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Cabot Prime Plus Week Ending April 21, 2023

Latest Summary

Cabot Weekly Review (Video)

In this week’s video, Tyler Laundon takes advantage of the relatively calm week in the market to skip over the macro picture and focus purely on small-cap companies set to report earnings in the next two weeks. He covers 10 names from across a variety of market sectors, all of which have intriguing charts, stories, and growth rates. As always, viewers are encouraged to do their own research on any stocks before purchasing shares.



How to Profit from the Biotech Bear Market

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Advisory Services

Portfolio Updates This Week

Cabot Growth Investor

Bi-weekly Issue April 20: The market continues to show many small positives, but we’re really looking for a BIG positive to change the market’s character and kick individual growth stocks (many of which are set up well) higher. Until then, many names are subject to potholes, as we saw this week; we trimmed our Shift4 position further and are placing Allegro on Hold. That said, our general outlook is unchanged--the odds favor the next big move is likely up, but until that happens, we’re playing things cautiously, holding some resilient names, small positions and plenty of cash. Tonight’s issue goes into detail into all our stocks, discusses one reason why the market is so choppy and talks about the hugely negative sentiment out there that could propel the market down the road.

Bi-weekly Update April 12: WHAT TO DO NOW:Continue to play things in the middle, as the on-again, off-again environment remains in place. We are seeing some improvement from our Cabot Tides and Two-Second Indicator, which is a plus, but most of the evidence is stuck in the middle, so we think having a good chunk of cash as well as a few resilient growth names makes sense. We have no changes in the Model Portfolio tonight; our cash position remains just under 50%.

Cabot Top Ten Trader

Weekly Issue April 17: Stocks remain under pressure as a mixture of geopolitical threats and inflation concerns weigh on the market’s growth-oriented segments. Meanwhile, as the major indexes test their January lows, we remain on the lookout for signs of bottoming and constructive setups—particularly in the tech sector. For now, though, we advise caution as this is still very much a stock picker’s market.

Movers & Shakers April 21: From an index point of view, it’s been about as flat a week as you can get, with everything from big-cap to small-cap, growth to value all within 1% of where they started the week. Not surprisingly, not much has changed with our thoughts: There are many small positives out there, including some positive-by-a-hair indicators (new lows on the NYSE, the intermediate-term trend, our Aggression Index, etc.) as well as a bunch of setups among many stocks and sectors out there. Heck, the fact that the S&P 500 itself recouped 95% of its February-March decline (including the bank panic) is encouraging, and it’s getting hard not to notice the huge amount of pessimism out there.

Cabot Undervalued Stocks Advisor

Monthly Issue April 4: We comment on the price of gold and what we see as its primary drivers. Gold is now trading above $2,000/ounce. We also provide updates on our recommended stocks.

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 Stock of the Week

Weekly Issue April 17: It’s possible stocks are stretched, at least in the near term, and the just-underway earnings season will put that to the test in the coming weeks. The next big move may be to the downside, so today we’re adding some more portfolio protection in the form of a mega-cap health insurer that pays a modest dividend but has a history of beating the market. It’s the latest recommendation from Cabot Dividend Investor Chief Analyst Tom Hutchinson.

Cabot Explorer

Bi-weekly Issue April 6: More than $15 trillion in assets are linked to the performance of the S&P 500 index in some way, according to S&P Dow Jones. Apple, at about $2.4 trillion, and Microsoft, at $2.1 trillion, are so large that, taken together, the two companies would be the third-largest sector of the index, behind tech and health care. This share is trending lower as other companies rise.

Bi-weekly Update April 20:Foreign automakers, including electric vehicle (EV) makers, are losing market share in China as the country doubles down on the EV supply chain.

China makes almost all of EV electric motors and refines most of the chemicals used for lithium batteries. China even leads in developing what could be the next generation of technology, sodium batteries.

Cabot Small-Cap Confidential

Monthly Issue April 6: We’re digging into another compelling MedTech story this month. The company in focus is a spine specialist. It’s been grabbing market share from larger players by growing a portfolio that covers the full spectrum of spine care, from imaging and surgery planning to surgical tools and implants.

Weekly Update April 20: The market continues to act “fine” as we get a little deeper into earnings season this week.

At the index level, small-cap stocks are unremarkable. But I continue to attribute the underperformance to the high weight of rate-sensitive sectors (financials, energy, industrials, materials).

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 April 19: January was up. February was down. March was up. April has not yet tipped its hand. The S&P 500 is up 8.12% YTD, as of Monday’s close. It’s been a bouncy market that has bounced up more than down so far. April has been directionless because investors are waiting for earnings.

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 Profit Booster

Weekly Issue April 18: This week we are adding a position in a leading copper player, though because the company will report earnings this Friday, we will be selling an in-the-money call.

Cabot Micro-Cap Insider

Monthly Issue April 12: Today, I’m recommending a failed biotech that is undergoing a strategic review.

Key points:
· Based on conservative assumptions, I see 30% to 92% upside within 12 months.
· Low downside risk given stock market cap is 51% of net cash.
· High insider / institutional ownership assures incentives are aligned.

All the details are inside this month’s Issue. Enjoy!

Weekly Update April 19: This week is school vacation week in Massachusetts, so I’ve spent the last five days in Puerto Rico with my family and a couple other families.

Highlights include:

1) Hiking into El Yunque rainforest for a swim in a little creek.

2) A night bioluminescent tour.

3) Lots of delicious margaritas!

In terms of micro-cap updates, it was a quiet week so I figured I would spend my update on Unit Corp. (UNTC) as I spoke to the CFO last week and got some good updates.

Cabot Income Advisor

Monthly Issue March 28: The banking situation has changed the Fed. The damage done by previous rate hikes is making the Central Bank far less hawkish. The risk is shifting from the Inflation/Fed cycle to recession. The end of this cycle may have been expedited. And stocks could rally out of this bear market sooner than thought. Of course, the banking issues might not be over yet. And the timing and severity of a possible recession is still unknown. Things may get worse in the market before they get better. For now, defensive stocks that can maintain earnings growth in a worsening economy or recession are better places to be.

Weekly Update April 18: The market is changing. The risk is shifting from more Fed rate hikes and inflation to a growing possibility of recession in the quarters ahead. The math is changing and so is market rotation.

At the same time, earnings season is here, and we are likely in an earnings recession already. Average S&P 500 earnings shrunk 4% last quarter and are forecast to fall 5% this quarter. Much of that expectation is already reflected in prices and investors will be carefully watching the guidance for future quarters.

Cabot Turnaround Letter

Monthly Issue March 29: This issue focuses exclusively on the banking industry. Given the recent turmoil and the second- and third-largest bank failures in U.S. history, we examine the question on the minds of value and contrarian investors: is it time to jump back into bank stocks? Our feature recommendation this month is First Horizon Corp (FHN), a relatively plain mid-sized regional bank that provides an appealing way to exploit the bank sell-off: merger arbitrage. Due to regulatory delays, the bank’s shares trade at a 33% discount to the $25/share all-cash offer from TD Bank Group, a large and well-capitalized Canadian bank. We believe that the deal will close at the $25 price, providing an attractive return, even as the shares’ discounted valuation offers considerable downside protection.

Weekly Update April 14: This week kicks off our earnings season, with Wells Fargo (WFC) reporting. There were no ratings changes this past week.

Cabot Money Club

Monthly Magazine April: Bonds or bond funds should be part of most investors’ portfolios or retirement plans because of the predictable income they generate. But with interest rates vacillating wildly, let’s take some time to explore how that impacts bond investors and some strategies you can employ to optimize your fixed-income returns.

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 Mike: Lululemon (LULU) since earnings has held on to its gains. And has good earnings and sales moving forward. What are your thoughts?

Mike: Good question. Generally speaking, I like it – wouldn’t say I love it per se (good not great growth, still some old overhead) but I agree the story and numbers are generally good and the action on and since earnings is eye-opening. I’m OK with a position in LULU but with a tight-ish stop.

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.