Here is your July Wall Street’s Best Digest, Mid-Year Top Picks Update issue 843.
Welcome to our Mid-Year Top Picks Update! While the markets in 2021 have continued to drive higher, so have our Top Picks. Our picks averaged a return of 37.5% so far this year, and our Top 5 gained an average of 242.5%!
Those are some great numbers! And as the markets continue to move higher, so does the economy continue to gain strength.
Job seekers are beginning to come back into the market after months of receiving temporarily increased unemployment benefits; that made the unemployment rate for June edge up to 5.9%. Housing sales continue to rise, as does manufacturing. That’s all great news!
In this month’s issue, we highlight updates on many of our Top Picks from our January issue. We begin with Growth stocks, and here we offer updates on the electric vehicle and travel sectors. In Growth & Income, our updates include a retail pharmacy, a jewelry company, a business that markets cell phone towers, and a tobacco stock.
In Financials, you’ll find several banks that pay nice dividends. Our healthcare offerings are four biotech companies. And in Technology, we profile a search and a software stock.
Our Resources and Energy stocks include gold mining, uranium, and lithium companies. And our Low-Priced stock operates in the therapeutic arena. Our remaining Top Picks updates are several funds that offer exposure to the AI, marijuana, cybersecurity, and income sectors.
In addition to our Top Picks updates, I’ve also included a section of new ideas, beginning with apparel, conglomerate, and gaming companies in the Growth genre. In Growth & Income, you’ll find a railroad company as well as a business that sells ID solutions.
Our Healthcare offerings are an HMO, a life sciences company, a biotech, a REIT, and a healthcare tech business. In Resources, we highlight a gold and a lithium stock. And in Funds & ETFs, our contributors profile a real estate and a genomics company.
I hope you are having a wonderful summer. For me, I’m dipping my toes back into travel, taking a few mini trips. And I’m preparing for our Cabot Smarter Investing, Greater Profits Online Conference, to be held August 17-19, 2021. I hope you will join us. As always, please don’t hesitate to email me with your feedback and questions. My address is nancy@financialfreedom.com.
There’s no doubt it has been an incredible year for the market. The S&P 500 has witnessed five straight months of gains while simultaneously carving out new all-time highs in the process. And last week was no different. The market continued to forge higher, with all three major market benchmarks closing the week near or at all-time highs. The S&P 500 added 1.67%, the Dow gained 1.02%, and the Nasdaq advanced by 1.94%.
Thank you for subscribing to the Cabot Undervalued Stocks Advisor. We hope you enjoy reading the July 2021 issue.
The main supports for the market (an improving economy, strengthening earnings, low interest rates and a lack of major negative surprises) remain in place. It looks like a road of green lights well into the future.
One green light has turned yellow, however, with China’s crackdown on Didi Global, owner of the country’s dominant ride-hailing app. We don’t see imminent risk for value-oriented companies, but the long-term risk is rising.
Earnings season starts next week. Earnings reports are often the primary driver of the shares of our undervalued companies. We look forward to seeing how the business fundamentals are improving and listening to managements’ commentaries and outlooks.
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.
Electric Delivery The first half of 2021 ended up being a needed retracement of the first leg of the new bull market that started in March 2020. The bear move from February to mid-May pushed the Greentech sector into a loss for the six months, anywhere from 1% to 10% depending on your benchmark. Yet we’re still in a long-term uptrend and investors continue to pour money into Greentech: the three largest environmental stock funds saw inflows equal to 33% of their assets under management this year, through June, easily the best six-months ever for Greentech investor inflows.
In this issue of SX Greentech Advisor, we present two businesses, one a recently public prime-mover in utility-scale energy storage and analytics; the other a long-time auto parts supplier that sees big growth ahead in the redesign of electrical systems for EVs. Also inside, our recurring look at the top three technically strong ESG stocks, our Greentech Timer, and a review of our portfolios.
“It is undoubtedly the greatest economic opportunity of our lifetime. The winning companies won’t be worth billions or tens of billions. They’ll be worth hundreds of billions or trillions if we can pull off that goal.” Ben Kortlang, founding partner of venture capital firm G2 Investors, on the U.S. carbon reduction goal of 50% cut by 2030.
It was a relatively quiet, but bullish, pre-holiday week, with the major indexes acting well and many stocks resting nicely. That said, there was still rotation evident, with growth stocks finally easing a bit while money sloshed into some other areas, before that situation reversed today. Overall, not much has changed with our thoughts—we’re generally encouraged, and actually think further pullbacks in growth titles could provide some tempting entry points (the Nasdaq is pretty extended short term), though there remains plenty of tricky and narrow action (just over half of all stocks are even above their 50-day lines and there are lots of potholes on a daily basis), so picking your stocks and buy points is important. We’ll keep our Market Monitor at a level 7.
This week’s list has a nice collection of stocks from different sectors and themes that have all shown some good-volume accumulation of late. Our Top Pick is Carvana (CVNA), which is near the top of a six-month launching pad.
The bull market rolls on, and our portfolio continues to deliver, so I continue to recommend that you be heavily invested in stocks that help achieve your investing goals.
Today’s featured stock is a big Asian consumer company that’s still growing extremely fast; in fact, revenues are accelerating!
As for the current portfolio, to keep it at our maximum level of 20 stocks, we’re parting company with little marijuana company Columbia Care (CCHWF), mainly because it’s our biggest loser.
The markets continue to perform well. And the economy is moving forward, with employment steadily increasing (it seems every business has a “for hire” sign in its window!).
We’re once again adding to our Financial holdings with our Feature recommendation this month--a regional bank that has strong fundamentals and looks like a promising takeover target. The bank is a survivor of more than 90 years, scooping up its competitors who haven’t been as well-capitalized. Lastly, it pays an attractive dividend yield and is undervalued.
We hope to see you on our July Platinum Club webinar; it’s scheduled for July 7 at 2pm. In the meantime, don’t hesitate to contact us with any questions or comments.
The growth stock selloff of February and March knocked good software companies down a peg. But many of these stocks are bouncing back now as investors realize growth isn’t going to evaporate as the pandemic eases.
Today’s addition is a newly public company with a software platform for hosting virtual events. The pandemic supercharged growth and revenue doubled. Deeper evaluation of the trends suggests things will calm down a little, but growth should be sustained well above 20% for years and could even top 30%.
Despite the potential, the stock is dirt-cheap as compared to its peers. We’ll jump in now before investors realize the disconnect.
It’s not 1999 out there, and the environment remains tricky and narrow. But there’s also improvement being seen among growth stocks, with more and more stocks showing persistency and power. We’re still going slow, but we added two new half positions last week; we’d like to increase our exposure soon, but tonight will sit tight.
In tonight’s issue, we talk in depth about some of the improved evidence we’re seeing, write about all of our stocks and highlight a few tempting titles (including a new cloud software name that’s on our watch list—see Other Stocks of Interest).
Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the July 2021 issue.
This month we look into major pharmaceutical stocks, which are selling at their widest discount to the market in decades. We discuss some reasons behind the market’s pessimism and why, for value investors with patience, the shares of five companies offer considerable appeal.
We also include our mid-year stock market update and mid-year bankruptcy review. Stocks have been remarkably strong so far this year and appear poised for more gains, yet we encourage value investors to remain selective and patient amidst the exuberance while keeping the long-term horizon in view.
Easy financial market conditions have helped shrink the number and size of bankruptcies to a fraction of their long-term average. We discuss this phenomenon and why investors in distressed securities should wait for conditions to become favorable again.
Our feature Buy recommendation, Organon & Company (OGN), is a recent spin-off from Merck. Investors have discarded the shares due to revenue concerns, but the bargain valuation and our more optimistic outlook make the shares appealing.
It was a busy month in the portfolio. We raised our price targets on Signet Jewelers (SIG), Molson Coors Beverage Company (TAP) and General Motors (GM), and moved four stocks to Sell: Biogen (BIIB), BorgWarner (BWA), The Mosaic Company (MOS) and Jeld-Wen Holdings (JELD).
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.
Remain bullish. The market continues to act well, and while the broad market has been futzing around for nearly a month, our market timing indicators are positive and most leading stocks are in good shape. Only change tonight is putting one position back on Buy.
We have the ideal environment for the relative performance of dividend stocks. You are in the right place at the right time. The portfolio has had another good week and one rating change moving a position back to Hold.
U.S. stocks markets are now continuing their rebound from the horrendous fourth-quarter 2018 market action. The S&P 500 and NASDAQ indexes look quite bullish, while the Dow Jones Industrial Average (DJIA) lags a bit.
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 market was met with some selling as investors returned from a long weekend, with sentiment souring after Apple said they’re unlikely to meet Q1 guidance due to supply and demand issues from China due to the effects of the coronavirus.
Shares fell after an earnings disappointment, making this turnaround company even more undervalued. The shares have a current dividend yield of 4.85%, paid quarterly.
This portfolio stock reported last night with revenue that was up 33.3% to $91.7 billion and beat by $3.4 million and adjusted EPS of $0.03 that beat by $0.04.
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.
Current Market Outlook