opportunity. There are many great income stocks that are not benefiting from this rally. Yet these stocks are selling at historically very cheap valuations with high yields. These stocks also can thrive in a slowing economy. In this issue, I highlight two stocks in particular that are cheap and high-yielding ahead of a period of likely market outperformance.
Weekly Update February 20: In what has been a basically good market this year, investors just got a dose of bad news. Inflation isn’t going down enough, even with the current high rates. That makes the rate cut “Holy Grail” far less likely anytime soon.
The Fed will have to at least keep interest rates at a very high level to prevent inflation from reigniting. But at some point, the Fed will need to lower interest rates in order to keep the recovery alive. But they can’t, at least to an impactful degree. Historically, inflation tends to come right back when the Fed takes its foot off the gas.
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 March 1: This week, we review earnings reports from Advance Auto Parts (AAP), Berkshire Hathaway (BRK/B), Dril-Quip (DRQ), Elanco Animal Health (ELAN), Fidelity National Information Services (FIS), Gannett (GCI), Macys (M), Six Flags Entertainment (SIX), Viatris (VTRS) and Warner Bros Discovery (WBD).
Cabot Money Club
Monthly Magazine March: Passive real estate investing is surging in popularity as it promises the wealth-building power of real estate without the headache of managing properties and tenants. This month’s issue features the pros and cons of passive real estate investing, the types of opportunities available to investors, and what you need to know before you get started.
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: Jacob, just had a quick question for you about AMZN. I saw in your morning Trader Watch list email that you listed this:
Buyer of 155,000 Amazon (AMZN) June 160 Calls for $21 – Stock at 173 (rolled from March 145 calls) ($325 million in premium purchased).
I’ve had some decent luck following a few of these big-volume trades. I know it’s not an official trade alert, but this is as massive of a position as I can remember. Is this potentially something you would target? I was looking at the September 175 or 180 strike.
Jacob: I like that expiration cycle and strike price (175) a lot. Exactly how I would do it.The only issue I have, and it’s super small, is AMZN is going to move with the market, so it is a full-on bull market play ... meaning if the market is strong, this trade will work ... if not, it likely won’t.