Despite some selling pressures early last week, the indexes rebounded nicely on nearly every small dip, and by week’s end the S&P 500 had gained 1%, the Dow was mostly unchanged, and the Nasdaq had risen by 1.8%.

It’s now been a couple of months since the market’s April low, but instead of a firm uptrend that’s telling you big investors are diving in or adding to positions, we’re seeing lots of split action. Whether this is a fresh launching pad for most stocks or near-term toppy action that will lead to a summer slump is anyone’s guess—right now, we’re just following along with the evidence, which means holding and targeting stocks that are fresher and under accumulation, raising stops and dumping names that crack and holding a chunk of cash given the sloppiness seen in the broad market. We’ll leave our Market Monitor at a level 7, but once again, it’s mostly about what you own.

From solar to chips to biotech to aerospace, this week’s list is another that has something for everyone. Our Top Pick is a turnaround-type chip player whose stock has decisively blasted off in late April as business is set to turn up.

It’s another week of inflation data, Fed speak and interest rate angst, but you shouldn’t let any of it influence what stocks you’re buying and selling. Stock of the Week is a long-term stock portfolio, and one week of parsing CPI data and Jerome Powell’s words isn’t going to alter the trajectory of your best stocks. Meanwhile, the major indexes are at all-time highs, despite some under-the-surface churn. So today, we take a big swing in the form of a small-cap, Canadian-based rare earths company that’s been in Carl Delfeld’s Cabot Explorer portfolio for months.

Details inside.

In 2000 a small company began selling a proprietary surgical adhesive to seal up arteries. Over the next two decades that company would acquire several highly specialized products for patients undergoing heart surgery.

Today, the company is hitting its stride as surgeons and patients (and the FDA) see how much better its solutions are.

This month’s Issue has all the details.

Renewable energy stocks have never lived up to their considerable promise, having peaked more than 16 years ago. And yet, there’s rarely been a bigger gap between the stocks’ value and the industry’s growth in the wake of the Inflation Reduction Act. Renewable energy projects – solar in particular – have taken off since President Biden signed that bit of eco-friendly legislation, in August 2022. Most solar companies are reporting record revenues these days. But the stocks haven’t followed suit, trading at 2018 levels.

That seems like a pretty extreme divergence between the industry and its companies’ share prices. So in this month’s issue of Cabot Value Investor, we add a solar company that’s capitalizing on the global investment in alternative energy, but is still woefully undervalued, trading at a mere 0.18x record sales.

Details inside.

This morning, from Normandy to Washington, D.C., there will be ceremonies honoring the 80th anniversary of D-Day. Now, we are amidst a different type of struggle, and semiconductor chips are at the heart of it all. And today’s new Explorer recommendation is one of the more important cogs in that global struggle.

It was a down week for the market as the Dow initially led the indexes lower early in the week, then was followed by the Nasdaq later in the week. Though on a positive note, the market rebounded nicely from its lows on Friday afternoon.

By week’s end the S&P 500 was down marginally, while the Dow and Nasdaq both lost 1%.

It was a down week for the market as the Dow initially led the indexes lower early in the week, then was followed by the Nasdaq later in the week. Though on a positive note, the market rebounded nicely from its lows on Friday afternoon.

By week’s end the S&P 500 was down marginally, while the Dow and Nasdaq both lost 1%.

It was a down week for the market as the Dow initially led the indexes lower early in the week, then was followed by the Nasdaq later in the week. Though on a positive note, the market rebounded nicely from its lows on Friday afternoon.

By week’s end the S&P 500 was down marginally, while the Dow and Nasdaq both lost 1%.

After a sharp correction in early April, the market posted a nice, but not powerful, rebound for four weeks but the past two weeks have definitely hurt the near-term evidence, whether you look at the overall market or leading stocks, where some abnormal action has appeared. There’s still more positive evidence than not, but at this point it’s very much a mixed bag, with some stocks acting fine, some coming under the gun and lots of up-and-down action. We’ll leave our Market Monitor at a level 7, but it’s vital to be in the right names and sectors.

This week’s list has many resilient names, including a few that have been out of the spotlight for a while. Our Top Pick is a small medical device outfit that, thanks to a good-sized acquisition of late, looks like a major player in the spinal surgery area, with new products and technology selling well.

Most stocks have barely budged the last two and a half years, but the Magnificent Seven and a handful of large-cap artificial intelligence-related leaders have picked up the slack, resulting in a 22% gain in the S&P 500 since the start of 2022. So, we’ve tried to play the hits here at Stock of the Week, adding a couple Mag. Seven names to the portfolio and several AI plays. All of them are up double-digit percentages (and one triple-digit winner!) in little more than a year. Now, with the market’s tides starting to shift away from AI and the Mag. Seven and toward other, long unloved sectors, we pivot toward one of the new favorites – retail – by adding a recent recommendation from Mike Cintolo to his Cabot Growth Investor readers.

Details inside.

The market’s rally has run into trouble, with our Cabot Tides and Two-Second Indicator effectively back on the fence. When it comes to growth stocks, most are acting more resiliently than the broad market, but even there it’s hit and miss, with lots of air pockets though many names that are acting well, too. Because of the divergent action, we’ve had a flurry of moves since the last issue, paring back or selling three names, but putting money to work in two names (including a new addition last week). All told, we’ll still have about 27% in cash and have a few stocks that look great, but are also keeping a close eye on a couple that remain iffy.

In tonight’s issue, we go over all our thoughts on the market and our various moves, as well as write about the solar sector that may be getting going after a long slumber, as well as small caps in general, which could finally get going ... if interest rates behave themselves.

The market is distinctly more optimistic this month as “soft landing’ hopes revive.

After a rough couple of months, the S&P is trending higher in October. The economy is still solid. In fact, retail sales numbers for September blew away expectations, once again showing that a recession is nowhere in sight.

The market is rallying this month as the “Goldilocks” scenario gets renewed traction.

The economy is still solid. There are no signs of recession. At the same time, the Fed is making noises like it may be done hiking rates because of the higher longer-term rates. A good earnings season may also buoy stocks.

Not a lot is happening in the market right now, but soon a lot will happen.


Tech earnings are just around the corner, which should help reveal whether the Magnificent Seven mega-cap tech stocks are worth their current prices. Apple (AAPL) shareholders nervously wait for signs that revenue growth isn’t truly stalled even though the company’s new product offerings don’t quite have the appeal as earlier ones. Broadly, investors of all types wonder how consumer and industrial goods producers will fare, given rising pressures from inflation, inventory de-stocking, global outlook worries and student loan repayments. Bank investors await results from Bank of America (BAC) and other banks to glean whether we are headed into a second round of deposit runs. Stocks are not cheap, especially in a world of 5-6% Treasury yields … how much, if at all, will this matter?

This week’s note includes our comments on earnings from Walgreens Boots Alliance (WBA) and Wells Fargo & Co (WFC). Next Thursday, we get earnings from Nokia (NOK). The deluge starts the following week with eight companies scheduled to report.

WHAT TO DO NOW: Remain cautious. The bounce starting last Friday does come from a nice setup and, encouragingly, has seen more than a few growth stocks perk up, including some to new highs. However, the weight of the evidence remains pointed to the downside, with our Cabot Tides and Two-Second Indicator clearly negative, the vast majority of stocks also in intermediate-term downtrends and interest rates still trending up. We’re taking it one day at a time, but right now, we’re sticking with a big cash position of around 65%—we have no changes in the Model Portfolio tonight.

Things have been rough in the MedTech world lately.

The new class of weight loss drugs (GLP-1s) is shaking things up way more than expected. And rather than think things through it appears that larger investors have decided to take down their exposure to MedTech now and ask questions later.

Just take a look at the iShares Medical Device ETF (IHI). It has fallen from 58 in late July to under 46 today, a greater than 20% decline.

This was an encouraging week for Explorer stocks with almost all making gains and Novo Nordisk (NVO) shares up 10%. Chile’s lithium and food fertilizer play, Sociedad Química y Minera de Chile S.A. (SQM), also got off to a nice start in its first week as an Explorer recommendation.

And today, we get into America’s decline as a food superpower - and reveal which emerging market is filling the void.

Cannabis stocks have retreated from recent highs in the rally sparked by news that the government may reschedule marijuana under the Controlled Substances Act.

Retraces are perfectly normal after big moves. Many traders typically expect a 33% give-back.

The key question is whether the pullback is buyable. I say yes, for two reasons – one fundamental (catalysts, below) and one technical. Let’s start with the technical factor.

Third-quarter earnings season is only days away. PepsiCo (PEP) will kick off the season on Tuesday, October 10. The “official” start is generally considered to be on Friday, October 13, when major financials like recommended stock Citigroup (C), as well as JPMorgan (JPM), Wells Fargo & Company (WFC) and Blackrock (BLK) report their results. For the S&P 500 members, Tuesdays, Wednesdays, and Thursdays are the busiest, as 20-50 companies report on each of those days. While weekends are almost cleanly bereft of reports, Berkshire Hathaway (BRK/B) provides a stand-out exception (estimated to report on November 4).

The market was already struggling after the Fed’s “higher for longer” comment about interest rates. Now it’s getting hit with ugly headlines regarding the situation in Israel.

Geopolitical risks are always out there, and they act up occasionally. Hopefully, this new Middle East situation won’t expand into a wider conflict. There is also the Ukraine conflict. These are risks that could develop into a much bigger problem. Even if they don’t, there is still the interest rate and inflation situation.

August expiration is near, and we need to roll a few positions in our various Fundamentals portfolios. Expect to see several alerts over the coming week as we roll into September and October expiration cycles.

SI-Bone (SIBN) reported yesterday afternoon that revenue rose by 30% to $33.3 million (beating by almost $2 million) and EPS came in at -$0.30, a penny better than expected. Management raised full-year guidance by $3.5 million to $133 million (at the midpoint), about $1 million more than the Q2 beat.

WHAT TO DO NOW: Remain cautious here as the correction plays out. Growth stocks continue to take the worst of it, with many names hitting intermediate-term peaks, though the selling is spreading to the rest of the market, too. Eventually, this should provide some excellent opportunities, but in the meantime we’re moving into more cash—today we’re going to dump our small-ish remaining positions of Monday.com (MNDY) and MasTec (MTZ), which will leave us with a bit over 50% in cash, which represents lots of buying power once the correction ends.

We can finally take our August 18, 2023, SPY 462/466 bear call spread off for a profit. If you choose to hold on to the trade to seek greater profits, please be aware of the risks.

Earnings Roundup: LUNG, RACE, ELF, SHOP, HUBS, FIX

IBM continues to rally, and the underlying price has now pushed past our short call strike. As a result, the delta of our short call is now at parity with our LEAPS contract, so we need to buy back our short calls and immediately sell more calls at a higher strike price that are further out in duration.

Sell Terex (TEX)

We jumped into TEX four months ago on March 3, literally just a few days before the stock took a dive that ended up sending it 30% lower over the next few weeks. We held on and those of you that added shares along the way should have a much better return than the roughly 7% gain showing in our official portfolio. With so many growthier stocks acting well and TEX up over 50% from its April lows, I’m going to take the modest gain and boot it from our portfolio today. To be clear, I don’t hate TEX and think the bullish thesis I presented back in March still holds true. That said, the reality is there are just too many other stocks with better upside potential right now and I want to maintain concentration in those while taking down our market exposure ever so slightly through next week’s Fed meeting (our next Issue is due out in two weeks). SELL

Our August 18, 2023, SPY 462/466 bear call spread is now in profitable territory, so for those who wish to take off the trade for a small profit, especially given the overall price action of the trade, well, no one is going to scoff at taking some profits off the table.

WHAT TO DO NOW: Earnings season remains a landmine of sorts, though we have seen some names find support later in the week. This bulletin is in regards to MasTec (MTZ), which, frankly, reported a totally unexpected sour quarter and poor outlook, which is leading to a big break today. We’ll sell half of our shares and hold the cash for now, leaving us with around 41% on the sideline.

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.