Issues
Growth stocks have gotten off a bit of a sour start in September, with a couple of leaders cracking near-term support and a few collapsing completely. That tells us the tricky environment remains in effect ... and yet, we don’t think the action is bad at all. Indeed, most growth stocks remain in good shape, and frankly a further pullback should offer up some high-odds entry points.
Tonight, though, we’re standing pat with our 32% cash position after selling one stock earlier this week.
Tonight, though, we’re standing pat with our 32% cash position after selling one stock earlier this week.
Markets are facing end-of-the-summer doldrums as concerns about job and Covid growth dampen enthusiasm. We move two stocks from buy to hold, while on the positive side, Cloudflare (NET) shares are up 73% this year and Novonix (NVNXF) shares are up 58% in the last 10 days of trading. Today we have a new semiconductor-related idea for you in an area usually overlooked by investors.
Here is your September Wall Street’s Best Digest, issue 845.
Thank you to all who attended our Cabot Wealth Summit last month. It was an information-packed few days, with lots of new ideas shared by all of our analysts. We hope next year we can resume our in-person meetings, as we miss seeing you!
Despite COVID’s resurgence, the markets are holding up surprisingly well. The economy is still strong, housing is robust, but businesses need employees. The unemployment rate for August fell to 5.2%, but new jobs added were much less than anticipated. Once those numbers improve, and COVID recedes, we should be in for an even stronger economy. And that’s great news for the markets!
In this issue, our Spotlight Stock revisits an old favorite of mine—a net-lease REIT that has boosted its dividend for 31 consecutive years! In my Feature article, I discuss all the reasons why this stock has been a perennial winner.
In our Growth section, you’ll find a lot of familiar names, including companies in the retail, hospitality, and communications realms, as well as a couple of newer ones in the fast food franchising, and electric vehicle charging arenas. There are a lot of great names to choose from in Growth & Income, including many industrial-related companies, as well as a home products and chemical manufacturer.
Our Financial offerings include a bank and a money exchange company. And in Healthcare, you’ll find options in biopharma, equipment, and 3-D. And speaking of 3-D, our contributors for technology stocks include one of those companies, as well as a semiconductor, cloud, and two payments businesses.
Resources, Energy, and Utilities continue to be popular fields, as our advisors offer several utilities and midstream energy companies here. Our Low-Priced Stocks are in two relatively new arenas—carbon credits and lab-grown gems. And in Preferred Stocks, High Yield, & REITs, you’ll find a couple of investment/capital corporations.
Lastly, our Funds & ETFs provide a variety of ideas, including cryptocurrency, consumer staples, alternative energy, and water sustainability.
Don’t forget to tune into my monthly Platinum Club webinars. Our October program is scheduled for October 6, at 2pm Eastern. And as always, please don’t hesitate to email me with your feedback and questions. My address is nancy@cabotwealth.com.
Thank you to all who attended our Cabot Wealth Summit last month. It was an information-packed few days, with lots of new ideas shared by all of our analysts. We hope next year we can resume our in-person meetings, as we miss seeing you!
Despite COVID’s resurgence, the markets are holding up surprisingly well. The economy is still strong, housing is robust, but businesses need employees. The unemployment rate for August fell to 5.2%, but new jobs added were much less than anticipated. Once those numbers improve, and COVID recedes, we should be in for an even stronger economy. And that’s great news for the markets!
In this issue, our Spotlight Stock revisits an old favorite of mine—a net-lease REIT that has boosted its dividend for 31 consecutive years! In my Feature article, I discuss all the reasons why this stock has been a perennial winner.
In our Growth section, you’ll find a lot of familiar names, including companies in the retail, hospitality, and communications realms, as well as a couple of newer ones in the fast food franchising, and electric vehicle charging arenas. There are a lot of great names to choose from in Growth & Income, including many industrial-related companies, as well as a home products and chemical manufacturer.
Our Financial offerings include a bank and a money exchange company. And in Healthcare, you’ll find options in biopharma, equipment, and 3-D. And speaking of 3-D, our contributors for technology stocks include one of those companies, as well as a semiconductor, cloud, and two payments businesses.
Resources, Energy, and Utilities continue to be popular fields, as our advisors offer several utilities and midstream energy companies here. Our Low-Priced Stocks are in two relatively new arenas—carbon credits and lab-grown gems. And in Preferred Stocks, High Yield, & REITs, you’ll find a couple of investment/capital corporations.
Lastly, our Funds & ETFs provide a variety of ideas, including cryptocurrency, consumer staples, alternative energy, and water sustainability.
Don’t forget to tune into my monthly Platinum Club webinars. Our October program is scheduled for October 6, at 2pm Eastern. And as always, please don’t hesitate to email me with your feedback and questions. My address is nancy@cabotwealth.com.
Ahead of the long holiday weekend, it was a mixed bag last week as the S&P 500 rose 0.58%, the Dow lost 0.25%, and the Nasdaq climbed 1.55%.
This week traders will keep a close eye on inflation as the Labor Department releases its August index of U.S. wholesale prices, otherwise known as the producer price index. The market is estimating an increase of 0.5%, after 1% increases in June and July. July witnessed a 7.8% increase year over year, which was the largest bump in over a decade. Another spike would not bode well for the overall market, so I will be keeping an eye on the release and its impact on price action.
With that in mind, and always an eye on diversification, this week’s pick is a steel and iron enterprise company.
This week traders will keep a close eye on inflation as the Labor Department releases its August index of U.S. wholesale prices, otherwise known as the producer price index. The market is estimating an increase of 0.5%, after 1% increases in June and July. July witnessed a 7.8% increase year over year, which was the largest bump in over a decade. Another spike would not bode well for the overall market, so I will be keeping an eye on the release and its impact on price action.
With that in mind, and always an eye on diversification, this week’s pick is a steel and iron enterprise company.
Today, we are recommending a small Canadian specialty pharma company that checks all the boxes of what we typically look for:
All the details are inside this month’s Issue. Enjoy!
- High insider ownership (insiders own ~41% of shares outstanding)
- Recent insider buying (insiders bought as recently as August 21)
- Strong momentum (stock is near 52 week high)
- Low valuation (P/E of 5.2x)
- Low share count (only 26MM shares outstanding)
- Strong revenue growth potential (promising pipeline)
- No debt (29% of market cap is in cash)
All the details are inside this month’s Issue. Enjoy!
It’s still an amazing market. The S&P is up 96% from the bear market low in March of 2020. The index is also up over 20% so far this year.
While the overall market may be pricey, there are still undervalued pockets within the market. The indexes don’t tell the whole story. Even in a market like this, some stocks get neglected.
The yield curve has flattened and two stocks in the portfolio, AGNC and USB, have pulled back as a result. I believe this interest rate dynamic is temporary and these stocks are good buys ahead of a likely reversal.
While the overall market may be pricey, there are still undervalued pockets within the market. The indexes don’t tell the whole story. Even in a market like this, some stocks get neglected.
The yield curve has flattened and two stocks in the portfolio, AGNC and USB, have pulled back as a result. I believe this interest rate dynamic is temporary and these stocks are good buys ahead of a likely reversal.
The bull market remains intact, so I continue to recommend that you be heavily invested in stocks that help achieve your investing goals.
Today’s featured stock is one of my favorite kinds of stocks—a small company that’s not well known but that’s growing fast by making a big difference in a global marketplace.
As for the current portfolio, most of our stocks look good, and many are hitting new highs, but I have two sells, Five Below (FIVE) and Molson Coors (TAP).
Details inside.
Today’s featured stock is one of my favorite kinds of stocks—a small company that’s not well known but that’s growing fast by making a big difference in a global marketplace.
As for the current portfolio, most of our stocks look good, and many are hitting new highs, but I have two sells, Five Below (FIVE) and Molson Coors (TAP).
Details inside.
Current Market OutlookWe traded in our crystal ball years ago, especially when it comes to short-term predictions, but our screens over the weekend told a clear tale: While it’s not 1999 out there, many growth stocks and indexes have enjoyed good moves of late, and when you combine that with some signs of complacency, a retrenchment looks possible. (Today, in fact, might be the start of that, as many growth stocks were hit.) Still, this isn’t some grand market call—overall, the environment remains the same, with some divergent and rotational action, but also more and more names acting well—but our point is more to make sure you’re still sticking with great-looking stocks at decent entry points, as opposed to chasing things higher. We’ll leave our Market Monitor unchanged this week.
This week’s list has a bunch of strong names thanks to recent earnings reports and other news items. Our Top Pick is Ambarella (AMBA), which staged a massive blastoff on earnings—we’re OK starting small here or on dips.
| Stock Name | Price | ||
|---|---|---|---|
| Academy Sports and Outdoors (ASO) | 45 | ||
| Ambarella (AMBA) | 136 | ||
| Asana Inc. (ASAN) | 95 | ||
| Avalara (AVLR) | 188 | ||
| Chipotle Mexican Grill (CMG) | 1895 | ||
| Floor & Décor (FND) | 125 | ||
| Macy’s, Inc. (M) | 22 | ||
| Nutanix (NTNX) | 44 | ||
| Quanta Services (PWR) | 115 | ||
| TX (TX) | 54 |
Thanks to all of you who joined us for our Cabot Wealth Summit in August. It was a great few days—lots of new ideas to share amid a backdrop of a still bullish market.
Sentiment continues to be bullish, but cautious. And Value stocks are still leading Growth. So far in 2021, we are seeing double-digit returns across both styles, with the exception of small-cap growth stocks, which are up 7.6% year-to-date.
The Dow Jones Industrial Average has stayed above 35,000, propped up by a fabulous earnings season. According to FactSet, 87% of S&P 500 companies reported both a positive EPS and revenue surprises.
The economy continues strengthening, with a nice drop in the unemployment rate, to 5.2%. Home sales are helping tremendously. Although inventory continues to be a challenge, the rise in prices (18.6%) are helping to mitigate that.
Consumer confidence remains strong, although we are still battling COVID, and hoping that the variant does not derail all the good progress.
In the meantime, I’m constantly searching for new ideas for you, and am pleased that our portfolio continues to outperform.
Please don’t hesitate to email me with your thoughts and questions. I look forward to hearing from you.
Happy Investing!
Sentiment continues to be bullish, but cautious. And Value stocks are still leading Growth. So far in 2021, we are seeing double-digit returns across both styles, with the exception of small-cap growth stocks, which are up 7.6% year-to-date.
The Dow Jones Industrial Average has stayed above 35,000, propped up by a fabulous earnings season. According to FactSet, 87% of S&P 500 companies reported both a positive EPS and revenue surprises.
The economy continues strengthening, with a nice drop in the unemployment rate, to 5.2%. Home sales are helping tremendously. Although inventory continues to be a challenge, the rise in prices (18.6%) are helping to mitigate that.
Consumer confidence remains strong, although we are still battling COVID, and hoping that the variant does not derail all the good progress.
In the meantime, I’m constantly searching for new ideas for you, and am pleased that our portfolio continues to outperform.
Please don’t hesitate to email me with your thoughts and questions. I look forward to hearing from you.
Happy Investing!
Updates
This is a great time to be invested in these stocks, clearly. And I hope the trend continues. But I do think we have a missing ingredient before we can feel super confident that these gains will stick. And that ingredient is more participation from a wider group of small-cap stocks. If we get that, we’ll see the S&P 600 Small Cap Index break above 990 and move back toward its 2018 high.
The market’s three-day rally has been solid, but even better than that has been the action of growth stocks, many of which have zoomed to new highs.
After the breakdown of trade negotiations with China and the escalation of tariffs, the market had a few ugly trading days, but now, it looks like we’re back in the saddle again.
After rising 25% from its December low to its May high, the S&P 500 index is finally taking a breather. I don’t expect a shocking price drop like we saw in December. Rather, I anticipate the S&P 500 receding to 2,750, which would be down 200 points from the recent high, or even 2,650. Pullbacks aren’t any fun, but they are normal, and they provide opportunities for investors to buy stocks while they’re on sale.
Everybody’s focus is on the high-stakes chess game the U.S. and China are playing with respect to trade, and the upcoming Uber IPO. But behind the scenes there’s a nice little rally going on in a certain group of small-cap stocks!
Alerts
This staffing company just reported excellent fourth quarter results, but the share have dipped a bit, creating a buying opportunity.
Today’s market meltdown is turning our Cabot Tides negative, which, following the many yellow flags in recent weeks, has us paring back some.
Global citizens are beginning to witness a relatively unprecedented situation in which a communicable virus that originated in China is now traveling around the globe.
This preferred stock has a current annual yield of 6.76%, and is backed by a lodging Real Estate Investment Trust with a market cap of $2.75 billion.
Today three of our covered calls will expire. The great news, all three trades will be closed for nice profits!
Earnings continue to grow at this Chinese internet company, consistently beating analysts’ forecasts.
Headed into the event our position is in fantastic shape as the stock is trading marginally above our short strike price.
Crista has two rating changes today and reports on another with a good 2020 outlook.
Earnings and occupancy are up for this REIT. The shares have a current annual dividend of 5.87%, paid quarterly.
We’re putting a little cash back to work tonight, buying a half-sized position in this application performance management stock, which will leave us with around 23% on the sideline.
This software company is expected to grow more than 43% next 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.