Issues
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.
First and foremost, all of us at Cabot wish you a great long holiday weekend; our offices will be closed tomorrow but we’ll be back at it again on Monday.
As for the market, the story remains largely the same--there are some blemishes, but most of the evidence is positive, so we’re sticking with a heavily invested stance, albeit with some moves based on the action of individual stocks. Earlier this week, we trimmed a bit, leaving us with around 14% in cash.
In tonight’s issue, we write about one new liquid leader we’d love to own at the right price, along with all our latest thoughts on our stocks and the market.
As for the market, the story remains largely the same--there are some blemishes, but most of the evidence is positive, so we’re sticking with a heavily invested stance, albeit with some moves based on the action of individual stocks. Earlier this week, we trimmed a bit, leaving us with around 14% in cash.
In tonight’s issue, we write about one new liquid leader we’d love to own at the right price, along with all our latest thoughts on our stocks and the market.
Digital payments were already a big trend prior to Covid-19. But the pandemic has pulled forward demand for solutions that help businesses pay and get paid whenever, wherever, and however.
Today we’re profiling a small company that specializes in payment processing solutions. It’s relatively new to the public markets and has a market cap well under $2 billion.
While areas of its busieness have been harmed by the pandemic the big-picture story remains great. And management reported record sales activity in both March and April. And the stock’s looking great.
All the details are inside this month’s Issue. Enjoy!
Today we’re profiling a small company that specializes in payment processing solutions. It’s relatively new to the public markets and has a market cap well under $2 billion.
While areas of its busieness have been harmed by the pandemic the big-picture story remains great. And management reported record sales activity in both March and April. And the stock’s looking great.
All the details are inside this month’s Issue. Enjoy!
Today’s featured companies have sturdy financial conditions and attractive valuations, with appeal to buy-and-hold investors as well as traders.
The markets eked out a positive return for the month of June, with the S&P500 returning 1.99%, capping one of the strongest quarters (+20.5%) on record. In this month’s letter, I describe a bit more about the re-opening and how it might affect the markets.
The markets eked out a positive return for the month of June, with the S&P500 returning 1.99%, capping one of the strongest quarters (+20.5%) on record. In this month’s letter, I describe a bit more about the re-opening and how it might affect the markets.
Like many consumer goods producers, companies that make apparel and related products have experienced sharply lower sales and profits with the stay-at-home restrictions during the pandemic. But, for companies that make everyday apparel, particularly those with enduring brands or an outdoor/active lifestyle focus, demand should eventually return to healthy levels.
In this issue, we list seven companies that we believe offer interesting recovery potential.
In this issue, we list seven companies that we believe offer interesting recovery potential.
Genetic testing makes it easier for medical professionals to understand and diagnose diseases since a big portion of health problems have genetic origins. Today’s recommendation specializes in gathering genetic info across every stage of a person’s lifespan, working to consolidate testing into a single low-cost, rapid turnaround service, and it’s making good progress on that front—its efforts have led to test costs dropping from thousands of dollars to as low as $250 today.
Current Market OutlookAs we’ve been writing for many weeks, most of the primary evidence (trends of the major indexes, action of leading stocks) remains in the plus column, as do some key secondary pieces of evidence (blastoff indicators, number of new lows, etc.), so we’re sticking with a bullish stance. But the near-term should be interesting—the continuing dichotomy in the market means most indexes aren’t far from their 50-day lines, and we’ve started to see more up-down-up-down action, which, after a big, prolonged (13-plus weeks) upmove, tells you that the bulls and bears are beginning to fight it out. None of this is a reason to anticipate something sinister—again, most of the evidence is still positive—but it’s prudent to pick your spots on the buy side and have some stops in place in case the sellers make a stand and/or another bout of rotation takes hold (we started to see that today). We’re nudging our Market Monitor down to a level 7.
This week’s list has something for everyone, with stocks of all stripes making the cut. Our Top Pick is Etsy (ETSY), which has come alive after a year-long rest. Try to buy on dips.
| Stock Name | Price | ||
|---|---|---|---|
| Crispr Therapeutics (CRSP) | 84.11 | ||
| Etsy (ETSY) | 112.97 | ||
| Farfetch (FTCH) | 26.23 | ||
| GenMark Diagnostics (GNMK) | 15.47 | ||
| HubSpot (HUBS) | 582.89 | ||
| Inphi (IPHI) | 120.16 | ||
| Invitae (NVTA) | 32.06 | ||
| Meritage Homes (MTH) | 102.20 | ||
| Plug Power (PLUG) | 8.35 | ||
| STAAR Surgical (STAA) | 57.94 |
The market remains in good health, though there’s been some weakness among growth stocks, but overall I think this correction provides some decent entry points so I continue to recommend that you be heavily invested in a diversified portfolio of the best stocks—while pruning your portfolio of underperformers.
Today our underperformer is Verizon (VZ), which I’ll sell because the stock has weakened further.
As for the newest recommendation, it’s unusual in that it’s actually in a sector I don’t care for, but the confluence of several factors (including COVID-19) means there’s substantial upside potential right now.
Today our underperformer is Verizon (VZ), which I’ll sell because the stock has weakened further.
As for the newest recommendation, it’s unusual in that it’s actually in a sector I don’t care for, but the confluence of several factors (including COVID-19) means there’s substantial upside potential right now.
Updates
Fifteen Cabot Benjamin Graham Value Investor companies reported quarterly financial results or other noteworthy news during the past week. I have changed my opinion on CVS Health (CVS) from Buy to Sell.
U.S. markets were mixed today after a remarkable three-day rally in the S&P 500 that began on Monday. The market is still working out the potential winners and losers implied by a Trump presidency, but having the S&P and the Dow above their 25- and 50-day moving averages is a good first step, although there’s no question the action is incredibly bifurcated.
While today brings an unexpected new political reality, markets around the world are already adjusting to the new order.
The reality is, there are so many undervalued stocks right now that I have to fight the urge to add another dozen to the Cabot Undervalued Stocks Advisor portfolios.
Fourteen Cabot Benjamin Graham Value Investor companies reported quarterly financial results or other noteworthy news.
Remain cautious! The sellers continue to have the upper hand with the major indexes and most stocks. You should be holding plenty of cash (and some resilient stocks) while waiting for the bulls to retake control.
We’re letting go of Equifax (EFX) today, booking a nice profit, and reducing our exposure to Home Depot (HD) by half. We also sold Amgen (AMGN) on Monday, after health care industry stocks suffered a major selloff. Drug companies and distributors are anticipating even more pressure to rein in drug prices next year.
Market volatility has picked up. Stocks are popping and dropping all over the place. In other words, welcome to the thick of earnings season.
Seventeen Cabot Benjamin Graham Value Investor companies reported quarterly financial results or other noteworthy news. I also include questions from subscribers along with my answers.
The Emerging Markets Timer is right on the fence, as the MSCI Emerging Markets Fund (EEM) is just a hair below its 50-day moving average, but still well within its recent trading range. Earnings season has claimed its first victim among our holdings, but the portfolio remains in good health. Tonight we’re selling Line Corp. (LN) and moving Tata Motors (TTM) to a Hold.
We saw very strong earnings reports last week from E*Trade (ETFC) and Goldman Sachs (GS). Yesterday, Scottrade Financial Services agreed to be acquired by TD Ameritrade (AMTD). This week;s Update discusses how that scenario might affect E*Trade (ETFC).
Alerts
Wall Street is latching on to this lithium producer.
One of our stocks is surging over 50% today on news that Vista Equity Partners will buy the firm.
This loyalty solutions company beat analysts’ estimates by $0.07 last quarter, and nine analysts have recently increased their EPS forecasts for the company.
We’re changing out some funds this month, recommending a growth fund.
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
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.