Issues
Since the COVID-19 crash ended just over weeks ago, the market has been impressively strong, with marijuana stocks some of the strongest, as they left behind a two-year bear market.
So even though some of these stocks seem a bit over-extended today, short-term, they still have enormous upside potential in the long-term.
Full details in the issue.
So even though some of these stocks seem a bit over-extended today, short-term, they still have enormous upside potential in the long-term.
Full details in the issue.
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.
Updates
The stock market also seems to be in wait-and-see-mode, consolidating on low volume for a second week in a row.
Last week, I changed the recommendation on Dollar Tree (DLTR) to Hold, and on Big Lots (BIG), Kraft Heinz (KHC) and WellCare (WCG) to Buy.
The market has been holding up well, and small caps in particular are looking steadfast as we move into the second half of August.
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.
Alerts
This oil company is expected to grow at an annual rate of 30% over the next five years.
Yesterday brought widespread carnage to the markets, which has carried on to today, but some tech stocks have found support. For now we are going to be watching and waiting, but I want to comment on three current holdings.
As we draw closer to October 17, the day cannabis is legal across Canada, there are growing projections that the supply of legal cannabis will be insufficient to meet demand in the early months.
Stocks don’t go straight up, right? Unless you began your stock-investing career two weeks ago, you know that stocks bounce around. They bounce upward during bull markets and they bounce downward during bear markets. We are currently experiencing a price correction during a bull market.
October 1, 2018, this company completed its spin-off from ServiceMaster.
While we have been holding a large amount of cash in the portfolio and have only a short list of stocks rated buy, the market’s assault has reached unacceptable levels.
Generally speaking, our strategy is to average in on the way up, and out on the way down. That means we need to take one more step today to protect our hard-earned gains.
This healthtech company is expected to grow at 30% annually for the next five years.
The market was on edge last week and reached a tipping point yesterday on concerns that the 10-year yield has broken well above 3% and could move higher still if the Fed continues to tighten (as it has signaled it will).
This restaurant chain beat analysts’ estimates by $0.03 last quarter.
The major indexes finished deep in the red again today, with growth stocks taking another pounding. Our Cabot Tides are now firmly negative, and we’ve been raising cash steadily during the past week. We have two more sales tonight raising our cash position to 52%.
This dredging company just announced a $48 million base contract award on the Big Bend Channel of the Port of Tampa Bay, from the United States Army Corps of Engineers.
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.