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!
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.
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.
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!
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.
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.
Updates
Things could actually be turning optimistic for the market and it’s looking like this could be more than just a bounce back from the overdone December lows. There is still risk out there. But a catalyst may be emerging for strong upside with increasing optimism for a U.S./China trade deal. My market prognosis is changing from pessimistic to good with a chance of great.
U.S. stocks delivered great performance in January and are now taking a breather. As such, I expect the S&P 500 index to trade between 2625 and 2825 for a while. The trading range might end up being a little higher or a little lower, but for now, a repetition of the trading range that took place between late October through early December seems most likely to occur. I anticipate that the market indexes will continue advancing later this year.
The market continues to look good as stocks are grinding higher with a few normal-looking down days mixed in (like yesterday) to keep investors honest. Average in, spread out your buys across different stocks, and take note of the current trading range and where support, and overhead resistance, appear to be. Action is starting to pick up in our portfolio, with a few companies having reported this week and a number on tap for next week too.
The sellers finally showed up today, with some negative headlines causing the market to pull back. In the Model Portfolio, we’re standing pat tonight with 35% in cash, though we’re spying a few names for possible new buying.
The market isn’t spiraling downwards anymore. It’s actually looking healthy again. The next stages of this market should be ideal for dividend payers and the relative return of dividend stocks in the upcoming quarters and years could be the best in a long time. Only one rating change today as we are selling a half position.
Emerging markets (EEM) continue to gain ground, and just today moved above their 200-day average. Since the S&P 500 index bottomed the day after Christmas, the EEM has risen 14% to reach a seven-month high.
The stock market recovery continues in a slightly better style than I had hoped for. I had expected big upswings followed by pullbacks, which is normal for a recovery.
As we close out the fourth week of 2019 small caps are looking good.
It’s time to do some more buying. Our Cabot Tides has flashed a new buy signal, and while the near term could easily see some retrenchment, the evidence is building that the worst of the market’s downturn is over and that another bull phase could be starting. We are adding one new position and buying the remaining half (to make them full positions) of two other positions.
Alerts
Six analysts rate this software company’s shares a ‘buy’, with an average target price of $99.
Coverage of the shares of this BDC was recently initiated at Deutsche Bank with a ‘Buy’ rating.
One of the portfolio stocks reports good fourth-quarter results.
This home builder beat analysts’ EPS forecasts by $0.05 last quarter, and Wall Street expects the company to grow at an annual rate of 14.83% over the next five years.
This preferred stock is issued by an investment and insurance company.
Especially with small caps, it’s not always an efficient market in the short-term. So sometimes the best thing to do is nothing. Just sit back and think it over.
The good news is that 2019, which started off so well for the cannabis sector but is ending so poorly, is nearing the finish line. The bad news is that we still have three weeks to go, technically, though many of those days will see light trading volume.
In the past 30 days, 13 analysts have increased their earnings estimates for this cloud computing company.
One of the portfolio stocks reported third-quarter results.
The market remains in a normal consolidation phase, and most of our stocks look fine.
The five largest holdings of this ETF are: Apple Inc (AAPL, 3.38% of net assets), Microsoft Corp (MSFT, 3.18%), JPMorgan Chase & Co (JPM, 3.04%), Johnson & Johnson (JNJ, 2.82%), and Verizon Communications Inc (VZ, 2.69%).
Coverage of the shares of this building supply company was recently initiated at Deutsche Bank and Buckingham, with a ‘Buy’ rating, and five analysts have raised their EPS estimates for the company over the past 30 days.
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.