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Recently, we’ve been adding very aggressive, high-growth names. These potential moonshots are a lot of fun to research and buy, but we need to maintain balance in our portfolio.

This month we’re going with more of a Steady Eddie-type, a small-cap company with a measured growth profile that features sustainable top line growth, significant EPS, and enough cash flow to fund both dividend payments and share repurchases.



I think in a few years we’ll look back and say it was one of the better investment decisions we made in 2021.



Enjoy!

The party continues on Wall Street, and we’re not going to forecast when it will end. Instead, we’re going to try and capitalize on the strength, a strategy that has worked very well for the Stock of the Week portfolio over the last four months. Today, we take another big swing in a stock that was a home run for Cabot Explorer Chief Analyst Carl Delfeld several years ago, before the sellers came for it. Now, it’s back. It’s an overseas stock that doesn’t have the China stench on it, something that hurt other perfectly good stocks (see BYD (BYDDY)) in the last year.

All in all, the evidence has continued to show some marginal improvement in recent weeks among individual stocks, plus, some top-down measures (long-term trend, health of the broad market) are looking better … but not quite enough for green lights. All in all, what we’re seeing are steps in the right direction—the market and many individual stocks are doing what they have to in order to repair the damage. But we still need to see continued progress to really extend our line, as little is being sustained on the upside. We’ll again keep our Market Monitor at a level 5.

This week’s list is a hodgepodge of names from different sectors and in different positions in their charts. Our Top Pick is a biotech name that, after many stops and starts, looks to have finally broken out on the upside.

September selling is already underway. Just remember that it’s almost always temporary. The S&P 500 has been down at least 4% after Labor Day in each of the last four years, with a bottom coming sometime in October. All four times, it has eclipsed pre-Labor Day levels by the third week of November. Thankfully, our portfolio enters September in very good shape, with 12 stocks up double-digit percentages and four others up by at least triple digits. To help weather another potential September storm, today we add a “safer” dividend stock recently recommended by Chief Analyst Tom Hutchinson to his Cabot Dividend Investor audience.

Details inside.

It was a much better week for the market, and even more so our portfolio, as all but two of our existing 20 stocks were up at least 2%. Of course, there’s a lot of ground to make up from the damage done by “Liberation Day” at the start of the month, but it’s possible the market has turned a corner and a glorious month of May awaits for U.S. stocks. In case it doesn’t, however, today we beef up our overseas exposure by adding our first ETF in a while. It’s a fund just recommended by Carl Delfeld to his Cabot Explorer audience – and one that aims to take advantage of recent strength in European stocks.

Details inside.

Before I dive into this morning’s Cabot Profit Booster covered call idea, I wanted to mention that the Mintz family will be traveling to Europe this Wednesday through the following Wednesday.

That means we will simply let our August positions expire this Friday, and we will not be sending a new trade next week. However, I will address August positions if needed when I return.

Moving on …

Early last week was fairly quiet as stocks went mostly nowhere until anxiety ramped higher on Friday on tensions rising in the Middle East. By week’s end the S&P 500 had fallen 0.4%, the Dow had lost 1.3%, and the Nasdaq declined by 0.6%.

The bull market rolls on, and our portfolio continues to deliver, so I continue to recommend that you be heavily invested in stocks that help achieve your investing goals.

Today’s featured stock is a big Asian consumer company that’s still growing extremely fast; in fact, revenues are accelerating!



As for the current portfolio, to keep it at our maximum level of 20 stocks, we’re parting company with little marijuana company Columbia Care (CCHWF), mainly because it’s our biggest loser.



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.

While the outlook for 2025 is positive, things are changing.

Sure, this bull market has driven the S&P 500 nearly 70% higher. But most of the gains are from technology stocks. Until this past summer, nearly all the bull market returns were driven by technology. The rest of the market had done very little.

But the rest of the market is waking up. While artificial intelligence (AI) will likely continue to be a powerful growth catalyst, its dominance over everything else might not be as pronounced in 2025 as it has been in the past. Earnings for other stocks are catching up.

The earning growth difference between the “Magnificent 7” companies and the other 493 S&P 500 companies is expected to plummet from 27.8% last year to 8.3% this year. The rest of the market is cheap, has momentum, and will likely get hot this year as stocks experience an earnings growth spike that could last for years.

In this issue, I highlight a healthcare stock that looks highly promising in 2025. It is poised in front of the aging population megatrend, which makes a successful pick so much easier, and it will likely experience a sizable earning spike in the years ahead. It is an existing portfolio stock of which half the shares were sold last year. It’s a great time to buy back the other half.

As everyone knows, the price of oil has plunged dramatically in recent months. There is a major upside and a downside to that.

Today’s addition is one of the world’s best engineering and construction firms in the highly specialized natural gas-fired power plant industry.

It’s a highly leveraged play on increasing U.S. energy loads and the expected, multi-year gas power plant buildout. If you want exposure to a picks and shovels play on AI, EVs and other electrification trends, this one is for you.

Enjoy!

The auto insurance market has been in a deep freeze since the middle of 2021. But now it’s thawing ... maybe even shifting into growth mode. That means huge potential for companies with direct access to the market.

That’s where today’s idea comes in. It’s a micro-cap internet company that offers unfiltered exposure to the auto, home and renters’ insurance markets.

All the details are inside the February Issue of Cabot Small-Cap Confidential.

Market truisms don’t offer specific advice for every market, but there is broad value in using them to rethink how you invest.

Cabot Top Ten Trader Editor Mike Cintolo wrote this about a month ago: “As the general market has heated up, we’ve noticed more and more ‘Bull Market stocks’—brokerage, investment bank and asset management firms, each of which directly benefit from higher stock prices and increased trading activity—pushing to new highs.” The market...

Stocks have finally hit a speed bump, retreating modestly in the last couple weeks. But pullbacks are both inevitable and healthy in the long run. And the latest one offers an opportunity to buy some great companies at more attractive prices. So today, we add perhaps February’s hottest stock – after it’s been knocked down more than 8% in the last two trading days. I’m betting it’ll bounce back, and so is Mike Cintolo, who recently recommended the stock to his Cabot Top Ten Trader readers.

The bull market remains alive and well, with most stocks and sectors in good shape, so we\'re generally letting our winners run and staying heavily invested. That said, January is often a tricky month, so with the potential for potholes and volatility, tonight\'s Cabot Stock of the Week is a mega-cap growth stock that, by some measures, is undervalued.