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Astera Labs (ALAB) Delivers

What’s the best way to invest $1,000? Here’s how to determine what the best answer is for you, without taking a big risk.

Dividend-paying stocks are a great addition to almost any portfolio, and companies that regularly raise their dividends (like these 3) are even tougher to beat.

Chemtura (CHMT) is Up 15% on Buyout Offer and Carnival (CCL) Reports Earnings Beat

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

Our letter describes our view that 2022 was a bridge year and that we may need some or all of 2023 to complete the bridge-crossing. We also provide our outlook for the stock market, the economy and the geopolitical environment, with some caveats about forecasting and model use provided by Yogi Berra and George Box.

All-in, we see 2023 as a year with many changes but also a year in which consumers, companies and countries – amazing sources of ingenuity and resolve – work their magic to adapt to whatever curve balls are thrown at them. Our optimism is undaunted.

We also have moved our rating for Arcos Dorados (ARCO) from Hold to Sell.

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.

Eleven weeks off the market bottom, with the S&P 500 up 45% from its low, the news is finally getting good—which to me says that short-term, investing in stocks is likely to become a bit more challenging. That’s one reason I’m recommending selling two stocks today—and putting another two on hold.

Long-term, however, the future remains bright, especially for companies like the one featured today, which are serving global mass markets with products that they’re (literally) hungry for.



Full details in the issue.

Some areas of the market have wobbled in recent days, and even the major indexes have stalled out a bit—but none of this looks unusual to me after such a strong 10-week run prior to this. With the trends pointed up and the vast majority of stocks in uptrends, we remain overall bullish, though we’re also keeping a close eye on all our stocks and jettisoning any where the potential has faded (we have two sells tonight).

And in their place, of course, we’re adding higher potential names. Tonight’s Stock of the Week is helping to revolutionize the advertising industry, and the stock has taken a brief rest after a powerful earnings-induced breakout nearly two weeks ago.

Black Friday stocks got good early news with October retail sales coming in better than expected. A few sectors in particular stood out.

I was talking with an investor recently about the latest stock market downturn. He was puzzled; if General Motors (GM) is supposedly such a great stock and vastly favored among portfolio managers, why would it fall 30% during a market correction?

Dividends are a useful way to add yield to your portfolio and these three dividend-paying stocks look good for 2023.

As you read this, I am likely fortifying my house in preparation for the 400-500 Trick-or-Treaters that are sure to descend on our place in Vermont in a few hours. That’s no exaggeration – we live on a crowded street that draws kids from all over town, and even adjoining towns, trying to maximize their Halloween hauls. The 1,000 pieces of candy I buy every year and the countless ghouls, skeletons, smoke-emitting jack-o’-lanterns and giant spiders I’ve accrued the last few years to adorn our lawn are almost like an annual tax.

Living in such a bustling Halloween hotbed is fun, and it’s certainly a blast for our two kids. But it’s a lot of work, and we’re always happy when the calendar flips to November. And in that way, it reminds me a bit of the market every October.

I’ve received a bunch of questions regarding the Visa IPO this week. Many believe, because MasterCard (MA) turned out to be such a good investment, that Visa is probably a good buy. My answer to that is ... maybe. From a technical perspective, the game plan is obvious: Do not buy the Visa IPO, but do keep an eye on the stock. If it can form a relatively tight consolidation and if the market can show real signs of turning up, then you could consider taking a position on a breakout. It takes some work, but the rewards can be worth it.

It appears that we will have a sharply divided government in Washington, which Wall Street initially is taking as a positive. A better way of putting it is that it could have been much worse for investors.

The broad market remains strong, while the cannabis sector remains stuck in the mud—in general.

Given the mixed evidence, we think the Model Portfolio is in a proper stance, with about one-third in cash, but also holding onto a bunch of attractive stocks that could be leaders of the next upturn.

The market’s three-day rally has been solid, but even better than that has been the action of growth stocks, many of which have zoomed to new highs.