Issues
This biopharmaceutical firm acquires, rebrands and reprices drugs for sale in the U.S., with many that treat inflammatory conditions, including a few that take aim at rare diseases.
The broad market remains in an uptrend, according to our intermediate-term market timing indicator, but our longer-term timing indicator, while improving, remains in a negative state. Thus, it remains possible that a major pullback is right around the corner—and if one comes, it will be handy to have cash at the bottom. So I’m still working to avoid being fully invested, though it’s getting tough because our stocks acting so well.
For today’s selection, I’m going with a small company that’s taken a proven path to growth—consolidating a fractured industry. The stock was originally recommended by Tyler Laundon in Cabot Early Opportunities and here are Tyler’s latest thoughts.
For today’s selection, I’m going with a small company that’s taken a proven path to growth—consolidating a fractured industry. The stock was originally recommended by Tyler Laundon in Cabot Early Opportunities and here are Tyler’s latest thoughts.
Current Market OutlookLast week brought some upside-down action, with the leading growth stocks doing OK (some up, some down) while the lagging names (small- and mid-caps, economically sensitive sectors) did very well. And that trend continued today, with growth stocks getting hit while the major indexes ramped up. Overall, the upmove in the beaten-down areas means the intermediate-term trend has survived its first test, and while taking on some water, growth stocks remain in fine shape, with very little abnormal selling. (In fact, pullbacks in some of the hot names could offer up some solid entry points, but we’ll see how that goes.) All in all, the divergent environment isn’t ideal and will probably lead to further crosscurrents; it remains important to pick your stocks and entry points carefully, and taking some partial profits on the way up isn’t a bad idea, either. But overall, most of the evidence remains positive, so you should, too. Our Market Monitor remains at a level 7.
This week’s list has many names that have just come to life after long rest periods. Our Top Pick is Spotify (SPOT), which has always had a good story, but now has decisively broken out following a meaningful catalyst.
| Stock Name | Price | ||
|---|---|---|---|
| Allogene Therapeutics (ALLO) | 48.94 | ||
| Big Lots (BIG) | 43.12 | ||
| BJs Wholesale (BJ) | 36.69 | ||
| Guardant Health (GH) | 88.34 | ||
| Horizon Therapeutics (HZNP) | 49.89 | ||
| Neurocrine Biosciences (NBIX) | 123.40 | ||
| 1Life Healthcare (ONEM) | 34.01 | ||
| Spotify (SPOT) | 272.82 | ||
| Wayfair (W) | 167.03 | ||
| Wix.com (WIX) | 302.53 |
Welcome to the inaugural issue of Cabot Income Advisor. It is my pleasure to share investment ideas that can provide you with a high income in today’s low interest rate world.
In this issue I highlight three stocks that are great buying opportunities right now for income investors. The stocks are chosen for their high yields, ability to generate attractive call premiums and the likelihood of capital appreciation over time.
While the market indexes have rebounded strongly from the March lows, many individual industries and stocks are still dirt cheap and high yielding, In fact, this is the best market in over a decade in which to find high yields in quality stocks.
Of course, the market is still dangerous and many high yielding stocks are in a precarious financial condition. Many will have to cut the dividend and the price will likely fall. While quality high yields are out there, stocks must be chosen wisely.
These three stocks are a great way to lock in high income and start to build your high income portfolio. Now is the time to embark on your journey to higher income and a more rewarding financial future. I look forward to being your trusted partner.
In this issue I highlight three stocks that are great buying opportunities right now for income investors. The stocks are chosen for their high yields, ability to generate attractive call premiums and the likelihood of capital appreciation over time.
While the market indexes have rebounded strongly from the March lows, many individual industries and stocks are still dirt cheap and high yielding, In fact, this is the best market in over a decade in which to find high yields in quality stocks.
Of course, the market is still dangerous and many high yielding stocks are in a precarious financial condition. Many will have to cut the dividend and the price will likely fall. While quality high yields are out there, stocks must be chosen wisely.
These three stocks are a great way to lock in high income and start to build your high income portfolio. Now is the time to embark on your journey to higher income and a more rewarding financial future. I look forward to being your trusted partner.
The market has hit a little turbulence over the past week, first seeing the major indexes test support and then, this week, as the major indexes rebounded, growth stocks have softened a bit. But net-net, the evidence remains mostly positive, so we remain optimistic. In the Model Portfolio, we did a little trimming last week, but as some growth stocks pull in, we’re adding a half position in a fresh leader.
While we are definitely not out of the woods yet—with the economy and the markets—we are making progress. The Dow Jones Industrial Average has had a nice bounce back, albeit, with some volatility. We can expect that to continue, probably through year-end. As you can see by our Advisor Sentiment Barometer and our Market Views section, we are turning more bullish.
As most of the economy is just beginning to reopen, unemployment remains a big issue. So far, some 38 million people have lost their jobs, bringing the unemployment rate in the U.S. to almost 15%. We can expect that to continue rising for the near future, also.
But in better news, housing seems to be holding up pretty well, and building permits this week were better than expected, around 1.074 million.
Of course, the bright side is that as more businesses reopen, we will start a steady climb back to normal.
As most of the economy is just beginning to reopen, unemployment remains a big issue. So far, some 38 million people have lost their jobs, bringing the unemployment rate in the U.S. to almost 15%. We can expect that to continue rising for the near future, also.
But in better news, housing seems to be holding up pretty well, and building permits this week were better than expected, around 1.074 million.
Of course, the bright side is that as more businesses reopen, we will start a steady climb back to normal.
While we are definitely not out of the woods yet—with the economy and the markets—we are making progress. The Dow Jones Industrial Average has had a nice bounce back, albeit, with some volatility. We can expect that to continue, probably through year-end. As you can see by our Advisor Sentiment Barometer and our Market Views section, we are turning more bullish.
As most of the economy is just beginning to reopen, unemployment remains a big issue. So far, some 38 million people have lost their jobs, bringing the unemployment rate in the U.S. to almost 15%. We can expect that to continue rising for the near future, also.
But in better news, housing seems to be holding up pretty well, and building permits this week were better than expected, around 1.074 million.
Of course, the bright side is that as more businesses reopen, we will start a steady climb back to normal.
As most of the economy is just beginning to reopen, unemployment remains a big issue. So far, some 38 million people have lost their jobs, bringing the unemployment rate in the U.S. to almost 15%. We can expect that to continue rising for the near future, also.
But in better news, housing seems to be holding up pretty well, and building permits this week were better than expected, around 1.074 million.
Of course, the bright side is that as more businesses reopen, we will start a steady climb back to normal.
Growth stocks are red hot! In this month’s Issue of Cabot Early Opportunities, I sift through all my ideas to feature a compelling mix of five stocks that still look to have significant upside potential over the coming months. Several of these names should represent new ways for investors to participate in long-term growth trends.
Today’s recommendation continues to look like the market’s top networking-related play, as it’s one of the only firms out there that’s firing on all cylinders.
Current Market OutlookThis morning’s positive news of a possible COVID vaccine helped the major indexes surge, but it also revealed some of the crosscurrents that remain—today saw a big bout of rotation, as leading growth titles were mostly lower while the lagging (usually economically-sensitive) areas did well. Even so, we don’t advise getting too involved in the day-to-day news or gyrations; overall, there’s still more positive evidence than negative, with the intermediate-term trend still up (today’s action helped on that front) and just about every leading stock remaining in a firm uptrend. Given the crosscurrents, we don’t advise going hog wild on the buy side, but we continue to think holding your strong performers (maybe with some partial profits here or there) and looking for decent entry points on strong names is the way to go. While we were going to knock our Market Monitor down late last week, the action of the past two sessions has us keeping it at a level 7.
This week’s list is a bit more diversified than in recent weeks, with strength seen in a few more sectors. Our Top Pick is PayPal (PYPL), which appears to have resumed its run after a multi-month rest period. Try to buy on dips.
| Stock Name | Price | ||
|---|---|---|---|
| Avalara (AVLR) | 102.00 | ||
| Beyond Meat (BYND) | 132.87 | ||
| Fastly (FSLY) | 39.31 | ||
| Fortinet Inc. (FTNT) | 137.53 | ||
| Inphi (IPHI) | 120.16 | ||
| MyoKardia (MYOK) | 108.56 | ||
| Ollie’s Bargain Outlet (OLLI) | 103.94 | ||
| PayPal (PYPL) | 147.00 | ||
| Scotts Miracle-Gro (SMG) | 155.72 | ||
| Tesla, Inc. (TSLA) | 818.87 |
Updates
Let’s maintain our current course, make incremental adjustments when they seem to make sense, and see how this plays out. I suggest one such incremental move today.
The market continues to act well, and we’re finally starting to see a bit of improvement among growth stocks, which showed solid accumulation last week and have begun to tighten up. That said, cyclical stocks remain strong, so tonight, we’re adding one to the Model Portfolio, giving us seven stocks (out of a possible 10) and a cash position around 30%.
The divergences that I mentioned in our last update disappeared last week, as the major indexes all rose over 3%, notching five consecutive positive days to hit record highs. I have one rating change today: Pembina Pipeline (PBA) moves to Buy thanks to renewed technical strength.
We’ve had nice run-ups in the DJIA and the S&P 500. Please expect a pullback, which would be perfectly normal and healthy too. The Dow could fall 6% to 18,600, and the S&P could fall 3% to 2,190. Unless a disruptive event happens, I would expect a stock market correction to be quite temporary.
The stock market has been having quite the party over the past month. Since November 8, the date of the election, the S&P 500 is up by 4.8%. Small caps have crushed that performance, rising by almost 16% over the same timeframe.
In this Weekly Update, I report on five Cabot Benjamin Graham Value Investor companies that reported quarterly financial results or had other noteworthy news during the past week.
Our two portfolio moves today are to buy a half position in Pampa Energia (PAM) bringing the portfolio to 45% invested and moving Melco Crown (MPEL) to a Hold after a Chinese government move knocked it lower.
We have no rating changes today; I continue to recommend you focus on what’s working, while keeping your personal investing goals in mind. The healthiest stocks in our portfolio today are the financials, Prudential (PRU) and US Bancorp (USB), dividend growth tier holding Carnival (CCL) and safe income tier recommendations Automatic Data Processing (ADP) and UPS (UPS).
11 Cabot Benjamin Graham Value Investor companies reported quarterly financial results or other noteworthy news during the past week. I also include questions from subscribers along with my answers.
Continue to lean bullish, but also keep some powder dry as we wait for growth stocks to kick into gear. The overall market remains in great shape, and with the trends pointed up, we expect higher prices down the road. However, growth stocks aren’t participating, with many still under pressure. Our one change tonight is that we’re placing Proofpoint (PFPT) on Hold.
Today I want to talk about energy stocks, because I’m seeing a growing correlation between quality and share price performance. Also, Royal Caribbean (RCL) moves from the Growth Portfolio to the Growth & Income Portfolio, and Tesoro (TSO) joins the Buy Low Opportunities Portfolio.
The Emerging Markets Timer is still negative, although investors are edging back into the sector, moving the MSCI Emerging Markets Fund (EEM) higher over the past week. Our only portfolio move today is to buy a half position in Vale (VALE) bringing the portfolio to 40% invested.
Alerts
One of the stocks in our Growth Portfolio issued new quarterly adjusted earnings guidance this morning, pleasing investors and sending the stock up 6% upon the market’s open.
This housing provider is expected to grow at a rate of 45.5% next year.
Two of the stocks in the portfolio report earnings beats.
This entertainment company beat analysts’ earnings forecasts by $0.35 last quarter.
This biopharma is forecasted to grown at an annual rate of 17.58% over the next five years.
Crista is retiring a stock from the Buy Low Opportunities Portfolio.
The top five holdings in this high-tech ETF are: Intuitive Surgical Inc (ISRG, 8.74% of assets); ABB Ltd (ABBN, 7.61%); Keyence Corp (6861, 7.60%); Mitsubishi Electric Corp (6503, 7.54%); and Fanuc Corp (6954, 6.67%).
The stock which just joined the Buy Low Opportunities Portfolio on January 8, reported fourth quarter results after yesterday’s market close (November year-end). Revenue and earnings per share (EPS) came in higher than analysts had expected, and higher than the company had recently projected in December.
Update on last year’s Top Pick from this contributor
Our New Top Pick (AMD) is forecast to grow at a rate of 34.8% this year.
In the past 30 days, 12 analysts have increased their EPS estimates for this tech company, and the consensus forecast is for 24.6% growth next year.
This speculative stock has significant insider holdings and looks very undervalued.
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.