Cabot Weekly Review (Video)
In this week’s video, Mike Cintolo says nothing much has changed with the market right now -- he’s still cautious, holding plenty of cash and practicing plenty of patience for the next upmove. However, he also emphasizes the need to stay flexible: More stocks are beginning to resist the market decline and show higher lows, so if the bad news cycle can end, many stocks look ready to pop--if not start sustained advances depending on how the market goes.
Stocks discussed: TSLA, META, SMH, AVGO, SNPS, DELL, DUOL, ONTO, CRWD, PANW, PCOR, NBIX/EXEL, APO, PDD, SPOT
Cabot Street Check (Podcast)
This week on Street Check, Chris and Brad welcome on Andy Crowder, Chief Analyst of Cabot Options Institute, to discuss the current state of the market, how he’s been able to generate double- and triple-digit returns in his portfolios despite the lackluster performance of most sectors and how he plans on tackling the upcoming earnings season. Other topics covered include Treasury yield curve disinversion, Coca-Cola (KO), volatility and the VIX.
Thursday, October 12 at 2:00 PM ET
SPECIAL EVENT: Join global investing expert Carl Delfeld, Chief Analyst of our Cabot Explorer advisory, for this key event in which he’ll talk about:
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 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 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 September 28: WHAT TO DO NOW: Remain cautious, as there’s not much change with our indicators or stance—the intermediate-term trend of most stocks, sectors and indexes is down, and while sentiment is very bearish and a decent number of growth stocks are holding well, it’s best to stay close to shore until the buyers return. Yesterday, we sold one-third of our remaining position in ProShares S&P 500 Fund (SSO) and are now holding about 55% in cash.
Cabot Top Ten Trader
Weekly Issue October 2: The market looked ugly early last week before finding some support, but we’re going to need to see more before changing our stance. We will say that, with September in the rearview mirror, there are many studies that point to a year-end rally and we continue to see a decent number of potential growth-y leaders that aren’t far from overcoming some technical hurdles. In other words, now’s not the time to stick your head in the sand, but as always, we want to see it first (some decisive buying) before taking much action. We’ll leave our Market Monitor at a level 5.
This week’s has a broad array of resilient stocks, with our Top Pick in pole position to be one of the top growth stocks—if and when the market gets going.
Movers & Shakers October 6: This week was looking a lot like last week, with the major indexes and lots of individual stocks and sectors hitting the skids earlier this week before bouncing—but today’s better-than-expected jobs report is erasing any good tidings from that. Including the indicated open, the S&P 500 and Nasdaq are off in the 1% range, while broader small- and mid-cap indexes are off more than 3%.
Cabot Options Trader and Cabot Options Trader Pro
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 September 26: Cisco Systems (CSCO) announced a huge $28 billion deal for security software specialist Splunk (SPLK). Regardless of concerns over the economy, rising interest rates, the incipient tech-driven Cold War II, rising government focus on anti-trust and other macro issues, there will always be blockbuster deals. We dig into the deal in our comments below on Cisco.
Cabot Stock of the Week
Weekly Issue October 2: October is the most celebrated month in Cabot’s native home of Salem, Massachusetts (i.e., home of the Salem Witch Trials). All month long, it’s one costume-heavy Halloween party. Will a similar party commence on Wall Street? The odds favor it. October has a long history of being a month where markets bottom – and rallies begin. In fact, it happened just last year. One area of the market that has already begun to rally is cannabis, thanks to some (long overdue) new legislation. So today, we add back a bit of cannabis exposure courtesy of Cabot Cannabis Investor Chief Analyst Michael Brush.
Bi-weekly Issue October 5: Explorer stocks, with the exception of Neo Performance (NOPMF), held their own in a difficult week. The market concerns center on the impact of high interest rates and mortgage rates on consumer spending, investment, and economic growth.
Bi-weekly Update September 28: The market and most Explorer positions struggled a bit this week except Conoco (COP), which is benefitting from crude oil hitting 2023 highs. Consumers and businesses are looking forward to the Fed ending interest rate increases as the inflation fight continues. Food inflation slowed to about 3% year-over-year in August, down from a troubling 13% a year earlier. Those topics, plus Japan, China and the electric vehicle arms race, in today’s Cabot Explorer update.
Cabot Small-Cap Confidential
Monthly Issue October 5: We’re switching things up this month, steering clear of high-tech, medical devices and other fancy types of companies.
This company is super easy to understand, sells a product pretty much everybody adores, has a seasonal tailwind and is executing on its profit growth agenda.
Weekly Update September 28: The market has been on edge since the Fed’s hawkish tone and updated Summary of Economic Projections (SEP) last week. But if we can get oil and interest rates to back off a little and some stock-specific catalysts during the upcoming Q3 earnings season maybe we can finally take our macroeconomist hats off and get back to doing what we’d rather do. Which is talk about some of the great small growth stories out there!
Cabot Dividend Investor
Monthly Issue September 13: This year’s strong market has surprised most pundits. Hopefully, the good times last. Anything is possible.
I don’t want to get into the business of trying to predict what the market will do over the rest of the year. Even if you get things right, some stupid headline can come out of nowhere and change all the math. There’s a much better way than market timing.
Buying good stocks cheap is perhaps the best way to assure good returns over time. Different market sectors go in and out of favor all the time. Technology stocks were out of favor at the beginning of this year. No one wanted energy stocks at the beginning of 2021.
You may not think there are a lot of bargains anymore. Sure, it’s a bull market for the indexes. But it is still the darkest days of the bear market in certain places. Defensive stocks in utilities and other sectors are wallowing near the lows of last October while the indexes are whooping it up.
In this issue, I highlight three defensive portfolio positions. These stocks are all selling near 52-week lows and, in some cases, multi-year lows. But operational results at these companies have been as strong as ever. And all these currently out-of-favor stocks have long histories of superstar performance that blows away the returns of the overall market.
Forget the Fed, and inflation, or the velocity of the landing. Buying some of the very best dividend stocks on the market near the lowest valuation at which they ever sell should be a money-making strategy regardless of what happens with all that other stuff.
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 Profit Booster
Weekly Issue October 3: The bond market’s wild gyrations were once again front of mind for traders last week, though interestingly by week’s end the market was mostly mixed as the S&P 500 lost 0.75%, the Dow fell 1.34%, and the Nasdaq was virtually unchanged.
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 3: Even the temporarily averted government shutdown can’t do much for this market. The S&P 500 is now down more than 7% from the 52-week high and may be headed to correction territory, down 10% or more.
The main problem is high interest rates. The benchmark ten-year Treasury rate continues to rise and just hit a new 16-year high near 4.7%. The Fed’s recent statement that interest rates will remain higher for longer continues to demoralize investors.
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 6: This week’s note includes updates on our companies, as earnings season is about a week away. Leading off the earnings reports is Walgreens Boots Alliance (WBA) on Thursday, October 12, followed by Wells Fargo & Co (WFC) the next day. Nokia (NOK) reports on Wednesday, October 18, with the deluge starting the following week with as many as 12 companies reporting.
Cabot Cannabis Investor
Monthly Issue September 27: The Senate banking committee is likely to approve key cannabis sector banking reform today.
Approval would be a significant catalyst for the group. So, it may spark a tradable rally.
Short-term traders may want to sell the strength in this volatile group. Another option would be to de-lever cannabis exposure by selling a portion of AdvisorShares MSOS 2x Daily ETF (MSOX) holdings and swapping the funds into the unlevered version, AdvisorShares Pure U.S. Cannabis ETF (MSOS). That maintains exposure to the group in front of expected catalysts ahead but dampens some portfolio volatility.
Monthly Update September 18: After the close Friday, we learned that the Senate banking committee has scheduled a vote on key cannabis sector banking reform on September 27.
Of course, we do not know that the committee will stick to its schedule. But it is likely, so I will assume that will be the case. This timing suggests a possible course of action for cannabis holdings
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 September 14: We’re still playing the seesaw game in the markets—up, down, up, down, etc. I don’t see any need for excess worry; just a little caution that we buy the right stocks. I’m still very long-term bullish, and why not?
The economy continues to strengthen; 79% of the companies in the S&P 500 Index reported positive earnings surprises for the second quarter, and the third quarter looks even better; home building continues to be strong, although low inventory levels continue to pressure resales. Home prices appear to be stabilizing, and employment remains strong.
The soothsayers seem to think that the Fed will keep rates steady at its next meeting, and the probability of a recession has fallen to 16%. What’s not to like?
Ask the Experts
Prime Question for Tyler: Hello Tyler. Why is Enovix (ENVX) tanking? Looks very weak. Is the thesis no longer valid?
Tyler: Earlier this morning I sent out an alert describing the situation yesterday. There’s no doubt ENVX is a volatile stock. But, in my view, the company is making the right moves to become much, much more valuable over time. It’s in that uncertain period of having to bring the exciting technology it has developed to market, at scale, and land really, really important customers. The carrot here is that a single press release saying something like “Apple, Samsung, LG, or fill in the blank has decided to use Enovix batteries in their mass-produced XYZ model smartphones starting in 2025" will likely move the stock enough that the seemingly big moves we experience these days will be more than compensated for. It’s like a biotech or oil exploration stock in that respect. The challenge is that holding it through those periods can be very trying. And there’s no guarantee that it will succeed. But that potential is why I continue to hold and like it, even if some of these days it’s not a lot of fun.
I hope that helps.