Dog days of summer? Ha!

Not in the midst of a presidential election with enough drama for an entire season of Game of Thrones, rising U.S.-China-Taiwan tensions, a software failure slowing global commerce to a halt (briefly), two major wars still ongoing, and the Olympics just four days away. It’s enough to cause investors to make rash decisions. So let’s make some sane ones instead by selling two obvious underperforming fallen tech stars and adding a low-drama dividend payer that has a long history of outperforming the market.

It’s all part of today’s busy mid-summer issue. Let’s get started.

The bull market finally expanded to more than just a select few names last week, with small caps, Chinese stocks and other sectors finally getting some love. It’s a good sign for the rally’s longevity and could be a boon for our diverse portfolio. So today, we add another non-AI, non-tech stock that’s been attracting some overdue buying. It’s a big-name, resilient growth company whose stock consistently outperforms the market – and yet is undervalued at the moment. It’s a recommendation I just shared with my Cabot Value Investor readers, and today it joins our Stock of the Week portfolio.

Stocks began the second half of 2024 exactly the way they behaved for much of the first half: at all-time highs, but with only a couple handfuls of mega-cap tech stocks and artificial intelligence plays doing most of the heavy lifting. It remains both a bull market and a stock picker’s market, so today we pick a stock that’s been attracting a lot of institutional attention of late. It’s a tech stock, but it’s no mega-cap; it’s a small-cap, space-related title that Tyler Laundon recommended to his Cabot Early Opportunities audience last month. Its shares have exactly doubled this year and yet still trade 40% below their 2021 highs.

Details inside.

After a productive but top-heavy first half of the year in the market, we set our sights on the back half of the year, and the potentially shifting winds from mega-cap tech and artificial intelligence into the many other unloved sectors. So to kick off the second half of 2024, today we add a retailer that’s bucking the trend of slowing U.S. retail sales due to its discount offerings – which plays well in an inflationary environment. It’s a new pick from Mike Cintolo in his Cabot Top Ten Trader advisory.

Details inside.

Stocks have hit the pause button in the last week. Is summer malaise already setting in? Or is this merely a deep breath before the buyers gain more fodder in the form of dovish Fed speak or the next round of earnings reports? We’ll see. In case it’s the former, today we add a value stock that potentially has an immediate, near-term catalyst. It’s the first contribution from the newest addition to our Cabot team, Matt Warder, a market veteran and cyclicals/commodities expert who has taken over our Cabot Turnaround Letter advisory. I think you’ll enjoy Matt’s unique, outside-the-box perspective.

Details inside.

Stocks keep rising to new highs, though only a handful of sectors are truly participating in the rally. That will need to change if the market is to sustain its recent momentum, but for now, we’ll go with the tides and lean into one of the new-age subsectors that’s been attracting major sponsorship: GLP-1, a.k.a. weight-loss drugs. They’re all the rage these days and have driven portfolio holdings Eli Lilly (LLY) and Novo Nordisk (NVO) to great heights. And today, we add a more under-the-radar, indirect play on the trend in the form of a mid-cap health food upstart that was recently recommended by Tyler Laundon to his Cabot Early Opportunities audience.

Details inside.

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.

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.

Stocks are hitting the pause button, which is normal action after another big run-up the first half of May. Could another breakout arrive before Wall Street goes on summer vacation? It did last June and July. But usually, summer slowdowns are to be expected. So this week, I add a stock that appeals to growth and value investors alike – one that I recommended to my Cabot Value Investor readers earlier this month. It’s a well-known company hiding in plain sight, but one that’s been undervalued by the market until recently.

Details inside.

The market is at all-time highs, and so are many of our Cabot Stock of the Week stocks. Sure, there are potential landmines out there – inflation, the Fed, this Wednesday’s Nvidia (NVDA) earnings report if it fails to meet lofty expectations, etc. – but right now, Wall Street is buying, so we will too. Today, we add one of the market’s best growth stocks so far this year. It’s been sitting in Carl Delfeld’s Cabot Explorer portfolio since late last year – he has a huge gain on it already – and we were reluctant to add it to the Stock of the Week portfolio until it pulled back a bit. Now it’s done so – the stock peaked in mid-March – but it’s building momentum again. It’s one of the best AI plays not named Nvidia or Microsoft.

Details inside.

It’s another dreaded inflation week, yet there’s not much dread in the market right now, considering the S&P 500 is up 3.75% in May and the Dow is off to its best winning streak in May ever (!). Still, a “hot” CPI or PPI number this week could prompt another pullback like we saw in April, so this week we’re playing it safe by adding a reliable, large-cap, dividend-paying healthcare stock. It’s been a longtime favorite of Cabot Dividend Investor Chief Analyst Tom Hutchinson.

Details inside.

The choppy market waters of April have given way to much calmer seas through the first week of May. In the grand scheme of things, the damage (4% drawdown in the S&P 500) was limited, and the bull market remains very much intact. It pays to be an optimist, especially in bull markets. So today, we add another growth-y name (with an AI twist, of course) that has become rejuvenated and recently caught the eye of Cabot Early Opportunities Chief Analyst Tyler Laundon.

Details inside.

It was a tale of two earnings responses with Eli Lilly (LLY) and Si-Bone (SIBN) yesterday.

On Holding (ONON) is in full retreat mode since reporting what appeared to be mostly good earnings on Tuesday this week.

Montauk Renewables (MNTK) reported third-quarter earnings after the bell on Wednesday and they weren’t good – at least not compared to estimates.

In recent days, several stocks recommended by Cabot analysts have rocketed to new highs, propelled by the twin forces of social media and short-covering, and our Virgin Galactic (SPCE) is one of them.

Long-term, the odds are very good that this recommendation will move higher, so there is an argument for holding patiently. But we will sell.

The shares of this China stock fell sharply today after the company announced that it had suspended the CFO and several employees reporting to him for misconduct related to “fabricated transactions.”

In this rare, mid-week update I will try to be brief, because I know you have a lot to read, including numerous notices of cancellations and closings.

One of our stocks is now rated Sell, simply because it has come so far so fast.

One of our stocks reported results on Thursday and investors didn’t care for the results.

While many investors will be selling stocks in panic today, fearful of the unknown, I recommend that you sit calmly. Wait for the panic to pass and the dust to settle.

Abiomed (ABMD) and GrubHub (GRUB) snapped their uptrends and are now rated Sell.

Twilio (TWLO) sold off in a big way this morning because late last Friday, the company announced that it will sell shares in a secondary offering—but it didn’t say how many!

Cabot Stock of the Week is a great way to build a diversified portfolio of the top growth, undervalued, momentum, international, dividend and small-cap stocks selected for current market conditions from seven Cabot investment advisories.