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CABOT EVENTS
Cabot Weekly Review (Video)
In this week’s video, small-cap expert Tyler Laundon reviews all the drama and market-moving news from the last week, including Trump’s call with Xi Jinping and his dust up with Tesla’s Elon Musk. Tyler also reviews the latest job market data and ties that in to his conversation of next week’s important inflation readings and what investors should expect from the Fed’s next meeting on June 18. Tyler wraps up the video with a look at three small-cap stocks that pique his interest right now, including one name that he expects few investors have ever heard of.
Stocks Discussed: FIP, LMND, FVRR
Cabot Street Check (Podcast)
This week on Street Check, with Brad still on his European vacation, Chris welcomed on Cabot Explorer Chief Analyst Carl Delfeld to talk about his ‘Great Rebalancing’ thesis and why it - with a boost from tariff fears - is leading money out of overbought U.S. markets and into under-loved overseas markets. Chris also examines the new jobs report, a potential technical breakthrough for the U.S. market, and a developing “yellow” flag for stocks in the gold market. For more information about the offer mentioned on this episode, visit cabotwealth.com/street.
Cabot Webinar
Quarterly Cabot Analyst Meeting
The recording of the Cabot Prime Members Meeting with the Analysts 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 May 29: The market has handled itself well during the past couple of weeks, consolidating normally, with our intermediate-term indicators still positive, which is all to the good. Still, leadership remains somewhat lacking and, while coming close, our Cabot Trend Lines are still negative, so we’re content to take things step by step while waiting for more institutional-quality names to get going. Tonight, we are extending our line a bit more, but will hold onto a 36% cash position and want to see added upside confirmation before we put too much more money to work.
Bi-weekly Update June 5: WHAT TO DO NOW: Continue to lean bullish, but pick your spots. Our intermediate-term indicators remain bullish, and the market’s consolidation so far has been tight and quiet, which is a plus. Leadership remains good-not-great, with many names acting well but also plenty of wobbles and some selling on strength, too. All told, we’re content to follow the playbook we’ve been using, adding as names emerge and averaging up if they start well. Tonight, we’ll fill out our position in Snowflake (SNOW), adding another half-sized stake, but we’ll hold 31% or so in cash and see how things go from here.
Cabot Top Ten Trader
Weekly Issue June 2: There’s little doubt the news has gotten worse, with the U.S. debt downgrade, renewed U.S-China trade tensions, another hike in steel tariffs announced last week and a big pickup in war uncertainty over the weekend … but so far, the market has handled itself decently, with some wobbles (mostly among the broad market) but overall a quiet-ish consolidation compared to the recent run-up. To be fair, that can always change, but given everything, we’re pleased with the action thus far. We’ll again leave our Market Monitor at a level 7 as we wait to see which way the market breaks from this tight range.
Movers & Shakers June 6: We’re now three weeks into this general market consolidation, and from a top-down perspective, it’s been according to plan, with very little giveback (and even some upside testing from the big-cap indexes) even as the market has been hit with some uncertainties (on-again, off-again U.S.-China trade, U.S. debt downgrade, Russia-Ukraine tensions).
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 5: Most companies that were hit hard by Covid have recovered and then some. Many are faring better than ever. But because of investors’ narrow focus on the Magnificent 7 and a handful of artificial intelligence stocks the last two and a half years, share prices across various sectors have not kept pace with revenue and earnings growth. In recent months, we’ve capitalized on that discrepancy by pouncing on United Airlines (UAL), The Cheesecake Factory (CAKE) and, just last month, Carnival Corp. (CCL), with great success.
This month, we hope to mine another quick double-digit winner from the industrials sector. It’s a company that’s thriving like never before, but there’s been a significant lag between the fundamentals and the share price. We hope our timing in adding it to the portfolio now can produce UAL- or CCL-like rapid returns.
Details inside.
Weekly Update May 29: Wall Street analysts expect stocks to be flat for the rest of the year. That’s according to a new Reuters poll, which surveyed 51 strategists, analysts, brokers and portfolio managers. Among them, the average year-end target for the S&P 500 was 5,900 – roughly in line with the current price, and essentially unmoved since the start of the year.
That’s not exactly exciting news, even if 5,900 would have felt like a win in early April, when the benchmark index dipped below 5,000 after President Trump’s now-infamous “Liberation Day” reciprocal tariff announcement. The rally since then has been impressive, but analysts aren’t confident we’ll get much more movement through the final seven months of the year.
Cabot Stock of the Week
Weekly Issue June 2: The market has become a bit stagnant and boring. After the last few months we’ve had, boring is good. So today, we lean into the boring theme by adding a “boring” stock to the portfolio. It’s a mid-cap insurance company that Tyler Laundon recommended to his Cabot Early Opportunities audience last month. It may be boring, but like the market, it has plenty of upside in the near term.
Details inside.
Cabot Explorer
Bi-weekly Issue May 22: The gold-silver ratio is an intimate relationship. It indicates how many ounces of silver are needed to buy one ounce of gold. In the last century, this ratio reached its lowest point at just under 15:1 at the end of 1979 and peaked at over 110:1 during the COVID crisis.
This year, we passed the 100:1 mark for only the fourth time in a hundred years – a strong signal that silver may be underpriced.
So today, we add an aggressive silver play to the Explorer portfolio as a bet that it will close the gap on gold.
Bi-weekly Update May 29: Closely watched Nvidia (NVDA) reported its first-quarter earnings yesterday, beating expectations nicely on revenue despite restrictions on shipments of its H20 chips to China. The company posted revenue of $44.1 billion, up 69% from a year ago, but Nvidia expects to miss out on roughly $8 billion in sales of H20s to China in the second quarter.
Cabot Small-Cap Confidential
Monthly Issue May 1: We’re putting our mining helmets back on today and taking a position in a speculative micro-cap gold and copper exploration company that’s just about to get the drills turning.
This type of stock is intended to scratch the speculator’s itch. It’s not suitable for investing money that you need. That said, if things go well – and I think there’s a good chance they will – the returns could be spectacular.
But please, go in with eyes wide open. This is supposed to be fun.
Weekly Update May 29: The S&P 600 Small Cap Index popped right back up this week after selling off and landing on its intersecting 50- and 25-day moving average lines last Friday.
Despite the holiday-shortened week, it feels like a lot has happened at the macro level since last Thursday’s update.
Cabot Dividend Investor
Monthly Issue May 14: Just a little over a month ago, stocks were crashing. But things are changing fast.
The tariff uncertainty has vastly improved with the announcement of trade deals with the U.K. and positive negotiations with China. The S&P has soared 22% from the intraday low on April 7. The index is now in positive territory YTD and within 5% of the all-time high. The technology-laden Nasdaq index is up 28% from the April low.
But the market tends to overreact in the near term. Tariff trouble isn’t over yet. There could still be setbacks. A negative headline can roil the market on any day. There’s also the economy. Growth is slowing. It may pick up or slow further. What will be waiting beyond the tariffs?
Fortunately, there is a trend to bank on that will thrive regardless of the near-term gyrations of the market or economy.
Artificial intelligence is a massive growth catalyst that will endure and thrive in any environment. It is a generational phenomenon that will drive certain stocks to huge gains. The dominant trend has sold down and consolidated in recent months. Such a move was overdue. But technology is coming back strong. It’s the hottest sector again.
In this issue, I highlight a goliath in the technology industry that is poised for a huge growth windfall from artificial intelligence in the years ahead. The stock has fallen far from the high. But the AI trend is revving up again and will likely transcend the current unpredictable environment.
Weekly Update June 4: The market rally has gotten stuck in the mud for now. It will likely take some good news to really get it moving higher again.
Stocks have hugely recovered from the tariff Armageddon selloffs of early April. The index made up all that tariff ground and the S&P came within just a few percent of the high. But the rally has stalled over the past couple of weeks as positive headlines have been in short supply.
Cabot Early Opportunities
Monthly Issue May 21: The stock market has perked up considerably since the Liberation Day turmoil in early April, igniting shares of stocks across the market cap spectrum.
We look under the hood of five names that span the risk spectrum this month, including a couple of old names that might be familiar and a new one that’s been hard to ignore.
Cabot Profit Booster
Weekly Issue June 3: Coming off a losing week two weeks ago, the indexes mostly regained that lost ground last week as the S&P 500 gained 1.9%, the Dow advanced 1.6% and the Nasdaq rallied 2%.
Cabot Income Advisor
Monthly Issue May 28: It’s been a wild market so far this year. The S&P 500 has gone from the cusp of a bear market to within 5% of the all-time high in just seven weeks.
Uncertainty remains. A negative development could still roil the market on any day. Negotiations will likely take more twists and turns in the weeks and months ahead. But investors appear, at this point, to believe that the tariff situation won’t blow up. The fear of Armageddon is being removed.
But there’s still the economy. It could gain steam or slow toward recession. We are in a place, at least for a while, where anything can happen. It’s tough to pick a horse amid such varying possibilities. Fortunately, there is a trend to bank on that will thrive regardless of the near-term gyrations of the market or economy.
Artificial intelligence is a massive growth catalyst that will endure and thrive in any environment. Investors temporarily forgot all about it. It’s a generational phenomenon that hasn’t gone away. It just took a break. Now, those stocks are soaring back.
In this issue, I highlight a stock that is likely to benefit in the months and years ahead. It is still well off the high with good momentum and has a huge catalyst for growth in the months and years ahead.
Weekly Update June 3: The market has leveled off since the huge recovery from the tariff Armageddon fears. And now, who knows.
The sticky issue to start the week is increasing trade tensions with China. A war of words is escalating between the two governments and threats are being made by both sides. It is being reported that President Trump will speak with Chinese President Xi today or later this week. Hopefully the two leaders will bring down the temperature.
Cabot Turnaround Letter
Monthly Issue May 28: Goodyear Tire & Rubber (GT) is no stranger to veteran subscribers of the Cabot Turnaround Letter. The stock was initially recommended in 2022 and was a long-time holding in the portfolio. I made the decision to sell the stock when I took over as chief analyst last summer, which at the time seemed like a good idea.
Indeed, the stock had been underperforming for quite some time, and management had just warned of “weaker underlying trends in the industry” for the second half of 2024, augmented by lower tire volume and higher costs. The stock dropped 16% to a new 52-week low at that time (early August) and was threatening to break a benchmark “support” level in its long-term chart, while the firm’s debt remained disturbingly high.
Weekly Update June 6: In today’s note, we discuss pertinent developments for some of the stocks in the portfolio, including Alcoa (AA), Dollar Tree (DLTR), Intel (INTC), Kenvue (KVUE), Pan American Silver (PAAS), Paramount Global (PARA), UiPath (PATH) and SLB Ltd. (SLB).
Dollar Tree (DLTR) had a big week in the wake of earnings, hitting a new high for the year to date.
Cabot Cannabis Investor
Monthly Issue May 28: The Senate Judiciary Committee recently approved the nomination of Terrance Cole to lead the Drug Enforcement Administration (DEA).
The full Senate may vote on Cole’s confirmation as soon as early June.
This could be the start of a significant turning point for cannabis stocks. That’s because Cole will address a Biden-era proposal to move cannabis to Schedule III from Schedule I under the Controlled Substances Act (CSA). The change would significantly enhance cannabis company cash flow by neutralizing an IRS rule that bars operating expense deductions against revenue from the sale of Schedule I substances.
Monthly Update May 14: It’s cannabis company earnings season once again. Below, I summarize the highlights from our portfolio companies. But first, here are the major sector trends that emerged from the calls.
Cabot Money Club
Monthly Magazine June: Loading your portfolio with high-flying growth stocks and steady dividend payers can help you generate market-beating returns, but there are also unique, company-specific events that can quickly turn stocks into big winners. This month, we’ll be taking a closer look at stock spin-offs, special dividends, IPOs, mergers, buyouts and more “special situations” that can give you an investing edge.
Stock of the Month May 8: While the volatility continues, the markets made some upward progress since our last issue, with all the broad indexes rising—although both Growth and Value stocks are still negative, year to date.
Sector-wise, all sectors— except for Energy (-6.02%), Technology (-7.34%) and Consumer Discretionary (-11.17%)—are in the black, led by Utilities (+5.10%), Consumer Staples (+3.66%), and Real Estate (+2.98%).
Ask the Experts
Prime Question for Mike: Hi Mike, just wanted to ask if you think the market is overbought or getting a little toppy, as many of the best names, i.e. PLTR, RBRK, APP, etc., have almost doubled from their lows. I have seen the market steadily rise, and have been hesitant to bite the bullet, as I have been waiting for a correction to get in, because just as one does not want to catch a falling knife, I do not want to get in at the top, only to see the market correct thereafter.
To tell the truth my personal style is to get in when stocks are at their low, then I can feel safe and comfortable to let it go through all of its gyrations and not worry about it because I know in the end when someday I sell, the price will be appreciably higher than when I got in (and there is no reason to sell before that, or any issue with the company or the market making a major downturn).
So just wanted to get your take on if you think the market is ripe for a downturn, or if this would still be a good time to get in? Somehow I feel in my bones that the market has appreciated a lot and may be ripe for a correction, and to hold off on buying? (Although I do not want to completely miss out on buying because I waited too long.)
Mike: So I wouldn’t say toppy, per se, but as we’ve been writing, I also wouldn’t say there are tons of leaders out there, with a lot of the action among stocks that went from 80 to 45 back to 75-80 type of thing. And you’re right, after things come all the way back, they’ve expended a lot of buying power to get there, so we might need time or some retrenchment.
That said, there’s plenty of positive intermediate-term evidence out there, too, and many stocks are working. In fact, I’m fairly confident we’ll be nicely higher when looking 6-12 months down the road (you can never be sure, but playing the odds), but whether we go up from here or pull back a few percent is up in the air.
All in all, there’s no way to know, which is why we’ve been buying small and averaging up if the stock works a bit, but still holding some cash should things retrench. I wish I could tell you there’s a 95% chance of this or that, but some of the evidence is relatively mixed and leadership isn’t fully formed, which adds uncertainty.