Latest Summary
CABOT EVENTS
Cabot Weekly Review (Video)
In this week’s video, Mike Cintolo discusses the late-week rotation seen out of the mega-cap growth titles, and short-term he wouldn’t be surprised to see more of it, with the market possibly starting its first “real” pullback of the advance. Thus, he’s not pushing the envelope at this point--but he also remains very bullish intermediate- and longer-term, so he’s holding his strong, profitable names and expecting higher prices after any coming wobbles the market throws at us.
Stocks Discussed: FTI, NE, RIG, MTZ, GTLS, MGM, THOMLM, VMC, PCOR, ONON, ITCI, DT, IOT, DOCN, PANW, NXT
Cabot Street Check (Podcast)
This week on Street Check, Chris and Brad welcome on Jacob Mintz (Cabot Options Trader, Cabot Profit Booster) and Mike Cintolo (Cabot Growth Investor, Top Ten Trader) to discuss growth stocks, artificial intelligence, and the state of the new bull market. They also break down signs of exuberance in individual sectors, navigating this quarter’s earnings and whether signs are pointing to higher prices ahead. To register for Mike’s upcoming webinar “3 Emerging Leaders of the New Bull Market, click here.
Cabot Webinar
3 Emerging Leaders of the New Bull Market
FREE WEBINAR: July 25, 2023 Sign up now.
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 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 July 13: There’s not much to say: The market and leading stocks continue to act in a textbook fashion, with not just more up than down but tame pullbacks that respect logical support and big volume on the advances--all signs that big investors are accumulating stock. We still want to be selective on new buys, and we’re sure earnings season will throw everyone a few curveballs, but we continue to put money to work--today we’re adding a few more shares to one of our positions and adding a full-sized stake in a new name.
Elsewhere tonight, we write about another bullish long-term market indicator, what the recent action in interest rates mean, and go over many leading and potential leading stocks that are enjoying the market’s newfound uptrend.
Bi-weekly Update July 7: WHAT TO DO NOW: Remain optimistic but keep an open mind. At this point, our market timing indicators remain bullish and we’re seeing little abnormal action among leading stocks—that said, the Fed/interest rate situation refuses to go away, and near term, some more shaking of the tree is certainly possible to raise the fear level. Tonight, we have no new buys or sells, but we’ll place Inspire Medical (INSP) and Monday.com (MNDY) on Hold and see how things progress. Our cash position will remain in the 30% range.
Cabot Top Ten Trader
Weekly Issue July 17: There’s no doubt the market continues to keep investors on their toes, and some further discomfort in the short term is certainly possible after the recent run. It’s also a decent bet that earnings season, which is now ramping up, will present a few potholes. But those are the trees—if you look at the forest, all of the bullish factors are still in place, whether it’s the uptrend in the major indexes, the solid action among most leading stocks, the sluggishness of defensive stocks and, more recently, the strength of the broad market (including five straight days of 2-to-1 NYSE breadth). We remain bullish and expect higher prices—we’ll leave our Market Monitor at a level 8.
This week’s list has a very broad mix of names, including everything from giant blue chips to more speculative small caps. Our Top Pick is in the right area (big-cap growth) and is trying to emerge from a tight consolidation. Earnings are out in a couple of weeks, so start small and build if the breakout works.
Movers & Shakers July 21: This week has brought a wave of rotation—after strong initial gains, the Nasdaq has reversed to minor losses on the week (coming into Friday), with the S&P 500 up less than 1%. Meanwhile, broader indexes are up in the 1.5% range on the week and, for individual stocks, we saw some of the hot mega-cap growth names get smacked around some, while the rest of the market held firm or pushed higher.
Cabot Options Trader and Cabot Options Trader Pro
Cabot Options Trader Pro Weekly Update
Cabot Options Trader Weekly Update
Cabot Value Investor
Monthly Issue July 5: Thank you for subscribing to the Cabot Value Investor. We hope you enjoy reading the July 2023 issue.
Almost like an annual rite of passage, major banks reported their Federal Reserve stress test results last week. All major banks passed, in that their capital levels were in excess of the minimum requirements under the Doomsday Scenario conditions outlined in the test assumptions. We’re not the biggest fans of these tests, for reasons outlined in our monthly letter.
Citigroup remains a riskier bank relative to other majors, but also has a higher return-potential share valuation, plus a 4.5% dividend yield to reward patient investors.
Weekly Update July 18: As value/contrarian investors, we have little interest in accepting the market’s wisdom. Some might say that we have little ability to accept the market’s wisdom, which is probably what distinguishes us from other investors (and academics) that accept such guidance.
We’ll quote Warren Buffett, founder and head of Berkshire Hathaway, who wrote in his 1987 letter to shareholders, “Mr. Market is there to serve you, not to guide you.” By this, he means that the stock market’s inability to make accurate predictions should help investors make money. And that these predictions shouldn’t provide guidance on how to invest, given that they are so often wrong.
Cabot Stock of the Week
Weekly Issue July 19: The new bull market went into hyperdrive last week, fueled by lower-than-expected inflation and an encouraging start to earnings season. With another interest rate hike and weak Q2 earnings expectations looming in the back half of this month and beyond, there could be some speed bumps ahead. But for now, the good times are rolling, and that means taking more big swings. This week, we do so in a small-cap, Canada-based rare earths producer that is a brand new recommendation from Cabot Explorer Chief Analyst Carl Delfeld.
Cabot Explorer
Bi-weekly Issue July 13: Inflation cooled last month to its slowest pace in more than two years, buoying markets even though the Fed may raise interest rates later this month.
While the Nasdaq composite is a basket of more than 3,000 stocks listed on the Nasdaq exchange, the Nasdaq 100 is the basis for the QQQ – the second-most heavily traded ETF in America, after the SPY ETF which tracks the S&P 500.
You should be aware that Nasdaq announced late last week that it plans to carry out a “special rebalance” on July 24 to redistribute weights after the sharp run-up in the QQQs led by seven mega-cap stocks.
Bi-weekly Update July 20: One reason I’m positive on the economy and stocks is that while the U.S. economy has its challenges, everything is relative, and America remains the largest economy and stock market in the world.
For example, the American economy has grown much faster than the 17 countries of the Eurozone (EU) over the past 15 years. In part, this is due to the persistent U.S. consumer which last year spent $19 trillion while EU consumption was $12 trillion.
Cabot Small-Cap Confidential
Monthly Issue July 6: This month we’re digging into a recovering healthcare specialist that is both a self-help and an AI automation story.
After a few missteps in 2022, a significant acquisition and a new management team have the stock on the right track again.
Moreover, high healthcare utilization and a rapid acceleration in the company’s automation capabilities suggest strong revenue and profit margin growth throughout 2023 and into 2024. Enjoy!
Weekly Update July 20: Aside from AI, a few other big-picture themes came into sharper focus for me this week.
All are positive for small caps.
First, economists and analysts are reducing their recession risk outlooks as the economy continues to hold up reasonably well. That’s good for small caps as they are more economically sensitive than mid and large caps.
Cabot Dividend Investor
Monthly Issue July 12: Artificial intelligence (AI) is a game-changer that will usher in the next wave of technological advancement that will have a dramatic positive impact on certain stock prices for years to come.
The phenomenon got a huge shot of adrenaline when Nvidia (NVDA) blew away earnings estimates, citing greater demand for AI technology far sooner than expected. It’s like the opening gun has sounded for the new craze.
The efficiency and cost-saving potential for businesses are massive. Companies can’t afford to fall behind. For many businesses, rapid AI adaptation is a matter of survival. There is a stampede to apply cutting-edge AI technology to businesses before the competition. Companies that provide AI-enabling products and services will benefit mightily for years to come.
In this issue, I highlight the great income stock of a company that will surely benefit from the race to adopt AI. The price is still very reasonable, and it pays a high dividend yield. There is a window of opportunity after the first wave of price surges levels off before the longer-term price appreciation sets in.
Weekly Update July 19: The good year is continuing. The market rally is broadening. And pundits increasingly have positive things to say about the second half of the year.
Artificial intelligence isn’t the only mania capturing the imagination of investors. The soft-landing belief is also widespread. Investors see inflation falling fast, the Fed nearly done hiking rates, and no recession. It looks like we can get through this rate hiking cycle, the steepest in decades, without much economic pain.
Cabot Early Opportunities
Monthly Issue July 19: In the July Issue of Cabot Early Opportunities, we take a quick look at earnings expectations for each of our positions. And we dig into five opportunities spanning AI, HVAC services, retail, real estate and quantum computing.
This may just be our most diverse group of stocks ever.
Enjoy!
Cabot Profit Booster
Weekly Issue July 18: The market surged higher yet again last week, and traders are beginning to wonder if a run at new highs is in the cards in 2023. While there is a way to go until we reach those peaks, last week’s gains of 2.4% for the S&P 500, 2.3% for the Dow, and 3.32% for the Nasdaq gives the bulls hope. Of note, this week is the expiration of our July covered call trades. I will update you where we stand with these positions Thursday afternoon or Friday morning.
Cabot Micro-Cap Insider
Monthly Issue July 12: Today, I’m recommending an aerospace company that is poised to double revenue over the next 3 years.
Key points:
- Earnings to triple over the next three years.
- Cheap valuation. Good dividend yield and share buyback program.
- High insider ownership.
All the details are inside this month’s Issue. Enjoy!
Weekly Update July 19: This week was a relatively quiet one in terms of our micro-caps, but the market had a good week.
The reason?
The June CPI and PPI readings came in significantly below expectations.
Cabot Income Advisor
Monthly Issue June 27: Few stocks have participated in the YTD rally. In fact, just ten large-cap technology stocks accounted for just about all the market gains this year. The market has so far shunned defense and favored growth. But that situation is unlikely to persist.
There is still lots of risk. Inflation could be stickier, and the Fed could be more hawkish than currently anticipated. Even if a recession never happens, it’s reasonable to expect that the economy will slow in the second half of the year. And overall market earnings have already contracted for the last two quarters.
The relative performance of defensive stocks historically thrives in a slowing economy. If the rally broadens in such an environment, it will need participation from the defensive sectors. If the market pulls back, defense should be the best place to be.
I highlight a new buy-recommended stock in the issue. It is a legendary income stock that pays dividends on a monthly basis. It’s also near the lowest price level of the past two years.
Weekly Update July 18: These are confusing times in the market. It looks like a soft landing for the economy is more likely. But that’s no guarantee. We could still have a recession next year. The bull market could rage on or pull back. Instead of betting on the economic cycle, it’s a time to focus on individual stocks.
Artificial Intelligence (AI) exploded onto the market scene in a huge way in May when semiconductor company Nvidia (NVDA) blew away earnings expectations citing much higher demand for AI chips than anyone expected. It added another leg to the bull market as AI-related stocks soared.
Cabot Turnaround Letter
Monthly Issue May 31: It’s no secret that a fresh fascination with artificial intelligence has ignited shares of companies like Alphabet (GOOG), Microsoft (MSFT) and Nvidia (NVDA), while “safety stocks” like Apple (AAPL) have rebounded on recession fears. Shares of more prosaic technology companies have lagged, but a few offer highly relevant albeit slow-growth products and services, making their businesses highly resilient. They are often well-supported by durable balance sheets and capable management. We highlight four such companies.
As a follow-up to our April edition that featured banks, we have found additional interesting financial stocks by looking at the 13F filings of like-minded value investors. We discuss three that saw sizeable new purchases or meaningful additions to already-sizeable holdings by well-respected value managers.
Our feature recommendation this month is Tyson Foods (TSN), a major producer of chicken, beef and pork products. Its earnings and shares have tumbled due to an unusual simultaneous downturn in all three protein groups. The hardest time to buy a commodity cyclical is at the bottom of the cycle, as there appears to be no end in sight to the malaise. We think this is the time to buy Tyson.
Weekly Update July 21: We comment on earnings from Capital One (COF), First Horizon (FHN) and Nokia (NOK). Next week, the deluge starts, with ten companies reporting.
Cabot Cannabis Investor
Monthly Issue June 28: There is a potentially nice trading opportunity setting up in cannabis near-term.
When Washington, D.C. lawmakers return from their July 4th break on July 10, they are likely to get down to serious business on the SAFE Banking Act.
This proposed law would boost investor interest in the space because it would allow banks to work with cannabis companies. This would help cannabis companies in several ways.
Monthly Update June 14: Cannabis stocks are about to make a big move over the next several weeks. This is a good trading opportunity.
What is going to send the group higher?
The Senate should take significant steps to advance key bank sector reform that would help cannabis companies, say lobbyists.
Cabot Money Club
Monthly Magazine July: With airline and cruise bookings eclipsing pre-pandemic levels, it appears that vacationers’ pent-up travel demands are finally being unleashed in this “revenge travel” summer. Here’s how you can save money as you tick a few items off your own travel bucket list and profit from the most in-demand travel companies.
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 Jacob: I’m have been option subscriber for a few years now; firstly, thank you for your many profitable trades. I have a question regarding a number of in-the-money calls I own that are expiring this week with 3 or 4 different stocks, I was wondering what your strategy is during the week of expiration of in-the-money calls. Do you sell early in the week or do you wait to the last day or somewhere in between? I would like to get your opinion on how you normally handle this matter; looking forward to your input.
Jacob: To be honest, there is not a surefire day of the week that is more beneficial to sell versus another. Instead, what I would recommend is to set stop levels on those trades. If an option is worth $7, for example, you say to yourself, if it drops to $6.50 I’m selling. That way you are using price levels, and not random days, as your trigger to sell.
Glad to hear your trading is going well!