Cabot Weekly Review (Video)
In this week’s video, Mike Cintolo is still overall bullish and thinks this could be a true bull market--but at the same time, he’s telling subscribers to keep their feet on the ground, as many stocks are extended, interest rates are testing key levels and earnings season is ramping up. Of course, Mike is still OK buying (he did a little bit this week) and sees many tight patterns that he reviews, but he’s being discerning and is OK holding a bit of cash as he waits for better entry points.
Stocks Discussed: KKR, TSM, PINS, EXPE, GTLB, ASO, AXP, FRPT, TDW, WFRD, ITCI, XBI
Cabot Street Check (Podcast)
This week on Street Check, Chris and Brad discuss the most recent GDP and inflation figures and the market’s expectations for the Fed’s rate policy glide path. Then, they break down the current state of the cannabis market following the release of Health and Human Services’ full recommendations, the performance of Bitcoin and the newly issued Bitcoin ETFs, and they close the conversation with a deep dive into electric vehicles, whether they’re approaching peak adoption, and what could change the calculus.
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 Pro 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 January 25: Big picture, it’s hard to find much wrong with the market, as the primary evidence (trends of the indexes, action of leading stocks) remains clearly positive. Thus, we’re generally holding our winners and think there’s a good chance last November marked a major turning point after nearly three years of growth stock sluggishness.
That said, near-term, we’re keeping our feet on the ground and going slow on the buy side, as there’s no question stocks have had a good run and many leaders are extended. Recently, we’ve trimmed a couple of positions but, tonight, we’re averaging up on one name to fill out our stake.
Bi-weekly Update January 18: WHAT TO DO NOW: Remain bullish, but keep your feet on the ground. January has lived up to its billing, with plenty of volatility—right now, we’re seeing lots of weakness in the broad market and even among some glamour funds, while our primary indicators and leading growth stocks are still acting well. At this point we’re taking things on a stock-by-stock basis, trimming here and there but holding most or all of our winners. Today, we’re going to book partial profits in Nutanix (NTNX), selling one-third and holding the rest, which will leave us with around 29% in cash.
Cabot Top Ten Trader
Weekly Issue January 22: The vast majority of our work is based on the trends of the major indexes and the action of leading stocks, and on those two fronts, things look very good; we’ve even seen the broad market perk up after a tough stretch, too, which helps the cause. About the only thing to worry about here is that ... there’s not much to worry about, and that many leading stocks are showing some near-term exhaustion patterns. Big picture, we’re moving our Market Monitor back to a level 8, but you should still keep your feet on the ground, looking for decent entry points in strong stocks.
This week’s list has a lot of stocks that not only have excellent overall charts but have either consolidated calmly for the past few weeks—or have shown outstanding buying volume in recent days. Our Top Pick is one of the latter, gapping up to new highs last week on earnings.
Movers & Shakers January 26: It’s been another up week for the market, though as of this morning, the gains have been relatively muted, generally up 1% or less.
Even so, that keeps all of the primary evidence intact: The intermediate-term (and longer-term) trends of the indexes, along with most stocks and sectors, are pointed up, and the action of most leading stocks (especially on the growth side of things) has been excellent, with many names kiting higher. Thus, we remain bullish and are holding most of our strong, profitable stocks.
Cabot Options Trader and Cabot Options Trader Pro
Cabot Value Investor
Monthly Issue January 2: Thank you for subscribing to the Cabot Value Investor. We hope you enjoy reading the January 2024 issue.
We review the stock market’s remarkable performance in 2023 and highlight our recommendations that produced notable gains along with our clunkers. Our view on the 2024 market is that stocks will have an average year, with the Magnificent Seven producing flat/modest returns at best. Readers should keep in mind quotes from Yogi Berra and Warren Buffett when considering market forecasts. Onward to 2024.
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 January 23: According to credit rating agency Moody’s, debt obligations of the United States federal government are “judged to be of the highest quality, subject to the lowest level of credit risk” and thus are worthy of a “AAA” credit rating.
The other two major credit rating agencies, Standard & Poor’s and Fitch, disagree. These firms place an “AA+” rating on federal debt. For its part, Moody’s is not fully convinced of its AAA rating, as it recently added a “negative” label, implying that the rating is no longer “stable.”
Cabot Stock of the Week
Weekly Issue January 22: After a sluggish start to the year, stocks have broken to new highs, with not even diminished expectations of Fed rate cuts able to slow them. Is it the next leg up in this still-nascent bull market? Perhaps. But in case there’s some earnings season turbulence ahead, today we add a low-risk value stock that’s been a favorite of Cabot Value Investor Chief Analyst Bruce Kaser for quite some time.
Bi-weekly Issue January 4: Although markets have stumbled a bit out of the gate, investors looking to see the S&P 500 build on the 11% advance in the final quarter of 2023 may not have long to wait. U.S. companies are due to start reporting results next week, with the big banks leading the way.
An election year like 2024 with a sitting president running is historically a bullish scenario for U.S. stocks. Since 1949, the S&P 500 is averaging a gain of nearly 13% in those election years, per the Stock Trader’s Almanac.
So let’s kick off the year by adding another aggressive growth stock.
Bi-weekly Update January 25: In my view, the best strategy for overseas markets is to play the trends with a contrarian value approach. For example, the Hang Seng China Enterprises index, a closely followed gauge of large Chinese listings in Hong Kong, has fallen about 11% so far this month after losing 14% last year. Foreign investors have sold about 90% of the $33 billion worth of Chinese stocks that they had purchased earlier in 2023 and have continued selling this year.
Cabot Small-Cap Confidential
Monthly Issue January 4: This month we’re jumping into a small software company that provides solutions for a specific small- and mid-sized business (SMB) market.
While the market for SMB software has been tough for the last two years, this company’s revenue growth has accelerated and customers that bailed in 2022 are coming back. In short, best-of-breed software isn’t dead! And this player is about to become profitable too. Enjoy!
Weekly Update January 25: It’s been another strong week for stocks despite rising concerns about overseas conflicts disrupting the flow of oil and that the market is overshooting just how fast the Fed will cut rates this year.
It wasn’t long ago that investors were factoring in an 80% chance of a March Federal Funds Rate (FFR) cut. Today that probability is down to just 40%.
That said, what’s most important is the expected trend in the FFR. While the timing of the first rate cut and the pace of subsequent cuts remains open to debate, there’s no arguing that the market still sees rates significantly lower at the end of 2024.
Cabot Dividend Investor
Monthly Issue January 10: Things look good for 2024. Inflation is down, interest rates have likely peaked, and there is no sign of recession. But you never know. It’s a tough game to predict the future of the market. However, certain trends are likely to persist.
It’s a good bet that interest rates have peaked. Sure, they could edge higher from here. But they are unlikely to soar to new highs past 5% for the 10-year Treasury. The situation would have to completely reverse for that to happen. Meanwhile, stocks that have been dragged lower by rising interest rates have come alive again.
These stocks, which have strong track records of market outperformance, are at historically cheap valuations, have established upward momentum, and are positioned ahead of a likely slowing economy.
Also, 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. And the trend will continue regardless of what the Fed does, or the state of the economy, or who is elected president.
In this issue, I highlight a fantastic dividend stock whose long record of strong performance has been interrupted these last two years. 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 January 24: After the stellar finish to last year, the market rally is continuing, sort of.
The S&P 500 is up for the year. But it’s only up 1.69% and participation is far less broad than it was. Technology stocks are driving the market higher but most of the other sectors are down. The AI euphoria is continuing, but the interest rate rally is gone.
Cabot Early Opportunities
Monthly Issue January 17: In the January issue of Cabot Early Opportunities, we take a look at updates within our portfolio then dive into five stocks from markets ranging from defense to cybersecurity to the blooming IT infrastructure market.
As always, there’s something for everybody!
Cabot Profit Booster
Weekly Issue January 23: Despite some weakness early in the week, the indexes bounced back in a big way, closing at new all-time highs. For the week the S&P 500 gained 1%, the Dow added 1.07%, and the Nasdaq soared higher by 2%.
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 January 16: The market surge has leveled off. The expectation debate about peak interest rates, inflation, and recession continues. And now, it’s another earnings season.
The S&P 500 pulled back during the first trading week of the year after a two-month, 15% spike. In the second week, the index gained back everything it lost the first week. He we are again on the cusp of the all-time high set about two years ago.
Cabot Turnaround Letter
Monthly Issue December 27: In this issue, we discuss our Top Five Stocks for 2024. We also dissect and review what happened in the capital markets in 2023 and offer our outlook for the coming year.
This month’s Buy recommendation, Mohawk Industries (MHK), is a major global flooring manufacturer whose shares are deeply out of favor. We discuss three key questions when considering an investment in a cyclical company and describe how Mohawk passes all three with flying colors.
Weekly Update January 26: This week, we review earnings reports from Capital One Financial (COF), General Electric (GE), Nokia (NOK), Western Digital (WDC) and Xerox Holdings (XRX).
Next week, we anticipate earnings from Polaris (PII) and Janus Henderson Group (JHG). Please know that some reporting dates are estimated based on the companies’ reporting history, others are confirmed dates. As always, it’s likely that some companies will report on a day different from what we anticipate.
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 November 13: There are three big developments in the cannabis space to report.
* A buyout of one of our portfolio names, which nets us 105% gains in four months.
* A confirmation that the Biden administration is serious about some major cannabis reform, which would be a huge catalyst for the group.
* A buyable selloff. Cannabis stocks sold off sharply Tuesday probably based on false fears that rescheduling won’t happen. I think that’s wrong, and the weakness is a buy.
Cabot Money Club
Monthly Magazine February: From stamps and coins to art, cards, cars and even wine, collectibles have been rapidly growing their share of the global financial markets. And while some portfolio managers may position them as “alternative assets,” are collectibles even really investments? More importantly, are they worth your hard-earned money? This month, let’s look at the trends of the booming (and busting) collectibles market.
Stock of the Month January 11: Welcome to our TOP PICKS issue! For this issue, I asked the Cabot analysts to give me a couple of their top picks for 2024. And I hope you will be pleased with the diversity—market-cap and sector-wise—that the analysts have offered.
But first, let’s talk about the market.
Ask the Experts
Prime Question for Tyler: Tyler, I am curious about your thoughts regarding Constructions Partners (ROAD), which you moved from the watch list to the buy list in December when the price was 44.40 (today it is running about 42.42).ROAD is definitely the poorest performer in my Early Opportunities portfolio of about nine stocks. Eight of the nine are showing profits anywhere from 3% to 25%. The only stock in the red is ROAD but it’s only down 0.12%.Is ROAD worth holding on to at this point given the market’s moving up and Road sitting pretty much still?
Tyler: At the moment, yes I think it’s worth holding. I’ve been watching the same performance gap as you, which broadly speaking has been opened up by the tech, chips, biotech, and software-type names. Obviously ROAD is somewhat different, a bit more “old school” small-cap type of name. It offers diversification and, should the current leaders pull back, it could be nice to have some different exposure. Just looking at ROAD’s chart in a vacuum it doesn’t look bad at all. A normal-ish dip a few weeks ago and it’s back on trend.
So while my thinking could change, for now I still like it. That said, I wouldn’t argue with anybody that feels like they have the type of diversification ROAD offers elsewhere in their holdings and would prefer to have their CEO portfolio hyper-focused on the more exciting, faster-moving names.