Issues
This is a fantastic environment for income. The upward bias of the market is creating high call premiums. And certain pockets of the market still offer deep value and higher dividend yields than have existed in many years.
In this issue I identify three excellent dividend stocks to buy now.
One is a high yielding energy play with a stratospheric, but safe, yield. Another is one of the most defensive and reliable income generating stocks in the market that still offers good value and a strong yield. And the third is a technology stock that sells at a reasonable price with an incredibly strong catalyst for the stock price to shoot up in the future.
The issue also includes covered calls on these same stocks that will provide a double digit income in a short time if the stocks move higher, and a great income return if they don’t.
In this issue I identify three excellent dividend stocks to buy now.
One is a high yielding energy play with a stratospheric, but safe, yield. Another is one of the most defensive and reliable income generating stocks in the market that still offers good value and a strong yield. And the third is a technology stock that sells at a reasonable price with an incredibly strong catalyst for the stock price to shoot up in the future.
The issue also includes covered calls on these same stocks that will provide a double digit income in a short time if the stocks move higher, and a great income return if they don’t.
After eleven weeks up, the broad market has been correctingfor the past fethreew weeks, and the marijuana stocks are also in gear, totally synchronized—which is good. Bottom line, this correction provides a fine buying opportunity.
I’m taking advantage of this opportunity to average up in Canada’s leading producer, Aphria (APHA). And I’m sticking with all the other portfolio stocks because I truly think we have a portfolio that will thrive as this industry matures.
Full details in the issue.
I’m taking advantage of this opportunity to average up in Canada’s leading producer, Aphria (APHA). And I’m sticking with all the other portfolio stocks because I truly think we have a portfolio that will thrive as this industry matures.
Full details in the issue.
In what came as a shock to many, some brick-and-mortar retailers actually did quite well during the shutdown. This retailer emerged as one of the winners in the locked down economy, keeping all its stores open during the pandemic and reporting strong online business (+45%) and higher comparable store sales in April.
The market remains in good health, so I continue to recommend that you be heavily invested in a diversified portfolio of the best stocks, both strong momentum stocks (we have several) and lower-risk dividend-paying slower growers. In the portfolio this week, the only change is an upgrade of Vertex Pharmaceuticals (VRTX) to buy.
As for the newest recommendation, it’s unusual in that it’s not one stock; it’s actually an ETF of a market sector that I think holds spectacular promise in the long term.
As for the newest recommendation, it’s unusual in that it’s not one stock; it’s actually an ETF of a market sector that I think holds spectacular promise in the long term.
Current Market OutlookAfter three weeks of rotation, where cyclical stocks took the reins and growth stocks rested (and some broad selling pressure showed up June 11-12), the reverse occurred last week, with the leaders again ramping up and cyclical stocks sagging. Still, while the endless rotation isn’t ideal, it hasn’t changed the big picture—most of the evidence remains bullish, so we’re still optimistic the path of least resistance is higher. That said, it’s important to keep your feet on the ground, too; looking for solid entry points and not hesitating to book some partial profits on the way up are still good ideas, as some selling pressure or another bout of rotation isn’t out of the question. We’re leaving our Market Monitor at a level 8.
This week’s list has a bit of a secondary feel to it, but many are showing solid setups; ideally some of these will be the next wave of names big investors focus on. Our Top Pick is Restoration Hardware (RH), which has a strong story and is resting nicely after a very strong run.
| Stock Name | Price | ||
|---|---|---|---|
| Big Lots (BIG) | 43.12 | ||
| Immunomedics (IMMU) | 34.23 | ||
| LGI Homes (LGIH) | 86.04 | ||
| MercadoLibre, Inc. (MELI) | 980.83 | ||
| Mersana Therapeutics (MRSN) | 22.28 | ||
| Nuance Communications, Inc. (NUAN) | 25.35 | ||
| PagSeguro Digital (PAGS) | 35.09 | ||
| RH Inc. (RH) | 252.93 | ||
| Teradyne (TER) | 82.83 | ||
| Yeti Holdings (YETI) | 42.80 |
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Markets rebounded this past month, albeit with plenty of volatility. But the net result was a 1,500+ gain in the Dow Jones Industrial Markets.
Unemployment, of course, is still pressuring the economy, with some 29.5 million Americans without jobs. However, the housing market perked up, with starts and building permits rising. Retail sales—reflecting the reopening of the economy—were also up.
It’s worrying that coronavirus is rising in about 20 states, but, hopefully, if people begin once again following social distancing, the new cases won’t push us off the economic reopening strategy.
Advisors and consumers are back on the bullish track, as you’ll see in our Barometer, as well as Market Views.
Despite the market’s rise, there are still plenty of undervalued stocks in the marketplace. And we begin this issue with our Spotlight Stock, a technology company that is gaining market share in the highly competitive field of cybersecurity—in this case, specializing in ID authentication for employees and customers. My feature article explores the industry in more depth, as well as additional reasons for adding our Spotlight Stock to your portfolio.
Unemployment, of course, is still pressuring the economy, with some 29.5 million Americans without jobs. However, the housing market perked up, with starts and building permits rising. Retail sales—reflecting the reopening of the economy—were also up.
It’s worrying that coronavirus is rising in about 20 states, but, hopefully, if people begin once again following social distancing, the new cases won’t push us off the economic reopening strategy.
Advisors and consumers are back on the bullish track, as you’ll see in our Barometer, as well as Market Views.
Despite the market’s rise, there are still plenty of undervalued stocks in the marketplace. And we begin this issue with our Spotlight Stock, a technology company that is gaining market share in the highly competitive field of cybersecurity—in this case, specializing in ID authentication for employees and customers. My feature article explores the industry in more depth, as well as additional reasons for adding our Spotlight Stock to your portfolio.
There remain some yellow flags in the market, but when you look at the big picture, there remains far more good than bad. It’s vital to remain flexible of course, as in 2020, things have changed on a dime a couple of times, but with most of the evidence still positive, we remain mostly bullish.
Markets rebounded this past month, albeit with plenty of volatility. But the net result was a 1,500+ gain in the Dow Jones Industrial Markets.
Unemployment, of course, is still pressuring the economy, with some 29.5 million Americans without jobs. However, the housing market perked up, with starts and building permits rising. Retail sales—reflecting the reopening of the economy—were also up.
It’s worrying that coronavirus is rising in about 20 states, but, hopefully, if people begin once again following social distancing, the new cases won’t push us off the economic reopening strategy.
Advisors and consumers are back on the bullish track, as you’ll see in our Barometer, as well as Market Views.
Despite the market’s rise, there are still plenty of undervalued stocks in the marketplace. And we begin this issue with our Spotlight Stock, a technology company that is gaining market share in the highly competitive field of cybersecurity—in this case, specializing in ID authentication for employees and customers. My feature article explores the industry in more depth, as well as additional reasons for adding our Spotlight Stock to your portfolio.
Unemployment, of course, is still pressuring the economy, with some 29.5 million Americans without jobs. However, the housing market perked up, with starts and building permits rising. Retail sales—reflecting the reopening of the economy—were also up.
It’s worrying that coronavirus is rising in about 20 states, but, hopefully, if people begin once again following social distancing, the new cases won’t push us off the economic reopening strategy.
Advisors and consumers are back on the bullish track, as you’ll see in our Barometer, as well as Market Views.
Despite the market’s rise, there are still plenty of undervalued stocks in the marketplace. And we begin this issue with our Spotlight Stock, a technology company that is gaining market share in the highly competitive field of cybersecurity—in this case, specializing in ID authentication for employees and customers. My feature article explores the industry in more depth, as well as additional reasons for adding our Spotlight Stock to your portfolio.
Investor received a well-deserved wake-up call last week but the big-picture trends are still positive and growth stocks continue to be where the action is. In this month’s Issue of Cabot Early Opportunities, we take a look at a diverse mix of fresh opportunities that are all linked by one commonality – they give investors exposure to some of the most interesting and durable growth trends out there.
Updates
I include summaries of 10 Cabot Benjamin Graham Value Investor companies that have reported quarterly financial results or other noteworthy news during the past week. I also report on the sectors of the economy that are likely to benefit from economic and political changes in 2017 and 2018.
The Emerging Markets Timer continues to flash a buy signal, as the iShares Emerging Markets Fund (EEM) has been sprinting away from its moving averages. We are responding by returning one stock to a Buy rating and initiating a half position in another.
The market is healthy and investors should be bullish. For our part, we’re putting one stock back on Buy today. Investors looking to put money to work should also consider these five stocks, which all look healthy and strong today.
Today’s portfolio changes: Archer Daniels Midland (ADM) moves from Strong Buy to Buy, Boise Cascade (BCC) moves from Buy to Hold and Tesoro (TSO) moves from Hold to Buy.
All but two of our positions are showing positive gains, and all but four have outperformed the Russell since they were recommended. On average, each position is outperforming by around 10%.
AbbVie’s (ABBV) earnings failed to impress last week, the stock is stuck in a trading range with a slight downward bias, and the biotech rally has failed—or at least been delayed—once again.
Buy-Rated Stocks Most Likely to Rise Near-Term: Adobe Systems (ADBE) and Tesoro (TSO). Today’s Portfolio Changes: Adobe Systems (ADBE) moves from Strong Buy to Buy, Federated Investors (FII) moves from Hold to Sell, and Schnitzer Steel Industries (SCHN) is added to the Buy Low Opportunities portfolio.
Our stocks will start to report the week after next. And with nothing looking totally overstretched or completely beat up (though a few positions bruised), we’re holding the line today.
Alerts
This biopharma is expected to grow by 44.3% next year.
One stock reports fourth-quarter results, another moves from Hold to Buy and we reiterate the Buy recommendation on a third.
This railway company beat analysts’ estimates by $0.05 last quarter, and in the past 30 days, three analysts have increased their EPS forecasts for the company.
After disposing of an unprofitable division and coming out the winner in a lawsuit, this company is trading at a very undervalued level.
This biotech is somewhat speculative, but analysts expect it to grow by 22% annually for the next five years.
One of our positions reported strong fourth-quarter results and just a quick update on the price action with another position.
The top five holdings of this Europe fund are: Roche Holding AG Dividend Right Cert. (ROG), 3.62% of assets; BP PLC (BP.L), 3.33%; Unilever PLC (ULVR.L), 3.21%; Total SA (FP.PA), 2.81%; and SAP SE (SAP.DE), 2.59%.
Two of our positions reported strong fourth-quarter results and one reported an earnings miss. On top of that, two of our positions have seen some interesting price action.
In the past 30 days, 13 analysts have raised their EPS estimates for this trucking company.
Coverage of the shares of this pharmaceutical company were just initiated at Berenberg, with a ‘Buy’ rating.
The top five holdings of this ETF are: AdvisorShares Sage Core Reserves ETF (HOLD), 35.79% of assets; Fidelity Instl Govt 657 C, 4.83%; PTC Inc (PTC), 4.42%; MasTec Inc (MTZ), 3.73%; and MSCI Inc (MSCI), 3.68 %.
One of our positions reports a strong earnings and revenue beat. For now it’s still a hold as we are awaiting a pullback, but it should be a buy candidate in the near future.
Portfolios
Strategy
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.