Cabot Weekly Review (Video)
In this week’s video, Mike Cintolo is sticking to the same tune -- there are many subtle positives out there, including the fact that he’s not having any trouble filling his watch list. But for the moment, most of the market remains in a washing machine-type environment (up, down and all around), so he’s staying cautious but also flexible, waiting for the time when the perception of big investors changes for the better.
Stocks Discussed: UBER, HUBS, SMCI, CELH, MLM, SHAK, Z, OLLI, BLDR, DKNG, SPOT
How to Profit from the Biotech Bear Market
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Quarterly Cabot Analyst Meeting
The recording of the Cabot Prime Members Meeting with the Analysts from January 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 Pro 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 May 4: The market remains in a rough spot, with a hawkish Fed that continues to raise rates into what’s become a rolling bank crisis, with some big names going under and others walking the plank. Far more important to us than the news is the market’s reaction to the news--and it remains mixed when it comes to the indexes (intermediate-term trend neutral), but growth stocks remain iffy at best, with many good-looking setups falling apart on earnings of late, and with relatively few really powering ahead. All of this can change in a hurry, but until it does, we continue to think growth investors should remain generally cautious and flexible as we wait for a more certain environment that will entice big investors to pile in.
Bi-weekly Update April 27: WHAT TO DO NOW: Remain cautious. The market and (especially) growth stocks have come under further pressure this week, and while many names are still setting up well, more are hitting air pockets. Overall, we think the general environment is mostly unchanged (tedious, up and down, etc.), but we are making a couple of small defensive moves today—we’ll sell one-third of our stakes in both Academy Sports (ASO) and Wingstop (WING), taking some profits and holding the cash (around 63% of the portfolio) for now.
Cabot Top Ten Trader
Weekly Issue May 1: For the big-cap indexes, last week was intriguing, with a sharp dip from resistance on Monday and Tuesday leading to an equally-sharp snapback—a possible shakeout of sorts. That said, the bullish action remains concentrated in a handful of names; the broad market is still meandering at best and there were more than a few air pockets last week among potential leaders. All in all, we’ll drop our Market Monitor to a level 4—that said, there are still tons of earnings reports on tap this week and next, so a bunch of gaps up (and broad market strength) could give us plenty to work with.
Movers & Shakers April 28: It’s been a highly divergent week in the market—everything started the week lower, but some positive mega-cap earnings have brought the Nasdaq and S&P 500 back to even-ish for the week. However, the action is far, far worse under the hood, with small- and mid-cap indexes down and, among growth-oriented stocks, many more air pockets emerging (including lots of poor earnings reactions).
Cabot Value Investor
Monthly Issue May 2: Thank you for subscribing to the Cabot Value Investor. The new name for the former Cabot Undervalued Stocks Advisor more clearly and broadly describes our mission to serve value-oriented investors. We hope you enjoy reading the May 2023 issue. Fitting for a value investment newsletter, your chief analyst will be making the pilgrimage to the Berkshire Hathaway Annual Shareholders Meeting this coming weekend. In this month’s letter, we include our recent new Buy recommendation: NOV, Inc. (NOV). This high quality mid-cap company ($7.3 billion market cap) appears to be in front of an upshift in demand for sophisticated drilling equipment even as its shares trade at a modest valuation. We also cover earnings reports and provide other relevant updates on our recommended companies. 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 March 28: This past week, among the 1,000 largest companies by market cap, the average percentage share price change was zero. Half of the stocks had moves of no more than +/- 1%. And, only 14 stocks had share price movements of +/- 10% or greater.
Cabot Dividend Investor
Monthly Issue April 12: So far, this has been a positive year for the market. But an enormous amount of uncertainty remains. The painful high inflation/hawkish Fed conundrum that caused last year’s bear market appears to be ending. But a high risk of recession is taking over. It will be difficult for stocks to rally into the next bull market without knowing the timing, severity, or duration of a possible recession.
Weekly Update May 3: A big week in the market has started badly. The failure of First Republic Bank (FRC) and fears of further fallout have sent stocks reeling ahead of more news the market may not like later this week. The market moved on from the banking crisis. But it is rearing its ugly head again. There is now worry of more bank failures and an escalating crisis. More small regional banks could fail. But the situation is still unlikely to devolve into a major crisis, at least at this point.
Cabot Early Opportunities
Monthly Issue April 19: In the April issue of Cabot Early Opportunities, we take a quick look at what to expect from portfolio positions set to report in the coming weeks and dive into fresh opportunities that are shaping up nicely now. At the top of the buy list is a software name we just added to our Watch List last month. We also take a position in a cosmetics stock that looks superb, pull back the curtain on a rising biotech star, tour an enterprise software name based in Canada and revisit a MedTech stock that’s finally getting some respect from the Centers for Medicare and Medicaid Services (CMS).
Cabot Income Advisor
Monthly Issue April 25: In the middle of an earnings recession and a slowing economy, defensive stocks are probably the best places to be. These companies can maintain earnings growth while most companies are sliding and remain consistent even as the economy deteriorates further. Defense is king right now. But defensive stocks are even better when they offer growth as well. In such uncertain times, it makes sense to bank on things that are more certain. Stocks poised in front of a megatrend are the best bet. A megatrend acts as a powerful tailwind for a stock that can make a mediocre pick very good and a good pick great. In this issue, I highlight a defensive stock that is also one of the world’s largest producers of alternative energy. At the same time, it is also one of the best traditional regulated utilities in the country. It offers defense as well as growth and can thrive in any kind of market.
Weekly Update May 2: This is a very important week that should determine the near-term direction of the market. While the market digests the JPMorgan (JPM) buyout of First Republic Bank (FRC), the largest bank failure since the financial crisis, it looks ahead to a packed week. There’s a Fed meeting on Wednesday, where the Central Bank is widely expected to raise the Fed Funds rate by 0.25%. But the Chairman’s comments afterward will probably have a bigger impact on the market.
Cabot Turnaround Letter
Monthly Issue May 3: We highlight three cash-rich companies that have real products and services whose shares are out-of-favor. We also discuss six additional companies that have both promising turnarounds ahead yet also discounted share prices. Our feature recommendation this month is Frontier Group Holdings (ULCC), a major ultra-low-cost airline focused on leisure travel. Its shares have fallen 50% from its IPO price due to investor concerns about demand, pricing and costs. We think these worries are overblown, leaving ULCC shares ready for take-off.
Weekly Update May 5: We discuss earnings from Adient (ADNT), ESAB (ESAB), Frontier Group Holdings (ULCC), Gannett (GCI), Ironwood Pharmaceuticals (IRWD), Janus Henderson Group (JHG), Kaman Corporation (KAMN), Molson Coors (TAP) and Western Union (WU). And, some comments on First Horizon Corp (FHN) following the deal termination.
Cabot Money Club
Monthly Magazine May: Online scams are already more common than ever and unlikely to slow down anytime soon. Let’s look at the most common types of scams, red flags to avoid, steps to take if you’re worried you’ve been a target or victim, and what you can do to help keep your friends and relatives safe online.
Stock of the Month April 13: The broad markets have improved nicely in the past month, albeit with a recent pullback. Leading sectors were Communication Services, Consumer Staples, Healthcare, Technology, and Utilities. Style-wise, large-cap growth stocks beat their value peers, gaining 3.64% for the month. The employment picture remains healthy, with 236,000 jobs added in March, taking the unemployment rate down to 3.5%. This was the slowest job growth in two years, so economists are hoping that will slow inflation—and the Fed’s rate hikes!
Ask the Experts
Prime Question for Jacob: The market is going crazy, as you know. Everyone is predicting it’s going down. From what I keep hearing it’s probably going to pull back another 15 to 20%. I’m wondering why you’re not sending out any put recommendations?
Jacob: I’m not so sure the market is going to fall 15-20%. I think the odds of that happening are 5% (total guess, and open to anything). And in fact, the market has been range bound since October and is within striking distance of a multi-month high. That would lead me to believe everyone is not predicting a 15-20% decline.
That being said, we do own SPY September 400 puts already, and if I was looking for more bearish exposure I might look at a buy of
...QQQ September 315 puts.