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The intermediate-term trend of most major indexes and most leading stocks is still pointed up, but there’s no doubt we’re seeing much more choppy action, with most leading stocks basically marking time since early February. The good news is that, while we are seeing some sluggishness and a larger number of potholes, there are some areas of the market that are perking up—retail names started to pop three or four weeks ago, and more recently we’ve seen some commodity areas begin to flex their muscles. As we said last Friday, then, it’s not so much that there are major red flags out there, but more that the very bright green light has dimmed some as money starts to slosh around and some uncertainties (like interest rates and the Fed) pop up. We’ll again leave our Market Monitor at a level 7.

This week’s list is heavy in commodities and newer retail names, and our Top Pick looks like it’s leading what could be a group move.

While there are new headlines each week that push and pull the overall market and individual sectors, the overall picture mostly remains the same: From a top-down perspective, the buyers continue to show up where they “should” after every pullback, keeping the intermediate-term trend of the major indexes up. Individual stocks remain trickier, and with earnings coming for most, that will probably tell the tale. We have seen a couple more breakouts of late, which is encouraging, but tonight we’ll stick with our level 7 on the Market Monitor and monitor how the gaggle of earnings reports are received in the days ahead.

This week’s list has something for everyone, including recent earnings winners, setups heading into quarterly reports and pullbacks in names that are already in strong uptrends. Our Top Pick rested in the summer and fall and has re-emerged on the upside.

Thank you for subscribing to the Cabot Undervalued Stocks Advisor. We hope you enjoy reading the February 7, 2023, issue.

We continue our mini-series on the Tech Hype Cycle and Value Investing with a look at what happens to companies after they tumble into the “Trough of Disillusionment.” We also include our perspective on the favorable earnings update from Sensata Technologies (ST).

This week, we changed our rating on State Street Corp. (STT) from Hold to Sell, and our rating on Dow (DOW) from Buy to Sell. Both are quality companies, but their shares have reached our price targets and we see no compelling reason to raise these targets.

Please feel free to send me your questions and comments. This newsletter is written for you and the best way to get more out of the letter is to let me know what you are looking for.

Thank you for subscribing to the Cabot Undervalued Stocks Advisor. We hope you enjoy reading the September 2022 issue.

We’re not in the predictions business, so we have little use for predictions or forecasts. Our commentary includes perspectives from Warren Buffett and Yogi Berra.



This past month we covered a complicated earnings season and added two new stocks (State Street Corporation and Gates Industrial Corporation) while selling our position in The Coca-Cola Company.



Please feel free to send me your questions and comments. This newsletter is written for you and the best way to get more out of the letter is to let me know what you are looking for.



I’m best reachable at Bruce@CabotWealth.com. I’ll do my best to respond as quickly as possible.

The world’s largest mega regions are where much of the global growth is happening. And one Chinese stock has its tentacles in several of them.

Editor Bruce Kaser will join Cabot as Chief Analyst of new Cabot Turnaround Letter

Anyone who recommends a stock, but fails to provide any guidance on how to manage that stock, isn’t giving you anything of much value. Free stock tips are being given away constantly on the internet. And that’s pretty much what they’re worth.

This energy stock reported a fourth-quarter earnings and revenue beat.

Asset allocation, instead of asset concentration, can help diversify your portfolio and ensure that you’re always invested in the best funds.

The longer you hold an investment, the better your chances of making money.

The retail and financial sectors have been up and down this year, but I have one retail stock and one financial stock that are set up well for big runs.

On November 11, Chinese consumers spent an astounding $14.3 billion on Singles Day, a number that dwarfs the Black Friday to Cyber Monday shopping binge in the U.S. The founders of the Day thought that the date 11/11 looked like trees with no branches and Singles Day began as an ironic way for unmarried and unattached people to give themselves a present (because there was nobody else to give them one).

Investors are on pins and needles about the presidential election. But history shows that elections don’t change the direction of the stock market.

Current Market Outlook


The big-cap indexes remain in rarified air, as they continue to levitate and the sellers refuse to put up a fight. Even more encouraging is that many stocks that took the prior few weeks off (generally building tight ranges) have resumed their advances, a good sign. That said, the upmove has become a bit more selective (small- and mid-cap indexes haven’t participated lately) and numerous yellow flags among secondary indicators are still in place. All of that is a longwinded way of saying that not much has really changed—it’s a strong bull market that should go higher down the road, but the risk of near-term potholes is elevated. Thus, you should remain bullish and continue to hold most of your strong performers, but picking your spots on the buy side makes sense as well.

This week’s list includes a bunch of names that have shown excellent strength after resting for a few weeks—or in some cases, months. Our Top Pick is blue chip Salesforce.com (CRM), which has accelerated to new highs after a 15 months of base-building.

Stock Name	Price	Buy Range	Loss Limit
Aecom Technology (ACM)	0.00	45.5-47	42-43
Axsome Therapeutics (AXSM)	0.00	83-88	71-75
Dexcom (DXCM)	421.36	225-235	202-206
Dynatrace (DT)	36.59	27.5-29	24-25
Fortinet Inc. (FTNT)	137.53	112-115	103-105
Guess (GES)	0.00	21-22	19-19.5
JD.com (JD)	39.58	38-39.5	34.5-35.5
Qorvo (QRVO)	129.47	112-116	101-102
Salesforce.com (CRM)	0.00	178-182	164-167
Western Digital Corporation (WDC)	0.00	65-67	59-60

The bull market rolls on, with Jerome Powell and company only adding fuel to the buyers’ fire by affirming their intention to cut interest rates three more times this year. While the artificial intelligence hype cycle has slowed a bit, other sectors are starting to get noticed. One of them is MedTech. So today, we add a once-great MedTech stock that got slashed in half during the bear market of 2022 but has since climbed all the way back to new highs, thanks in part to a new product just approved by the FDA. It was enough to convince Tyler Laundon to add the stock to his Cabot Early Opportunities portfolio, and today we do the same.

Stocks are back in business!

Yes, a little more than a month after some of the worst investor sentiment readings in years, soaring volatility, and a 19% decline in the S&P 500 – not to mention both the Nasdaq and the Russell 2000 swinging to bear market territory – stocks are suddenly on a roll, recession fears are abating, and, perhaps most importantly, tariff deals have been struck. The 90-day pause on most reciprocal tariffs initiated by President Trump on April 9 – one week after the deeply unpopular “Liberation Day” was announced – triggered one of the biggest one-day rallies in stock market history. Indexes flirted with their early-April lows two weeks later but eventually stabilized, and May has brought a wave of positive tariff news – first, a deal with the United Kingdom, in which key imports like cars were reduced to 10% and steel and aluminum tariffs were eliminated; then, last weekend came a 90-day truce with China. That sent stocks soaring more than 3% on Monday, and they haven’t looked back.

The market is in a tough spot, and has been for about a month and a half. It doesn’t mean the bull market is on borrowed time – remember, we had a much deeper correction in July and August, only to have stocks roar to all-time highs by Labor Day – but it does make for a tricky environment in the short term. A news-heavy week (inflation data, the start of earnings season, two big industry conferences) could potentially help turn the tide. But right now, the bears are in control. One subsector that has mostly avoided the recent selling is the airlines. So today, we add one of the stronger airline stocks, courtesy of Cabot Turnaround Letter editor Clif Droke.

Details inside.

Cannabis stocks have fallen sharply since the beginning of April. The AdvisorShares Pure U.S. Cannabis (MSOS) is down 15.4% since April 1. There are two reasons.

First, investor enthusiasm for stocks overall has waned, creating significant declines across indices. Because cannabis is perceived as a riskier sector, cannabis stocks decline more than most stocks when investors move into risk-off mode.

Second, many analysts and investors had hoped for visible progress on key catalysts by now – chiefly rescheduling and cannabis banking reform. They have been disappointed.