Issues
There is no shortage of great stories in the medical technology field. Today we’re jumping in on one that’s been on my radar for some time.
The company has just begun to commercialize a revolutionary technology for treating BPH and prostate cancer, which affects millions of men around the world. Regulatory approval is in hand across three continents, and revenue growth is in the 80% to 100% range.
There are plenty of challenges ahead, but this company appears to be on the path to enormous success.
All the details are inside. Enjoy!
The company has just begun to commercialize a revolutionary technology for treating BPH and prostate cancer, which affects millions of men around the world. Regulatory approval is in hand across three continents, and revenue growth is in the 80% to 100% range.
There are plenty of challenges ahead, but this company appears to be on the path to enormous success.
All the details are inside. Enjoy!
Years from now, I wonder how historians will label this new decade. Will it be the “Terrific Twenties” or the “Turbulent Twenties”? It’s obviously too soon to tell, but we remain optimistic about the future today with a new idea at the fringe of the powerful clean energy trend that has moved past an inflection point. Meanwhile, the Explorer’s group of stocks had another good week as Virgin Galactic (SPCE) launched into space. I wonder if its take-off might be wrapped up in the Reddit revolution?
In January’s Issue of Cabot Early Opportunities we take a trip down memory lane to January 2020, and try to take some of our own advice that seems even more timely now.
We also dig into five stocks that cover a wide variety of end market exposures. We unpack a small stock that represents a play on infrastructure and clean energy, two rising stars in MedTech, a consumer name that just won’t quit and even a beaten down growth stock that should recover as people get back out there later in 2021.
As always, there should be something for everyone!
We also dig into five stocks that cover a wide variety of end market exposures. We unpack a small stock that represents a play on infrastructure and clean energy, two rising stars in MedTech, a consumer name that just won’t quit and even a beaten down growth stock that should recover as people get back out there later in 2021.
As always, there should be something for everyone!
Get this Investor Briefing now, Growth Investing Strategies that Will Make You Rich, and you’ll learn about strategies that will ensure your financial freedom and security. From the ten rules for making big profits with growth stocks to six ways to pick monster growth stocks … from nine tips for better investing to key indicators a bull market is ahead … and from stocks to buy when volatility sets in to stocks that thrive during a pandemic. Growth Investing Strategies that Will Make You Rich is your best guide to building a fortune so you can live a happy and stress-free life.
Thank you for subscribing to the Cabot Undervalued Stocks Advisor. We hope you enjoy reading the February 2021 issue.
We briefly comment on how the response by hedge funds to the Reddit trades may have led to last week’s sell-off and this week’s rebound in the stock market. Is there a bubble? Yes, and our note touches upon how all four ingredients of a bubble, outlined in a recent book on bubbles, are in place.
Earnings season is upon us. We review the reports from Dow (DOW) and JetBlue (JBLU), and look forward to six more reports in the coming week.
Please feel free to send me your questions and comments. This newsletter is written for you and the best way to get more out of the 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.
We briefly comment on how the response by hedge funds to the Reddit trades may have led to last week’s sell-off and this week’s rebound in the stock market. Is there a bubble? Yes, and our note touches upon how all four ingredients of a bubble, outlined in a recent book on bubbles, are in place.
Earnings season is upon us. We review the reports from Dow (DOW) and JetBlue (JBLU), and look forward to six more reports in the coming week.
Please feel free to send me your questions and comments. This newsletter is written for you and the best way to get more out of the 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.
Welcome to Wall Street’s Best Stocks! We are thrilled that you have joined us on this journey to find undervalued growth stocks that offer great upside potential.
In this monthly newsletter, our goal is to add to your knowledge about the markets while helping you make money. We’ll do that by leveraging our combined years of market expertise to uncover stocks in a variety of industries to help you build a diverse portfolio of growing wealth. We’ll tell you how to buy the stocks, giving you both our target price, as well as a stop-loss strategy.
Each month, we’ll also give you our take on the markets and keep you up to date on our stocks, including any important news that may affect our view of the stocks, as well as price and rating changes. And should an event occur that requires immediate notification to you, in between issues, we will send you an email containing all the information you need to know.
In this inaugural issue, you’ll see that we’ve already built a base portfolio, which will be augmented each month with a new stock. Right now, the market has risen so quickly that the stocks in the existing portfolio are too pricey to enter, but keep your eyes glued to your email, in case we see an opportunity to add shares. And, of course, in each monthly issue, we will update those ratings with either Buy, Hold, or Sell.
As for the markets right now, we are very bullish, but cautious. We believe these are markets that require judicious stock-picking, not the dartboard approach, and we will be very diligent in our selections.
The economy is beginning to gain strength, and as more of our population is vaccinated, we should see some great opportunities in industries and sectors that were hit pretty hard by COVID-19.
We are ready to roll, and are looking forward to bringing you some great investment opportunities.
Happy Investing!
Nancy Zambell and Kate Stalter
In this monthly newsletter, our goal is to add to your knowledge about the markets while helping you make money. We’ll do that by leveraging our combined years of market expertise to uncover stocks in a variety of industries to help you build a diverse portfolio of growing wealth. We’ll tell you how to buy the stocks, giving you both our target price, as well as a stop-loss strategy.
Each month, we’ll also give you our take on the markets and keep you up to date on our stocks, including any important news that may affect our view of the stocks, as well as price and rating changes. And should an event occur that requires immediate notification to you, in between issues, we will send you an email containing all the information you need to know.
In this inaugural issue, you’ll see that we’ve already built a base portfolio, which will be augmented each month with a new stock. Right now, the market has risen so quickly that the stocks in the existing portfolio are too pricey to enter, but keep your eyes glued to your email, in case we see an opportunity to add shares. And, of course, in each monthly issue, we will update those ratings with either Buy, Hold, or Sell.
As for the markets right now, we are very bullish, but cautious. We believe these are markets that require judicious stock-picking, not the dartboard approach, and we will be very diligent in our selections.
The economy is beginning to gain strength, and as more of our population is vaccinated, we should see some great opportunities in industries and sectors that were hit pretty hard by COVID-19.
We are ready to roll, and are looking forward to bringing you some great investment opportunities.
Happy Investing!
Nancy Zambell and Kate Stalter
The stock market was under a bit more selling pressure last week as investors seem to be acting negative, even in response to positive earnings results. Unfortunately, the volatility shook us out of our Coeur Mining (CDE) covered call position. We won’t get every trade right, but that highlights the importance of risk management, especially in turbulent markets. This leads me to this week’s Cabot Profit Booster recommendation from a somewhat more defensive sector.
Current Market OutlookAfter one of the wildest weeks in months, you’ve probably seen countless articles talking about the action and the reasons for it. To us, though, it’s what happens during the next few trading sessions that will count most—right now, the intermediate-term trend of the major indexes is up, though it’s more of a mixed bag for leading stocks (both growth and cyclical). In our view, there’s been enough iffy action to warrant some action; we’re moving our Market Monitor down to a level 6 in today’s issue and have a fair number of sells. But what comes next will count most, with a strong, broad rebound (including some positive earnings reactions) likely boding well, while an inability to bounce/further selling possibly putting a nail in the coffin of the post-November advance. For now, we’re paring back and tightening stops but still giving most of our winners a chance to hold support and resume their advances.
This week’s list has a surprising number of solid charts given the recent turmoil, though we generally still favor buying on dips or some tightening action. Our Top Pick is PagerDuty (PD), which is refusing to budge.
| Stock Name | Price | ||
|---|---|---|---|
| Affiliated Managers Group, Inc. (AMG) | 114 | ||
| Aphria Inc. (APHA) | 13 | ||
| Axon Enterprise, Inc. (AXON) | 166 | ||
| Marvell Technology Group (MRVL) | 53 | ||
| Matador Resources Company (MTDR) | 16 | ||
| The Michaels Companies (MIK) | 15 | ||
| Novavax, Inc. (NVAX) | 269 | ||
| PagerDuty (PD) | 51 | ||
| Penn National Gaming (PENN) | 104 | ||
| Redfin (RDFN) | 75 |
The market’s main trend remains up, and thus I continue to recommend that you be heavily invested.
However, last week’s GameStop affair has increased the risk of a well-deserved major correction and thus for the second week in a row, I’m recommending a slightly conservative stock with less downside potential—and a small dividend.
As for our current holdings, there are no obvious bad apples, but we must sell something to keep the portfolio a proper size and the victim today is our Brazilian Water company SABESP (SBS).
Details inside.
However, last week’s GameStop affair has increased the risk of a well-deserved major correction and thus for the second week in a row, I’m recommending a slightly conservative stock with less downside potential—and a small dividend.
As for our current holdings, there are no obvious bad apples, but we must sell something to keep the portfolio a proper size and the victim today is our Brazilian Water company SABESP (SBS).
Details inside.
Get this Investor Briefing now, How to Become a Master Stock Investor for Life, and you’ll learn all the investing essentials you need to ensure your own financial freedom and security. From the basics about investing styles and sectors to stock-market seasonality and cycles … from protecting your portfolio to key investing resources for you … and from knowing when to buy, sell, and hold stocks to getting specific stock recommendations. How to Become a Master Stock Investor for Life is your best guide to a good foundation for achieving and maintaining your financial freedom.
Updates
As you can tell by glancing at the portfolio summary table at the bottom of this update, the market is healthy. I’m putting two stocks back on Buy today.
When I do research for this weekly update, I review the consensus earnings per share (EPS) estimates for each portfolio stock. The consensus estimate represents the average of all the estimates of the Wall Street analysts who do research on the company. This past week, estimates surged more than I’ve ever seen, involving a majority of our portfolio stocks, and involving much more than the typical one- or two-penny per share increases.
The iShares EM Fund (EEM) has raced past its 25-day (upper) moving average, giving us a solid buy signal from the Cabot Emerging Markets Timer that is supported by similarly strong performance from the Golden Dragon ETF.
There were again no significant movements among our stocks in the past week, but many of our stocks went up to their fair values.
Trading remained muted this week, with markets closed Monday for New Year’s Day. Wall Street began to return to work yesterday, and got the New Year off to a good start with solid gains in all the major indexes. On the flip side, some conservative high yield investments, like utilities and preferred shares, declined.
There has been very little going on in our portfolio this week. After last week’s 3.5% average gain, our stocks have moved only -0.5% this week, on average.
We did not see any significant price movement among our recommended stocks in the previous week.
The overall market remains in good shape, as our trend-following market timing indicators remain clearly bullish, and the Two-Second Indicator, while not positive, continues to show some improvement.
With only four low-volume trading days elapsed since our January issue was published, there’s not much new to report from the markets. The exception is the interest rate front.
This stock rose $6 in after-hours trading on December 22, subsequent to the company’s announcement that “in response to inquiries from interested parties, it has initiated a formal process to explore strategic alternatives for the Company focused on maximizing shareholder value.”
Small caps bounced off their 50-day line last week and are nearing all-time highs. It’s anybody’s guess what will happen in the days ahead as many people will have stepped away from the market, so don’t be surprised if there is some odd trading in some of our stocks. There’s usually some inefficient trading, especially with the microcap stocks, during these periods.
The iShares EM Fund (EEM) has popped back above its 50-day line, which is a plus, but the Emerging Markets Timer remains basically neutral, having made no net progress over the past two months.
Alerts
Adobe Systems (ADBE) reports strong second-quarter results.
We’re buying one software company’s stock today and selling another’s.
We’re buying one software company’s stock today and selling another’s
The shares of this commercial payment company were just upgraded by Goldman Sachs to ‘Buy’.
The market is indicated to open slightly higher this morning as stocks continue to work to officially come out of their correction. Our Cabot Trend Lines remains positive and the Real Money Index tells us many weak hands have already bailed out, both good signs. But we’re waiting on the Cabot Tides to give a green light before doing any major new buying from here.
This database platform company is expected to grow by 33% next year.
This Chinese internet company is expected to grow at an annual rate of 26.9% over the next five years.
There are five large holdings in this capital appreciation fund.
Six analysts have increased their EPS estimates for this childcare company in the past 30 days.
The market has been up for six straight days, marijuana stocks look good, overall, and while we don’t quite have a buy signal from our intermediate-term trend-following indicator, we are very close. Today we are averaging up in three stocks.
This industrial company is forecasted to grow at an annual rate of 20% over the next five years.
This solar business is forecasted to grow by 51% annually over the next five years, and the company just beat earnings estimates by a whopping $0.80!
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.