WHAT TO DO NOW: The overall evidence remains mostly positive, though after a heady rebound, the indexes and many growth stocks are correcting and consolidating. We’re optimistic, but we’re also taking things on a stock-by-stock basis—tonight, that means selling our position in Wingstop (WING), which has been unable to get off its knees. That will leave us with around 26% in cash.
The market is selling off today after a solid start. As of 2 pm, the Dow was off 220 points and the Nasdaq was down 94, aiming for its fifth straight down day.
Overall, our Cabot Tides remain positive and the recent dip in most leading stocks looks normal after some heady advances during the prior three weeks or so. That said, some things look better than others, so we continue to take things on a stock-by-stock basis, adding names that look like leaders while rotating out of ones that have lost their luster.
We’ve done some buying of late, but today’s bulletin is on the sell side—after giving it a chance, Wingstop (WING) is now rated SELL, as the stock has dipped back to our cost and, bigger picture, has been unable to get off its knees in recent weeks despite the rally.
The sale will leave us with just over one-quarter of the Model Portfolio in cash. We could put some to work if the right opportunity pops up, but right now, we’ll hold onto that cash.
Your next scheduled message is this Thursday’s (October 22) issue of Cabot Growth Investor.