Issues
We’re beginning to see some short-term signs of spring in the market, first via some resiliency in the broad market, and now from buyers actually stepping up to the plate. We think there’s a decent chance the market has found a workable low, and we’re encouraged to see a decent number of growth stocks bounce back. All of that is good to see, but the primary evidence -- the trends of the market and most stocks --are still pointed down. We’re not ruling out a nibble or two if the buyers keep at it, but it’s best to remain defensive until we see more than a modest bounce.
In tonight’s issue we talk about one group that has seen some very big-volume buying of late, a sign big investors were eager to jump in on weakness. And we also review our remaining positions and a few other top-notch names we think could put on big runs once the market enters a new uptrend.
In tonight’s issue we talk about one group that has seen some very big-volume buying of late, a sign big investors were eager to jump in on weakness. And we also review our remaining positions and a few other top-notch names we think could put on big runs once the market enters a new uptrend.
These are harrowing times to be an investor but we’re always on the hunt for emerging opportunities, regardless of market conditions. As always we’re spreading things around this month, with the focus on two defensive names (including one larger company), two beaten and battered names that seem miss-priced (depends on what happens) and one stock that seems to be in high demand, despite the market conditions. Suffice to say, there’s little incentive to place big bets right now. But we’d be remiss not so send some ideas your way. These new names will come with a short leash!
On Monday, the market completed the quickest 30% pullback in history.
Since then, it’s completed one of the quickest rebounds!
Interesting times.
Equally interesting for investors in the young and fast-growing marijuana sector is that marijuana stocks actually bottomed a week ago, and they’ve been advancing every day since, which is a very good sign.
Because of that, I’m recommending a little averaging up in the portfolio today, taking our cash level down to 50%.
Full details in the issue.
Since then, it’s completed one of the quickest rebounds!
Interesting times.
Equally interesting for investors in the young and fast-growing marijuana sector is that marijuana stocks actually bottomed a week ago, and they’ve been advancing every day since, which is a very good sign.
Because of that, I’m recommending a little averaging up in the portfolio today, taking our cash level down to 50%.
Full details in the issue.
China was the first country to be devastated by coronavirus, and although the pandemic there is not completely over (and there are doubts about the accuracy of that country’s daily virus count), it’s almost surely on a downhill swing. That’s helped the Shanghai composite to fare better than the S&P this year, and not surprisingly, many (not all) Chinese stocks have shown some interesting resilience during this crisis
Get this Investor Briefing now, Earn Big Dividends to Ensure Your Happy Retirement, and you’ll learn how to make the most money from dividends, to ensure your own financial freedom and security. From the basics about understanding dividend investing to specific stock recommendations for growth and safety … from discovering how ex-dividend dates work to key investing sectors for you to consider … and from boring stocks that pay reliable dividends to a once-in-a-decade chance for high-yield dividend stocks. Earn Big Dividends to Ensure Your Happy Retirement is your best guide to ensuring you get big dividends for achieving and maintaining your financial freedom.
Current Market OutlookWith all of the measures (both in real life, and in the financial markets) taken during the past month, one thing has remained the same: The trend of the major indexes and the vast majority of stocks has been down since late February, which has kept us cautious and holding lots of cash. And until that changes, your top priority is to remain defensive and patient as we wait for the buyers to show up for more than a couple of hours. That said, we’re always on the lookout for rays of light, and we are seeing one from the broad market, as fewer stocks are participating on the downside during the last week. That’s a plus, though we need to see it backed up by real buying and a break of at least some shorter-term moving averages (10-day, etc.) to think a workable low could be in. Right here, we remain cautious.
Encouragingly, though, this week’s list is fairly heavy on the growth side of the equation, including many stocks that found big-volume support on earnings last week. Our Top Pick is Chewy (CHWY), a defensive growth stock that’s executing well and has seen some major accumulation.
| Stock Name | Price | ||
|---|---|---|---|
| Adobe Inc. (ADBE) | 315.23 | ||
| Chewy (CHWY) | 43.92 | ||
| Cloudflare (NET) | 39.32 | ||
| Coupa Software (COUP) | 262.20 | ||
| Gilead Sciences (GILD) | 75.10 | ||
| JD.com (JD) | 39.58 | ||
| Moderna (MRNA) | 29.39 | ||
| Smartsheet (SMAR) | 44.12 | ||
| Vertex Pharmaceuticals (VRTX) | 230.36 | ||
| Zoom Communications (ZM) | 155.83 |
Bottoms bring bargains, but identifying bottoms is devilishly difficult—which is why it’s better not to try but to simply reduce your risk-taking until the environment is more constructive. Last week’s recommendation of Zoom Video is off to a great start (though risk in the stock is higher now), and this week’s recommendation is a smaller Software-as-a-Service (SaaS) company with decent growth prospects in the corporate finance sector.
As for the current portfolio, we now hold eleven stocks out of a possible twenty, and many of them look like they are building a bottom here. Thus the only change is a downgrade of our weakest stock, Brookfield Infrastructure Partners (BIP) to Sell
Full details in the issue.
As for the current portfolio, we now hold eleven stocks out of a possible twenty, and many of them look like they are building a bottom here. Thus the only change is a downgrade of our weakest stock, Brookfield Infrastructure Partners (BIP) to Sell
Full details in the issue.
Well, March in the markets certainly came in like a lion, didn’t it? And it looks like it may end the month the same way. Until we make progress in defeating the coronavirus, we expect continued volatility in the markets, and we recommend that you remain defensive.
That doesn’t mean Sell everything in your portfolio. Remember, you don’t have real losses until you sell your stocks. But it does mean if you are holding on to some stocks that weren’t doing well before the coronavirus outbreak, it might be a good idea to think about unloading them. But being defensive also means being judicious when buying. For the near future, I’m going to include this message in all my writings, as an alert that, certainly, you may buy these recommendations, but for most of us, they will provide entries into a ‘watch’ list that can be acted upon as the volatility disperses. Or you may find that you might want to nibble just a bit at some of them. That’s up to you, but please know that I’m here to help you with your investing decisions, so please don’t hesitate to reach out to me.
In the meantime, I—and our contributors—are very busy trying to find some great recommendations that will help your portfolio recover, once normalcy returns to the markets.
That doesn’t mean Sell everything in your portfolio. Remember, you don’t have real losses until you sell your stocks. But it does mean if you are holding on to some stocks that weren’t doing well before the coronavirus outbreak, it might be a good idea to think about unloading them. But being defensive also means being judicious when buying. For the near future, I’m going to include this message in all my writings, as an alert that, certainly, you may buy these recommendations, but for most of us, they will provide entries into a ‘watch’ list that can be acted upon as the volatility disperses. Or you may find that you might want to nibble just a bit at some of them. That’s up to you, but please know that I’m here to help you with your investing decisions, so please don’t hesitate to reach out to me.
In the meantime, I—and our contributors—are very busy trying to find some great recommendations that will help your portfolio recover, once normalcy returns to the markets.
Market volatility and weakness accelerated this week through Wednesday though U.S. Senate passage of a “bailout” measure may lead to a rebound on Thursday. In general, you should sell into strength and cautiously buy into weakness. Our emerging market signal is decidedly negative with the EEM down to 30 from a mid-January high of 46. It has not been at this low a level since early 2016 and got down to 20 at the bottom of the global financial crisis in 2008. Today we do a little selling, increase our S&P 500 Inverse ETF position marginally and add JPMorgan (JPM) to the watch list.
Well, March in the markets certainly came in like a lion, didn’t it? And it looks like it may end the month the same way. Until we make progress in defeating the coronavirus, we expect continued volatility in the markets, and we recommend that you remain defensive.
That doesn’t mean Sell everything in your portfolio. Remember, you don’t have real losses until you sell your stocks. But it does mean if you are holding on to some stocks that weren’t doing well before the coronavirus outbreak, it might be a good idea to think about unloading them. But being defensive also means being judicious when buying. For the near future, I’m going to include this message in all my writings, as an alert that, certainly, you may buy these recommendations, but for most of us, they will provide entries into a ‘watch’ list that can be acted upon as the volatility disperses. Or you may find that you might want to nibble just a bit at some of them. That’s up to you, but please know that I’m here to help you with your investing decisions, so please don’t hesitate to reach out to me.
In the meantime, I—and our contributors—are very busy trying to find some great recommendations that will help your portfolio recover, once normalcy returns to the markets.
Read the Issue for more details.
That doesn’t mean Sell everything in your portfolio. Remember, you don’t have real losses until you sell your stocks. But it does mean if you are holding on to some stocks that weren’t doing well before the coronavirus outbreak, it might be a good idea to think about unloading them. But being defensive also means being judicious when buying. For the near future, I’m going to include this message in all my writings, as an alert that, certainly, you may buy these recommendations, but for most of us, they will provide entries into a ‘watch’ list that can be acted upon as the volatility disperses. Or you may find that you might want to nibble just a bit at some of them. That’s up to you, but please know that I’m here to help you with your investing decisions, so please don’t hesitate to reach out to me.
In the meantime, I—and our contributors—are very busy trying to find some great recommendations that will help your portfolio recover, once normalcy returns to the markets.
Read the Issue for more details.
Updates
Eleven of my Benjamin Graham companies reported quarterly financial results or other noteworthy news. I have included one sell recommendation: Avnet, Inc. (AVT).
The Emerging Markets Timer is still pointed up, despite the market’s recent consolidation. Our two moves tonight are buying a half position in Alibaba (BABA) and shifting our position in Anglogold Ashanti (AU) to a Hold rating.
Not much has changed in our portfolio, though Home Depot (HD) did report solid earnings on Tuesday.
I’m changing my recommendations on Dollar Tree (DLTR) to Hold; and on Big Lots (BIG), Kraft Heinz (KHC) and WellCare (WCG) to Buy.
Remain bullish. The overall market remains in great shape, and while a pullback of some sort is possible after a nice run during the past few weeks, the evidence points to higher prices in the weeks and months ahead. In the Model Portfolio, we sold Ligand Pharmaceuticals (LGND) on a special bulletin Monday, replacing it with Amazon (AMZN). We’ll stand pat tonight, though with two open slots (cash position near 16%), we’re aiming to do some new buying in the days ahead.
Very conservative stocks like utilities have weakened. The utility sector is still up 17% year-to-date, but what goes up must come down, and we’ll be selling half our position in Xcel Energy (XEL) today. I encourage you to reinvest the profits in stocks with stronger growth potential, like fellow Safe Income tier holdings Home Depot (HD), J.M. Smucker (SJM) or UPS (UPS).
Nobody has missed their chance to buy low and catch a long overdue run-up in some great stocks. There are lots of great opportunities listed in this week’s update.
Sixteen Cabot Benjamin Graham Value Investor companies reported quarterly financial results or other noteworthy news. I include one sell recommendation in today’s update: AMC Networks (AMCX).
The Emerging Markets Timer is still pointed up, despite the market’s recent consolidation. Our only move tonight is shifting our position in TAL Education (XRS) to a Hold rating.
Many of our stocks are following the market’s lead and trading sideways. I have no rating changes in today’s update, but several of our holdings reported earnings over the past week.
The bull is back! The recent breakout of stock market indexes above their two-year trading range clearly signals that a new bull market is at hand.
We had a terrific week with the vast majority of our stocks, supported by a 0.8% rise in the S&P 600 Small Cap Index. That’s not a big move, but given the recent break-out to all-time highs, a little follow-on strength across the board suggests the market could be setting up for another run higher.
Alerts
Four stocks from the Portfolios reported earnings.
On Tuesday, voters in three states continued the trend toward increased legalization of marijuana: Michigan voted to legalize the recreational use of the plant, while Utah and Missouri voted to legalize it for medical use.
These four funds focus on healthcare and offer a variety of subsectors.
Rapid7 (RPD) and Q2 Holdings (QTWO) Report Q3 Earnings
Our second recommendation is a sale of a company’s whose stock is not performing as expected.
Our first idea is an ecommerce company that is getting rave reviews from Wall Street, with 20 analysts recently increasing their estimates for the company.
Goosehead Insurance (GSHD) and Everbridge (EVBG) Report Q3 Earnings
Altair (ALTR) buys Datawatch (DWCH) and IntriCon (IIN) Reports
Technical indicators say it’s time to trade this gold ETF.
Several readers have asked about what effect tomorrow’s election might have on marijuana stocks, in part because four states have measures on the ballot that would increase legality.
This electrical product maker beat analysts’ estimates by $0.21 last quarter.
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.