Issues
Today’s new addition has all the attributes we look for in a small-cap software stock.
The company is young, management is insanely smart, the products fit a huge need, growth is 30%+, and the sales team is growing quickly.
In short, it’s an extremely attractive opportunity. Which is why we’re jumping in right after the company came public.
Enjoy!
The company is young, management is insanely smart, the products fit a huge need, growth is 30%+, and the sales team is growing quickly.
In short, it’s an extremely attractive opportunity. Which is why we’re jumping in right after the company came public.
Enjoy!
Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the September 2021 issue.
While the stock market continues to set new record highs, oil and gas exploration and production (E&P) companies have been left behind. Yet, at current commodity prices, which we believe are sustainable, several companies have shares that trade at surprisingly high free cash flow yields, some as high as 24%. We make our case for five stocks.
Related to this, our featured recommendation is Marathon Oil Company (MRO), a mid-cap oil-focused E&P company. Its strong fundamentals, including a high-quality asset base, strong free cash flow and a solid balance sheet, make it particularly attractive.
We highlight three former Cabot Turnaround Letter winners whose shares have retreated since our exit. These now look interesting once again.
In this issue we also discuss three one-off contrarian ideas that have considerable appeal.
During the month, we had a few ratings changes: we moved Berkshire Hathaway (BRK/B) to a Hold, and moved Albertsons (ACI) and Oaktree Specialty Lending (OCSL) from Buy to Sell.
Please feel free to send me your questions and comments. This newsletter is written for you. A great way to get more out of your letter is to let me know what you are looking for.
I’m best reachable at Bruce@CabotWealth.com. I’ll do my best to respond as quickly as possible.
While the stock market continues to set new record highs, oil and gas exploration and production (E&P) companies have been left behind. Yet, at current commodity prices, which we believe are sustainable, several companies have shares that trade at surprisingly high free cash flow yields, some as high as 24%. We make our case for five stocks.
Related to this, our featured recommendation is Marathon Oil Company (MRO), a mid-cap oil-focused E&P company. Its strong fundamentals, including a high-quality asset base, strong free cash flow and a solid balance sheet, make it particularly attractive.
We highlight three former Cabot Turnaround Letter winners whose shares have retreated since our exit. These now look interesting once again.
In this issue we also discuss three one-off contrarian ideas that have considerable appeal.
During the month, we had a few ratings changes: we moved Berkshire Hathaway (BRK/B) to a Hold, and moved Albertsons (ACI) and Oaktree Specialty Lending (OCSL) from Buy to Sell.
Please feel free to send me your questions and comments. This newsletter is written for you. A great way to get more out of your letter is to let me know what you are looking for.
I’m best reachable at Bruce@CabotWealth.com. I’ll do my best to respond as quickly as possible.
Thank you for subscribing to the Cabot Undervalued Stocks Advisor. We hope you enjoy reading the September 2021 issue.
This past week was vacation week – a valuable respite from the stresses of investing and other features of daily life. We now return to the investing desk, ready for what could be a very interesting remaining four months of the stock market year.
There hasn’t been much recent news on our names, so we provide a bit more color on some of the issues surrounding Arcos Dorados (ARCO) and some other names. We would like to see a market pullback to bring shares of otherwise attractive companies back to attractive valuations. However, even in the current market, we are starting to find appealing stocks again and will bring them to you.
Please feel free to send me your questions and comments. This newsletter is written for you and the best way to get more out of the letter is to let me know what you are looking for.
I’m best reachable at Bruce@CabotWealth.com. I’ll do my best to respond as quickly as possible.
Thanks!
This past week was vacation week – a valuable respite from the stresses of investing and other features of daily life. We now return to the investing desk, ready for what could be a very interesting remaining four months of the stock market year.
There hasn’t been much recent news on our names, so we provide a bit more color on some of the issues surrounding Arcos Dorados (ARCO) and some other names. We would like to see a market pullback to bring shares of otherwise attractive companies back to attractive valuations. However, even in the current market, we are starting to find appealing stocks again and will bring them to you.
Please feel free to send me your questions and comments. This newsletter is written for you and the best way to get more out of the letter is to let me know what you are looking for.
I’m best reachable at Bruce@CabotWealth.com. I’ll do my best to respond as quickly as possible.
Thanks!
Greentech peaked in February and bottomed in May. There are still headwinds – as there are for many growth stocks – but we’re seeing the sector build a base for a resumption of its long-term bull move. We’re also seeing more stocks that are setting up for long-term success and more predictable performance from our current holdings.
This issue, we examine one of the leading providers of an essential technology for residential solar systems, a fast-growing market. The last two quarters for home-based solar have been the best ever in the U.S. Our pick this week is gaining market share with a unique approach that makes systems more efficient and more reliable. It’s also expanding into segments that could quadruple sales in coming years.
We also have newly recommended ratings and sell-stops for many of our current portfolio holdings.
Read through for more details.
This issue, we examine one of the leading providers of an essential technology for residential solar systems, a fast-growing market. The last two quarters for home-based solar have been the best ever in the U.S. Our pick this week is gaining market share with a unique approach that makes systems more efficient and more reliable. It’s also expanding into segments that could quadruple sales in coming years.
We also have newly recommended ratings and sell-stops for many of our current portfolio holdings.
Read through for more details.
Up, up and away! The S&P 500 rose 1.52%, the Dow advanced 0.96%, and the Nasdaq climbed 2.82% last week, aided by Federal Reserve Chairman Jerome Powell’s dovish commentary.
There is no doubt this year’s rally has been one of the most impressive rallies market participants have ever seen. More than 50 new closing highs and over 200 trading sessions without a 5% pullback defines the power and consistency of this rally. And as we have all witnessed, the slightest pullback seems to act as a frenzied feeding ground for buyers.
There is no doubt this year’s rally has been one of the most impressive rallies market participants have ever seen. More than 50 new closing highs and over 200 trading sessions without a 5% pullback defines the power and consistency of this rally. And as we have all witnessed, the slightest pullback seems to act as a frenzied feeding ground for buyers.
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 a speculative suggestion—a small company with great potential to grow as the market for electric vehicle charging booms.
As for the current portfolio, most of our stocks look good, and many are hitting new highs, so I’m downgrading three to hold because they are ripe for correction.
Lastly, a reminder that because of the Labor Day holiday, next week’s issue will be published on Tuesday, September 7.
Details inside.
Today’s featured stock is a speculative suggestion—a small company with great potential to grow as the market for electric vehicle charging booms.
As for the current portfolio, most of our stocks look good, and many are hitting new highs, so I’m downgrading three to hold because they are ripe for correction.
Lastly, a reminder that because of the Labor Day holiday, next week’s issue will be published on Tuesday, September 7.
Details inside.
Current Market OutlookLast week was definitely a good one for the bulls, with the indexes acting well but also many individual growth stocks scoring some great gains (and most of those came after tests of support earlier this month). Interestingly, the strength didn’t come at the expense of the rest of the market, either, which is a pleasant change from the rotational wars of late. If this strength can be sustained, it’ll be time to get more aggressive, but to us, the market still has some proving to do, especially with the chop factor, which continues to lead to some dramatic pullbacks in stocks that have recently pushed higher. All in all, we’re encouraged by what we see, including an increasing number of setups and breakouts—we’re OK putting money to work, but buying dips and starting small continue to mostly be your best bet, along with banging out partial profits on the way up.
This week’s list has a bunch of solid actors, including some that are putting the finishing touches on multi-month launching pads. But for our Top Pick, we’re going with an earnings winner—Palo Alto Networks (PANW) is part of the strong cybersecurity group and just leapt out of its own long rest. Try to buy on dips.
| Stock Name | Price | ||
|---|---|---|---|
| Alkermes (ALKS) | 31 | ||
| Continental Resources (CLR) | 38 | ||
| Horizon Therapeutics (HZNP) | 109 | ||
| Inspire Medical Systems (INSP) | 222 | ||
| Kulicke and Soffa Industries (KLIC) | 70 | ||
| MRVI (MRVI) | 60 | ||
| MercadoLibre, Inc. (MELI) | 1879 | ||
| NVIDIA Corporation (NVDA) | 227 | ||
| Palo Alto Networks (PANW) | 459 | ||
| Sonos (SONO) | 39 |
Growth stocks went through the wringer for a bit but have again found support and bounced back in recent days. We’ll certainly take it, and we like the way most of our stocks are acting, but it’s too soon to conclude growth stocks have completely escaped the chop that we’ve seen in recent months.
Thus, we’re still going slow, but we are putting a little money to work tonight, filling out our position in one of our holdings.
Elsewhere in tonight’s issue, we write about some of the mixed evidence out there, including divergences (negative) and the recent plunge in rates (a type of blastoff indicator), as well as review all of our stocks and updated watch list.
Thus, we’re still going slow, but we are putting a little money to work tonight, filling out our position in one of our holdings.
Elsewhere in tonight’s issue, we write about some of the mixed evidence out there, including divergences (negative) and the recent plunge in rates (a type of blastoff indicator), as well as review all of our stocks and updated watch list.
The marijuana sector peaked in February, bottomed from late March to mid-April, and since then has been building a base, preparing for a resumption of the big advance.
Fundamentals in the industry remain terrific, as second quarter results have recently revealed, and the trend toward legalization in the U.S. continues, so it’s only a matter of time before these stocks enjoy their next upwave.
In the portfolio today the one small change is that I’ll downgrade Columbia Care (CCHWF), our biggest loser, to Hold.
Full details in the issue.
Fundamentals in the industry remain terrific, as second quarter results have recently revealed, and the trend toward legalization in the U.S. continues, so it’s only a matter of time before these stocks enjoy their next upwave.
In the portfolio today the one small change is that I’ll downgrade Columbia Care (CCHWF), our biggest loser, to Hold.
Full details in the issue.
The S&P 500 and the Nasdaq just made new all-time highs. Strong earnings and a booming economy are outweighing concerns about the delta variant, the Chinese slowdown, inflation and a Fed tapering of bond purchases.
It’s difficult to say what narrative will be dominant after the summer. The cyclical slump could gain traction or turn around. Much will depend on the headlines, which are unpredictable. While I like the way the current portfolio is positioned, it needs more stocks with momentum that generate high call premiums.
In this issue I highlight for purchase one of the very best financial stocks on the market. Prospects are dazzling over the rest of this year. But the stock is also moving right now. It should offer a quick opportunity to ring the income register with a covered call.
It’s difficult to say what narrative will be dominant after the summer. The cyclical slump could gain traction or turn around. Much will depend on the headlines, which are unpredictable. While I like the way the current portfolio is positioned, it needs more stocks with momentum that generate high call premiums.
In this issue I highlight for purchase one of the very best financial stocks on the market. Prospects are dazzling over the rest of this year. But the stock is also moving right now. It should offer a quick opportunity to ring the income register with a covered call.
Updates
With markets expecting a deal right around the corner, the Trump administration signaled its frustration by threatening to raise tariffs on roughly $200 billion of Chinese imports to 25%, from 10%, last Friday.
Things were going so well in the market. Last week I gushed about the strong 3.2% first quarter GDP report. Then an outside event had to come in and spoil the party, at least for now.
Remain bullish, but keep your eyes open. Our indicators and most of our stocks are still trending up, though we’re seeing some funky action that’s worth monitoring.
The new all time high is a significant milestone. Although the S&P 500 hasn’t hit new highs quite yet it is only just about .01% from the mark. The new high is significant because it negates any possibility that we have been in a bear market since September, when the previous high was established.
When a famous company’s stock falls, there are lessons to be learned that can help you improve your game. Shares of 3M Co. (MMM) fell last week when first-quarter results revealed revenue and profits that did not meet the market’s expectations.
It’s earnings season so most investors are focused on individual stocks. And with the S&P 500 and Nasdaq hitting new all-time highs this week, the big picture is looking pretty good too!
Our EEM Signal slipped below its 20-day moving average this morning and is right on top of its 50-day average. We will remain positive and constructive but lean toward finding some bargains. Most likely, the next two ideas will come from heavyweights India and China.
Alerts
The market was met with some selling as investors returned from a long weekend, with sentiment souring after Apple said they’re unlikely to meet Q1 guidance due to supply and demand issues from China due to the effects of the coronavirus.
In the past 30 days, 33 analysts have boosted their EPS estimate for this giant tech company.
Marijuana stocks have been building a meaningful bottom since November—and there are good and bad aspects to that.
The bullish stock market is boosting growth at this diversified financial company.
Tyler updates us on four Cabot Early Opportunity Stocks.
Shares fell after an earnings disappointment, making this turnaround company even more undervalued. The shares have a current dividend yield of 4.85%, paid quarterly.
Analysts expect this wellness company to grow at a rate of 21.3% this year.
This portfolio stock reported last night with revenue that was up 33.3% to $91.7 billion and beat by $3.4 million and adjusted EPS of $0.03 that beat by $0.04.
Crista has rating changes for three portfolio stocks and reports an earnings miss for a fourth.
This airline is a value and growth play. Analysts expect 21.47% annual growth from the company over the next five years.
This marijuana company is expected to grow by 169% 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.