Latest Summary
CABOT EVENTS
Cabot Weekly Review (Video)
In this week’s video, Mike Cintolo talks about the sharp tech selloff to end the week and how most of the evidence is now mixed--possibly a bit worse for growth stocks given some abnormal selling that’s popped up. Mike’s been paring back, though it’s mostly a stock-by-stock situation, as there are still more than a few fresher stocks and sectors that are acting just fine, many of which he gets into today.
Stocks Discussed: TNX, DELL, FSLR, HWR, CRS, CNX, STN, TER, DAL, FRPT, ONON, BOOT, SG, SKX, CPNG, PINS
Cabot Street Check (Podcast)
This week on Street Check, Chris and Brad discuss what’s behind the market’s latest swoon, what it could mean for the summer months, and whether prior election year patterns could signal a return of the bull market later in the year. Then they break down the software stocks that are blowing up on solid earnings reports and what’s behind it. Finally, they rate 10 stocks and sectors as “buy,” “sell” or “hold” for the next year, including cannabis stocks, Bitcoin, meme stocks, NVDA and more.
Cabot Webinar
May 30, 2024 Webinar
Opportunity Knocks: 3 Asset Classes to Profit from NOW
Join renowned small-cap and early-stage investing expert Tyler Laundon, Chief Analyst of Cabot Early Opportunities and Cabot Small-Cap Confidential, for this exclusive live event
Quarterly Cabot Analyst Meeting
The recording of the Cabot Prime Members Meeting with the Analysts from January 24, 2024 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 30: The market’s rally has run into trouble, with our Cabot Tides and Two-Second Indicator effectively back on the fence. When it comes to growth stocks, most are acting more resiliently than the broad market, but even there it’s hit and miss, with lots of air pockets though many names that are acting well, too. Because of the divergent action, we’ve had a flurry of moves since the last issue, paring back or selling three names, but putting money to work in two names (including a new addition last week). All told, we’ll still have about 27% in cash and have a few stocks that look great, but are also keeping a close eye on a couple that remain iffy.
In tonight’s issue, we go over all our thoughts on the market and our various moves, as well as write about the solar sector that may be getting going after a long slumber, as well as small caps in general, which could finally get going ... if interest rates behave themselves.
Bi-weekly Update May 23: WHAT TO DO NOW: Remain optimistic, but continue to pick your spots. Most of the evidence is positive, but the action among growth stocks is good but somewhat mixed, with many names acting great but some hitting air pockets and lots hitting resistance near prior highs. In the Model Portfolio, we’re doing a little reshuffling tonight—we’re going to sell one-half of DraftKings (DKNG) and sell one-quarter of Uber (UBER), but we’re also going to start another half-sized stake in On Holding (ONON). We’re also placing Pulte (PHM) on Hold. We’ll still have about 23% in cash after these moves. Details below.
Cabot Top Ten Trader
Weekly Issue May 28: All in all, the good-not-amazing environment remains in place, with intermediate-term uptrends intact for the major indexes and a solid amount of good-looking leadership out there. That said, there also remain a fair number of potholes out there, and most broader indexes tested their 50-day lines late last week. All told, there are plenty of stocks in a variety of sectors that are working, so we’re bullish, but picking strong names, targeting decent entry points and booking a few partial profits on the way up are advised. We’ll leave our Market Monitor at a level 8.
This week’s list has something for everyone, and we like how many of them have shown excellent power of late. Our Top Pick looks like an institutional way to play the energy transition trend. Aim to enter on dips.
Movers & Shakers May 31: It’s been a sour week for the market, with the major indexes down a bit (1% give or take depending on what index you’re looking at), growth measures down more (call it 2%-ish) and some abnormal action among a few names (especially in the software group, which went over the falls yesterday).
Cabot Options Trader and Cabot Options Trader Pro
Cabot Options Trader Pro Weekly Update
Cabot Options Trader Weekly Update
Cabot Value Investor
Monthly Issue May 2: The dark clouds of persistent inflation and high interest rates continue to hover over the market. But with a record amount of capital on the sidelines and little to no movement in most stocks over the last two-plus years, I’m optimistic that better days are ahead, assuming the inflation/Fed clouds eventually part. Thus, I continue to seek out companies that are essentially growth stocks at value prices. And today, we add another one to our portfolio in the form of a big-name company that’s benefitting greatly from a return to normalcy in a post-Covid world … but whose shares are trading at barely half their pre-pandemic peak.
Enjoy!
Weekly Update May 23: “Markets are never wrong, only opinions are.” – Jesse Livermore
Few quotes related to investing have stuck with me more than that one.
Jesse Livermore, of course, is an investment legend who, in the early 20th century, pioneered day trading and who was the basis of the best-selling Edwin Lefevre book, Reminiscences of a Stock Operator – considered by many to be the investing Bible. Many of his words are relevant to today’s market, nearly 85 years after his death. And I think the above quote is as evergreen as any and is important to remember in bull markets like this one.
Cabot Stock of the Week
Weekly Issue May 28: Stocks are hitting the pause button, which is normal action after another big run-up the first half of May. Could another breakout arrive before Wall Street goes on summer vacation? It did last June and July. But usually, summer slowdowns are to be expected. So this week, I add a stock that appeals to growth and value investors alike – one that I recommended to my Cabot Value Investor readers earlier this month. It’s a well-known company hiding in plain sight, but one that’s been undervalued by the market until recently.
Details inside.
Cabot Explorer
Bi-weekly Issue May 23: Going back to 1960, nearly 85% of the cumulative total return of the S&P 500 Index can be attributed to reinvested dividends. And that’s why today we’re adding a new high-yield fund to the portfolio that gives us exposure to fast-growing overseas markets.
Bi-weekly Update May 30: As we approach the end of May, the S&P 500 is still up 10% for the year, including a 4.6% gain so far in May. But the market was off yesterday as bond yields creep upwards. It was a lackluster week for Explorer stocks as well.
U.S. stocks trade at a P/E ratio over 21x earnings while European stocks trade at a cheaper 14x earnings on average. U.K. stocks look even more compelling at just 12x earnings.
Cabot Small-Cap Confidential
Monthly Issue May 2: The digital marketing world has been turned upside down as new privacy measures make it more challenging to track consumers across online and in-app activities.
But one company has been building out a unique opt-in data set and the backend technology to do just that. It sells this information to the biggest companies in the world so they can reach consumers with personalized marketing messages. With the new privacy measures, business is strong.
All the details are inside the May Issue of Cabot Small-Cap Confidential.
Weekly Update May 30: It’s been another week of small caps getting pulled around by moves in the 10-year yield, which is largely a function of Fed speaker commentary.
First it was Neel Kashkari (non-voter) sounding off with hawkish comments (yields up, small caps down), though it’s the inverse today after Raphael Bostic (voter) said he still thinks the Fed will be in position to cut rates in Q4.
Next up are NY Fed President John Williams (12:05 ET) while Dallas Fed President Lorie Logan speaks after the close today.
Cabot Dividend Investor
Monthly Issue May 8: The market has rallied for more than a year in the happy space between inflation and recession. But that dynamic is unlikely to persist. Amid persistent inflation, it is likely that the market will have to contend with high interest rates or a faltering economy. Each one is problematic.
In a flatter or faltering market, dividends provide a bigger part of total returns. Let’s get ahead of the curve and get a big fat yield.
In this issue, I highlight a stock with a massive dividend yield that has shown good price stability for several years. The company can also thrive amidst inflation and high or rising interest rates and can provide a high income return even if the market struggles through an inflation/recession catch-22.
Weekly Update May 29: The market has been good for a while. The S&P 500 is up roughly 11% YTD and about 30% since late October. But I expect choppier waters ahead.
The main driver of the S&P has been the technology sector, which is being driven higher by the artificial intelligence catalyst. Most of the rest of the market seems to be at the mercy of the interest rate narrative. And that seems to change every couple of weeks nowadays.
Cabot Early Opportunities
Monthly Issue May 15: In the May Issue of Cabot Early Opportunities we dig into prospects across next-gen AI-enabled devices, emerging markets, meal replacement shakes and picks-and-shovels type infrastructure plays.
Cabot Profit Booster
Weekly Issue May 29: In an effort to keep the Profit Booster portfolio as diversified as possible, today we are adding an emerging broker play that is coming off a strong quarter, and just last night announced a large buyback.
Cabot Income Advisor
Monthly Issue May 28: It’s a great time for income. The market is at an all-time high. The May through November period is historically a more lackluster period for stocks. Income generation is an ideal way to generate positive returns when stocks aren’t rising. But not if the stocks generating the income get knocked down by rising rates.
There is a great answer: midstream energy stocks. These are companies that transport and store oil and gas for a fee. The subsector is among the highest yielding of all income-generating stocks. And unlike many dividend stocks, they have thrived over the last few years of rising interest rates. For the most part, these stocks are not interest rate sensitive and can endure inflation or recession. They have proven to be the perfect sector to generate a high income in this market environment.
In this issue I highlight a stock that has been the very best income generator in the Cabot Income Advisor portfolio. It has been held profitably in the portfolio on three past occasions. Each time it delivered a positive total return along with several covered calls for huge income. It’s a tested and true income-generating superstar.
Weekly Update May 21: The market dodged a bullet. And the rally forges on.
After a 5% dip from the high, stocks started climbing again in mid-April and have regained all the losses. Last week’s inflation report had the potential to derail the recent rally. But it didn’t. And the good times are continuing.
Cabot Turnaround Letter
Monthly Issue May 29: Sizing up a merger arb opportunity requires more than just garden variety equity analysis. In his famous letter to Berkshire Hathaway shareholders in 1988, Warren Buffett laid out four questions to answer regarding arbitrage situations:
- How likely is it that the promised event will indeed occur?
- How long will your money be tied up?
- What chance is there that something still better will transpire – a competing takeover bid, for example?
- What will happen if the event does not take place because of anti-trust action, financing glitches, etc.?
Today, we add a new Cabot Turnaround Letter recommendation that we think comes close to answering all four.
Weekly Update May 31: Duluth Holdings Inc. (DLTH) reported its fiscal first-quarter 2024 results, with revenues of $116.68 million, missing estimates by 2.52% and down from $123.76 million a year ago. The company posted a net loss of $7.9 million and Adjusted EBITDA of $1.8 million. Despite sales challenges, CEO Sam Sato highlighted improved inventory management and successful customer engagement campaigns. The company ended the quarter with $6.8 million in cash and updated its fiscal 2024 outlook to net sales of $640 million and Adjusted EBITDA of $39 million.
Cabot Cannabis Investor
Monthly Issue May 29: Cannabis stocks remain unloved by investors. This makes the group buyable because catalysts are on the horizon.
The tricky part now is that it is more difficult to predict that we may see a catalyst near term, or even when the next one will occur. Patience is required.
Here is a look at the four main potential catalysts.
Monthly Update May 8: Cannabis stocks look buyable in the current weakness.
Cannabis stocks are always buyable when they are down, but there are potential near-term catalysts on the horizon. That is the case now. There are three to expect over the next few months, and possibly as soon as the middle of May.
Cabot Money Club
Monthly Magazine May: Household debt is rising, and consumers are feeling the squeeze of higher interest rates everywhere, from mortgages to auto loans to credit cards. In this month’s issue we’ll share ten warning signs that signal financial trouble ahead and the ten bad financial habits you need to drop now to avoid it.
Stock of the Month May 9: It was more of the same for the markets this past month—some momentum, but ultimately, we ended up in just about the same place.
Investors are a little gun-shy as most were expecting Fed rate cuts to begin in the latter half of the year. But as the inflation beast is proving harder to tame than expected, Fed Chair Powell has indicated it may take longer before we see a rate cut.
Ask the Experts
Prime Question for Chris: Chris, should I buy Nvidia (NVDA) today?
Chris: I wouldn’t recommend buying NVDA at these levels, having just gapped up 10% to new all-time highs in the last few days. That said, if you plan on holding NVDA in your long-term portfolio, I would definitely aim to buy on the next pullback. That could come as early as next week, given the sort of two-steps-forward, one-and-a-half-steps-backward environment it’s been for growth stocks the last couple months.
Big picture, though: NVDA’s the hottest stock on the market for a reason. And I certainly wouldn’t bet against it in the long or even intermediate term.