Issues
The market’s recovery this week has been very impressive, especially in the face of what looks like continued election uncertainty in the days ahead. That said, two days of action isn’t the be-all, end-all, but it’s certainly encouraging; we’re adding one new half position tonight in Novocure (NVCR) and aiming to add more. The only issue is that many stocks we’re high on are reporting earnings tonight or early next week; if they can survive their reports, we’ll likely be putting money to work.
In tonight’s issue, we write about all our stocks and some bullish signposts for the market longer-term--whether we’re seeing a kickoff here or whether it takes a while longer, the odds strongly favor the past two months being a normal rest within a major bull market.
In tonight’s issue, we write about all our stocks and some bullish signposts for the market longer-term--whether we’re seeing a kickoff here or whether it takes a while longer, the odds strongly favor the past two months being a normal rest within a major bull market.
This month we’re jumping into a small MedTech company that represents a picks and shovels play on the cell and gene therapy market. It makes biopreservation media and storage solutions for cutting-edge treatments, including Kite’s (owned by Gilead) CAR T-cell therapies YESCARTA and TECARTUS.
It’s a high growth company with exposure to both clinical trial and commercial-stage therapies. Covid-19 therapies and vaccines are part of the mix too. And there is an M&A angle that’s increasingly relevant.
The stock appears to have huge upside over the coming years. And we’ll get an update from management almost immediately after you read my reports since the company reports Q3 earnings after the close today.
All the details are inside. Enjoy!
It’s a high growth company with exposure to both clinical trial and commercial-stage therapies. Covid-19 therapies and vaccines are part of the mix too. And there is an M&A angle that’s increasingly relevant.
The stock appears to have huge upside over the coming years. And we’ll get an update from management almost immediately after you read my reports since the company reports Q3 earnings after the close today.
All the details are inside. Enjoy!
Thank you for subscribing to the Cabot Undervalued Stocks Advisor. We hope you enjoy reading the November 2020 issue.
We briefly discuss the soon-to-evaporate election cloud, the merits of holding value stocks when growth/momentum stocks tumble, and highlight one of our portfolio stocks that had some earnings issues along with several others that reported strong earnings that lifted their share prices meaningfully.
Earnings season is in full swing. Six portfolio companies report later this week. We encourage subscribers to visit the reporting companies’ websites to review their earnings-related slide presentations and listen to the post-earnings conference call. These are all available to the public under the “Investor Relations” tab. Sometimes what portfolio companies actually do can seem murky – a quick visit to their website can help clarify, and (at least to me, a certified investment geek) provide some fascinating reading.
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 discuss the soon-to-evaporate election cloud, the merits of holding value stocks when growth/momentum stocks tumble, and highlight one of our portfolio stocks that had some earnings issues along with several others that reported strong earnings that lifted their share prices meaningfully.
Earnings season is in full swing. Six portfolio companies report later this week. We encourage subscribers to visit the reporting companies’ websites to review their earnings-related slide presentations and listen to the post-earnings conference call. These are all available to the public under the “Investor Relations” tab. Sometimes what portfolio companies actually do can seem murky – a quick visit to their website can help clarify, and (at least to me, a certified investment geek) provide some fascinating reading.
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.
If you’ve ever searched for instructions for tackling do-it-yourself tasks, there’s a good chance you’ve turned to today’s recommendation for ideas.
With the election tomorrow, the biggest cause of uncertainty will soon be behind us, leaving investors able to focus once again on what’s important—growth and valuation.
In the meantime, it’s worth noting that the market’s technical strength deteriorated last week, turning our intermediate-term timing indicator negative once again. For that reason, among others, we have a couple of sell recommendations today.
As for today’s recommendation, it’s one of America’s most well-known companies, and selling for a bargain price as management steers the big old beast into what could be an exciting future.
In the meantime, it’s worth noting that the market’s technical strength deteriorated last week, turning our intermediate-term timing indicator negative once again. For that reason, among others, we have a couple of sell recommendations today.
As for today’s recommendation, it’s one of America’s most well-known companies, and selling for a bargain price as management steers the big old beast into what could be an exciting future.
Current Market OutlookThe market had been under some pressure since early October, but last week was a different animal, with the sellers coming out of the woodwork and cracking numerous leading stocks and major indexes. Longer-term, this is still a bull market, with the past two months being a (very) tedious up-and-down consolidation period following the huge March-August advance; we still think the next major move is up. Near-term, though, stocks are back in the soup, and while the headlines will be coming fast and furiously this week (earnings and the election), the onus is on the buyers to step up. Until that happens, we advise a cautious stance—holding a good chunk of cash makes sense, while keeping new positions on the small side and honoring your stops and loss limits. We’re pulling down our Market Monitor another notch to a level 5.
Meanwhile, it’s easiest to spot strength in a down market, so the next couple of weeks should be telling. This week’s list has a broad array of stocks and sectors on it, and our Top Pick is Pinduoduo (PDD), one of many resilient Chinese names that’s actually picking up steam while the market sags.
| Stock Name | Price | ||
|---|---|---|---|
| Bunge Ltd (BG) | 57.98 | ||
| Cloudflare (NET) | 51.96 | ||
| Five9 (FIVN) | 144.12 | ||
| Martin Marietta Materials (MLM) | 270.94 | ||
| Mattel, Inc. (MAT) | 13.95 | ||
| Novocure (NVCR) | 112.15 | ||
| Pinduoduo (PDD) | 91.62 | ||
| Pinterest (PINS) | 58.56 | ||
| Quanta Services (PWR) | 66.45 | ||
| Ultragenyx Pharmaceutical Inc. (RARE) | 95.53 |
Markets are choppy, which is normal considering uncertainty is high and we’re less than a week from the presidential election. Today I look at what history can teach us about politics and markets and why it might be a bit different this time. The Ant Technology giant IPO moves forward as China flexes its muscle, and it’s a signal for coming events. Today’s new idea is an electric vehicle play from Canada that is under the radar of even the trends of most avid supporters.
These are crazy times. This pandemic-riddled year isn’t done with us yet. In fact, Covid cases are rising and many states are reinstating new batches of lockdown restrictions. At the same time, we’re less than a week away from an election with a high risk of a contested result and the ensuing uncertainty.
At some point, we will get past the election and the pandemic. The economy should boom and the market will be free to rise. But things could still get awfully dicey in the weeks and months before we get to the Promised Land.
In this issue, I highlight a high-income stock that is ideal for the current situation. The business is benefitting mightily from the pandemic. It’s a defensive stock that should continue to perform well amidst the volatility. Yet, it should also be a star in the post-pandemic market.
Not only does this stock pay a high dividend, but it attracts high call premiums as well. It is one of the very few stocks that is well worth buying in the current situation.
At some point, we will get past the election and the pandemic. The economy should boom and the market will be free to rise. But things could still get awfully dicey in the weeks and months before we get to the Promised Land.
In this issue, I highlight a high-income stock that is ideal for the current situation. The business is benefitting mightily from the pandemic. It’s a defensive stock that should continue to perform well amidst the volatility. Yet, it should also be a star in the post-pandemic market.
Not only does this stock pay a high dividend, but it attracts high call premiums as well. It is one of the very few stocks that is well worth buying in the current situation.
The past month has brought great performances from many of our marijuana stocks, but right now, there’s a risk that the market is turning down, preparing to take some of our profits.
Long-term, however, trends toward increased legalization mean prospects for the marijuana sector are brighter than ever; next week’s election will tell us a lot about what the next few years might bring.
How do we balance this short-term risk with this long-term opportunity? By remaining invested in the best-performing stocks, of course.
Long-term, however, trends toward increased legalization mean prospects for the marijuana sector are brighter than ever; next week’s election will tell us a lot about what the next few years might bring.
How do we balance this short-term risk with this long-term opportunity? By remaining invested in the best-performing stocks, of course.
Updates
The broad market remains in a holding pattern. Some stocks are breaking out to new highs, but others are breaking down. The Nasdaq regained some ground this week, but the divergences between the major indexes remain. There’s no reason to panic, but we are making a couple of moves to reduce risk this week.
Just in case any of my subscribers wants to invest in energy companies, but feel bad that perhaps those companies are cheating America, there are three things I’d like to point out about ExxonMobil (XOM).
The turmoil in stock prices continued last week. The S&P 500 index declined only 0.4%, but consumer discretionary, energy and technology stocks suffered larger losses. Money flowed into several value sectors, including industrial, financial and materials stocks. Is the bull market in growth stocks over?
The iShares EM Fund has been trading mostly sideways since the middle of May, and that has kept the Emerging Markets Timer above its moving averages, but just barely. We have two portfolio moves tonight.
Stocks were pummeled Thursday, with tech showing the worst losses. The Nasdaq closed down 1.4%, and the S&P 500 and Dow both lost about 0.8%. Financials and energy stocks were among the only names spared, as oil prices continued their recovery and the Fed approved the banks’ new capital plans.
There’s been some turbulence in our portfolio this week, but nothing we haven’t experienced at some point in 2017. Small caps are up 1% from last week, and would have been up more if not for another bout of selling in technology stocks yesterday.
Stock indexes stumbled again yesterday, June 29, led by large-cap tech stocks. Thus far, the profit-taking looks normal. Technology stocks have been on a tear in 2017, so investors are taking advantage of sky-high prices to harvest extraordinary gains.
Our trend following indicators remain bullish and most growth stocks are still in good shape, so we’re sticking with our current stance. Our only change tonight is that we’re placing one of our stocks on Hold.
I’ve been watching for opportunities to add companies to the Cabot Undervalued Stocks Advisor portfolios that are outside the financial, energy and construction sectors and industries. Today, I’m adding an aerospace manufacturer to the Growth Portfolio as a Strong Buy.
All things considered, the past week has been tame. The S&P 600 Small Cap Index retreated 1.4% to get back to its 50-day moving average, while the S&P 500 Index traded sideways.
Stock indexes are situated just a tad below all-time highs, yet tech stocks are sitting on quicksand, energy prices are dropping, and President Trump’s policy agenda is falling apart. The bears have plenty of reasons to push prices lower, but stocks keep rising.
The iShares EM Fund has been trading effectively sideways since the middle of May, and that has kept the Emerging Markets Timer above its moving averages. We have one portfolio move tonight.
Alerts
While the long-term prospects for this industry remain very bright, and I’m thrilled to be your guide to these opportunities, the short-term risks are now high. Which means that someday, there will be a correction, and some investors, particularly those who bought at the top, will lose a lot of money. And I don’t want you to be one of them.
Eight analysts have increased their EPS estimates for this Chinese internet company in the past 30 days.
Crista is adding a stock to the the Buy Low Opportunities Portfolio.
The top five sector in this ETF are: Financial, 16.66%, Technology, 16.2%, and Industrials, 15.72%.
This telecom is forecasted to grow at almost 20% next year, and by triple digits in the next five years.
As part of its new North American leadership changes, this turnaround flooring company just named a new CFO from International Paper, who will replace the current retiring Chief Financial Officer.
This automotive supplier beat analysts’ EPS estimates by seven cents last quarter.
Awareness of cannabis is definitely up, but there are still major friction points, which will continue at least until the U.S. government legalizes marijuana as it has just legalized hemp.
This chemical company’s stock was also recently recommended by Zacks, who cited the company’s rising earnings.
This infrastructure company’s stock was also recently recommended by simplywallstreet.com, due to its strong fundamentals, growth potential, and undervaluation.
Next, we are taking significant profits on a previous sale.
Our first idea is a mining company that is showing strong results; buy on weakness.
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.