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More color on our recent sale that generated a 40% gain since September and comments on other recommended stocks.

It will take years for bankruptcy and (possibly) criminal courts to unwind what happened to FTX, but for now, it looks like this cryptocurrency scam was less about the crypto and more about the currency.

The failure of FTX wasn’t a failure of cryptocurrencies, it was just (per the unsealed indictment) fraud. But there are still lessons to be learned, whether you love crypto or hate it.

Thank you for subscribing to the Cabot Value Investor. We hope you enjoy reading the February 2024 issue.

Spin-offs should be in every value investor’s toolkit. In this issue, we are adding a spin-off, Worthington Enterprises (WOR), to our Buy recommendations roster.

We comment on recent earnings from Comcast (CMCSA) and provide updates on our other recommended stocks.

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.

The world of major pharmaceutical stocks can be split into two camps: winners and laggards. Eli Lilly (LLY) is a clear winner, with its successful roll-outs of new treatments led by the immense promise of weight-control drugs like Mounjaro and Zepbound. Lilly’s shares have surged 545% (up 5.5x) in the past five years and are increasingly mentioned as a replacement for Tesla in the “Magnificent Seven.” The shares trade at 47x estimated 2024 EBITDA.

Depending on the market in your area and the condition of the property you’re buying, you may still be able to secure seller concessions.

In the ever-widening stock market vs. economy gap, it’s easy to assume Wall Street has it wrong. But as long as the institutions are buying, you should too.

Sustained cash flow in energy stocks and an evolved approach to CAPEX could prolong an energy bull market and make this stock an attractive micro-cap.

The Chinese economy is stronger than it’s getting credit for, but is it strong enough to make shares of China’s largest Internet and consumer stock Alibaba (BABA) a buy?

My kids are both starting to get interested in finance, so I gave them $750 to invest. These are the stocks they bought.

AbbVie’s (ABBV) earnings failed to impress last week, the stock is stuck in a trading range with a slight downward bias, and the biotech rally has failed—or at least been delayed—once again.

The bulls came out swinging after Labor Day, putting at least a brief half to all the late-summer selling. Whether the mini-rally lasts another week (or longer) may depend on the new inflation data, due out tomorrow morning before the opening bell. For now, the bear market remains, but it was a good week for stocks – and an even better week for the Stock of the Week portfolio, with several of our stocks up double-digit percentages since we last spoke. And today we add a new stock that’s poised to lead the next true market rally – whenever it arrives – but in the meantime is faring quite well in its own specific niche.

Details inside.

Don’t let loyalty or affection cloud your judgment when investing in stocks.

Private equity, the polished-up name for venture capital and leveraged buyout funds, is white-hot. If every market cycle has its own Masters of the Universe (the 1990s had tech mutual funds, the 2000s had hedge funds), the past decade’s MOTU was clearly private equity. Today, everyone wants to get in on the bonanza: MBA graduates, bankers, mutual funds, hedge funds, endowment and pension funds, insurance companies, wealthy individuals … and soon the average retail investor will get government-approved access to private equity investments. Exuberance1 abounds.

Remain mostly bullish, but continue to pick your spots. The overall market looks great, and our own 7.5% Rule has flashed, portending higher prices in the months ahead.

Small caps and growth stocks continue to look better for the third consecutive week. This is a welcome trend given that the beginning of May was pretty tough.

Crista updates us on some Earnings and has two rating changes

The market looks healthier today than it has in nearly two weeks. After its big drop on June 9, the Nasdaq found support repeatedly last week, and this Monday brought an impressive surge in all the indexes.