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.
Markets struggled for direction this week as data coming in is mixed and growth and inflation battle for a “goldilocks” middle ground. The controversy over DiDi’s recent IPO has Chinese-listed U.S. stocks in the crosshairs of both China’s regulators and American legislators. Looking ahead, these summer doldrums may just be a precursor to the market continuing its bull run and a bit of a pullback totally in line with the sharp upward swing we have experienced since March 2020. Today we have a pink sheet blue chip clean tech idea of the highest quality.
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.
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.
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.
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 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.
U.S. stock markets continue to suffer, wiping out year-to-date gains that had previously culminated in all-time-high prices on the S&P 500, Dow Jones Industrial Average and NASDAQ indexes. If you’re looking for “the bright side” of this dour news, take heart that none of these market indexes have retraced their early-2018 lows.
Following last week’s big decline, the market has shown some resilience, and we continue to see a growing number of stocks showing great resilience. Even so, our Cabot Tides green light from two weeks ago has disappeared and the longer-term Cabot Trend Lines remain down, so we continue to advise a cash-heavy posture as we patiently wait for confirmation the buyers have taken control. We have no changes in the Model Portfolio tonight.
The weakness that was troubling the market before last Wednesday’s unanticipated holiday worsened when markets opened again Thursday, and the major indexes are back at their correction lows. I was optimistic when the market strengthened two weeks ago, for now it’s time to stay defensive. That means selling half of one our holdings. But on a positive note, some sectors are still working well, and I’m moving both our REITs back to Buy.
U.S. stock markets continue to suffer, revisiting lows from October and November. We could see modest improvement through year end, but I don’t expect a strong stock market rebound until at least January.
Trade war uncertainties have nipped our young buy signal in the bud, but the situation is highly fluid, so we’ll be making portfolio choices on a stock-by-stock basis.
With our mix of conservative, growth-oriented and high-yield investments, our portfolio continues to do well. Most of our non-Safe Income stocks are still on Hold, so it’s time to start thinking about becoming more aggressive, if the market becomes more constructive. But we don’t want to get ahead of the market, so no rating changes for now.
Remain defensive, but stay tuned as we could get a Cabot Tides buy signal as early as tomorrow if the market cooperates. Tonight, we’ll stand pat with our huge (90%-plus) cash position, but we’ll send out a bulletin if we get a green light.
Following the second 10% U.S. stock market correction of 2018, stocks are trying to get their footing. We’re witnessing some large daily price swings, especially among energy stocks, which are being buffeted by falling oil prices.
I think we can all use a break from this market, and there’s no new fundamental news related to any of our positions. So today I’m just going speak for a few minutes on the state of the market and small caps.
The top five holdings of this fund are: Googl Call Usd 1275 15/Nov/2019 (7.84% of assets); Fidelity National Information Services Inc (FIS, 7.16%); Microsoft Corp (MSFT, 4.27%); IHS Markit Ltd (INFO.PA, 4.14%); and Air Liquide SA (AI, 4.00%).
This entertainment/media company beat analysts’ estimates by $0.12 last quarter, and five analysts have recently increased their EPS forecasts for the company.
The top five holdings in this fund are: Nestle SA (NESN, 2.27% of assets); Roche Holding AG Dividend Right Cert. (ROG, 1.47%); Novartis AG (NOVN, 1.30%); Toyota Motor Corp (7203, 1.11%); and HSBC Holdings PLC (HSBA.L, 1.06%).
There’s been a lot going on lately as earnings season has heated up. With many of the stocks covered in the September and October Issues of Cabot Early Opportunities we have a few updates to get into.
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.
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.
Current Market Outlook