Latest Summary
CABOT EVENTS
Cabot Weekly Review (Video)
In this week’s video, Mike Cintolo is pretty straightforward: He likes what he sees, with the market’s early leadership remaining strong, more leaders emerging in the past couple of weeks and, more recently, the market as a whole broadening out. He’s not cannonballing into the pool, and in fact some near-term shakeout or further rotation wouldn’t surprise him; flexibility remains key. But he’s listening to the evidence and gradually adding exposure.
Stock Discussed: FIVE LVS BA MTZ KBR DOCN PCOR ONON ADBE CFLT NVDA AMD CELH NXT ANF
Cabot Street Check (Podcast)
This week on Street Check, Chris and Brad talk the new bull market, recent enforcement actions against Coinbase and Binance and debate whether the firing of GameStop’s CEO is the final nail in the coffin of the “meme stocks.” Then, they welcome on Tom Hutchinson, Chief Analyst of Cabot Dividend Investor and Cabot Income Advisor, to discuss the value of dividend stocks in a narrow bull market, how they’ll benefit from rotation, and strategies for allocating into fixed income while rates are at 15-year highs.
Cabot Webinar
3 Little-Known Stocks to Take Advantage of the AI Boom
FREE WEBINAR: July 13, 2023 Sign up now.
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.
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 June 1: The market still has many of the same issues that have been hanging around for weeks, including an extreme narrowness, with the vast majority of the market struggling while mega-cap indexes do pretty well. Even so, we do think the evidence has taken a step in the right direction -- the AI boomlet is a positive sign, and many non-AI leaders acted well in May and have rested normally since. We’re not flooring the accelerator, but given our monstrous cash position, we’re dropping a couple more lines in the water tonight, adding two half-sized stakes in old favorites. Elsewhere in tonight’s issue, we give our thoughts (and some ideas) within the AI advance, write about a long-term growth area that could be re-emerging and, as always, go over our stocks, an expanded watch list and some other new ideas to chew on.
Bi-weekly Update June 8: WHAT TO DO NOW: Remain optimistic. The market has steadily shown improvement during the past two or three weeks, with even yesterday’s rotation helping the broad market—and today’s snapback in leading stocks is good to see. Our Cabot Tides have effectively turned positive, and our Two-Second Indicator is close, too. Having just put a slug of money to work (including three new half-sized buys on Tuesday’s special bulletin), we’ll sit tight tonight, but if the good vibes continue, we’ll probably add more exposure next week. We have no changes tonight. Our cash position stands around 50%.
Cabot Top Ten Trader
Weekly Issue June 5: The market finished solidly in the black thanks to a strong end to last week; interestingly, while the intermediate-term trend is still neutral overall, a couple of broad up days from here could kick it into the green. Even better is the action of leading stocks, with more names emerging and, importantly, more names holding their recent upmoves. To be clear, there’s still a lot of proving to do, but overall, we think the evidence has taken another step in the right direction—we’ll move up our Market Monitor to a level 6 and see what comes from here.
This week’s list has a ton of strong names and other good setups that could lift should the market continue to improve. Our Top Pick looks like the leader of the improving cybersecurity group, having lifted out of a long consolidation. Dips should be buyable.
Movers & Shakers June 9: It’s been an interesting and, frankly, encouraging week on two fronts. The first is that the market has broadened out a bit—coming into Friday, the S&P and Nasdaq are flat-ish, but the broader indexes have pushed nicely higher, with small and mid-caps up 2% to 2.5% and equal-weighted big-cap indexes outperforming their weighted cousins.
Cabot Options Trader and Cabot Options Trader Pro
Cabot Options Trader Pro Weekly Update
Cabot Options Trader Weekly Update
Cabot Value Investor
Monthly Issue June 6: Thank you for subscribing to the Cabot Value Investor. We hope you enjoy reading the June 2023 issue.
The U.S. presidential election, “only” seventeen months away, is shaping up to follow a predictable script. Investors should keep their personal views and their investing process separate.
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 May 30: Longer-term subscribers are no doubt familiar with our immense patience with beleaguered discount retailer Big Lots (BIG). Its shares initially sagged due to bloated inventory, similar to other more highly regarded retailers like Target and Walmart, leading to our initial recommendation. We had expected that its earnings would be weakened as it offloaded its excess goods at sizeable discounts, but also that it would ultimately work its way out of its difficult but by no means impossible situation. At the time, Big Lots had a cash-heavy, nearly debt-free balance sheet, was generating positive free cash flow and traded at a depressed 3x EV/EBITDA multiple. What could go wrong?
Cabot Stock of the Week
Weekly Issue June 5: Stocks are the highest they’ve been since last summer, and with the debt ceiling in the rear-view mirror and the Fed sounding less hawkish these days, it’s possible they could keep rising as we enter Summer 2023. One sector that’s been unstoppable of late is artificial intelligence, so today we add some more AI exposure, which has already served us well with the performance of Microsoft (MSFT). The new addition is a lesser-known name but is equally red-hot. Mike Cintolo recently recommended it to his Cabot Top Ten Trader audience.
Cabot Explorer
Bi-weekly Issue June 1: It was another good week for Explorer recommendations led by ChargePoint (CHPT), up 17%, and Butterfly (BFLY), up another 8%.
Some of you will remember when George Gilder’s Wealth and Poverty hit the market in 1981 like a thunderclap. It was intellectual capital and political firepower for both the Reagan Revolution and a big bull market.
Mr. Gilder has been active ever since and has a new book out that I highly recommend, Life After Capitalism.
Bi-weekly Update June 8: Explorer stocks gained or held their ground this week as the so-called “Mega-Cap 8” stocks dominate a narrow market for now.
China has become the 20% market – 20% of world GDP and 20% of multinational total revenue. This explains the steady stream of CEOs to China while Washington and Beijing top officials traded insults at a Singapore defense forum.
Cabot Small-Cap Confidential
Monthly Issue June 1: This month I’m featuring an innovative software company with an AI angle.
While AI is all the rage, bordering on hype, this company’s learning platform has been harnessing the technology for a few years. The latest iterations of AI are likely to help make its product better and open new monetization opportunities.
It’s a neat story and the company has terrific products that are loved by users. Because of the recent run in tech stocks, we’ll start with a half-sized position. Enjoy!
Weekly Update June 8: While everyone has been watching the highlight reel of top performers with leverage to the AI theme lately, the real story this week is that more areas of the market are shaping up.
Yesterday, while the Nasdaq sold off, we saw the S&P 600 Small Cap Financial ETF (PSCF) pop 3%. That came on the heels of a 4% rally Tuesday.
Yes, yes, I know. Nobody really cares about this ETF. But small banks make up almost a third of total U.S. deposits. They matter, bigly.
Cabot Dividend Investor
Monthly Issue May 10: Energy stocks have been by far the best-performing market sector over the last couple of years. They went from worst to first in dramatic fashion. And the good times may be just beginning. The industry has had very low capital spending and expansion in recent years. Crude oil inventories have fallen below the five-year average and are likely headed far lower. OPEC has pledged dramatic production cuts to push prices higher. There is also a high degree of geopolitical risk. In fact, Goldman Sachs analysts are forecasting oil prices to get back to $95 per barrel before the end of this year.
Weekly Update June 7: This is, dare I say, a good market.
The S&P 500 is up 11.31% YTD, and the year isn’t even half over. Stocks have rallied more than 20% from the October low. The index is within bad breath distance of last summer’s high. The S&P is only 10% below the all-time high.
Why is the market so strong? There are several reasons. Inflation is coming down. The Fed is almost done hiking rates. And there is no recession. Throw in a booming artificial intelligence business and you have a rising market.
Cabot Early Opportunities
Monthly Issue In the May Issue of Cabot Early Opportunities, I profile a potential turnaround story in a well-known stock that is returning to its roots. We also take a closer look at one of the highest-end luxury brands in the world, an unknown green tech company, an emerging MedTech star and a construction materials specialist that’s spreading across the U.S. Enjoy!
Cabot Profit Booster
Weekly Issue May 31: Despite a couple concerning days to start the week, the bulls took control on Thursday and Friday as tech titan Nvidia’s (NVDA) earnings blowout triggered a “risk-on” bull run. By week’s end the indexes were mostly mixed as the S&P 500 gained 0.32%, the Dow lost 1%, and the Nasdaq rallied 2.51%. Today we are adding a retailer that reported strong earnings last week.
Cabot Micro-Cap Insider
Monthly Issue May 10: Today, I’m recommending a “buy when there’s blood in the streets” type of stock:
Key points:
- The company owns valuable real estate in Manhattan and Brooklyn.
- The underlying asset value implies 7x upside to the stock’s current price.
- Insiders have been buying aggressively over the past year.
All the details are inside this month’s Issue. Enjoy!
Weekly Update June 7: This week, I wanted to share a few charts before getting into my weekly update.
The first chart shows the amazing valuation discrepancy between small stocks and large-cap stocks.
Mega-cap stocks are trading at a PE ratio of 29.4x while small-cap stocks are trading at a 12.8x.
Cabot Income Advisor
Monthly Issue May 23: This is a tough one. The overwhelming majority of the time the market goes up in the year following a down year. The S&P 500 is up over 9% YTD. That’s a better than 20% annual pace.
Of course, much of that YTD return has to do with the strong performance of the large technology stocks that comprise more than 25% of the index. Nevertheless, stocks have climbed a wall of worry and shown impressive resilience so far.
Weekly Update June 6: The economy is showing some mixed signals. But it certainly does not appear to be near a recession now. That could change. But it keeps not coming.
At the same time, the Fed is near the end of the rate hiking cycle. Sure, there’s speculation about another rate hike in the June meeting or the next one. But it is still close to the end of the hiking cycle. Inflation appears to be moderating (for now). Unless there is a big surprise with that number, the market can soon stop worrying about the Fed.
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 June 2: This week, we comment on earnings from Duluth Holdings (DLTH) and Macy’s (M).
We also include the Catalyst Report and a summary of the June edition of the Cabot Turnaround Letter, which was published on Wednesday. We encourage you to look through the Catalyst Report. This report is a listing of all of the companies that have reported a catalyst in the past month. These catalysts include new CEOs, activist activity, spin-offs and other possible game-changers. We source many of our feature recommendations from this list. You will find it nowhere else on Wall Street.
Cabot Cannabis Investor
Monthly Issue May 31: Now that Florida Gov. Ron DeSantis (R) is officially in the race for the Republican presidential nomination, it’s worth knowing more about his views on cannabis policy.
After all, DeSantis will now play an even bigger part in the election debates, even if polls say DeSantis has a slim chance against frontrunner Donald Trump. His voice matters – since cannabis is such a politically driven sector.
Monthly Update May 10: Cannabis stocks rose sharply in early May on news that Congress is getting serious again about allowing banks to serve cannabis companies. The Senate banking committee will hold hearings on the favorable bank reform May 11.
The reform bill, called the Secure and Fair Enforcement (SAFE) Banking Act, was recently refiled by a bipartisan group of lawmakers in both branches of Congress. The co-sponsors were: Sens. Jeff Merkley (D-OR) and Steve Daines (R-MT), and Reps. David Joyce (R-OH) and Earl Blumenauer (D-OR).
Cabot Money Club
Monthly Magazine June: Teaching your children basic financial literacy pays serious dividends throughout their lives. It helps them avoid debt, practice responsible budgeting and can even help them pay for college and retirement. In this month’s issue, we’ll explore the best ages to teach your children important financial skills, the best apps and tools for learning about money, and even the best games to make financial learning less of a chore.
Stock of the Month June 8: The markets have been fairly volatile this past month. The Dow Jones Industrial Average sits at just about the same place we were in last month’s issue. But the S&P 500 has been on a tear, up about 140 points, and the Nasdaq has risen some 50 points due to the momentum in the tech sector, where the average stock is up more than 33% year to date.
Communication Services and Consumer Discretionary stocks have moved along nicely in the past month, on average up 32% and 22%, respectively.
Growth stocks are still outperforming value in all capitalization categories.
Ask the Experts
Prime Question for Mike: Hi Mike. Over the last several years it seems like the overall market (and especially growth stocks) have become much more volatile than in the past. It seems like some stocks can swing 15-20% in a day and certainly over a week. My question is, has this changed the “old” general stop of 15 - 20%?
Mike: Thanks for writing. So, I do agree we’ve had a period of elevated volatility -- really since the pandemic. That said, I think these things go in waves. The next few years will likely be less volatile.
As for the loss limit, no, I wouldn’t change that, but you’ve seen us use half-sized positions or what-not to get started – I wouldn’t start giving stocks 30%, as that is just too much room, but I do think using smaller positions makes sense so that you can withstand the normal-but-severe dips that occasionally occur.
Of course, I’m always open to being wrong and changing my mind, but those are my thoughts here and I do think that volatility is likely to fade back some in the years ahead.