Cabot Weekly Review (Video)
In this week’s video, Mike Cintolo talks about the market’s latest bounce--in short, he thinks more patience will be needed, as the trends of most stocks and indexes are still down, but there’s no doubt there are some encouraging signs, the biggest of which is the fact that some themes and leadership are trying to emerge. How the market handles this dip will be key short-term, and Mike goes over a bunch of stocks in pole position to get moving if the market and earnings season cooperates.
Stocks discussed: CRWD/PANW, AVGO/SNPS, XPO/ODFL, ANET, PDD, DELL, NVO/LLY, ADBE, AXON, FANG/CHRD/RRC
Cabot Street Check (Podcast)
This week on Street Check, with Brad out on vacation Chris is joined by Michael Brush, long-time MarketWatch columnist and Chief Analyst of Cabot Cannabis Investor. Chris and Michael discuss why the bears are wrong, bond yield fears are overblown, and reasons the market may be on the cusp of its next big leg up. Then, they get into the many potential catalysts in the cannabis sector that could soon trigger another major rally in cannabis stocks.
Quarterly Cabot Analyst Meeting
The recording of the Cabot Prime Members Meeting with the Analysts from April 26, 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 October 5: The market remains in a correction, with most indexes, sectors and stocks in control of the sellers, and until that changes, we’re advising a cautious stance with plenty of cash and little new buying; in the Model Portfolio, we trimmed further this week and are up to around 65% in cash.
That said, we’re staying alert for many reasons, not the least of which is that we’re starting to see some real, true oversold readings (which we consider “alerts”) and because more than a few growth stocks are resisting the decline, hitting higher lows since August. That’s not a reason to buy, but we’re keeping our watch list in good shape and are ready to move if the buyers appear.
Bi-weekly Update October 12: WHAT TO DO NOW: Remain cautious. The bounce starting last Friday does come from a nice setup and, encouragingly, has seen more than a few growth stocks perk up, including some to new highs. However, the weight of the evidence remains pointed to the downside, with our Cabot Tides and Two-Second Indicator clearly negative, the vast majority of stocks also in intermediate-term downtrends and interest rates still trending up. We’re taking it one day at a time, but right now, we’re sticking with a big cash position of around 65%—we have no changes in the Model Portfolio tonight.
Cabot Top Ten Trader
Weekly Issue October 9: Friday was an encouraging day, not just because the indexes were up—for the first time in a while, we finally saw a few stocks that were holding up well really pop higher. However, does that change what we’re thinking? Not yet—from a top-down perspective, the intermediate-term trend remains for the indexes and the vast majority of individual stocks. The way we’d think about it is that what we’re seeing out there is a good first step, but the market will have to show more to gain enough momentum for a sustained advance. We’ll leave our Market Monitor at a level 5 for now.
This week’s list targets many of the stocks that are perched near (or are already hitting) new high ground. Our Top Pick is leading a possible new group move in cybersecurity stocks—you can start small here, though we prefer to look for pullbacks as selling on strength is still the norm in the market.
Movers & Shakers October 13: It’s been an interesting week thus far—we’ve seen interest rates take a nice step backward (10-year note is down 16 basis points this week), which has helped the indexes build on last week’s show of support, albeit in a modest way (up 0.5% to 1.5%, in general).
Cabot Value Investor
Monthly Issue October 3: We include brief updates from investor day presentations by Philip Morris International (PM) and Sensata (ST), as well as comments on our other recommended names. We also share a view on how streaming services are changing the sports viewing experience, along with a thought on why Comcast (CMCSA) should be fine.
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 October 10: Third-quarter earnings season is only days away. PepsiCo (PEP) will kick off the season on Tuesday, October 10. The “official” start is generally considered to be on Friday, October 13, when major financials like recommended stock Citigroup (C), as well as JPMorgan (JPM), Wells Fargo & Company (WFC) and Blackrock (BLK) report their results. For the S&P 500 members, Tuesdays, Wednesdays, and Thursdays are the busiest, as 20-50 companies report on each of those days. While weekends are almost cleanly bereft of reports, Berkshire Hathaway (BRK/B) provides a stand-out exception (estimated to report on November 4).
Cabot Dividend Investor
Monthly Issue October 11: It’s a confusing market, to say the least. Six months from now we could be in an environment of high rates and sticky inflation, or we could be spiraling toward recession, or anything in between. And stock sector performance is highly dependent on which situation unfolds.
Forget trying to predict the near-term market gyrations, or the Fed, or GDP. Instead, let’s focus on the bigger picture and what we do know. For example, know for a fact the population is aging at warp speed. The population is older than it has ever been all over the world. And the trend is accelerating.
We are in the midst of a tectonic shift in the human population that will have a profound effect on the market and economy. Companies that benefit from this megatrend will have a huge advantage. It’s not an accident that pharmaceutical stocks Eli Lilly (LLY) and AbbVie Inc. (ABBV) are the best performing stocks in the portfolio.
In this issue I highlight the stock of a company that serves a vital role in the pharmaceutical supply chain. It operates a near monopoly that grows every year. Performance has been spectacular and there is every reason to believe the good times will continue.
Weekly Update October 4: This market is officially flirting with ugly. The S&P is now down about 7% from the 52-week high and not far from correction territory, down 10% from the high.
The selling intensified over the last week after the Fed struck an unexpectedly hawkish tone at last week’s meeting. The gist of the Fed’s message is that rates may well go higher and will stay higher for longer. The statement pours cold water on the notion that rates will be cut in the near future and reinforces the realization that higher rates are here to stay.
Cabot Early Opportunities
Monthly Issue September 20: In the September issue of Cabot Early Opportunities, we look into what this afternoon’s Federal Reserve meeting could mean for the market. Then we dig into five small-cap companies from the industrial, biotech, software and clean energy markets. There’s something for everybody.
Cabot Income Advisor
Monthly Issue September 26: In this issue, I highlight the stock of a company that operates in an incredible niche market that has provided earnings growth for 31 consecutive years and enabled the stock to consistently outperform the market in every kind of environment. The company is positioned for strong growth in the years ahead and is selling below its average valuations over the last five years despite the high-priced market.
Weekly Update October 10: The market was already struggling after the Fed’s “higher for longer” comment about interest rates. Now it’s getting hit with ugly headlines regarding the situation in Israel.
Geopolitical risks are always out there, and they act up occasionally. Hopefully, this new Middle East situation won’t expand into a wider conflict. There is also the Ukraine conflict. These are risks that could develop into a much bigger problem. Even if they don’t, there is still the interest rate and inflation situation.
Cabot Turnaround Letter
Monthly Issue September 27: The attention of most investors, commentators and analysts has been on the winners, notably the Magnificent Seven, driving this year’s stock market rally. As contrarians, we are fine with letting a few overpriced trendy stocks capture the spotlight. One place that draws our attention is the other end of the spectrum – those with the worst performance. While most of these stocks fully deserve the market’s dour judgment, some have favorable changes underway. We look into four large and mid-cap stocks that fit this description and one that does not. We also discuss a tactic to help improve one’s success in investing in out-of-favor stocks.
Our feature recommendation this month is Advance Auto Parts (AAP), one of the four major auto parts retailers. The shares have fallen sharply out of favor, but a comprehensive and much-needed overhaul is now starting.
We also include our recent Sell recommendations: Toshiba (TOSYY), Holcim AG (HCMLY), First Horizon (FHN) and ESAB Corporation (ESAB), and our suspension of our rating of shares of Kopin Corporation (KOPN).
Weekly Update October 13: This week’s note includes our comments on earnings from Walgreens Boots Alliance (WBA) and Wells Fargo & Co (WFC). Next Thursday, we get earnings from Nokia (NOK). The deluge starts the following week with eight companies scheduled to report.
Cabot Money Club
Monthly Magazine October: When it comes to your financial health, saving more money can be just as important as earning more money. If you’ve been considering buying an electric vehicle, making improvements to your home, or just replacing a window, the Inflation Reduction Act unleashed a slew of federal rebates that will put more money back in your pocket. This month we’ll focus on how to take advantage of those programs, plus, we’ll explore a wide range of discounts available to seniors, students, travelers, and more.
Stock of the Month October 12: Investors weren’t surprised by the Federal Reserve’s decision to hold rates steady, but they also didn’t react by ramping up their stock purchases—too much uncertainty what with the election rhetoric heating up and the turmoil in Congress, after Kevin McCarthy was unceremoniously ousted as Speaker. And now, we have the war in Israel.
ASK THE EXPERTS
Prime Question for Tyler: Tyler, is hold 3/4 meaning to sell 1/4 (of a position)? If I am new to the group I’m assuming the buy rating is a green light to buy from scratch today?
Tyler: Yes, a buy rating means the stock looks good to buy now. The rating isn’t updated daily so just factor in daily/weekly swings in share price. This is why it’s always a good idea to average in (i.e. buy the same dollar amount in a few purchases on different days to get up to your desired “full” position size).
Hold three-quarters means that, at one point, we had a full-size position, then elected to take a partial profit by selling a quarter of it. That left us with three-quarters of our original position size, which we are holding.