Issues
Explorer stocks had an unusually quiet week as the Delta variant and weaker-than-expected job growth gave markets something to worry about. Meanwhile, the economy moves ahead. In particular, the pace of U.S. electric vehicle sales doubled in the first half of 2021 as we try to catch up to other parts of the world. Today’s recommendation is an indirect but powerful way to play this accelerating trend.
Please join me for the 9th Annual Smarter Investing, Greater Profits Online Conference, August 17-19. We have an incredible line-up of experts ready to share their best picks.
Please join me for the 9th Annual Smarter Investing, Greater Profits Online Conference, August 17-19. We have an incredible line-up of experts ready to share their best picks.
Among all the small-cap stocks I’ve studied in recent weeks one keeps jumping out at me. In fact, I’ve been eying it since March. It’s time to act.
This stock is different in virtually every respect from our typical stock. It’s not high tech and growth isn’t off the charts. That’s because it’s a value stock.
I think once you read my report you’ll “get it.” And in a year or so I believe this stock will be trading 50% to 100% higher than it is now, meaning it could offer the same upside potential as growthier names.
Enjoy!
This stock is different in virtually every respect from our typical stock. It’s not high tech and growth isn’t off the charts. That’s because it’s a value stock.
I think once you read my report you’ll “get it.” And in a year or so I believe this stock will be trading 50% to 100% higher than it is now, meaning it could offer the same upside potential as growthier names.
Enjoy!
Thank you for subscribing to the Cabot Undervalued Stocks Advisor. We hope you enjoy reading the August 2021 issue.
Earnings season is in full gear, and we review the several companies that have reported as well as provide some expectations for those yet to report. General Motors (GM) releases its earnings on Wednesday, August 4, after our publishing deadline – this is a highly anticipated report.
Perhaps the biggest difference between value investing and growth and momentum investing is what to do when a stock price falls. Many investors using growth and momentum strategies have a discipline of selling if a stock price falls 15-20%. This may make excellent sense for these strategies but is the exact opposite of what one using a value strategy should do. With value strategies, one generally should buy when their stocks go down in price. We touch upon this more in today’s note.
I’d like to invite you to our 9th Annual Cabot Investor Conference, held online again this year, on August 17-19, that’s Tuesday – Thursday. You can see presentations by all of our analysts, which will include updates on 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 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.
Earnings season is in full gear, and we review the several companies that have reported as well as provide some expectations for those yet to report. General Motors (GM) releases its earnings on Wednesday, August 4, after our publishing deadline – this is a highly anticipated report.
Perhaps the biggest difference between value investing and growth and momentum investing is what to do when a stock price falls. Many investors using growth and momentum strategies have a discipline of selling if a stock price falls 15-20%. This may make excellent sense for these strategies but is the exact opposite of what one using a value strategy should do. With value strategies, one generally should buy when their stocks go down in price. We touch upon this more in today’s note.
I’d like to invite you to our 9th Annual Cabot Investor Conference, held online again this year, on August 17-19, that’s Tuesday – Thursday. You can see presentations by all of our analysts, which will include updates on 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 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.
Building Up
The $1 trillion infrastructure bill is now in the Senate’s hands, meaning Greentech faces a pivot point. Passage of the bill is a potential catalyst to get our sector out of its recent range-bound activity and back on bullish footing. Failure of the bill probably gives bears new life in the near term—investors pretty quickly get used to the idea of more money coming and, like the “taper tantrums” of the past decade, tend to express displeasure through their trading desks.
We’ve said before Greentech doesn’t need direct government support to succeed—renewable energy continued to take market share in recent years even under previously unsupportive federal leadership. This issue, we’re adding two stocks to our portfolio that show excellent strength due to macro trends and at least one of which will help catch any infrastructure bill momentum as well. We also make some shifts in our existing portfolio and watchlist as we adjust to market reactions to earnings.
A good opportunity to step out of the daily volatility of the market and get some perspective on the longer term would be to attend the 9th Annual Smarter Investing, Greater Profits Online Conference, August 17-19. My fellow analysts and I will present our look ahead and some of our best picks for the next year.
Contact me anytime with questions or comments at brendan@cabot.net. Thank you for joining me on the path to climate profits.
The $1 trillion infrastructure bill is now in the Senate’s hands, meaning Greentech faces a pivot point. Passage of the bill is a potential catalyst to get our sector out of its recent range-bound activity and back on bullish footing. Failure of the bill probably gives bears new life in the near term—investors pretty quickly get used to the idea of more money coming and, like the “taper tantrums” of the past decade, tend to express displeasure through their trading desks.
We’ve said before Greentech doesn’t need direct government support to succeed—renewable energy continued to take market share in recent years even under previously unsupportive federal leadership. This issue, we’re adding two stocks to our portfolio that show excellent strength due to macro trends and at least one of which will help catch any infrastructure bill momentum as well. We also make some shifts in our existing portfolio and watchlist as we adjust to market reactions to earnings.
A good opportunity to step out of the daily volatility of the market and get some perspective on the longer term would be to attend the 9th Annual Smarter Investing, Greater Profits Online Conference, August 17-19. My fellow analysts and I will present our look ahead and some of our best picks for the next year.
Contact me anytime with questions or comments at brendan@cabot.net. Thank you for joining me on the path to climate profits.
The overall market continues to trade without much conviction at the moment. Last week, the S&P 500 fell 0.37%, the Dow declined 0.36% and the Nasdaq pulled back 1.11%. As I’ve pointed out over the past few weeks, the bullish surge has been somewhat tainted by what has been going on below the market’s surface recently. Ideally, in a bullish environment, we would see healthy participation in most stocks, but that just hasn’t been the case over the past few weeks. As a result, I will continue to take a cautious, but certainly optimistic approach.
Summer is in full swing, and the Dow Jones Industrial Average has broken 35,000! Value stocks are still leading the charge, but Growth stocks have come on strong.
The markets had a brief rattle earlier this week, most likely due to China’s new tough regulatory environment, as well as the rapid spreading (again!) of coronavirus, particularly the Delta variant. However, they did quickly rebound, which shows the markets’ resilience.
Here at Cabot, we’re still mostly bullish (as are most of my advisors to Wall Street’s Best Digest). But that doesn’t mean that the market is going to continue to push the majority of stocks up. Instead, as I’ve been noting lately, this is definitely a stock picker’s market.
As I research stocks and funds to suggest to you in these pages, I am not only looking at fundamentally strong stocks, but also reviewing the industries and sectors to ascertain which areas are likely to see appreciation over the next 6-12 months.
The economy continues on a strong path, with housing still booming (prices are up 17% month-to-month); unemployment is steadily dropping; and consumer confidence is rising. Second-quarter earnings look very healthy, and as long as that trend continues, the market and economy should prosper.
I also wanted to let you know that we’re making a couple of changes to Wall Street’s Best Stocks this month. We decided—after reviewing our mission for both Wall Street’s Best Stocks and Wall Street’s Best ETFs—that our subscribers would be better served if we combine the two newsletters, putting all of the recommendations in one place and reducing the number of emails you receive from us. So, that’s what we are doing this issue!
From now on, I’ll be maintaining a portfolio of both stocks and funds/ETFs in the Wall Street’s Best Stocks portfolio, so that you can see all of my recommendations at one glance. And every month, I will offer you a new recommendation or two—stocks and/or funds, with the same thorough write-up you are used to seeing. I hope that this will make it easier for you to keep track of all of my recommendations.
The second change is that Kate Stalter is moving on to other Cabot projects, and I want to thank her for her past assistance and wish her the best.
Well, let’s get on with it! This month, I’m going to recommend that you make a couple of partial sales to lock in your profits, along with a new stock idea.
And don’t forget—our Cabot Wealth Virtual Summit, the 9th Annual Smarter Investing Greater Profits Online Conference, is right around the corner. Won’t you join us on August 17-19? You may register here.
I look forward to seeing you!
Happy Investing!
The markets had a brief rattle earlier this week, most likely due to China’s new tough regulatory environment, as well as the rapid spreading (again!) of coronavirus, particularly the Delta variant. However, they did quickly rebound, which shows the markets’ resilience.
Here at Cabot, we’re still mostly bullish (as are most of my advisors to Wall Street’s Best Digest). But that doesn’t mean that the market is going to continue to push the majority of stocks up. Instead, as I’ve been noting lately, this is definitely a stock picker’s market.
As I research stocks and funds to suggest to you in these pages, I am not only looking at fundamentally strong stocks, but also reviewing the industries and sectors to ascertain which areas are likely to see appreciation over the next 6-12 months.
The economy continues on a strong path, with housing still booming (prices are up 17% month-to-month); unemployment is steadily dropping; and consumer confidence is rising. Second-quarter earnings look very healthy, and as long as that trend continues, the market and economy should prosper.
I also wanted to let you know that we’re making a couple of changes to Wall Street’s Best Stocks this month. We decided—after reviewing our mission for both Wall Street’s Best Stocks and Wall Street’s Best ETFs—that our subscribers would be better served if we combine the two newsletters, putting all of the recommendations in one place and reducing the number of emails you receive from us. So, that’s what we are doing this issue!
From now on, I’ll be maintaining a portfolio of both stocks and funds/ETFs in the Wall Street’s Best Stocks portfolio, so that you can see all of my recommendations at one glance. And every month, I will offer you a new recommendation or two—stocks and/or funds, with the same thorough write-up you are used to seeing. I hope that this will make it easier for you to keep track of all of my recommendations.
The second change is that Kate Stalter is moving on to other Cabot projects, and I want to thank her for her past assistance and wish her the best.
Well, let’s get on with it! This month, I’m going to recommend that you make a couple of partial sales to lock in your profits, along with a new stock idea.
And don’t forget—our Cabot Wealth Virtual Summit, the 9th Annual Smarter Investing Greater Profits Online Conference, is right around the corner. Won’t you join us on August 17-19? You may register here.
I look forward to seeing you!
Happy Investing!
Current Market OutlookFrom a top-down perspective, the issues that have surrounded the market are still hanging around—the intermediate-term trend is basically neutral, relatively few stocks are plowing ahead (many below their 50-day lines, fewer names hitting new highs, etc.) and every week or so there’s usually some news-driven rotation into or out of one section of the market. And yet, from a bottoms-up perspective (looking at individual stocks), we’re seeing more to like—more multi-month setups from growth stocks (and even some tidy six- to eight-week structures for cyclical names) and more big-volume breakouts or upmoves, often spurred on by earnings reports. We’re leaving our Market Monitor where it is today, but a good week of earnings reactions will have us extending our line.
| Stock Name | Price | ||
|---|---|---|---|
| Advanced Micro Devices (AMD) | 109 | ||
| Alcoa (AA) | |||
| Align Technology (ALGN) | 700 | ||
| ArcelorMittal (MT) | 34 | ||
| Atlassian (TEAM) | 323 | ||
| Dynatrace (DT) | 64 | ||
| Hilton Worldwide Holdings (HLT) | 128 | ||
| Monolithic Power (MPWR) | 454 | ||
| Old Dominion Freight Line Inc. (ODFL) | 267 | ||
| Repligen (RGEN) | 248 |
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 provides a cloud-based service that has been in great demand through the pandemic and will continue to grow in popularity as the world’s business becomes more virtual.
As for the current portfolio, all our stocks look good, so there are no sales, just one simple downgrade to Hold.
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.
Today’s featured stock provides a cloud-based service that has been in great demand through the pandemic and will continue to grow in popularity as the world’s business becomes more virtual.
As for the current portfolio, all our stocks look good, so there are no sales, just one simple downgrade to Hold.
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.
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.
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.
Updates
Everybody’s focus is on the high-stakes chess game the U.S. and China are playing with respect to trade, and the upcoming Uber IPO. But behind the scenes there’s a nice little rally going on in a certain group of small-cap stocks!
With markets expecting a deal right around the corner, the Trump administration signaled its frustration by threatening to raise tariffs on roughly $200 billion of Chinese imports to 25%, from 10%, last Friday.
Things were going so well in the market. Last week I gushed about the strong 3.2% first quarter GDP report. Then an outside event had to come in and spoil the party, at least for now.
Alerts
The stock market is down again today due to oil price competition and aggression between Russia and Saudi Arabia, which led to plummeting oil prices.
I had already sensed an opportunity in big oil over the weekend and wrote an article that will appear on the Cabot website in the coming days.
The Model Portfolio is holding its own in this storm thus far, but we continue to pare back as needed given the selling wave.
This bank is trading at an undervalued level and has a current dividend yield of 4.91%, paid monthly.
It looks like we’ll be ending this week on a big down note as stocks are heading south once again. The culprit is no surprise; concern that this virus will spark at least a short-term economic downturn.
This financial company is expected to produce growth of more than 27% this year, and recently announced a 3-for-2 stock split.
Please understand that stock market corrections are about market adjustments and reactions to news and economic scenarios.
Wall Street expects this REIT to grow by 10.3% annually over the next five years. The REIT has a current dividend yield of 3.93%, paid quarterly.
This portfolio stock reported preliminary Q4 revenue results a while back that were better than expected, and last night in the official earnings release and on the conference call management announced that profitability was also way above expectations.
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.
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.