Issues
The markets are certainly keeping us on our toes! I really didn’t know what to expect when I began calculating the returns for this Mid-Year Top Picks issue. We’ve had so much volatility; a big disruption in March, as coronavirus took hold; and many sectors that just haven’t bounced back.
So, you can imagine my relief and joy when I totaled up our contributors’ gains for the first six months of the year!
Despite the ongoing devastation of COVID-19, our contributors have broken all of our records, averaging a gain of 16.41%, while the Dow fell 8.6%, the S&P 500 is down 1.2% and only the Nasdaq is in positive territory, with gains of 18.3%.
Even better, our Top 5 picks averaged 221.48%!
So, you can imagine my relief and joy when I totaled up our contributors’ gains for the first six months of the year!
Despite the ongoing devastation of COVID-19, our contributors have broken all of our records, averaging a gain of 16.41%, while the Dow fell 8.6%, the S&P 500 is down 1.2% and only the Nasdaq is in positive territory, with gains of 18.3%.
Even better, our Top 5 picks averaged 221.48%!
Technology stocks took a hit on Monday when the Nasdaq posted a concerning reversal. However, the current evidence doesn’t yet suggest that we should be moving materially more conservative. That said, we’re not going to chase every hot stock right now. This month’s Issue of Cabot Early Opportunities seeks to offer a balance of rapid and modest growth from fresh faces, including some that have yet to break out and run wild (as many tech stocks have).
Some 100 gigawatts of solar power projects were completed last year, and after some virus-related issues, there’s every reason to expect even faster deployment of solar in the future. That should help today’s recommendation, a provider of residential solar electricity via solar panels and battery storage
Current Market OutlookThe Nasdaq and leading stocks had a huge reversal today, with many names that had gone vertical suffering some heavy-volume selling, representing another shot across the bow. Still, as we’ve written before, one day does not a trend make; the trend of the Nasdaq and growth stocks remain up, while the broader indexes and cyclical sectors are positive but mostly range-bound. As has been the case earlier in the rally, what happens from here will be key--continued distribution would be a sign that the current run could be ending, likely followed by a well-deserved digestion phase, but strong support in the near future would likely tell us this was just another brief stumble on the way to higher prices. Stepping back, most of the evidence remains positive, so we’re still bullish, but the next few days will be key.
As opposed to the last two weeks, this week’s list is back to having a leadership, growth-ier feel to it. Our Top Pick is Alibaba (BABA), which has always had the makings of a liquid leader, and is helping to lead the group rally in Chinese stocks as it lifts out of a two-year rest.
| Stock Name | Price | ||
|---|---|---|---|
| Alibaba (BABA) | 254.81 | ||
| Bill.com Holdings (BILL) | 88.76 | ||
| Kinross Gold (KGC) | 8.19 | ||
| Marvell Technology Group (MRVL) | 36.88 | ||
| Pacira Biosiences (PCRX) | 54.85 | ||
| Redfin (RDFN) | 40.40 | ||
| Roku, Inc. (ROKU) | 150.46 | ||
| Splunk (SPLK) | 207.67 | ||
| Sunrun (RUN) | 38.40 | ||
| XP Inc. (XP) | 44.59 |
The market remains in good health and trending higher, and our stocks as a whole have been benefitting thoroughly. However, it’s possible that today we may be seeing the beginning of a correction in the leading Nasdaq glamour stocks. Time will tell.
In the meantime, owning a diversified portfolio of high-potential stocks is the best prescription for your financial health, and today’s featured stock is a good one, a leader in the industry of nationwide homebuilders.
As for the current portfolio, there are no changes, though there is one stock I’m downgrading to hold as I keep a close eye on it.
Full details in the issue.
In the meantime, owning a diversified portfolio of high-potential stocks is the best prescription for your financial health, and today’s featured stock is a good one, a leader in the industry of nationwide homebuilders.
As for the current portfolio, there are no changes, though there is one stock I’m downgrading to hold as I keep a close eye on it.
Full details in the issue.
U.S. markets are trading cautiously with the latest uncertainty surrounding the coronavirus pandemic. Chinese markets have surged over the last week and I’ll outline a trading idea to take advantage of the momentum. Our emerging market (EEM) signal is decisively positive as our portfolio moves ahead, led by our Alibaba (BABA) position, up 18% this week, and Sea Limited (SE) continuing its incredible run. Today, we discuss changes afoot in Hong Kong with a new recommendation that is an undervalued throwback blue chip that is also a high-quality proxy for Asian growth.
While everyone is focused on the near-term risks and inconveniences of this pandemic, lasting changes are being forged. Major events have a way of reshaping the American psyche and changing behavior. This pandemic ordeal is forever altering aspects of our culture, creating an a unique opportunity for investors.
In this month’s issue I highlight a stock that directly benefits from the fact that people will continue to do more things from home than they did before the pandemic. It sells popular packaged food brands. Business is booming and should stay good for a long time.
A former slow-growth stock is being transformed into a fast-growing, high-yielding investment that is ideal to hold through the crisis and beyond. Investors are just beginning to realize the opportunity. But you can still get in cheap.
In this month’s issue I highlight a stock that directly benefits from the fact that people will continue to do more things from home than they did before the pandemic. It sells popular packaged food brands. Business is booming and should stay good for a long time.
A former slow-growth stock is being transformed into a fast-growing, high-yielding investment that is ideal to hold through the crisis and beyond. Investors are just beginning to realize the opportunity. But you can still get in cheap.
Today we are profiling a logistics company that is far under the radar of most investors, despite strong revenue growth, 100%+ earnings growth in its most recent fiscal year, and a mid-single-digit P/E.
Further, management and directors own 44% of the company’s stock, ensuring that investors are well aligned.
All the details are inside this month’s Issue. Enjoy!
Further, management and directors own 44% of the company’s stock, ensuring that investors are well aligned.
All the details are inside this month’s Issue. Enjoy!
Any doubts surrounding the work-from-home secular theme were dispelled by the pandemic, as remote platforms are now more prevalent than ever, and it should stay that way—recent surveys point out that up to three quarters of companies anticipate remote work being part of their long-term strategy, and Harvard just today said it’s going fully online in the fall.
The market remains in good health and trending higher, so while there’s always a possibility of a big correction starting any day, the important thing is to remain heavily invested, because the trend is your friend.
Most of our portfolio stocks have been performing superbly (with three hitting new highs today!), but one that isn’t is Tyson Foods (TSN), so that’s now a sell.
As for the newest recommendation, after last week’s dividend-payer, this week we swing back to the small and aggressive side of the market, with a fast-growing company that’s thriving by providing a great consumer service in the cloud.
Full details in the issue.
Most of our portfolio stocks have been performing superbly (with three hitting new highs today!), but one that isn’t is Tyson Foods (TSN), so that’s now a sell.
As for the newest recommendation, after last week’s dividend-payer, this week we swing back to the small and aggressive side of the market, with a fast-growing company that’s thriving by providing a great consumer service in the cloud.
Full details in the issue.
Updates
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.
Fourteen Cabot Benjamin Graham Value Investor companies reported quarterly financial results or other noteworthy news during the past week.
All of our market timing indicators remain bullish, and the major indexes and many stocks are attempting to resume their post-election uptrends. In the Model Portfolio, we have three changes tonight.
As we enter 2017, big changes are afoot, both economically and politically. News media is currently laser-focused on which stocks are or are not likely to fare well with a new political administration in Washington D.C. This is a good time to remind you why I make my investment decisions based on numbers and price charts, not on trending news topics.
We booked a few profits after the big post-election runup in stocks. And with most of our positions holding firm right now, were sitting pat.
Alerts
Coverage of the shares of this cloud company was recently initiated by Atlantic Equities with an ‘Overweight’ rating.
This medical device company is due to report earnings on January 24, and recently reported that its revenue would be up about 17%, which is higher than analysts expected.
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.
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 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.