Issues
There remains a lot of choppy action, where it seems like one stock does well and another hits a pothole. But we also continue to see improvement among growth stocks, with more launching pads and some names beginning to pop out to new highs. All in all, we’re paring our weakest names while holding (or averaging up in) our best performers. Tonight, we’re holding our 40% cash position but are looking to add a new holding soon if things hold together.
The marijuana sector peaked in February, bottomed from late March to mid-April, and since then has been building a base, preparing for a resumption of the big advance.
Fundamentals in the industry remain terrific, and the trend toward legalization in the U.S. continues, so it’s only a matter of time before these stocks enjoy their next upwave—perhaps as second quarter reports begin to be released next week.
In the portfolio today the one small change is that we’ll sell half our position in TerrAscend (TRSSF) and move the proceeds into Innovative Industrial Properties (IIPR).
Full details in the issue.
Fundamentals in the industry remain terrific, and the trend toward legalization in the U.S. continues, so it’s only a matter of time before these stocks enjoy their next upwave—perhaps as second quarter reports begin to be released next week.
In the portfolio today the one small change is that we’ll sell half our position in TerrAscend (TRSSF) and move the proceeds into Innovative Industrial Properties (IIPR).
Full details in the issue.
It’s been a sideways summer market. Perhaps earnings will change that. But summer markets have a tendency to do whatever they were doing before investors stopped paying attention in the dog days of August.
In this issue I highlight a high-paying REIT that has been bucking the trend and moving higher in this market. It presents a timely buying opportunity that can create a call writing opportunity in a short amount of time.
Few income stocks have had consistent upward momentum in this market, but those that do generally fetch higher call premiums. The target buy is a fantastic REIT that pays a high dividend and continues to move higher. It should provide a great income opportunity in an otherwise lackluster summer market.
In this issue I highlight a high-paying REIT that has been bucking the trend and moving higher in this market. It presents a timely buying opportunity that can create a call writing opportunity in a short amount of time.
Few income stocks have had consistent upward momentum in this market, but those that do generally fetch higher call premiums. The target buy is a fantastic REIT that pays a high dividend and continues to move higher. It should provide a great income opportunity in an otherwise lackluster summer market.
Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the August 2021 issue.
With the stock market’s remarkable strength over the past five and ten years, most stocks have produced at least reasonable gains, such that even out-of-favor stocks aren’t down-n-out stocks. We look at attractive turnarounds among stocks with flat to negative five-year returns.
SPACs, or special purpose acquisition companies, are all the rage. While the group has rightfully earned the disdain of value investors, there are some post-SPAC companies worth a closer look. We highlight five.
Our featured Buy recommendation, Walgreens Boots Alliance (WBA), is viewed as a broken growth company. While its challenges are clear, its shares now trade at a bargain valuation, yet the company has sturdy finances and a new outsider CEO. This combination, combined with a sustainable (and growing) 4.1% dividend yield that pays investors to wait, makes it an attractive turnaround candidate.
During the month, we moved Macys (M) to a Hold and raised our price target on Duluth Holdings (DLTH) from 17.50 to 20.
Please join us for the our 9th Annual Smarter Investing, Greater Profits Online Conference, held on Tuesday, August 17 through Thursday, August 19. You can see presentations by all of our analysts, which will include updates in their areas of expertise and discussions of their best picks.
Please feel free to send me your questions and comments. This newsletter is written for you. A great way to get more out of your letter is to let me know what you are looking for.
I’m best reachable at Bruce@CabotWealth.com. I’ll do my best to respond as quickly as possible.
With the stock market’s remarkable strength over the past five and ten years, most stocks have produced at least reasonable gains, such that even out-of-favor stocks aren’t down-n-out stocks. We look at attractive turnarounds among stocks with flat to negative five-year returns.
SPACs, or special purpose acquisition companies, are all the rage. While the group has rightfully earned the disdain of value investors, there are some post-SPAC companies worth a closer look. We highlight five.
Our featured Buy recommendation, Walgreens Boots Alliance (WBA), is viewed as a broken growth company. While its challenges are clear, its shares now trade at a bargain valuation, yet the company has sturdy finances and a new outsider CEO. This combination, combined with a sustainable (and growing) 4.1% dividend yield that pays investors to wait, makes it an attractive turnaround candidate.
During the month, we moved Macys (M) to a Hold and raised our price target on Duluth Holdings (DLTH) from 17.50 to 20.
Please join us for the our 9th Annual Smarter Investing, Greater Profits Online Conference, held on Tuesday, August 17 through Thursday, August 19. You can see presentations by all of our analysts, which will include updates in their areas of expertise and discussions of their best picks.
Please feel free to send me your questions and comments. This newsletter is written for you. A great way to get more out of your letter is to let me know what you are looking for.
I’m best reachable at Bruce@CabotWealth.com. I’ll do my best to respond as quickly as possible.
The overall market continues to be, well, wobbly. After a 2.1% loss last Monday, the sharpest decline in roughly 10 months, the bulls took charge at the opening bell last Tuesday and have yet to give up. Last week, the S&P 500 climbed 1.92%, the Dow advanced 1.07% and the Nasdaq surged 2.76%.
What a difference a week makes! Since our last issue, stocks have recovered from their worst trading day since March to reach new all-time highs. So, the bull market remains very much intact, though some growth stocks continue to wobble. Fortunately, today’s featured stock combines both elements of growth and value – and unlike many traditional growth stocks right now, it’s hitting two-year highs.
Details inside.
Lastly, I hope you’ll join me for the 9th Annual Smarter Investing, Greater Profits Online Conference, August 17-19. We have an incredible lineup of experts ready to share their best picks.
Details inside.
Lastly, I hope you’ll join me for the 9th Annual Smarter Investing, Greater Profits Online Conference, August 17-19. We have an incredible lineup of experts ready to share their best picks.
Current Market OutlookLooking at just the major indexes, things couldn’t be better right now. The S&P 500 and Nasdaq are both at all-time highs, while growth stocks look good for the most part. But a peek below the surface reveals that some crosscurrents still abound. There’s still an above-normal amount of Nasdaq stocks making new 52-week lows, while new highs aren’t as expansive as they could be—especially given the strength of the leading mega-cap names. Meanwhile, only around half of S&P stocks are above the 50-day line, and the advance-decline line could be stronger. That said, we’re still seeing lots of nice setups in growth stocks, and while we likely haven’t seen the end of earnings-related volatility, the latest earnings season has been mostly kind to growth stocks. We’re moving our Market Monitor to a level 6 but are keeping our eyes open for what comes next.
This week’s list includes a nice mix of sectors, including a few that have had spectacular earnings reactions. Our Top Pick is Trane Technologies (TT), an HVAC company benefiting from the return-to-office trend.
| Stock Name | Price | ||
|---|---|---|---|
| Arvinas, Inc. (ARVN) | 95 | ||
| ASML Holding (ASML) | 754 | ||
| AutoNation (AN) | 116 | ||
| BioNTech (BNTX) | 286 | ||
| Dropbox (DBX) | 31 | ||
| HCA Healthcare (HCA) | 246 | ||
| Morgan Stanley (MS) | 97 | ||
| PTC Inc. (PTC) | 151 | ||
| Snap Inc. (SNAP) | 76 | ||
| Trane Technologies plc (TT) | 200 |
While concerns over the Covid Delta variants are escalating, the market has steadied as the week progressed as 85% of S&P 500 companies have exceeded analysts’ Q2 earnings expectations, according to FactSet. Still, investors remain moderately cautious and relatively risk averse. Today’s new recommendation is an overlooked stellar fund run by none other than value investor Bill Ackman.
Updates
Remain bullish, but keep your eyes open. Our indicators and most of our stocks are still trending up, though we’re seeing some funky action that’s worth monitoring.
The new all time high is a significant milestone. Although the S&P 500 hasn’t hit new highs quite yet it is only just about .01% from the mark. The new high is significant because it negates any possibility that we have been in a bear market since September, when the previous high was established.
When a famous company’s stock falls, there are lessons to be learned that can help you improve your game. Shares of 3M Co. (MMM) fell last week when first-quarter results revealed revenue and profits that did not meet the market’s expectations.
It’s earnings season so most investors are focused on individual stocks. And with the S&P 500 and Nasdaq hitting new all-time highs this week, the big picture is looking pretty good too!
Our EEM Signal slipped below its 20-day moving average this morning and is right on top of its 50-day average. We will remain positive and constructive but lean toward finding some bargains. Most likely, the next two ideas will come from heavyweights India and China.
There are three changes to the portfolio today.
Prepare yourself for more ups and downs in our medtech & biotech stocks if this debate heats up. I’m not planning to step out of the space since I think this will pass and we can still do quite well with these types of stocks.
The overall market remains in good shape, with both of our trend-following indicators—the Cabot Tides (intermediate-term) and Cabot Trend Lines (longer-term)—currently pointing up. We’re still keeping an eye on small-cap indexes, which have still not eclipsed their late February peaks, as well as the Nasdaq, which has found repeated resistance near 8,000. But overall, there’s no question that the trends are up.
The new all time high is a significant milestone. Although the S&P 500 hasn’t hit new highs quite yet it is only just about .01% from the mark. The new high is significant because it negates any possibility that we have been in a bear market since September, when the previous high was established.
Alerts
This credit information company beat earnings estimates by $0.04 last quarter.
This biopharma handily beat earnings estimates this past week, posting EPS of $0.08, significantly higher than the -$0.06 loss that was expected.
After seven consecutive down days and a swift, brutal stock market correction, we’re bound to see a few up days quite soon. Please be cautious.
This accessories manufacturer/retailer is trading at discounted levels.
This portfolio stock reported last night that Q4 revenue rose 20.6% to $43.5 million (beating by $1.7 million) and that adjusted EPS of -$0.21 beat by $0.07.
The market has been tripped up by what seems to be an overreaction to the potential economic disruption of the coronavirus, but which is more likely the result of a trifecta of potential issues including coronavirus, a previously elevated market trading at high multiples, and uncertainties related to this year’s Presidential election.
With the market’s decline only intensifying today, more stocks are beginning to crack.
Now that the market has fallen substantially, I think we’ve reaped the bulk of the potential profits on our recent purchase of these two ETFs.
Once again, the media has done a splendid job of creating fear and panic among the citizenry.
Wall Street expects this communications equipment company to grow at a 30% annual rate over the next five years.
One portfolio stock had a earnings beat and there are two additional rating changes.
Further upside is expected from this biotech, as a result of ongoing data on the company’s drug’s trials.
Portfolios
Strategy
Our Cabot Top Ten Trader’s market timing system consists of two parts—one based on the action of three select, growth-oriented market indexes, and the other based on the action of the fast-moving stocks Cabot Top Ten features.