Issues
Growth stocks went through the wringer for a bit but have again found support and bounced back in recent days. We’ll certainly take it, and we like the way most of our stocks are acting, but it’s too soon to conclude growth stocks have completely escaped the chop that we’ve seen in recent months.
Thus, we’re still going slow, but we are putting a little money to work tonight, filling out our position in one of our holdings.
Elsewhere in tonight’s issue, we write about some of the mixed evidence out there, including divergences (negative) and the recent plunge in rates (a type of blastoff indicator), as well as review all of our stocks and updated watch list.
Thus, we’re still going slow, but we are putting a little money to work tonight, filling out our position in one of our holdings.
Elsewhere in tonight’s issue, we write about some of the mixed evidence out there, including divergences (negative) and the recent plunge in rates (a type of blastoff indicator), as well as review all of our stocks and updated watch list.
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, as second quarter results have recently revealed, 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.
In the portfolio today the one small change is that I’ll downgrade Columbia Care (CCHWF), our biggest loser, to Hold.
Full details in the issue.
Fundamentals in the industry remain terrific, as second quarter results have recently revealed, 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.
In the portfolio today the one small change is that I’ll downgrade Columbia Care (CCHWF), our biggest loser, to Hold.
Full details in the issue.
The S&P 500 and the Nasdaq just made new all-time highs. Strong earnings and a booming economy are outweighing concerns about the delta variant, the Chinese slowdown, inflation and a Fed tapering of bond purchases.
It’s difficult to say what narrative will be dominant after the summer. The cyclical slump could gain traction or turn around. Much will depend on the headlines, which are unpredictable. While I like the way the current portfolio is positioned, it needs more stocks with momentum that generate high call premiums.
In this issue I highlight for purchase one of the very best financial stocks on the market. Prospects are dazzling over the rest of this year. But the stock is also moving right now. It should offer a quick opportunity to ring the income register with a covered call.
It’s difficult to say what narrative will be dominant after the summer. The cyclical slump could gain traction or turn around. Much will depend on the headlines, which are unpredictable. While I like the way the current portfolio is positioned, it needs more stocks with momentum that generate high call premiums.
In this issue I highlight for purchase one of the very best financial stocks on the market. Prospects are dazzling over the rest of this year. But the stock is also moving right now. It should offer a quick opportunity to ring the income register with a covered call.
The recent August expiration cycle was our second disappointing month in a row. And while 18 wildly successful months of trading out of 20 is a truly spectacular track record, when trades go wrong there is little doubt it’s painful in the moment. However, trading/investing isn’t about being a prisoner of the moment. It’s about building wealth over time, which the Cabot Profit Booster has been very successful at since its inception in early 2020.
The bull market remains intact, so I continue to recommend that you be heavily invested in stocks that help achieve your investing goals.
Today’s featured stock is a solid grower whose products help millions of people with diabetes manage their condition in increasingly efficient ways.
As for the current portfolio, most of our stocks look good, and some are hitting new highs, but one has to go and the victim this time is Driven Brands (DRVN).
Details inside.
Today’s featured stock is a solid grower whose products help millions of people with diabetes manage their condition in increasingly efficient ways.
As for the current portfolio, most of our stocks look good, and some are hitting new highs, but one has to go and the victim this time is Driven Brands (DRVN).
Details inside.
Current Market OutlookThe selling in growth stocks spread to the rest of the market last week, with most major indexes finishing lower, led again by growth-y indexes and funds. The good news is that, for now, the worst-case scenario has been avoided—many growth stocks tested key support in recent days (50-day lines, etc.) and almost all held up, with Friday and today seeing some solid bounces. Cyclical stocks have done a similar dance, with many pulling in, but few really cracking, and now the bounce is underway. Ideally, this rebound will develop some power—strong bounces off support often provide low-risk entry points—but, while we won’t wait weeks to see how it plays out, it’s too soon to conclude the recent selling wave is over. We remain more optimistic than not, and the past couple of days are certainly encouraging, but let’s see if some new and potential leaders lift off in classic fashion.
This week’s list is a mix of various different stocks, including a number of names we haven’t written up before. Our Top Pick is Chart Industries (GTLS), an under-the-radar name that’s set to see earnings soar as demand for its various energy infrastructure items (including many that play into the clean energy space) takes off.
| Stock Name | Price | ||
|---|---|---|---|
| Axon Enterprise, Inc. (AXON) | 187 | ||
| Builders FirstSource (BLDR) | 50 | ||
| Chart Industries (GTLS) | 178 | ||
| Elastic (ESTC) | 157 | ||
| PKI (PKI) | 182 | ||
| Rapid7 (RPD) | 113 | ||
| Regeneron Pharmaceuticals (REGN) | 667 | ||
| UPST (UPST) | 203 | ||
| WK (WK) | 137 | ||
| Zscaler (ZS) | 251 |
In the August Issue of Cabot Early Opportunities we (mostly) return to our roots, focusing on technology and MedTech growth stocks, while adding a little flavor with a consumer stock we’ve been keeping an eye on.
Enjoy!
Enjoy!
Stocks slipped a bit yesterday after minutes from the Federal Reserve’s last meeting showed officials increasingly in agreement about pulling back on the central bank stimulus. This was prompted by increasing evidence of mounting inflation. Markets are a bit choppy against this backdrop but earnings continue to be relatively strong, such as Sea Limited (SE) posting another superlative quarter yesterday. This week you will see I have divided Explorer stock updates into two categories: “trading” and “buy and hold,” as we turn to clean tech infrastructure for a new recommendation.
The market continued to test new highs last week as the S&P 500 gained 0.71%, the Dow climbed 0.87%, while the Nasdaq broke trend by closing 0.9% lower. That being said, we continue to see thin summer trading led by ongoing sector rotation. Growth waned last week and it was the cyclicals’ time to shine, with the financials leading the way.
Updates
In many individual stocks I’d say the action is starting to lean more towards frothy, than bearish. That’s why I’ve been pulling on the reins in recent weeks, moving more stocks to hold and suggesting taking smaller positions if you’re buying.
The U.S.-China trade talks continue and the deadline for closure has evaporated as President Trump signaled that the U.S. is in no hurry to come to an agreement.
Despite a slight pullback over the past couple of weeks, the market is showing a slow and steady upward slog. It’s an ideal environment for defensive dividend stocks. For the time being, things are good and the portfolio had another good week. We are selling two positions (1/2 in one of them) and moving another position back on Buy.
I’m as “political” as they come, but I don’t make investing decisions based on politics. I make my decisions based on corporate successes (which show up via profit and revenue growth), economic facts (definitely not economic speculation) and stock market trends.
The S&P 600 Small Cap Index has pulled back a bit more after trading up near the high end of my expected trading range last week. We’ll continue to watch this range (900 to 1,000) as I expect the index to bounce around within it for several weeks, if not months.
Remain bullish, but take things on a stock-by-stock basis. The market has begun to pull back after a great couple of months, and stocks could easily correct and consolidate further.
We’re in an environment that is ideal for dividend stocks. And the relative performance of these stocks going forward will likely be the best in many years. Enjoy this update, because you’re in the right place at the right time. No rating changes today.
Our Emerging Markets Signal is still positive as the MSCI Emerging Market index (EEM) basket—containing 800 stocks worth $1.9 trillion—pulled back only slightly.
I haven’t added any new stocks for a while because we’ve already got 30 stocks in the portfolios. Our current stocks have mostly been rising: the good, the bad and the ugly. However, I always have a good list of stocks that are waiting in the wings, so I really should rotate into some of them.
Alerts
The shares of this advertising company were recently upgraded at Needham to ‘Buy.’
The broad market remains strong, while the cannabis sector remains stuck in the mud—in general.
The Financial Times reported this morning that this portfolio stock was in talks, in late December, to possibly be acquired by AIG, Prudential Financial Group or Prudential Financial.
This small-cap medical device stock has grown at an annual rate of more than 28% for the past five years.
This biotech is forecasted to grow at a 25% rate next year.
This lithium producer is poised to break out with a potential major source.
Our first move in 2020 is going to be to modestly reduce our exposure by dropping a few stocks that are looking weak right now.
This midstream energy company trades at a P/E ratio less than 13 and pays a high dividend yield of 6.29%, paid quarterly.
In light of last night’s events in the Middle East, and this morning’s market declines, I wanted to update where we stand with our Cabot Profit Booster positions. The good news, despite today’s wobbles, is that all are working very well!
Here are the top five holdings in this gold fund.
The shares of this gold royalty company recently hit a 52-week high, and the future looks promising.
This industrial machinery company is expected to grow 75.5% next year.
Portfolios
Strategy
A few Cabot Options Trader subscribers have asked me about ways to protect gains in their portfolios, so I thought I would write to everyone with a couple of strategies using options to hedge your portfolio.
A subscriber recently asked me if I keep a journal of my trades. Many traders keep journals so they can look back at their trades and evaluate what they did right and what they did wrong.
Want to know how the big institutional investors use options? Here is an example of how one trader spent $132 million on three technology stocks.
Options trading has its own vernacular. To know how to do it, you need to know what every options term means. Here are some of the basics.
Our Cabot Momentum 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 Momentum Trader features.