Issues
With the election just around the corner, there’s a lot of uncertainty in the air. Nevertheless, the bull market is alive and well, as both of Cabot’s trend-following market-timing indicators remain positive, so I continue to recommend that you be heavily invested.
Today’s recommendation is an old friend that is back in the limelight as the online world is increasingly hungry for software that enables machines to understand human voices. It’s a good story, and the stock is on a good pullback now.
As for the current portfolio, there’s just one sell (for a small profit), to make room for the new recommendation.
Today’s recommendation is an old friend that is back in the limelight as the online world is increasingly hungry for software that enables machines to understand human voices. It’s a good story, and the stock is on a good pullback now.
As for the current portfolio, there’s just one sell (for a small profit), to make room for the new recommendation.
The overall evidence continues to lean bullish, but growth stocks are on a wild ride, first selling off in August/early September, then rallying for a few weeks before backing off again in recent days. We remain optimistic, but are still taking things on a stock-by-stock basis, pulling the plug on laggards while aiming to put money to work in potential new leaders. This week, we let go of Wingstop on Monday, leaving us with around one-quarter of the portfolio in cash.
In tonight’s issue, we write more about our thoughts on the market and our stocks, talk about one recent sell we wish we had back and dive into two secondary indicators we’re watching closely to tell us when the market (and growth stocks) will decisively break out.
In tonight’s issue, we write more about our thoughts on the market and our stocks, talk about one recent sell we wish we had back and dive into two secondary indicators we’re watching closely to tell us when the market (and growth stocks) will decisively break out.
In October’s Issue of Cabot Early Opportunities we zero in on four software and internet companies that are benefiting from a variety of tailwinds, including two that are finding success after years of less-than-stellar performance. We also revisit an old MedTech friend that helps deliver drugs and vaccines around the world.
Enjoy!
Enjoy!
This week’s idea is a stock in a hot sector, though can be volatile day-to-day.
Current Market OutlookWe like to go with the evidence that’s in front of us at any given time, and if you do that today, you’ll see that most of the key evidence continues to look solid—the intermediate-term trend of the major indexes is tilted higher (though there’s still some resistance at the early-September highs to chew through), while more and more leading stocks are acting constructively; most have pulled back reasonably (so far) after heady runs during the prior three-plus weeks. Of course, we’re not leaving our brains at the door either, as earnings season (which ramps up this week in a big way) and the upcoming U.S. elections certainly have the potential to carve out a few potholes, while sentiment has picked back up after the August/September dip. Thus, we remain flexible and think picking buy points is vital, but overall, we remain mostly bullish.
This week’s list has a ton of potential pullback buys, though you have to be aware of earnings dates. Our Top Pick is Beyond Meat (BYND), which is enjoying a normal breather and looks to be approaching a good risk-reward entry point.
| Stock Name | Price | ||
|---|---|---|---|
| Avalara (AVLR) | 153.44 | ||
| Beyond Meat (BYND) | 183.98 | ||
| Bill.com Holdings (BILL) | 116.15 | ||
| Carvana (CVNA) | 213.52 | ||
| Deckers Outdoor Corp. (DECK) | 253.08 | ||
| Invitae (NVTA) | 48.38 | ||
| Monolithic Power (MPWR) | 312.85 | ||
| Paycom Software (PAYC) | 383.11 | ||
| Plug Power (PLUG) | 16.39 | ||
| SunPower (SPWR) | 17.62 |
The bull market is alive and well, as both of Cabot’s trend-following market-timing indicators are now positive, so I continue to recommend that you be heavily invested.
Today’s recommendation is a fast-growing company helping businesses in the cloud, one of today’s major growth themes. Aggressive investors should love it.
However, the addition of this stock means I need to sell one, and the unfortunate victim is the stock that’s our biggest loser (not that we have many).
Full details in the issue.
Today’s recommendation is a fast-growing company helping businesses in the cloud, one of today’s major growth themes. Aggressive investors should love it.
However, the addition of this stock means I need to sell one, and the unfortunate victim is the stock that’s our biggest loser (not that we have many).
Full details in the issue.
Market volatility has eased a bit this past month, with the Dow Jones Industrial Average gaining almost 1,000 points. The service industry, according to ISM, improved, and the unemployment rate dropped to 7.9% for September.
As you’ll see in our Advisor Sentiment Barometer and Market Views, sentiment remains about the same. It seems investors are awaiting the election results before they make any big moves.
Nonetheless, our contributors have been very busy selecting ideas that look interesting—no matter how the election turns out.
We begin this issue with our Spotlight Stock, a specialty chemical company that is growing its global market share. In my Feature article, I explore the catalysts that are driving industry growth, as well as the unique properties that should keep our Spotlight Stock in an industry-leading position.
Moving on, our Growth ideas include companies in the retail, electronics, and e-commerce sectors. In Growth & Income, you’ll find a transportation stock and a restaurant business. Value stocks are still lagging, and remain heavily discounted, and here, we offer two food producers.
We include one Financial stock, operating in the pawn store sector, and in Healthcare, our contributors recommend companies in the medical equipment, therapeutics, diagnostic monitoring, and pharmaceutical sectors.
Technology companies continue to be the market darlings, and this month, we feature ideas from the enterprise software, cloud database, big data, and e-commerce industries. In Energy & Resources, we offer a gas company, a utility, and a gold miner.
Our Low-Priced stocks include a coal producer, biotech, and a maker of CBD products. We offer banking, asset management, food producers, and a refiner in our Preferred & High Yield section. And we also include a Short-Sale candidate from the restaurant/entertainment sector.
Lastly, in Funds & ETFs, our offerings this month focus on biotech, health sciences, and blue chips.
There’s a lot of uncertainty today—with a fiercely fought presidential election, and especially, with the COVID-19 pandemic. Fortunately, the markets seem to be holding up well, and I think they’ll continue to do so post-election results. In the meantime, it is my hope that you and your families stay healthy.
As always, please don’t hesitate to email me with your feedback and questions. My address is nancy@cabotwealth.com.
The next Wall Street’s Best Investments issue will be published on November 19, 2020.
As you’ll see in our Advisor Sentiment Barometer and Market Views, sentiment remains about the same. It seems investors are awaiting the election results before they make any big moves.
Nonetheless, our contributors have been very busy selecting ideas that look interesting—no matter how the election turns out.
We begin this issue with our Spotlight Stock, a specialty chemical company that is growing its global market share. In my Feature article, I explore the catalysts that are driving industry growth, as well as the unique properties that should keep our Spotlight Stock in an industry-leading position.
Moving on, our Growth ideas include companies in the retail, electronics, and e-commerce sectors. In Growth & Income, you’ll find a transportation stock and a restaurant business. Value stocks are still lagging, and remain heavily discounted, and here, we offer two food producers.
We include one Financial stock, operating in the pawn store sector, and in Healthcare, our contributors recommend companies in the medical equipment, therapeutics, diagnostic monitoring, and pharmaceutical sectors.
Technology companies continue to be the market darlings, and this month, we feature ideas from the enterprise software, cloud database, big data, and e-commerce industries. In Energy & Resources, we offer a gas company, a utility, and a gold miner.
Our Low-Priced stocks include a coal producer, biotech, and a maker of CBD products. We offer banking, asset management, food producers, and a refiner in our Preferred & High Yield section. And we also include a Short-Sale candidate from the restaurant/entertainment sector.
Lastly, in Funds & ETFs, our offerings this month focus on biotech, health sciences, and blue chips.
There’s a lot of uncertainty today—with a fiercely fought presidential election, and especially, with the COVID-19 pandemic. Fortunately, the markets seem to be holding up well, and I think they’ll continue to do so post-election results. In the meantime, it is my hope that you and your families stay healthy.
As always, please don’t hesitate to email me with your feedback and questions. My address is nancy@cabotwealth.com.
The next Wall Street’s Best Investments issue will be published on November 19, 2020.
Market volatility has eased a bit this past month, with the Dow Jones Industrial Average gaining almost 1,000 points. The service industry, according to ISM, improved, and the unemployment rate dropped to 7.9% for September.
As you’ll see in our Advisor Sentiment Barometer and Market Views, sentiment remains about the same. It seems investors are awaiting the election results before they make any big moves.
Nonetheless, our contributors have been very busy selecting ideas that look interesting—no matter how the election turns out.
As you’ll see in our Advisor Sentiment Barometer and Market Views, sentiment remains about the same. It seems investors are awaiting the election results before they make any big moves.
Nonetheless, our contributors have been very busy selecting ideas that look interesting—no matter how the election turns out.
Updates
Small caps broke above their six-month trading range last Friday (albeit very modestly and very briefly) even as tech was selling off hard. The reason appears to be that money was flowing out of small cap tech and, potentially, into small cap financials, industrials and consumer staples.
In this Weekly Update, I report on a sell candidate, plus four companies that raised their dividends. I also include one question from a subscriber with my answer.
We’re focused on seeing how the market and leading growth stocks act following the Friday/Monday wave of selling; so far, there’s been some abnormal selling but most stocks are holding key support. The overall market is also still in good shape, and thus, we’re generally standing pat, with around 22% in cash.
For now, the long-term trend remains up, and so do most of our Cabot Dividend Investor positions. Here’s what’s going on with each of them as we enter summer.
While I don’t think we just saw the end of the run-up in technology stocks, I do think investors should begin to pare back their tech holdings and do these two things: raise cash, and buy undervalued stocks in other sectors.
Market continues to climb a wall of worry. I don’t know if this is the last hurrah of the bull market. A final push before a major retreat. But I do know that we should be mindful of the risks out there.
In this Weekly Update, I include a summary for Five Below (FIVE) which reported quarterly financial results during the past week. I also include a question from a subscriber along with my answer.
Despite today’s pullback, the Emerging Markets Timer is doing just fine, as the iShares EM Fund remains safely above its moving averages. We have three portfolio moves tonight, including booking our profits in two positions and dropping one stock from the Watch list.
Most of the stocks in our Cabot Dividend Investor portfolio are behaving quite well; two stocks streaked to new highs in the last few days. I have no changes to the portfolio this week.
I include summaries for 11 Cabot Benjamin Graham Value Investor companies that reported quarterly financial results or other noteworthy news during the past two weeks. I also include questions from subscribers along with my answers.
Remain mostly bullish, but hold a little cash to respect the market’s growing divergences. Our market timing indicators are still mixed, though the long-term trend and growth stocks remain in good shape.
There’s something unusual and significant afoot in the bond market so I’m going to pluck my Goldman Sachs update out of the Growth Portfolio updates, and put it right here in the intro so that nobody misses what’s going to be happening soon.
Alerts
This food distributor has also just been recommended by Zacks, who cited the company’s earnings growth, asset utilization, and upward EPS revisions as attractive.
One stock reports strong fourth quarter and moves from Strong Buy to Hold.
Two recommendations today—an energy company with an improving future, and some profit-taking.
Our second recommendation will be taking some profit.
This gold company is expecting double-digit growth next year.
Last week, we began to see selling begin to appear in some leaders, either through stalling action (selling on the way up) or, more importantly, via some selling on good news. Today we saw the sellers really come out of the woodwork, with many leading growth stocks taking big hits on volume.. As a result, we placing three of our stocks on Hold.
This resource company mines a key ingredient for electric vehicles—a booming market.
One stock moves from Hold to Strong Buy.
The shares of this defense company were recently initiated with a ‘Positive’ rating at Susquehanna.
One stock moves from Buy to Hold and there is price action and/or news on three more.
This potato company beat Wall Street’s earnings forecasts by $0.08 last quarter.
Two of our portfolio stocks reported Q4 2018 results.
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.