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We included comments on earnings from nearly a dozen recommended companies, news about other recommended stocks, and a delay in the publishing of the May edition of the Cabot Turnaround Letter as the chief analyst is stuck in London.

We are in the late stages of a recovery and bull market. The economy is still strong and the bull market could continue for a while. But the escalation of trade frictions with China is disrupting the situation.
Since the trade war escalated a month ago, the market has fallen every week since. And things might get worse before they get better. The trade war takes a small toll on the economy but it hurts the global economy much more. A faltering global economy would come back and bite us, and perhaps draw the next recession closer.
With no catalyst in sight to fix the current situation and a recession looming somewhere in the not-too-distant future, it makes sense to play defense. Defensive dividend paying stocks are the stars of the market now and may continue to be for a long while.
In this issue I highlight one of the very best defensive dividend stocks on the market. It has rock solid earnings in any environment and the stock should perform well in just about any market.

So far, the market has had a fantastic year with the S&P up 16.38% at the halfway point. It’s also been a stellar June as the index has climbed 7.3% this month alone. Now, the market is perched near all-time record highs. In this issue, I highlight a stock that is cheap in an expensive market that has a great chance of moving higher in the quarters ahead. It is the best run American refiner that has been knocked back because of temporary conditions in an environment otherwise ideal for American refiners.

The broad market remains in fine health, with the major indexes trending higher and sentiment measures still bullish. Thus I continue to recommend that you be heavily invested in a diversified portfolio of stocks that fit your investment needs.

Today’s recommendation is a well-known name on the consumer side, the biggest airline on the west coast. And, interestingly enough, it will be replacing our current airline stock, which is now being sold for a decent profit after less than four months.

Beyond that, there’s only one change to the portfolio today. Last week’s recommendation, which was bought at an unfortunately high point, will now be downgraded to Hold. Details in the issue.

Following the second 10% U.S. stock market correction of 2018, stocks are trying to get their footing. We’re witnessing some large daily price swings, especially among energy stocks, which are being buffeted by falling oil prices.

With this morning’s broad selling, the intermediate-term of the market is now down—but the long-term trend is still up! How you handle this depends partly on your own risk tolerance and partly on how your stocks are acting. If your stocks look good, I favor holding, but if they’re falling, I recommend selling.

In this advisory, the only immediate change is the sale of one stock, LGI Homes (LGI) to create room for our new one.



And that new one, by the way, comes from a sector that is definitely outside our usual hunting ground. But fundamental trends look good, so this just might turn into a great investment!



Full details in the issue.

You may have noticed that the price of West Texas crude oil is up about 48% since it bottomed in late December.

With the election just around the corner, there’s a lot of uncertainty in the air. Nevertheless, the bull market is alive and well, as both of Cabot’s trend-following market-timing indicators remain positive, so I continue to recommend that you be heavily invested.

Today’s recommendation is an old friend that is back in the limelight as the online world is increasingly hungry for software that enables machines to understand human voices. It’s a good story, and the stock is on a good pullback now.



As for the current portfolio, there’s just one sell (for a small profit), to make room for the new recommendation.

The major indexes continue to hit new highs, all Cabot’s market timing indicators remain positive, and our portfolio is solid, overall, though I’m downgrading three stocks to Hold today for various reasons.

As for today’s new recommendation, it’s a very familiar name—a dividend-paying Wall Street Blue Chip—that Mike Cintolo says now has great growth potential because of its new business.



Details in the issue.

First, note that next week’s Presidents Day holiday means we will publish Cabot Stock of the Week a day later, on Tuesday, February 16th.

As for the market. last week’s GameStop affair had the potential to trigger a broad correction—but it didn’t. Thus, the bull market remains intact, the buyers remain in charge and I am happy to recommend a fast-growing company with a great story today.



Sadly, that means I need to sell something to stay at or under 20 stocks, and the victim today (locking in a nice profit) is Qualcomm (QCOM).



Details inside.

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 is a consumer stock with a classic cookie-cutter story, which brings the possibility of extended long-term growth.



As for the current portfolio, to keep it at our maximum level of 20 stocks, we’re parting company with long-time holding Huazhu Group (HTHT), for a variety of reasons.



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.

It’s been over a month since the major indexes hit their peaks, and while there’s been no major move to the downside yet, the odds of one grow with time, particularly considering that we’re still in October (often a difficult month). Thus, I have no trouble recommending a slightly more cautious attitude at the moment.

But there’s always something attractive to buy, and this week it’s another stock in the vast and complex semiconductor industry. This will be our fourth in the industry.



As for selling, I’m working to hold a bit of cash until the climate improves, and the easy choice to sell today is our biggest loser, Global-E Online (GLBE).



Details inside.

It’s too soon to buy new stocks aggressively. But there is a safer place in the meantime to generate a high yield without much downside in the near term.
In this issue, I highlight a stock from the energy sector, the only market sector having a good year. Yet, the stock is not overvalued or overpriced. It provides a high yield without much downside if the market decline continues. And the price is likely to trend higher over the rest of the year.

The current stock market correction has investors eyeing the exits, but decades of market history says that’s the wrong approach. Here’s how to position your portfolio instead.

Stocks have exceeded expectations so far this year. The S&P has rallied 20% from the October bottom and is up over 9% YTD. But there is a plethora of issues in the way of a further rally.

Even if we get past this debt ceiling issue without consequence, there’s inflation and the Fed. There’s also an increasing possibility of a recession later this year or early next year. The market rarely performs well ahead of a recession. A bear market rally should be about out of gas. And it’s difficult to see how stocks can soar into the next bull market until there is more clarity on these issues.

It still makes sense at this point to only buy the defensive stocks that are below the targeted price as well as sell covered calls for income when a stock gets near the top of the recent range.

In this issue, I highlight a covered call in a solid defensive stock that has recently rallied near the high point of the recent range. It’s a terrific way to get a high level of current income at a time when the market isn’t giving much else.

What a week for the market! That’s not something we’ve said a whole lot this year. But we’ll take the good news and try and capitalize on the momentum by adding the first pure growth stock to the Stock of the Week portfolio in a while – one that Cabot Growth Investor analyst Mike Cintolo thinks could be a new leader in its fast-blossoming field.

Plus, with a lot of our stocks acting well, we’ve upgraded two of our existing recommendations to Buy. Details inside!

The selling continued on Wall Street this past week, which has us trimming two more positions in the Stock of the Week portfolio. But most of our stocks are holding up well, and two in particular – Centrus Energy (LEU) and Ulta Beauty (ULTA) – are thriving. Today, we add a stock that not only insulates us a bit from all the selling, but also broadens our international exposure. It’s a value play, courtesy of Bruce Kaser, that’s also growing – up 24% this year!

Details inside.

The market is ending the year a lot like it began it -- by going down, led mostly by growth stocks, and that’s keeping us defensive. We do think better times are ahead, and we even saw a positive broad market divergence this week as the Nasdaq retested its lows. But as has been the case all year, we’ll refrain from any major buying until the buyers truly show up.

Tonight’s issue talks about some puke action from individual investors (a good thing) and the fact that, after this bear ends, the market is likely set to resume its advance (not a long-term top), plus we fine tune our watch list (one name broke out today) and dive into some potential leaders, too.

Last but not least, all of us here wish you and yours a happy, healthy and prosperous 2023. Cheers to better times ahead!