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For many of your value stocks on the recommended list, the New Year’s rebound continues. Most of these shares were heavily over-sold late last year. Almost given up for dead, shares of Organon (OGN) have surged 38% since hitting an all-time low in mid-October. Similarly, shares of Barrick Gold (GOLD) are up over 43% since their nadir in November.

The market has been hot as a pistol in recent days, and today, after a hot open, stocks rolled over and finished down. Odds are that this downward movement could turn into a real correction. But it’s important not to predict; it’s much more profitable to simply observe the trends and invest in sync with them. Today’s recommendation is a hot little medical stock with a great service.

The recommended stock, unusually, is not a U.S. company; it’s a Canadian company. But it trades on the NYSE, and it has a great growth story.

The market’s main trends remain up, and thus I remain bullish. In fact, I think the challenging action of the past few weeks has cleared the air a bit and set the stage for a renewed advance.

So far, our recommended companies have reported strong earnings but the share performances following the reports have generally been sloppy. What’s going on?

Investors, of course, are forward-looking. So, decent trailing results can take a back seat to the incremental changes in near-term prospects. As we note in our discussion about the recent and continued slide in shares of Citigroup (C), investors are assuming that the company not only has no chance of improving its earning power but are also assuming that profits will probably slide backward. Comcast (CMCSA) reported one of the strongest quarters in its history, yet the outlook is for incremental headwinds in its customer count, so the shares slid.

Thank you for subscribing to the Cabot Value Investor. We hope you enjoy reading the June 2023 issue.

The U.S. presidential election, “only” seventeen months away, is shaping up to follow a predictable script. Investors should keep their personal views and their investing process separate.

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.

Options trading can be tricky, so it helps to learn some important options trading strategies that can help maximize return and limit risk.

This week has been all about earnings, even though we’ve only heard from one company in our portfolio. That company is Repligen (RGEN), which reported this morning (the stock is reacting well). Notes on that report are below.

With the election tomorrow, the biggest cause of uncertainty will soon be behind us, leaving investors able to focus once again on what’s important—growth and valuation.

In the meantime, it’s worth noting that the market’s technical strength deteriorated last week, turning our intermediate-term timing indicator negative once again. For that reason, among others, we have a couple of sell recommendations today.



As for today’s recommendation, it’s one of America’s most well-known companies, and selling for a bargain price as management steers the big old beast into what could be an exciting future.

The overall market remains healthy, and while we still haven’t received an “all-clear” signal from our long-term timing indicator, we do have a positive signal from the 90% Blastoff Indicator, and that’s good!

Overall, our portfolio stocks are behaving quite well, with none disappointing today. In fact, many are so strong that I expect pullbacks in the future. The only sale today is of a stock that has given us a quick 30% profit. Otherwise, I’m sitting tight.



As for today’s recommendation, it’s a company in the online education industry, where demand is booming thanks to COVID-19.



Full details in the issue.

As widely reported, Jamie Dimon, the 23-year-and-counting CEO of JPMorgan and its predecessor Bank One, recently penned his annual letter to shareholders. The 43-page tome covered topics ranging from the bank’s “Steadfast Principles Worth Repeating” to “Our Serious Need for More Effective Public Policy and Competent Government” along with some impressive numbers about JPMorgan’s financial, operational and share price performance over the decades.

Today, I tackle one of the questions I get most frequently: What is the difference between Cabot Options Trader and Cabot Options Trader Pro?

A proposed Broadcom-Qualcomm merger would set records for the tech industry. But QCOM shares may already be overcooked on early news of the deal.

We didn’t know the Splunk takeover by Cisco was coming, but the stock showed strong signs of accumulation and big buying that led us to take a position and realize some phenomenal returns.

Today’s recommendation is a very strong Chinese stock that had quieted down nicely during the past two weeks and is now on a four-day run. One thing we really like in a growth stock is a huge mass market, and this company is right in the middle of one of the biggest markets there is.

Well, things are looking up in the emerging markets world! The Cabot Emerging Markets Timer has given us a new buy signal and we’re taking advantage by moving two stocks from the Watch column, one from the Hold column and one brand new stock all to Buy ratings. All told, it’s an early holiday present for all of us. Read on for details of the good news!

After years of being either ignored or sold off, value stocks are finally having a moment on Wall Street. The Vanguard S&P 500 Value Index Fund (VOOV) is up 25% in the last five months and is actually outpacing growth titles over the last month. Still, it’s a bull market, and growth stocks are king. How to compete as value investors in a growth-minded market? By seeking growth stocks at value prices.

Today, we do just that, adding a household name that’s been rejuvenated thanks to a shift in industry trends. The stock is up 18% year to date, and yet its shares remain dirt cheap by virtually every measure.

Enjoy!

The S&P crashed more than 5% on consecutive days last week for the first time since the onset of the pandemic. The index came within a whisker of a bear market, down 20% from the high on a closing basis.

It’s easy to get spooked out of the market these days. Few people believe the market has hit bottom when it does. Unheeded warnings play over in your mind as Judgement Day seems to have arrived. Stocks were overvalued. The trade war will cause a global recession. Excesses of the last several decades are being called. It’s time to get out of the market and save yourself.

Markets are emotionally driven in the short term. Fear and greed tend to be the dominant forces. But over time, emotions take a back seat to money and profits. When the market tanks, our emotions tell us to run for the hills. But history tells us it’s the best time to invest.

There are some truly stellar stocks in the portfolio that have generated returns comparable to the most successful stocks on the market. The problem is that these stocks are rarely cheap. But the recent market has put these phenomenal investments back within reach.

The recent panic has provided a rare entry point. Even if prices fall further before they rise, these stocks can easily make up for lost time when they move higher again. In this issue, I highlight two of the best stocks in the market to own at valuations not seen in years.

After a brief shakeout last Monday, supposedly on fears that Italy would leave the EU, the market reversed course and has been pushing higher and higher since, supposedly cheering on the continued strong performance of the U.S. economy.

I’m enjoying the ride, and I assume you are, too. But I must remind you that good news is prevalent at market tops, while bad news is what you wallow in at market bottoms. So keep your eyes on the exits—while continuing to hold the best stocks as long as the market supports them.