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Across almost the entire length of the yield curve, interest rates are ticking up. The benchmark 10-year Treasury yield reached 1.53% and may be headed back toward its December 2019 rate of about 1.90%. In an economy that is showing rapid growth, with inflation well above the Fed’s 2% target and likely at 6% or more if housing prices were properly factored in, a sub-2% 10-year Treasury yield doesn’t seem to make sense.

In the July Issue of Cabot Early Opportunities we briefly consider some of the factors making right now a particularly difficult time to make investing decisions, even though markets are near record highs.

To help make life a little easier we once again seek comfort in diversification. This Issue features dissimilar stocks that are bound by a common denominator; each company is either in an early stage of its life cycle, or early in a phase of growth/business model transition that should drive market-beating returns over the coming quarters.



Enjoy

While stocks may well trend higher over the rest of the year, it is unlikely the recent remarkable pace higher can last. The easy money and sky-high returns of the earlier recovery may be over. But the party for income investors is still going strong.

You can find yields of 6% or 7% and even higher on stocks with good momentum and a positive outlook over the remainder of the year. These kinds of yields haven’t been around since 2010, when stocks were still depressed from the financial crisis. Those yields didn’t last. And neither will these.



In this issue I highlight a phenomenal stock. It sells at a cheap valuation, has great momentum and a sky-high 7% yield that is not only safe and secure, but the payout is likely to grow at a high rate going forward.

The markets had a very good week, and so far, we are also seeing momentum in the first couple of trading days this week. These upward moves have taken the Dow Jones Industrial Average to just about where we started at the beginning of 2023.

The market continues to thrive, and technology stocks have been the market leaders. Here are the five best tech stocks so far this year.

There’s a war going on! Growth investors are proclaiming that Apple is done, kaput. It’s history. To a value investor, however, Apple shares are an irresistible bargain! Apple sells at a very reasonable 13 times earnings and pays a nice dividend yielding 1.9% annually. Further, Apple’s PEG ratio (current P/E divided by the forecast growth rate) is also very attractive at 0.86.

Shares of Pinterest (PINS) are selling off today after Q4 earnings came in slightly below expectations (food and beverage weakness a culprit), though the big-picture story remains one of a company that’s made a number of operational adjustments and launched a series of growth initiatives that should drive higher revenue and EPS growth in 2024. I think the recovery story is intact and the stock’s worth owning. Keeping at buy half.

The broad market remains strong, and all Cabot’s market timing indicators are currently positive, so I remain optimistic that we’ll see higher prices in the month ahead.

This week’s recommendation is a growth-oriented medical stock with great potential; it was originally recommended by Mike Cintolo last November and it’s currently hitting new highs.



And as for the current portfolio, most of our stocks look fine, but because I limit the portfolio to 20 stocks, one has to go—and it’s the weakest.



Details in the issue.

Last week I downgraded four stocks to Hold, and this week I recommend selling two—one for a fat profit and one for a quick loss. Still, because I keep adding a new stock every week, that leaves nineteen stocks in the portfolio, and most of them are acting very well!

As to this week’s recommendation, it’s a real wild card, a recent Chinese IPO that has been spun off from one of the big Chinese leaders. Risk-averse investors might want to give it a pass, or at least wait until there’s an established uptrend, but if you can handle the risk, buying down here might work out really well!

Last night at Hollywood’s Academy Awards, the movie “Everything Everywhere All at Once” won the award for best picture, long considered the top prize of the event. It also won six other coveted Oscars. The movie, ostensibly, is a science fiction film about alternative realities and an everyday laundromat owner.


For investors, the movie is immediately elevated to mandatory viewing – the title applies directly to what is going on in “this here” in “this now” in today’s capital markets.

Looking at the bigger picture, nothing has changed with our overall thoughts: The evidence tells us it’s a bull market and that the intermediate-term uptrend remains intact.

Anyway, the market doesn’t seem to be fazed by all the incredible things going on in the world these days. Stepping back, that makes some sense.

Explorer recommendations were pretty flat this week but demonstrated some strength as well. JPMorgan led the banks, reporting a first quarter with a net profit of $8 billion on over $32 billion of revenue. Keep your perspective and play defense and offense. Emerging markets offer you both and we will be adding to the portfolio selectively. This week I highlight a defensive healthcare play of the highest quality.

Governments across the globe have been reining in spending to help reduce debt and balance their budgets. Here are three asset classes to take advantage of the belt-tightening, and three to avoid.

These growth investing rules have been carefully selected as the most important guidelines a growth investor can use.

After reaching new highs this summer, the S&P 500 index has receded to price support around 2,120. That’s frustrating for investors because most good stocks will move somewhat in tandem with the S&P, so your stock portfolios have probably been a disappointment in recent weeks.

We saw very strong earnings reports last week from E*Trade (ETFC) and Goldman Sachs (GS). Yesterday, Scottrade Financial Services agreed to be acquired by TD Ameritrade (AMTD). This week;s Update discusses how that scenario might affect E*Trade (ETFC).

Today we’re wading into the sports betting market, which is evolving into a duopoly where two players hold most of the data that provides a vast network of sportsbooks access to the world’s biggest sporting events.

There is, however, more to the story than just placing a wager on your favorite team.

The October Issue of Cabot Small-Cap Confidential explains it all, and which of these global tech companies we’re teaming up with.

Today we’re diving into a fast‑growing oilfield‑services company that sits at the center of one of the most powerful energy build‑outs happening anywhere in the world.

This company is a pure‑play operator in the Middle East and North Africa (MENA) – home to the steadiest upstream spending on the planet – and it just secured a multi‑billion‑dollar contract that makes it the largest unconventional completions provider in the region.

With national oil companies racing to expand gas production to fuel AI, data centers, and industrial growth, this stock is positioned to benefit from multi‑year demand in the MENA region.

All the details are inside the January issue of Cabot Small‑Cap Confidential.