Cabot Weekly Review (Video)
In this week’s video, Mike Cintolo is encouraged but not yet bullish, as the intermediate-term trend hasn’t yet clicked and the broad market is still very iffy. But Mike is very happy with what he’s seeing from individual growth names, and if that continues (and more names pop out to new highs) he could be flooring the accelerator soon. Stocks discussed: TDG, PINS, DUOL, SNPS, NOW, WING, MSFT/ADBE, PHM/FIX, GWW. Off the bottom: EXPE, SQ/FOUR, SHOP.
Cabot Street Check (Podcast)
This week on Street Check, Chris and Brad discuss the November market rally and what they’re watching to signal a resumption of the bull market. Then, they talk about China’s foreign direct investment outflows and potential contrarian opportunities overseas. Finally, they break down Berkshire Hathaway’s massive cash balance, why what Warren Buffett does isn’t necessarily a game plan for individual investors, and they highlight a few year-end strategies to help take the bite out of taxes and maximize your tax-free retirement portfolio growth.
Dividend Growth & Megatrends: 2 Ways to Win the Long Game in Uncertain Markets
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 November 2: Nothing has officially changed with our market timing indicators, so we remain in a very cautious stance, but the wear-you-out bear phase of the past couple of years (and the sharp declines of the past three months) has had many secondary indicator (breadth, sentiment, etc.) in high-reward positions, and this week’s strength is certainly intriguing. We’re not jumping the gun in any major way, but we are adding one half-sized position in a strong actor and have our antennae up to see if this rally can finally be the real deal.
In tonight’s issue, we review our remaining positions (most of which have popped nicely), our overall market thoughts (including some rays of light from our Two-Second Indicator) and go over many high-potential stocks should the bulls continue to press forward.
Bi-weekly Update November 9: WHAT TO DO NOW: Remain cautious overall, but if you have a ton of cash, it’s OK to put a little to work. Our market timing indicators have improved, but by our eye, haven’t yet turned up, and while last week was a great first step for the market, there hasn’t been much follow through or expansion of new highs. To be clear, we’re optimistic and a few good days could make all the difference, but right here we’re still going slow and seeing if the market and leadership can truly emerge. In the Model Portfolio, we’ll buy another half of DraftKings (DKNG), leaving us with around 65% in cash. We’re also restoring our Buy rating on Uber (UBER) for those that don’t own any given the stock’s very powerful snapback. If things kick into gear, we’ll likely put money to work quickly, but right now we’re going slow and letting the rally prove itself.
Cabot Top Ten Trader
Weekly Issue November 6: We’ve been writing for a few weeks that many secondary indicators were near levels normally associated with the market lows, so if something actually went right in the world, the market could respond powerfully—and we’re optimistic that process is now underway as interest rates have fallen off and the market popped beautifully last week. In response we’re bumping up our Market Monitor ... but only to a level 5 at this point, as the intermediate-term trend still isn’t up. Long story short: We’re OK throwing a couple more lines in the water, but we want to see constructive action from here (tame pullbacks, more breakouts, etc.) before turning truly bullish.
This week’s list has charts in a few different places (some coming off the lows, some near new highs, etc.), but a ton of them reacted well to earnings and most should do well if the market follows through on its rally. Our Top Pick is a stock that, after many months of tedious action, appears to be ready to resume its major upmove.
Movers & Shakers November 10: Overall, the week started out just fine, and for many stocks and indexes it remains so, though as things progressed the broad market began to have some issues again. As of this morning, the S&P 500 and Nasdaq are flat to up 1%, but equal-weighted big-cap indexes are down 1.5% or so and small and mid-caps are down 2.5% to 4%. As for interest rates, they’re up marginally (10-year Treasury up three basis points).
Cabot Options Trader and Cabot Options Trader Pro
Cabot Value Investor
Monthly Issue November 7: We discuss recent earnings from our companies and move shares of Sensata Technologies (ST) from Buy to Hold given the company’s lower overall quality compared to our initial understanding.
We also include some thoughts on the current stock market and how rising interest rates and other factors have led investors to unload shares of most companies and riskier companies in particular.
Weekly Update October 31: Comments on earnings from Comcast (CMCSA), Allison Transmission (ALSN) and NOV, Inc (NOV). Despite strong earnings reports, our companies’ shares have been sloppy. What’s going on?
Cabot Stock of the Week
Weekly Issue November 6: Stocks had their first legitimately good week since July, thanks to declining bond yields, improving earnings and – surprise! – Jerome Powell. Can the market keep the momentum going? I’m betting yes, even if it’s not a straight line. Market bottoms frequently occur in October, and this year will be no exception. Therefore, today I’m adding more growth to the portfolio in the form of a mid-cap name that’s little known to the masses but is essentially the Google search engine for big corporations. It’s a new recommendation from Cabot Early Opportunities Chief Analyst Tyler Laundon.
Bi-weekly Issue November 2: The Federal Reserve yesterday maintained its benchmark interest rate while leaving the door open for further action as officials work to bring inflation back to the central bank’s 2% target. This makes sense, though markets are still a bit on edge as further increases are a possibility.
But today, we take a big swing with an aggressive stock that combines biotech with artificial intelligence - and is trading well off its highs.
Bi-weekly Update November 9: With a 29% average annual rate of return over 13 years at Fidelity, Peter Lynch certainly earned his status as a legendary investor.
Recently, Lynch revealed that indexes like the S&P 500 and Nasdaq have been propped up by a handful of high-flying tech stocks. “The truth is, we’ve been in a stealth bear market for a long while now if you don’t count those 10 or so darling mega-caps,” Lynch remarked with his trademark sarcasm.
That may soon be coming to an end.
Cabot Small-Cap Confidential
Monthly Issue November 2: This month we’re adding a small company that specializes in the opaque and inefficient market for selling surplus and salvaged goods.
The company has a market cap of just $580 million and is growing revenue and EPS by double digits. It’s an interesting setup, especially as government agencies and corporations increasingly look to save money and achieve sustainability goals.
Weekly Update November 9: The broad market has traded higher for eight straight sessions, the longest run since 2021. The Nasdaq is up for nine sessions.
The S&P Small Cap Index is up in five of the last nine sessions, but the last four have been down. What the ...?!!
Big picture, this isn’t great for the broad market as we want a more broad-based rally. And in theory it’s not great for us.
But the reality is our portfolio isn’t diversified along the same lines as the small-cap index. We’re not overweight financials, energy and health care (we have little to no exposure to all three) and instead are focused on pure-play opportunities that aren’t expected to trade in lockstep with the small-cap index.
Cabot Dividend Investor
Monthly Issue November 8: The market has been highly unpredictable over the last several years. Things are too uncertain to make bets on the current outlook. Timing the market and betting on sector rotation is a riverboat gamble. I’d rather bank on prevailing trends that will transcend short-term market gyrations.
There is a strong prevailing positive trend in the energy industry, particularly American energy.
Clean energy is the future, but not the near future. The world will continue to rely overwhelmingly on fossil fuels for at least the rest of this decade and probably much longer. But the world has underinvested in oil and gas exploration and production over the last decade and a half. Global supplies are straining to meet growing demand. The dynamic will last for some time.
Investors are realizing the value of companies and stocks in a sector that had been neglected for many years until recently. While commodity prices will go up and down based on several circumstances, energy companies should benefit over time going forward.
In this issue, I highlight the largest American oil refiner. The stock has been a stellar performer. And the company will continue to benefit from cheaper American oil and a reduced number of refineries.
Weekly Update November 1: The market officially entered a “correction” last week when the S&P fell 10% from the 52-week high on a closing basis. Now, it’s largely up to the Fed to determine where the market goes next.
The Fed meets on Wednesday and will decide on the Fed Funds rate. They are widely expected to leave the rate unchanged and then indicate they might raise it in the future. But the main event isn’t the Fed Funds rate. It’s the benchmark 10-year Treasury yield.
Cabot Early Opportunities
Monthly Issue October 18: In the October Issue of Cabot Early Opportunities, I dig into a group of software companies that have upside potential from AI, automation and security. I also feature a diversified bioprocessing and advanced materials company that’s drawing attention right now and go deeper into a very small industrial company that few investors have ever heard of.
Cabot Profit Booster
Weekly Issue November 7: Ahead of the long holiday weekend the market had yet another good week. The S&P 500 gained 1.75%, the Dow rallied 1.5%, and the Nasdaq rose another 1.9%.
This week in an attempt to diversify the portfolio we are adding an energy play.
Cabot Income Advisor
Monthly Issue October 24: The market has been choppy and unpredictable. Optimism about a “soft landing” is being tempered by rising interest rates. Either the strong economy or high interest rates will dominate the market in the months ahead. We’ll see.
But what seems to be quite clear is that the economy is solid for now. Third-quarter GDP is expected to be over 5%. Even if the economy does slow, it will likely take several quarters to slow from here. That means gasoline demand should remain solid. And that should be good news for refiners.
In this issue I highlight one of the best performing large company stocks in the energy sector over the last several years. It is also one of the few plays out there that still has solid momentum, as the stock remains in an uptrend that began three years ago.
Good momentum means high call premiums as more investors are willing to be on higher prices in the future. The refiner stock highlighted in this issue has a great chance of providing the opportunity to sell covered calls in the near future. It should help generate a high income in this uncertain environment.
Weekly Update November 7: What a difference a week can make. Just one week ago, the market was reeling. The S&P 500 concluded the third straight month of declines after falling into correction territory a few days earlier. But then stocks turned around and had the best week of the year with the S&P 500 rallying nearly 6% for the week.
Cabot Turnaround Letter
Monthly Issue October 25: Much of the art of finding interesting turnaround stocks is looking at catalysts, tracking management changes and searching through lists of out-of-favor companies. Sometimes, however, good ideas can be found closer to home – literally – by looking through the roster of public companies in one’s home state. We discuss five turnarounds underway in our home state of Massachusetts.
Despite near-record gold prices, shares of gold producers remain depressed. We discuss two attractive companies. Our Buy recommendation this month is Agnico Eagle Mines Ltd (AEM), a premier gold mining company selling at a discounted price.
Please feel free to send me your questions and comments. This investment letter is written for you. A great way to get more out of your letter is to let me know what you are looking for.
Weekly Update November 10: This week’s note includes our comments on earnings from Adient (ADNT), Ammo, Inc (POWW), Bayer AG (BAYRY), Berkshire Hathaway (BRK/B), Brookfield Re (BNRE), Elanco Animal Health (ELAN), Goodyear Tire & Rubber (GT), L.B. Foster (FSTR), TreeHouse Foods (THS) and Warner Bros Discovery (WBD). The earnings deluge continues next week.
Cabot Cannabis Investor
Monthly Issue October 25: Cannabis stocks are trading like a group in need of a catalyst.
* The AdvisorShares Pure U.S. Cannabis (MSOS) exchange traded fund (ETF) has fallen 28% from the peak of the rally caused by last summer’s news of federal government progress on rescheduling.
* The AdvisorShares MSOS 2x Daily (MSOX) ETF is down 38%.
Will the group see a catalyst soon? I put odds at much higher than 50%. This makes cannabis stocks a buy in the current retreat, both for a trade but also as a medium-term, multiyear position.
Monthly Update November 8: Cannabis stocks are up 10%-20% since I encouraged you to buy them on weakness in my last update on October 31.
That’s a nice short-term gain – much better than the 5.5% S&P 500 advance over the same time.
I hope you participated.
Traders may want to book profits. The stocks are strong this morning on news that Ohio voters approved a referendum on recreational use legalization. This rally could reverse. However, cannabis stocks are still down sharply from the rescheduling rally last summer. I suggest continuing to stay long in the midst of the overall weakness since that rescheduling news rally last summer.
Cabot Money Club
Monthly Magazine November: Getting an early head start on a career or trade that you’re passionate about can mean the difference between just punching the clock and doing meaningful work that’s satisfying in its own right. On top of that, you can potentially save hundreds of thousands of dollars on education expenses and make significantly more over the course of your career by tailoring your educational pursuits to match your career goals. This month, we’ll help you outline a blueprint to pursue your dreams while maximizing your earnings, and we’ll discuss the pros and cons of investing in your employer and industry.
Stock of the Month November 9: The markets had a very good week, and so far, we are also seeing momentum in the first couple of trading days this week. These upward moves have taken the Dow Jones Industrial Average to just about where we started at the beginning of 2023.
Last month, inflation edged up to 3.7%, from 3.67%, and the unemployment rate also slightly increased, to 3.9%. The Federal Reserve—for two continuous decisions—kept the Fed Funds rate steady.
Ask the Experts
Prime Question for Mike: Mike, question that’s not in your norm. I’ve been putting away money for my kids not to touch for 15+ years in the Vanguard 500 Index Fund (VOO). Do you have any opinion on the Equal Weighted S&P ETF (RSP) vs. the VOO? Thanks.
Mike: I don’t have deep thoughts per se but after a long period of underperformance my guess is there will be some catch-up in the broad market/unweighted indexes. Not seeing much of that now, but just a gut feel that something like that will happen within the next year or so.