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 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.

Current Market Outlook


From 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	Buy Range	Loss Limit
Advanced Micro Devices (AMD)	109	104-109	94-96
Alcoa (AA)		38.5-40.5	34-35.5
Align Technology (ALGN)	700	685-702	625-635
ArcelorMittal (MT)	34	33-34.5	30-30.5
Atlassian (TEAM)	323	305-315	275-280
Dynatrace (DT)	64	62-64.5	55-57
Hilton Worldwide Holdings (HLT)	128	126-128.5	117-119
Monolithic Power (MPWR)	454	430-442	382-389
Old Dominion Freight Line Inc. (ODFL)	267	263-269	246-249
Repligen (RGEN)	248	233-240	208-212

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.

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, 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—perhaps as second quarter reports begin to be released next week.



In the portfolio today the one small change is that we’ll sell half our position in TerrAscend (TRSSF) and move the proceeds into Innovative Industrial Properties (IIPR).



Full details in the issue.

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.

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the August 2021 issue.

With the stock market’s remarkable strength over the past five and ten years, most stocks have produced at least reasonable gains, such that even out-of-favor stocks aren’t down-n-out stocks. We look at attractive turnarounds among stocks with flat to negative five-year returns.



SPACs, or special purpose acquisition companies, are all the rage. While the group has rightfully earned the disdain of value investors, there are some post-SPAC companies worth a closer look. We highlight five.



Our featured Buy recommendation, Walgreens Boots Alliance (WBA), is viewed as a broken growth company. While its challenges are clear, its shares now trade at a bargain valuation, yet the company has sturdy finances and a new outsider CEO. This combination, combined with a sustainable (and growing) 4.1% dividend yield that pays investors to wait, makes it an attractive turnaround candidate.



During the month, we moved Macys (M) to a Hold and raised our price target on Duluth Holdings (DLTH) from 17.50 to 20.



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.

The overall market continues to be, well, wobbly. After a 2.1% loss last Monday, the sharpest decline in roughly 10 months, the bulls took charge at the opening bell last Tuesday and have yet to give up. Last week, the S&P 500 climbed 1.92%, the Dow advanced 1.07% and the Nasdaq surged 2.76%.

What a difference a week makes! Since our last issue, stocks have recovered from their worst trading day since March to reach new all-time highs. So, the bull market remains very much intact, though some growth stocks continue to wobble. Fortunately, today’s featured stock combines both elements of growth and value – and unlike many traditional growth stocks right now, it’s hitting two-year highs.

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.

Right now, keep new positions small and don’t get fooled into thinking we’re on a one-way conveyor belt higher. If this bull market is to stay healthy and continue, we’ll need to see a pause in leading stocks and some catch up performance from areas of the market that haven’t done much lately.

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.

Three quarters of earning’s beats and solid revenue growth are pushing this consulting stock higher.

Crista has updates on several portfolio stocks.

The fund pays a current annual dividend yield of 9.83%, paid monthly.

Our second recommendation is a sale of a company that proved to be a disappointment.

Let’s talk about a specific category of stocks that I like to buy after they fall from grace. These are famous stocks that don’t fall very often, but when they do, I like to snap them up because they’re almost always destined to rebound. And it just hit me: these are MOVIE STAR STOCKS.

Our second recommendation is a short sale of a stock that is facing increasing competition.

Our first idea today is a medical device company who recently saw coverage of its shares initiated at Roth Capital with a ‘Buy’ rating.

The stocks in are our portfolio are gradually looking healthier, as bargain hunters invest more carefully, focusing on the stocks with the best prospects for real revenue growth and real earnings.

The shares of this low-cost airline company were recently upgraded by Vertical Research and Buckingham, to ‘Buy’.

This mortgage insurer has beaten analysts’ EPS estimates for the last four quarters, topping last quarter’s forecasts by eight cents.

This specialty chemical company is forecasted to grow at an annual rate of 13.2% over the next five years.

Today is the expiration of our first positions.

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 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.