Latest Summary
CABOT EVENTS
Cabot Weekly Review (Video)
In this week’s video, Tyler Laundon talks about the pressure interest rates continue to put on the market and what he sees as the key threshold rates need to stay below for the market to do anything positive. Rather than go down the rabbit hole of any of the big macro themes Tyler zeroes in on three software stocks that are at the top of his list to for upside potential in the final months of the year. He digs in to each name, talking about what they do (hint: AI is part of the story) and what could drive revenue and earnings growth in the quarters ahead. Stocks discussed: GTLB, DT, ESTC
Cabot Street Check (Podcast)
This week on Street Check, Chris and Brad discuss early earnings season results and the impact (if any) they’re having on the market. Then they talk Eli Lilly (LLY) and Novo Nordisk’s (NVO) blockbuster weight loss drugs and what knock-on effects they could have on other stocks and sectors. To close out the podcast, they briefly touch on the situation in Gaza and the potential impact on investors before discussing Brad’s trip to Japan and (more importantly) the value of a favorable exchange rate when ticking items off your travel bucket list, whether Japan has turned the corner and is now a good investing destination, as well as a Japanese stock pick to take advantage of a recovering travel sector. Email Street Check at streetcheck@cabotwealth.com with feedback, comments, or suggestions.
Cabot Webinar
3 Global Investments to Take Your Portfolio to the Next Level
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 October 19: The market remains under pressure as interest rates rise, which keeps us in a cautious stance -- we’re holding nearly as much cash as we have during the past two years as few stocks are able to sustain any upside. That said, we actually think the market has a solid setup here--there are a decent number of names forming normal launching pads, sentiment is awful and earnings season could be a catalyst. The bulls still have a lot to prove, but we’re remaining flexible should the buyers appear.
Tonight’s issue reviews our remaining names and market outlook in more detail, talks about some big-picture positives to keep in mind, as well as some things we want to see as a sign the buyers are taking control. More watchful waiting is needed, but we’re keeping our watch list up to date should the market’s character change.
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 16: The story remains mostly the same in the market as it has for the past few weeks: The intermediate-term trend for nearly all major indexes and the vast majority of individual stocks is pointed down. That said, there also are a decent number of stocks holding up fairly well—and with earnings season starting in a major way this week, the potential is there for some leadership to develop if we see some strong upside gaps following reports. We’re all for it happening, but overall it’s best to remain cautious as the market attempts to turn the corner. Once again, we’ll leave our Market Monitor at a level 5.
This week’s list has a wide array of good-looking names, though for our Top Pick we’re going with a liquid leader that, while not in the first inning of its run, acts like it wants to go higher.
Movers & Shakers October 20: The story remains the same for the market this week: The major indexes are all down (in the 1% to 2% range), which keeps the intermediate-term trend pointed down (every major index we look at is below its 50-day moving averages). Going along with that, the vast majority of individual stocks (about 80% of the S&P 1500) are in the same boat and hundreds of stocks are hitting new lows most days while only a couple handfuls hit new highs.
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 17: Not a lot is happening in the market right now, but soon a lot will happen.
Tech earnings are just around the corner, which should help reveal whether the Magnificent Seven mega-cap tech stocks are worth their current prices. Apple (AAPL) shareholders nervously wait for signs that revenue growth isn’t truly stalled even though the company’s new product offerings don’t quite have the appeal as earlier ones. Broadly, investors of all types wonder how consumer and industrial goods producers will fare, given rising pressures from inflation, inventory de-stocking, global outlook worries and student loan repayments. Bank investors await results from Bank of America (BAC) and other banks to glean whether we are headed into a second round of deposit runs. Stocks are not cheap, especially in a world of 5-6% Treasury yields … how much, if at all, will this matter?
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 18: The market is distinctly more optimistic this month as “soft landing’ hopes revive.
After a rough couple of months, the S&P is trending higher in October. The economy is still solid. In fact, retail sales numbers for September blew away expectations, once again showing that a recession is nowhere in sight.
Cabot Early Opportunities
Monthly Issue October 18: In the October Issue of Cabot Early Opportunities, I dig into a group of software companies that have upside potential from AI, automation and security. I also feature a diversified bioprocessing and advanced materials company that’s drawing attention right now and go deeper into a very small industrial company that few investors have ever heard of.
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 17: The market is rallying this month as the “Goldilocks” scenario gets renewed traction.
The economy is still solid. There are no signs of recession. At the same time, the Fed is making noises like it may be done hiking rates because of the higher longer-term rates. A good earnings season may also buoy stocks.
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 20: This week’s note includes our comments on earnings from Nokia (NOK). Next week, the deluge starts, with earnings from as many as ten companies.
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 Mike: I read your article recommendation of Synopsys, Inc. (SNPS). I don’t have any cash. I’m fully invested. I own Amazon, Google, Nvidia, CrowdStrike, ServiceNow and Microsoft. Do I trade out of one to purchase SNPS? If so, which one? I have roughly the same dollar value in each. Thanks for your advice.
Mike: Thanks for writing.
So, a few things.
First, just to say this, I can’t give overly personal advice – exactly how you run your ship is up to you.
Second, I would say that, overall, I’m cautious on the market – we’re holding a good chunk of cash until the market turns up.
Third, you can’t kiss all the babies – even if this were a strong bull market, there are going to be good-looking stocks you can’t own as there will be too many of them.
Now, with all of that out of the way, yes, I do think SNPS looks good, though it’s a chip name so will broadly swim with NVDA most likely. It’s stronger than MSFT or AMZN, so if you’re intent on swapping, I would personally go that route if that were you; that said, I personally would probably be holding some cash, too, though your stocks are generally acting well; it’s unlikely much of anything is going to really run until the market turns.