Latest Summary
CABOT EVENTS
Cabot Weekly Review (Video)
In this week’s video, Mike Cintolo discusses the market’s retreat this week; his indicators never quite were able to turn green, so the action keeps the correction in force. That said, not all is lost, as many of the under-the-surface positives that started to appear are still there, including resilience among many growth titles and a lack of any interest in defensive stocks. Overall, Mike’s about 45% in cash and staying close to shore as he patiently keeps his watch list up to date for the next sustained rally.
Stocks Discussed: SPLK, IOT, DUOL, PSTG, NOW, WDAY, NXT, ARRY, KLAC, LRCX, ZS, CIVI, NOG, CPNG, NVO
Cabot Street Check (Podcast)
This week on Street Check, Chris and Brad debate whether September will spell an end to the market rally, rising oil prices and the effect on investors, and they dive into what’s ailing Disney’s (DIS) shares. Then, they bring on Cabot Cannabis Investor’s Chief Analyst Michael Brush to discuss his prognosis of cannabis stocks, the mega-rally on the back of HHS’s rescheduling letter and what catalysts (and risks) are still on the horizon.
Cabot Webinar
2 Cabot Stocks Most Likely to Become the Next Tesla
FREE WEBINAR: Thursday, August 17 at 2:00 PM ET
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 September 7:The market showed some promise in the past couple of weeks, but our indicators never could turn up and now the sellers are back at it, driving the broad market back down. All in all, then, the correction that started in earnest in early August remains in place, so we’re remaining relatively cautious. To be fair, there are some positives, not the least of which is growth stocks, many of which reacted well to earnings last week and a bunch have been resilient of late. That’s not enough to start a buying spree, but it’s another sign that there should be fresh leadership to sink our teeth into whenever the correction finishes up.
In tonight’s issue, we talk about one fundamental transition that three potential leaders are in the midst of, review our Growth Tides and go over a bunch of enticing candidates, be them cyclical or growth stocks.
Bi-weekly Update August 31: WHAT TO DO NOW: Do a little buying. The market’s evidence has improved somewhat, as have our indicators, though we haven’t seen any fresh green lights just yet (Cabot Tides on the fence, Two-Second Indicator getting there, etc.) and growth stocks are still hit and miss. Given the improvement and the big-picture positives (including our bullish Cabot Trend Lines), we’re putting a little money to work but are still to hold plenty of cash. Tonight, we’ll average up on Noble (NE) and start a half-sized stake in CrowdStrike (CRWD), which will leave us with about 40% on the sideline. If the rally falters, we’ll prune, but obviously if the buyers flex their muscles after Labor Day, we’ll be looking to add more.
Cabot Top Ten Trader
Weekly Issue September 5: Following a tough 9% dip in the Nasdaq and 6% haircut in the S&P 500, the market rebounded about as well as the bulls could have hoped--though, with that said, we don’t advise cannon-balling back into the pool per se, as the intermediate-term trend is mostly neutral here, interest rates are still a bugaboo and a lot of stocks still have work to do to repair the damage seen in late July and early August. Simply put, we see the past two weeks as a great first few steps for the market trying to emerge from its correction—but now we need to see continued follow through. We’ll bump our Market Monitor back to a level 6.
After a couple of so-so lists, this week’s crop of stocks is broad and includes many that have shown outsized buying volume of late. There are many enticing choices, but our Top Pick is threatening to break free from its recent launching pad and a giant post-IPO base after another great quarterly report.
Movers & Shakers September 8: After a couple of good weeks, the sellers reappeared after Labor Day and have driven the market (especially the broad market) lower. Coming into Friday, big-cap indexes were down 1.5% to 2%, while small- and mid-caps were off more than 3%.
Cabot Value Investor
Monthly Issue September 5: Thank you for subscribing to the Cabot Value Investor. We hope you enjoy reading the September 2023 issue.
We do a deep-dive into what ails Citigroup (C) shares and remain steadfast in our conviction.
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 August 29: It seems like only yesterday when winter/spring faded and summer rolled in. Our kids wrapped up their classes, reminding me of Alice Cooper’s timeless classic “School’s Out.” As Van Halen wrote, “Summer’s here and the time is right, for dancin’ in the streets.”
The stock market did some sweet dancing with an 11% surge from Memorial Day through early August. Unlike the cold, narrow winter at the start of the year, in which seemingly only the Magnificent Seven stocks ran higher, most stocks thrived in the summer sun. From the official start of the season, the average stock in the S&P 500 sprouted a 10% gain.
Cabot Dividend Investor
Monthly Issue August 9: The market looks great right now. Inflation is falling fast, the Fed is just about done hiking rates, and there is no recession in sight. It looks like we will get through the steepest rate-hike cycle in decades without much economic pain.
But nothing is certain. Inflation could rise again. The Fed may keep rates high for longer than the market expects. The economy may turn south in the quarters ahead. There could be more trouble with bank failures or the war in Ukraine. S&P earnings have been contracting for three straight quarters.
We’ll see if the market can add to the 30% rally from the low, or if it turns south again. A reasonable argument can be made for either scenario. Instead of trying to guess the possible short-term gyrations, let’s look to investments that should be longer-term winners no matter what.
In this issue, I highlight a stock that diversifies the portfolio into the consumer space. The company operates in an incredible niche market that has provided earnings growth for 31 consecutive years and enabled the stock to outperform the market in every measurable period over the last 15 years. The company is positioned for strong growth in the years ahead and the stock has a long track record of delivering stellar returns in all kinds of markets.
Weekly Update September 6: The summer is over. The post-Labor Day market has arrived. What can we expect?
Historically, September is the worst month for the market. Sobered up investors back from vacation tend to be cranky when they take a fresh look at things. But seasonality doesn’t always apply. And there are some reasons for optimism.
Cabot Early Opportunities
Monthly Issue August 16: In the August Issue of Cabot Early Opportunities, we talk about what happened to the summer stock rally and dig into five companies selling everything from coffee to sporting goods to mobile advertising tools.
Enjoy!
Cabot Income Advisor
Monthly Issue August 22: This market has confounded a lot of people over the past few years. Individual market sectors have been as perplexing as the indexes. Last year, the worst performing market sector by far was technology. This year it is by far the best performing sector. Last year, energy was the best performing sector. In the first half of this year, it was the worst performing.
Other sectors like consumer discretionary stocks that had been among the worst sectors last year are among the best this year. Defensive sectors including health care and utilities that delivered stellar returns last year have been dogs this year. In fact, the utility sector has displaced energy as this year’s worst performing S&P 500 sector.
The last few years have also illustrated a tendency for downtrodden stock sectors to rise from the canvas and become among the market’s best performers. Many utility stocks are currently near multi-year lows. But not because of the operational performance of the companies, which has largely remained solid. It’s mostly because of high interest rates, which may be peaking, and the mood of investors so far this year, which always changes.
Utilities are dirt cheap in an expensive market. They are also stellar relative performers in a slowing economy. But they are likely to rise from the current dark depths even if the economy remains buoyant. In this issue, I highlight one of the best performing utility stocks over the past 10 years that is currently selling near a multi-year low in a changing market.
Buying great stocks cheap is never a bad strategy over time.
I also highlight a fantastic covered call opportunity in a stock that has been on fire over the past couple of months. It’s a great chance to keep the income rolling in.
Weekly Update September 5: Summer is over. The post Labor Day market begins this week. What can we expect?
The market has been nearly impossible to predict over the past several years. There was the pandemic crash, the recovery that began shortly after the lockdowns began, the 2022 bear market, and the surprising return to a bull market this year.
Cabot Turnaround Letter
Monthly Issue August 30: 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 September 8: Newell Brands (NWL) and Xerox Holdings (XRX) demoted to the S&P Small Cap 600 Index. Comments on Walgreens Boots Alliance (WBA), Wells Fargo (WFC), Elanco Animal Health (ELAN), Tyson Foods (TSN) and TreeHouse Foods (THS). Roll-over in Apple (AAPL) shares may help value investors. A major turnaround in the NFL.
Cabot Money Club
Monthly Magazine September: The expanding senior population is a major demographic trend that’s driving higher costs in senior living and senior care services across the country. If you’re retired (or planning to), unexpectedly high living expenses can put your entire retirement picture in doubt. This month, let’s explore assisted and unassisted living options for seniors, how to plan for those expenses even as they climb, and important factors to consider before you shake up your living situation. Plus, we’ll pick a few of the best-looking stocks taking advantage of the trend.
Stock of the Month July 13: Manufacturing is steady; construction spending is up; and employment numbers surged to 497,000, according to ADP. That’s more than double the number that economists had predicted. In fact, the leisure and hospitality segment produced 232,000 jobs alone—more than the entire 220,000 job increases forecast. The unemployment rate for June declined slightly, to 3.6%.
All in all, the economy seems to be sailing along pretty well, and recession forecasts have dropped to about a 25% chance. We’ll just have to wait and see.
In the meantime, the markets continued their volatility over the last month, which I find exciting, as the down days provide some great opportunities for buying attractive stocks at lower entry prices.
Growth stocks continue to outpace value names. And sector-wise, Technology, Communication Services, and Consumer Discretionary stocks are the market leaders, rising 37.6%, 35.6%, and 31.1%, respectively, year to date.
ASK THE EXPERTS
Prime Question for Mike: Hi Mike, just a quick question: I bought (two stocks) last year at a high price and lost about 50% so far. I don’t know if I should hold on for a possible bounce back or sell them at this loss. What would you do in this situation? I would greatly appreciate your help.
Mike: Yes, a tough situation – I do think both could bounce here a decent percentage if (big if) the market rallies further and the correction is really over (I need to see a bit more to conclude that).That said, my main thought is that your goal should be to make the money back – but you don’t have to make it back in those stocks. And I see many other stocks that, should the market move higher over time (which the odds favor), should perform better in general.Thus, whether here or later on, I would look to piece out of these two barring some major positive change, and look to accumulate some fresher leaders. If it were me I might start selling some of each, just to respect the action, and free up some cash for better opportunities.