Issues
A stimulus bill looks like it is right around the corner but we need to get through this winter before vaccines are widely available. Facebook faces a real challenge to break it up and accept legal liability for content. An EU-China summit is cancelled after China tried to limit speakers critical of China’s clampdown of Hong Kong. On the Explorer front this past week, MP Materials (MP) and NovoCure (NVCR) were particularly strong as Sea Limited (SE) briefly made a new high at 200. As promised, our new idea this week hails from Brazil and is a monopoly play on the most essential of all resources.
Due to the holidays, the next issue of Cabot Global Stocks Explorer will be published on January 7, 2021.
Due to the holidays, the next issue of Cabot Global Stocks Explorer will be published on January 7, 2021.
The vaccine is changing everything. Stocks that had been left for dead by the market recovery are springing back to life and leading the market higher.
One area of opportunity ahead of the New Year is in banks stocks. As a cyclical sector, banks took it on the chin during the pandemic. They crashed during the bear market and have lagged the recovery. But they are rising fast and have great momentum ahead of what looks to be a promising year for the sector.
In this issue, I highlight one of the very best and most profitable banks in the country. It still sells at a great value, pays one of the highest dividends in the industry and now has solid upward momentum.
One area of opportunity ahead of the New Year is in banks stocks. As a cyclical sector, banks took it on the chin during the pandemic. They crashed during the bear market and have lagged the recovery. But they are rising fast and have great momentum ahead of what looks to be a promising year for the sector.
In this issue, I highlight one of the very best and most profitable banks in the country. It still sells at a great value, pays one of the highest dividends in the industry and now has solid upward momentum.
Today, we are recommending a micro-cap stock in the virtual lease-to-own market.
I think this stock has ~100% upside over the next year or so.
This company’s characteristics include:
All the details are inside this month’s Issue. Enjoy!
I think this stock has ~100% upside over the next year or so.
This company’s characteristics include:
- Secular revenue growth
- Significant operating leverage
- Company insiders own over 20% of shares outstanding
- Recent insider buying
All the details are inside this month’s Issue. Enjoy!
As 2020 winds to a close, and as the market races to all-time highs, our six open covered call positions are all doing very well ... especially our December positions set to expire next Friday, December 18.
Current Market OutlookIf you’re looking at the trends of the major indexes, the price/volume action of leading stocks (both cyclical and growth) or the breadth of the overall market, it’s hard to find much to fault—the buyers are clearly in control as most stocks, sectors and indexes trend higher. About the only thing to worry about is that there’s not much to worry about; sentiment measures of all stripes (money flows, option activity, surveys) as well as some market action (huge moves in many speculative stocks) tell us that things are a bit hot and heavy right now. To be clear, that’s no reason to dramatically alter your game plan, but it’s a reminder that risk is rising, so keep your feet on the ground, look for good entry points and, once you’re in, honor your stops and book some profits (or partial profits) on the way up.
This week’s list features a wide mix of stocks, including many that have recently staged longer-term breakouts. One of those is our Top Pick: Applied Materials (AMAT) sports accelerating growth and a beautiful chart, and while short-term dips are possible, a major advance looks to be underway.
| Stock Name | Price | ||
|---|---|---|---|
| Applied Materials (AMAT) | 89.25 | ||
| Cleveland-Cliffs (CLF) | 12.62 | ||
| Pinduoduo (PDD) | 146.82 | ||
| Qorvo (QRVO) | 167.01 | ||
| Snowflake (SNOW) | 388.38 | ||
| Tapestry, Inc. (TPR) | 29.75 | ||
| Uber (UBER) | 53.80 | ||
| Vale S.A. (VALE) | 16.29 | ||
| United States Steel Corporation (X) | 17.20 | ||
| Zscaler (ZS) | 178.17 |
The bull market remains alive and well, and I continue to recommend that you be heavily invested in a diversified portfolio of stocks.
This week’s recommendation is a very small medical technology company focused on the business of processing and testing cells, as accurately and efficiently as possible. Long-term potential is big.
But to make room for it in the portfolio, something has to go, and this week it’s Digital Realty (DLR), which never really got going for us.
Full details in the issue.
This week’s recommendation is a very small medical technology company focused on the business of processing and testing cells, as accurately and efficiently as possible. Long-term potential is big.
But to make room for it in the portfolio, something has to go, and this week it’s Digital Realty (DLR), which never really got going for us.
Full details in the issue.
This month we’re jumping into a company that specializes in precision medicine for cancer.
It has developed a sequencing platform that is able to analyze over 20,000 genes, far more than most competitor solutions. Even better, this platform allows analysis of both tissue biopsies and liquid biopsies.
Ultimately, the company is going after a roughly $40 billion market. Yet its market cap is a mere $1 billion today.
This company is still unknown, but that’s likely to change as it brings new products to market and continues to transform the market for personalized cancer vaccines and next-gen cancer immunotherapies.
All the details are inside. Enjoy!
It has developed a sequencing platform that is able to analyze over 20,000 genes, far more than most competitor solutions. Even better, this platform allows analysis of both tissue biopsies and liquid biopsies.
Ultimately, the company is going after a roughly $40 billion market. Yet its market cap is a mere $1 billion today.
This company is still unknown, but that’s likely to change as it brings new products to market and continues to transform the market for personalized cancer vaccines and next-gen cancer immunotherapies.
All the details are inside. Enjoy!
The market remains in great shape, and even better, growth stocks have (mostly) avoided any further severe rotation in recent weeks, with more and more joining the party. There are a couple of bugaboos out there (especially sentiment, which has gotten giddy), but we continue to steadily put money to work as opportunities arise. Last week, we added a new half position in Halozyme (HALO), and tonight, we’re filling out our position in Uber (UBER), which looks like a fresh, early-stage leader to us.
Open up tonight’s issue for all our latest thoughts on the market, our stocks, some new ideas and the myriad longer-term breakouts we’re seeing across sectors and themes, which should bode well.
Open up tonight’s issue for all our latest thoughts on the market, our stocks, some new ideas and the myriad longer-term breakouts we’re seeing across sectors and themes, which should bode well.
Updates
In this Weekly Update, I summarize the latest news for the only one of our companies to report quarterly results during the past two weeks.
In the short-term, the market could be ready to rest and there’s some rotation going on, which could affect leadership. But, big picture, the intermediate- and longer-term trends are pointed up and even the broad market is returning to health.
The Dow and S&P 500 both closed at all-time highs yesterday, as the Dow notched its eighth straight day of gains. Financials were the week’s best-performing sector, as interest rates suddenly reversed direction to post big gains.
After two months of sideways trading, the three major U.S. stock market indices are rising and reaching new highs.
The market backdrop is much improved this week and small caps posted another week of encouraging action (up 2.1% over the last five sessions). The S&P 600 had that sketchy drop below the 200-day line (red line in chart) in mid-August, but the index has come back strong since.
The iShares EM Fund is holding up in fine style, holding well above its 25-day moving average, so our Buy signal remains in place. While our stocks are generally holding up well, there has been a slight increase in volatility.
The week has brought some impressive rebounds, and I’m putting two stocks back on Buy today. That brings our total number of Buy-rated positions to six (plus our bond ladder), a slightly more constructive stance than we’ve taken in recent weeks.
There’s a lot on my mind lately: hurricanes, child-rearing, college freshmen, human tragedy and Dollar Tree (DLTR).
The market didn’t change much over the past week but it feels like it’s on more solid ground. Perhaps that’s because it’s been three weeks since we were on the brink of a bigger leg down. Or because earnings-related volatility is calming down. Or because after two weeks of gains, a week of consolidation feels like the right next step.
In this Weekly Update, I summarize the latest news for one company. I also include pertinent questions from subscribers with my responses.
Growth stocks and many indexes perked up nicely during the past couple of weeks, but the intermediate-term trend is effectively neutral and we still haven’t seen much big-volume buying. We’re optimistic, but advise you to continue being selective on the buy side and holding a chunk of cash on the sideline.
Last week’s action still improves the market picture a bit, but yesterday’s panic shows we’re not out of the woods yet. I’m making one portfolio change today.
Alerts
Two of the portfolio stocks each reported first quarter results that beat expectations.
One of our gold companies today is gaining cash from a mine sale; the other—post merger—is a previous recommendation that is now a hold.
Two of the portfolio stocks each reported strong quarterly earnings beats.
The shares of this pharmaceutical stock is seeing new analyst coverage.
This engineering and consulting firm is eating up its competition.
This gene therapy company has been getting lots of good attention from analysts, with coverage of the shares being initiated at Evercore ISI Group, with an ‘Outperform’ rating.
The shares of this cosmetic company were recently upgraded by JP Morgan to ‘Overweight’.
This fast food giant beat earnings estimates by $0.04 last quarter, and three analysts recently raised their EPS forecasts for the company.
It’s not entirely unusual for a new CEO at a company to change the dividend policy due to having a different idea of how the company should be using its cash flow.
In the past 30 days, seven analysts have raised their earnings forecast for this restaurant company.
Two stocks are moving up and a third stock is moving from Buy to Strong Buy.
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.