Search

With interest rates expected to fall in the next few months, now is a prime opportunity for investors to consider buying gold and other rate-sensitive assets.

There have been a few times this year when the onus was on the bulls to snap the market out of a downturn, correction or choppy period—and, happily, in most cases they did. Now the shoe is on the other foot: Yes, there are some worries out there, with a lot of stuff extended to the upside and some signs of complacency, but the vast majority of rubber-meets-the-road evidence remains positive, with the major indexes in strong uptrends, a ton of fresh breakouts (including many from names that built launching pads for five to eight months) and little in the way of pullbacks. As we’ve been writing, you shouldn’t get crazy and lose all risk discipline or start buying fly-by-night operations, but overall, there’s no question the evidence tells us to remain bullish. We’ll nudge up our Market Monitor to a level 8 today.

This week’s list features a ton of names that have recently lifted off on earnings, and from a variety of industries, too. Our Top Pick is Arista Networks (ANET), which is a high-priced stock but showed extreme power and a change in character after a great quarterly report and multi-quarter outlook last week.

Stock Name	Price	Buy Range	Loss Limit
ABNB (ABNB)	200	195-200	175-178
Arista Networks (ANET)	526	515-535	453-468
Canada Goose Holdings (GOOS)	49	47-49.5	42-43.5
CFLT (CFLT)	88	82.5-85	72-74
Devon Energy (DVN)	44	42-44.5	36-37
EOG Resources, Inc. (EOG)	97	94-97.5	84-85.5
KLA Corp. (KLAC)	413	395-410	357-367
ON Semiconductor (ON)	59	56.5-59.5	50-51.5
Planet Fitness (PLNT)	96	93-96	84-86
ZoomInfo (ZI)	74	71-74	63-64.5

Stocks are already at all-time highs, and now it appears the Fed is (finally) prepared to give them an extra nudge in the form of interest rate cuts this week. When that happens, it’s typically bullish for stocks, even if there are some bumps along the way. So today, we continue to try and capitalize on a growth-friendly market by adding a fast-expanding biotech play to the Stock of the Week portfolio. It’s a new recommendation from Mike Cintolo in his momentum-based Cabot Top Ten Trader newsletter. And it’s been on a tear for the last month.

Details inside.

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the February 2024 issue.

This issue focuses exclusively on spin-offs and discusses seven attractive and relatively recently spun-off companies.

This month’s Buy recommendation, Baxter International (BAX), a major producer of medical equipment and hospital supplies, is involved in a spin-off. In this case, it is the parent company of an upcoming spin-off. The transaction, along with fundamental improvements and a long-time low share valuation, makes Baxter shares attractive.

More than half the country is buried in snow or ice today. And yet, stocks continue to hum along regardless of the weather, economic headwinds or myriad geopolitical worries. A big one was quickly stamped out last week, when renewed tariff threats caused a brief market shock before cooler heads prevailed in Davos. This week will be dominated by mega-cap earnings and another Fed meeting. Given the market’s resilience against all-comers of late, today we take another big swing with a mid-cap industrial stock that was the Top Pick from Tyler Laundon in the most recent edition of Cabot Early Opportunities advisory.

Details inside.

Happy Thanksgiving week, everyone! The market’s much-needed strong start to this holiday-shortened week is certainly something to be thankful for in the midst of what has mostly been a rough November, particularly for growth investors. Maybe today’s run-up will spark a turnaround. In case there are more wild gyrations ahead, however, today we add a low-beta, way-undervalued utility stock that I recommended to my Cabot Value Investor audience earlier this month. We could use a couple more defensive positions as the market has become more risk-off, and this stock certainly qualifies.

Details inside.

Current Market Outlook


It’s been six weeks since the market bottomed, and the evidence since then has steadily improved—whether it was the blast off from the lows (2-to-1 Blastoff Indicator), the lack of any sustained selling since, the amazing upside breadth or the increasing number of setups and breakouts among growth stocks, it’s all been going the bulls’ way. Of course, now that the market has basically marched ahead for six weeks, things could easily get trickier; even some intermediate-term measures (84% of NYSE stocks above their 50-day lines) are stretched. That’s no reason to worry (longer-term, such power is probably a good sign), but we’d be looking to buy mostly on dips, though we’re still interested in the occasional earnings breakout, too. And, as things head higher, don’t forget to book some partial profits along the way. We’re bumping up our Market Monitor another notch tonight.
This week’s list is another diverse set of stocks that are acting well. Our Top Pick is Entegris (ENTG), where an upcoming merger (and a uptick in the chip group) has investors piling in.

Stock Name	Price	Buy Range	Loss Limit
Boeing (BA)	432.22	382-395	347-352
Cree, Inc. (CREE)	67.96	48-50.5	44-45
CyberArk (CYBR)	111.74	83.5-86.5	75.5-77.5
Elastic (ESTC)	86.17	84-87	76-78
Entegris (ENTG)	48.08	32-34	28.5-29.5
ServiceNow (NOW)	341.86	218-226	199-203
Smartsheet (SMAR)	44.12	30-32	26.5-28
Spirit Airlines (SAVE)	57.03	60-63	55-56.5
Woodward (WWD)	111.91	87-90	80-82
Zscaler (ZS)	126.22	47-49.5	42.5-43.5

Current Market Outlook


The third week of September brought another bout of sharp rotation, with leading growth stocks trading lower while other areas of the market firmed up. To this point, the action has been acceptable given the big runs in so many stocks during the summer, but some indexes and many stocks are approaching key levels—if the buyers show up here, all could be well, and we wouldn’t be shocked to see another leg up develop. But if not, the odds that a deeper and longer retreat among leading stocks will increase. Today, we’ll keep our Market Monitor at a 7 (out of 10), and it’s good to see some new leaders emerge. But the next few days will likely be important for the intermediate-term outlook.

This week’s list is still heavy on growth ideas (though some are turnaround-type plays), but our Top Pick is Rowan Drilling (RDC), which is showing great strength by lifting out of a big bottoming area.

Stock Name	Price	Buy Range	Loss Limit
Aaron’s (AAN)	74.35	51.5-53.5	46-47.5
Atlassian (TEAM)	182.16	88-92	79-81
CF Industries (CF)	45.23	51-53	46-47
Dave & Buster’s (PLAY)	57.01	61-63	55-56.5
Omnicell (OMCL)	81.03	67-70	62-63.5
Pacira Biosiences (PCRX)	54.85	48.5-51	42.5-44
Paylocity (PCTY)	97.34	77.5-81	70-72
Rowan Drilling (RDC)	15.52	17.7-18.7	15.8-16.4
Wingstop (WING)	121.52	64-66	58-59
Yelp (YELP)	41.30	47-50	43-45

I previously gave you a heads up that new low-sulfur diesel regulations (IMO 2020) and a serious hog disease in China (African Swine Fever) are quite likely to increase inflation numbers in 2020 and beyond. Are you ready for the next sweeping industrywide change that will be hitting the credit markets?

So how can you pick stocks that have a good chance to become winners? Interestingly, the best way is by looking backwards!

In a market where seemingly everything is selling off, these 2 high-yield dividend stocks can boost your returns while you wait for the market to head higher again.

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 provides a cloud-based service that has been in great demand through the pandemic and will continue to grow in popularity as the world’s business becomes more virtual.



As for the current portfolio, all our stocks look good, so there are no sales, just one simple downgrade to Hold.



Details inside.



Lastly, I hope you’ll join me for the 9th Annual Smarter Investing, Greater Profits Online Conference, August 17-19. We have an incredible lineup of experts ready to share their best picks.