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CABOT EVENTS
Cabot Weekly Review (Video)
In today’s Weekly Video, small-cap analyst Tyler Laundon runs through the market action of the Holiday-shortened week and explains why things turned around on Thursday. He briefly covers the lates commentary from Fed officials, which points toward first rate cut in June, and talks about some of the market drivers that need to continue for analysts to remain bullish into summer. Tyler wraps things up by digging into three small and mid cap stocks that have compelling stories and decent looking charts. As always, do your own research on any stocks you purchase.
Stocks Discussed: NVDA, WIX, INTA, OCUL
Cabot Street Check (Podcast)
This week on Street Check, Chris and Brad tackle Nvidia’s (NVDA) latest earnings release, the risks to the markets of having one stock in the driver’s seat, and how impactful the artificial intelligence revolution has been for shares and the company’s fundamentals. Then, they talk Amazon’s (AMZN) new place in the Dow and the stocks and evolving consumer behaviors that put it there. To wrap the episode, they discuss Capital One’s (COF) acquisition of Discover (DFS), arbitrage in DFS shares, regulatory risks to the proposed merger, and the possible outcomes for investors.
Cabot Webinar
2024 Stock Market Outlook: Secrets to Success in a New Bull Market
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 Plus 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 February 22: The market had an excellent snap back today, which was good to see, but we’re still playing things a bit near-term cautiously for now—many leaders have suffered some distribution after good runs (and after some yellow flags near the turn of the month). Tonight, we’re holding some strong names, but also about one-third in cash, waiting a couple more days to see if today really does put in a low for most leaders.
Big picture, though, we remain quite optimistic—we’re certainly not looking to raise more cash if we can help it (we do have three names reporting next week), and we could put some cash back to work very soon if things hold up. Stay tuned.
Bi-weekly Update February 14: WHAT TO DO NOW: Hold your strong stocks, but near-term, it’s OK to sit on your hands a bit and see how things shake out. The overall evidence remains bullish, but there have been some yellow flags of late and yesterday’s broad, sharp decline is likely to have some near-term reverberations. We took partial profits in Arista (ANET) yesterday, selling one-third of our shares, and placed Pulte (PHM) on Hold, leaving us with around 33% in cash—and some great performers. We’ll stand pat tonight, though if things settle down for a couple of days, we could put some of our cash back to work.
Cabot Top Ten Trader
Weekly Issue February 20: The trends of the indexes remain up and the leading growth stocks remain firm, although many big tech names are showing signs of entering what appears to be an overdue pullback.
Volatility is also on the rise and a classic split tape environment is emerging, with some sectors weakening while others show strength. We’re keeping a weather eye out for any sudden changes, continuing to hold our winners, building some cash, but also taking advantage of recent sector rotation. This week’s Top Pick is a name making waves in the app publishing market while also harnessing the power of AI to grow its customer base.
Movers & Shakers February 23: The market has certainly had an interesting couple of weeks as volatility has picked up—the Nasdaq and especially leading stocks saw a big drop early last week, a sharp recovery through last Friday, followed two days of fairly heavy selling—and then we had Nvidia’s (NVDA) report Wednesday evening, which caused another rush of buying yesterday. Our thoughts:
Cabot Value Investor
Monthly Issue February 6: Thank you for subscribing to the Cabot Value Investor. We hope you enjoy reading the February 2024 issue.
Spin-offs should be in every value investor’s toolkit. In this issue, we are adding a spin-off, Worthington Enterprises (WOR), to our Buy recommendations roster.
We comment on recent earnings from Comcast (CMCSA) and provide updates on our other recommended stocks.
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 February 20: As the stock market soars ever higher, driven in no small part by the Magnificent Seven mega-cap tech stocks, vitriol again is being heaped upon passive investing. This form of investing, more commonly known as indexing, is considered “passive” because it considers no other traits beyond a stock’s weight in an index. There is no work involved in picking such stocks or setting the weighting – the index passively determines these. The opposite, of course, is “active” investing, in which investors work to select which stocks, and how much, to buy and sell. Active investing can involve a lot of activity.
Cabot Stock of the Week
Weekly Issue February 20: Stocks have finally hit a speed bump, retreating modestly in the last couple weeks. But pullbacks are both inevitable and healthy in the long run. And the latest one offers an opportunity to buy some great companies at more attractive prices. So today, we add perhaps February’s hottest stock – after it’s been knocked down more than 8% in the last two trading days. I’m betting it’ll bounce back, and so is Mike Cintolo, who recently recommended the stock to his Cabot Top Ten Trader readers.
Cabot Explorer
Bi-weekly Issue February 15: The latest earnings reports were mixed but generally encouraging.
The S&P 500 exceeding the 5,000 mark reminds us that while our dynamic economy leads to disruptions in companies and markets, and Fed interest rate moves can impact the market, it is revenue and earnings growth that really drives stock returns over time. Companies normally become more profitable over time, and that’s what leads to higher stock prices. Staying in the market and leveraging the power of compounding returns is important to successful investing.
So today, we expand our portfolio by starting a small position in a brand new asset class.
Bi-weekly Update February 22: It was a relatively quiet week for Explorer stocks as a financial media frenzy focused an unprecedented amount of attention on the expected financials of one stock – Nvidia (NDVA).
Nvidia has quickly become the third most valuable company in the United States.
As of last Friday, about 30% of the S&P 500’s gain for the year was due to Nvidia, according to an S&P analyst.
Cabot Small-Cap Confidential
Monthly Issue February 1: The auto insurance market has been in a deep freeze since the middle of 2021. But now it’s thawing ... maybe even shifting into growth mode. That means huge potential for companies with direct access to the market.
That’s where today’s idea comes in. It’s a micro-cap internet company that offers unfiltered exposure to the auto, home and renters’ insurance markets.
All the details are inside the February Issue of Cabot Small-Cap Confidential.
Weekly Update February 22: Small caps traded slightly lower the first two sessions of this holiday-shortened week while the S&P 500 and Nasdaq wobbled a bit but enjoyed a bigger pop than small caps today.
Nothing high level that’s a huge priority at the moment, other than that today we saw a significant “risk on” rally as Nvidia’s (NVDA) monster quarter restoked the AI enthusiasm flame that was beginning to dim earlier in the week.
Given all the earnings reports, and another due up early tomorrow (DCBO) I’m jumping right into our stocks for short and sweet updates.
Cabot Dividend Investor
Monthly Issue February 14: A year from now we could be in a raging bull market or bounding toward a recession. Interest rates could be high or much lower. And we have to see what will happen with these wars and who will be elected president in November. Nobody knows the answers to these questions.
But a year from now there is at least one thing we can bank on: The population is already older than ever before in history and will continue to get still older at warp speed. Between 2011 and 2029, about 76 million boomers born in the U.S. between 1946 and 1964 will turn 65. That’s about 3.6 million per year. There will be tens of millions more older people running around in the years ahead.
The inescapable fact about older people is that they spend much more than any other segment of the population on healthcare. That’s just how we’re built. Boomers control about 70% of this nation’s wealth and the aging population has enormous implications for businesses and markets.
Certain healthcare companies and stocks are positioned ahead of a megatrend and a massive wave of spending. In this issue, I highlight two “BUY”-rated portfolio healthcare stocks. If you don’t own them already, they are well worth considering.
Weekly Update February 21: The market has had a good year so far. The rally that began at the end of October is still in force. But things are getting wobbly.
Last week’s inflation number came in higher than expected. CPI was 3.1% for January and that’s down a lot from the high of 9.1% in June of 2022. But it’s still above the Fed’s target rate of 2%. And inflation has stopped going down even with interest rates at the highest level in decades. That’s a problem.
Cabot Early Opportunities
Monthly Issue February 21: In the February issue of Cabot Early Opportunities, we take something of a barbell approach, reviewing a couple of phenomenal large-cap stocks poised for the next big chapter of their lives while also uncovering a handful of much smaller companies, one of which is just getting its business off the ground (literally)!
Cabot Profit Booster
Weekly Issue February 21 : As traders grappled with the moves in the bond market last week (expectations of rate cuts coming soon have faded), the market moved violently day-to-day, though big picture the indexes were mixed. By week’s end the S&P 500 had fallen 0.35%, the Dow was mostly unchanged, and the Nasdaq had lost 1%.
Cabot Income Advisor
Monthly Issue January 23: I believe the good news will prevail in 2024. But you never know. Forget about trying to predict the direction of the overall market. However, certain aspects of the current environment and established trends are much more bankable.
For example, it is highly likely that interest rates have peaked. Sure, rates could bounce higher than they are now. But that 5% peak level on the 10-year Treasury is unlikely to be eclipsed, at least in this cycle. Artificial intelligence is here to stay. Businesses must spend on it not only for competitive advantage but as a matter of survival. The new technology will continue to be a strong growth catalyst for technology stocks.
In this issue, I highlight a fantastic dividend stock whose long record of strong performance has been interrupted these last two years because of rising interest rates. It’s also a company that focuses on technology and will surely benefit from the proliferation of AI in the years ahead. The timing for this stock should be outstanding.
Weekly Update February 20: In what has been a basically good market this year, investors just got a dose of bad news. Inflation isn’t going down enough, even with the current high rates. That makes the rate cut “Holy Grail” far less likely anytime soon.
The Fed will have to at least keep interest rates at a very high level to prevent inflation from reigniting. But at some point, the Fed will need to lower interest rates in order to keep the recovery alive. But they can’t, at least to an impactful degree. Historically, inflation tends to come right back when the Fed takes its foot off the gas.
Cabot Turnaround Letter
Monthly Issue January 31: This issue focuses exclusively on spin-offs and discusses seven attractive and relatively recently spun-off companies.
This month’s Buy recommendation, Baxter International (BAX), a major producer of medical equipment and hospital supplies, is involved in a spin-off. In this case, it is the parent company of an upcoming spin-off. The transaction, along with fundamental improvements and a long-time low share valuation, makes Baxter shares attractive.
Weekly Update February 16: This week, we review earnings reports from Agnico Eagle Mines (AEM), Goodyear Tire & Rubber (GT) and TreeHouse Foods (THS).
Next week, we anticipate earnings from Elanco Animal Health (ELAN), Macy’s (M), Gannett (GCI), Dril-Quip (DRQ), Vodafone (VOD) and Warner Bros Discovery (WBD).
Cabot Cannabis Investor
Monthly Issue December 27: Our cannabis trades continue to perform very well, beating the market by more than tenfold since the last update, depending on the index position considered.
The AdvisorShares Pure U.S. Cannabis (MSOS), is up 10.5%, and the AdvisorShares MSOS 2X Daily (MSOX) is up 18.7% since I last suggested getting long cannabis on December 13. I suggested both as proxies for the sector, at the time.
Monthly Update February 14: It sounds heartless to say, but successful investing is largely about exploiting the emotions of others.
The two biggest emotions to exploit in the market are obviously fear and greed. When investors are too fearful, it pays to exploit that emotion by betting the other way. And vice versa for greed.
Another common emotion to exploit is impatience.
Cabot Money Club
Monthly Magazine March: Passive real estate investing is surging in popularity as it promises the wealth-building power of real estate without the headache of managing properties and tenants. This month’s issue features the pros and cons of passive real estate investing, the types of opportunities available to investors, and what you need to know before you get started.
Stock of the Month February 8: The markets have continued their bullish momentum so far in 2024, with growth stocks continuing to lead the way—especially large caps, which are up 32.94% so far this year.
Sector-wise, Communication Services (up 9.74%), Technology (up 5.07%), and Healthcare (up 4.11%) are the winners so far, with Real Estate (down 4.37%), Utilities (-2.91%), and Consumer Discretionary (-0/83%) the losing sectors.
Ask the Experts
Prime Question for Jacob: I wanted to get your advice on Super Micro Computer (SMCI). I own 100 shares at 664 and was looking to capture some premium since the option market is insane. I was looking at 870 for $13 expiring this Friday. Any thoughts? Would drive my price basis down by $13 and, worst case, I sell at $100 above the current trading price.
Jacob: You would think that is a stone-cold lock, no-brainer, of a good trade.
That being said, the stock is up a million bucks in the last two weeks, so sure it could go up another $100.
Big picture, I like the trade, and worst-case scenario you make another $10,000. (Note: the stock continued to go way higher, and even traded over 1,000 a share on Friday!)