Issues
It’s a New Year, but the market’s evidence remains unchanged--big picture, it’s a strong bull market, though short-term risks are rising, telling us to be choosy on the buy side and to hold a chunk of cash. That said, we’re still holding on tightly to our winners and think a few of our current stocks can enjoy sustained runs from here.
In tonight’s issue, we write about how many stocks that have recently had big moves actually look to be early in their overall advances; pullbacks, in other words, should offer buying opportunities. We also dive into our stocks and write about a couple of names on our watch list could be our next buys.
In tonight’s issue, we write about how many stocks that have recently had big moves actually look to be early in their overall advances; pullbacks, in other words, should offer buying opportunities. We also dive into our stocks and write about a couple of names on our watch list could be our next buys.
The stock market’s strong and resilient upward march this year to a 32% total return was great. Yet, few, including us, expected such an uplifting outcome in 2019.
In this issue, we give our turnaround market outlook for 2020.
In this issue, we give our turnaround market outlook for 2020.
This stock has always had a great story—the company looks like one of the best cookie-cutter stories in construction-related retail, operating large (75,000 square feet on average) warehouse-style locations that specialize in hard flooring (tile, wood, stone, laminate and the like).
The broad market remains strong, and all Cabot’s market timing indicators are currently positive, so as we head into the New Year, I remain optimistic that we’ll see higher prices in the month ahead.
However, there’s always room for portfolio improvement, and as we head into January, there are a number of laggards in the portfolio that may be cut soon if they don’t shape up. Additionally, there is one stock you can sell this week for a quick five-week profit—though you can hold for longer-term gains if you choose.
As for the new addition, it’s an English stock (which is rare), but it has a good story as well as a good chart, so prospects are good. The stock was originally recommended by Tyler Laundon in Cabot Early Opportunities.
Details in the issue.
However, there’s always room for portfolio improvement, and as we head into January, there are a number of laggards in the portfolio that may be cut soon if they don’t shape up. Additionally, there is one stock you can sell this week for a quick five-week profit—though you can hold for longer-term gains if you choose.
As for the new addition, it’s an English stock (which is rare), but it has a good story as well as a good chart, so prospects are good. The stock was originally recommended by Tyler Laundon in Cabot Early Opportunities.
Details in the issue.
Current Market OutlookAs the year winds to a close, nothing has changed with the market’s overall stance—big picture, it’s a bull market, and numerous factors tell us that the uptrend has farther to go; the odds favor higher prices when looking months down the road. Shorter-term, though, there are also many signs that tell us risk is elevated—that doesn’t necessarily mean a huge correction is on tap, but we think it’s safe to say that the next few weeks are likely to be more challenging than the past few weeks, with potholes, rotation and news-driven moves possible. As we’ve been writing, that’s no reason to bail out, but being discerning on the buy side (good entry points, starting small, etc.) and booking some partial profits makes sense.
Our last list of 2019 is a broad mix of strong stocks, including turnarounds, recent breakouts and fresh setups. Our Top Pick is Crocs (CROX), which is benefiting from some rotation into retail titles and a string of solid quarterly reports.
| Stock Name | Price | ||
|---|---|---|---|
| Bed Bath & Beyond (BBBY) | 0.00 | ||
| Cardlytics (CDLX) | 0.00 | ||
| Carvana (CVNA) | 82.90 | ||
| Crocs (CROX) | 0.00 | ||
| Floor & Décor (FND) | 68.03 | ||
| GSX Techedu (GSX) | 97.59 | ||
| Luckin Coffee (LK) | 0.00 | ||
| Paycom Software (PAYC) | 0.00 | ||
| Sea Limited (SE) | 132.86 | ||
| United Rentals, Inc. (URI) | 0.00 |
The latest issue of Cabot Marijuana Investor is now available, with my current advice on the fourteen stocks in the portfolio.
The cannabis sector remains in a correction, but the new year brings the promise of a great rebound, and I want you to be in the stocks that will benefit most, so, while there hasn’t been much news over the past week, I do include full updates on each stock in the portfolio so you can best decide which stocks fit your own portfolio.
Also, the portfolio remains 25% in cash, waiting for the sector’s main trend to turn up.
Full details in the issue.
The cannabis sector remains in a correction, but the new year brings the promise of a great rebound, and I want you to be in the stocks that will benefit most, so, while there hasn’t been much news over the past week, I do include full updates on each stock in the portfolio so you can best decide which stocks fit your own portfolio.
Also, the portfolio remains 25% in cash, waiting for the sector’s main trend to turn up.
Full details in the issue.
All Explorer positions except Grupo Televisa (TV) advanced this past week and the emerging markets timer (EEM) is positive in an uptrend and above both its 20-day and 50-day moving averages.
Today’s recommendation is a company showing some relative strength that offers a nice blend of emerging growth and Western management. It’s a business with a diversified portfolio of fuel distribution, sugar production, ethanol and electricity, rail transportation and warehousing as well as the distribution of natural gas.
Today’s recommendation is a company showing some relative strength that offers a nice blend of emerging growth and Western management. It’s a business with a diversified portfolio of fuel distribution, sugar production, ethanol and electricity, rail transportation and warehousing as well as the distribution of natural gas.
As we steamroll toward the holidays, the market remains in great shape, and bigger picture, we continue to expect good things in 2020. Near-term, we are finally seeing a few signs of complacency, so some rocky trading is likely at some point; being choosy on the buy side makes sense. But we’re thinking bigger, aiming to hold our strong leaders with the goal of developing some bigger winners.
In tonight’s issue, we’re adding one half-sized position to the Model Portfolio; that will leave us with 19% in cash, which we’re looking to put to work as opportunities arise. We also review three initial lessons learned from this year, highlight some intriguing names that are setting up well and give you our latest thoughts on all our holdings.
In tonight’s issue, we’re adding one half-sized position to the Model Portfolio; that will leave us with 19% in cash, which we’re looking to put to work as opportunities arise. We also review three initial lessons learned from this year, highlight some intriguing names that are setting up well and give you our latest thoughts on all our holdings.
Updates
I’m changing the stock rating on BorgWarner (BWA) to Hold, E*Trade Financial (ETFC) to Buy, H&R Block (HRB) to Hold and Vulcan Materials (VMC) to Hold. Quarterly earnings were reported last week by Big Lots and H&R Block. There’s dividend news on Big Lots (BIG), and there’s stock repurchase news on Big Lots (BIG), Delta Air Lines (DAL) and H&R Block (HRB).
The Cabot Emerging Markets Timer is flashing a robust buy signal. So, following our rules, we’re edging steadily back into the market, increasing our exposure to strong growth stocks. Today, we are upgrading SSW from Hold to Buy and initiating positions in SBGL and TLK with recommendations to Buy a Half position of each stock.
The market has maintained its intermediate-term uptrend, and you can continue to become more invested, cautiously. Today we’re putting Target (TGT) back on Buy after the retailer reported improvement in some key metrics in the latest quarter.
It was a good week despite the ongoing rumblings of oil-related debt defaults, talk of the perils of a negative interest rate environment and relatively lackluster growth from companies that have reported thus far.
Remain defensive but keep your eyes open. Our Cabot Tides are toying with a buy signal, though the past couple of days have delayed it. Because of that, we’re sticking with our three remaining stocks and a cash position around 75% tonight, but we have our shopping list ready should we get a clear green light in the days ahead.
Last week, The Priceline Group (PCLN) reported fourth-quarter 2015 results that surpassed market earnings per share (EPS) expectations, while Boise Cascade (BCC) reported fourth-quarter 2015 results that disappointed the market. I’m raising the ratings on Carnival (CCL), D.R. Horton (DHI) and Royal Carribean Cruises (RCL) to Buy. I’m lowering the rating on Boise Cascade (BCC) to Hold.
The market is still serving up its fair share of surprises, both to the upside and to the downside. We’ve experienced a few of both in our portfolio, and over the last two weeks, we’ve stepped aside from three stocks (my rationale was detailed in the Special Bulletins). This week, two of our stocks reported, and I moved one to Sell.
The Cabot Emerging Markets Timer has edged its way up to a new buy signal. While we want to be cautious until we get confirmation of this uptrend, we will increase our exposure slightly. We will fill our position in TAL Education, changing its rating from Hold a Half to Buy.
Our portfolio is hunkered down in a pretty conservative stance and we’re selling the rest of our Novo Nordisk (NVO) position today and moving our PowerShares Preferred ETF (PGX) to Hold. We have no other rating changes today.
Global stock, bond, oil and gold markets continue to bounce around as investors look for trends that signal a re-entry into stocks. Today, I’d like to review facts vs. fiction, in order to give us a little more peace as we live through the stock market correction.
This week we had three of our stocks report, and we become incrementally more defensive. Two stocks are moved to Sell. Two more are moved to Hold.
The market is retesting its January 20 lows this week, and some minor positive divergences could lead to another short-term bounce attempt. But the market’s major trends remain down, and our three key market-timing indicators are all bearish. Thus, you should remain mostly on the sideline as we patiently wait for a new bull move to develop. In the Model Portfolio, we sold Amazon (AMZN) on a special hotline Monday morning, leaving us with just two stocks and a cash position near 80%.
Alerts
One of our stocks reported a great second quarter and moves from Strong Buy to Buy and moves from Buy Low Opportunities Portfolio to Growth & Income Portfolio.
The top five holdings of this socially-responsible fund are: Microsoft Corp (MSFT, 6.61% of assets); Facebook Inc A (FB, 3.52%); Alphabet Inc C (GOOG, 3.26%); Alphabet Inc A (GOOGL, 3.12%); and Intel Corp (INTC, 1.92%).
Today, there are two rating changes for portfolio stocks. And, news on three other stocks.
Analysts expect this robotic company to grow at a rate of 20% this year.
This auto financing company beat analysts’ estimates by $1.23 last quarter, and 10 analysts have increased their EPS forecasts for the company in the past 30 days.
This is an unscheduled interim update to give you some guidelines to help you deal with the current strength—one of my readers used the word “craziness’—in marijuana stocks.
Apple (AAPL) has several product upgrades and there are new details on the spin-off and merger for one of the portfolio stocks.
The top five holdings of this natural gas fund are: EOG Resources Inc (EOG, 7.90%); Anadarko Petroleum Corp (APC, 6.60%); Schlumberger Ltd (SLB, 6.49%); Occidental Petroleum Corp (OXY, 5.40%); and Devon Energy Corp (DVN, 5.06%).
Our second idea is taking some profits in a previous pick.
Five analysts have increased their EPS forecasts in the past 30 days, for our first recommendation, a lending company.
Two analysts have increased their EPS forecasts for this mining company in the past 30 days and RBC Capital has recently upgraded its shares to ‘Outperform’.
Berenberg and Raymond James also like this medical device company, boosting its ratings to ‘Buy’ and ‘Outperform’, respectively.
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.