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Stock of the Week
The Best Stock to Buy Now
Issues
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.
The buyers finally stepped up after a brutal first three weeks of April, and suddenly the bull market feels back on again. One week doesn’t make a rally – not if the Fed (which rears its ugly head again this week) has anything to say about it. But for now, the selling has ceased, with an assist from a better-than-expected earnings season. Today’s addition isn’t exciting – it specializes in things like pipes, valves and water meters – but it’s a practical – and potentially quite profitable – way to play America’s geyser of infrastructure spending. It was newly recommended by Mike Cintolo to his Cabot Top Ten Trader readers.
It’s been a painful April for stocks, with the S&P 500 down more than 5% and many growth and small-cap stocks down much further. But in the grand scheme, some selling was to be expected after five straight months of gains. It’s still a bull market, and it’s not likely to up and fizzle after five months. Eventually, selling pressures will ease, and the market will bounce back. Until then, we have to ride out the storm. Today, we do that in several ways: selling two more of our laggards, downgrading two once-red-hot stocks that are in the midst of steep corrections, and adding a new stock from perhaps the one strong sector at the moment: gold miners. It’s a new addition from Tyler Laundon in Cabot Early Opportunities.
The first real market turbulence of 2024 has arrived. But you don’t have to fear it. Pullbacks are normal – no bull market simply goes up in perpetuity – and, in the long run, healthy. It’s best to use it as an opportunity to cleanse your portfolio of some laggards and buy good companies at better prices. We check both of those boxes in today’s issue, adding an up-and-coming retail cookie-cutter story that’s a new favorite of Cabot Growth Investor Chief Analyst Mike Cintolo. Mike loves the upside, and buying on the recent dip makes it even more attractive.
Stocks are coming off a rare down week, though the “damage” was mostly limited to last Thursday after a couple rogue Fed members came out with some hawkish quotes (though, in fairness, this happens just about every month). Still, the bull market is very much intact, and it’s a great time to go looking for growth stocks at value prices. As the new Chief Analyst of Cabot Value Investor, I just added such a stock to that portfolio, so today’s new Stock of the Week recommendation comes from yours truly. It’s a giant in the auto industry that is benefitting greatly from Americans’ burgeoning appetite for hybrid cars.
Stocks keep rolling into spring on the heels of an excellent first quarter. Can the next three months match the previous three (or five)? Probably not. But bull markets don’t normally die of old age, and there are plenty of reasons to believe stocks will be higher by the end of Q2. With that in mind, today we add another beneficiary of artificial intelligence, though a company that’s not entirely dependent on AI. Instead, it’s one that’s found new life thanks in part to AI – similar to Microsoft (MSFT) when we added it to the portfolio a year ago. It’s been in Carl Delfeld’s Cabot Explorer portfolio for months, and today we welcome it to Stock of the Week.
Alerts
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!
Strategy
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.