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All in all, the good-not-amazing environment remains in place, with intermediate-term uptrends intact for the major indexes and a solid amount of good-looking leadership out there. That said, there also remain a fair number of potholes out there, and most broader indexes tested their 50-day lines late last week. All told, there are plenty of stocks in a variety of sectors that are working, so we’re bullish, but picking strong names, targeting decent entry points and booking a few partial profits on the way up are advised. We’ll leave our Market Monitor at a level 8.

This week’s list has something for everyone, and we like how many of them have shown excellent power of late. Our Top Pick looks like an institutional way to play the energy transition trend. Aim to enter on dips.

The market had yet another mostly quiet, mostly positive week, and the vast majority of the top-down evidence is still in good or great shape. That said, there’s no doubt things are a bit extended in time and that more stocks and sectors are beginning to lag, which is one reason we’re not flooring the accelerator. Another is the fact that earnings season really picks up this week—35%-plus of the S&P 500, along with more growth leaders, are reporting, which will obviously be key. Don’t get us wrong, we’re overall bullish, but near term we’re picking our spots. We’ll leave our Market Monitor at a level 7.

This week’s list has a wide variety of names, with many types of names and setups. This week’s Top Pick has earnings this week, but after a huge-volume ramp, shares have dipped on low volume to the 25-day line—we’re OK with a small buy here or on dips with a loose stop.

Even as worries fade over the recent Middle East flare-up, new tariff-related headlines have lately crept back into the news. However, stocks have taken it in stride by ignoring what would normally be “bad” news. In view of this, we’re pleased with the market’s resilience—and it’s also welcome that it hasn’t become overheated with too much enthusiasm yet. We’re still seeing a few flies here and there, with some stocks having trouble breaking above resistance, but a growing number of stocks are joining the parade, with a nice mixture of growthy and cyclical names getting into sync with the general march forward. All told, we like what we’re seeing, and in view of the continued strength, we’re raising our Market Monitor to a level 8.

This week’s list features names across multiple industries, which we view as a sign that categorical strength is building. Our Top Pick is a sporting goods giant that has multiple growth tailwinds and is tightening up as the 25-day line has caught up. We’re fine entering here or (preferably) on a dip.

For the most part, the story remains the same with the market, as most of the evidence is positive, though not necessarily powerful. The good news is that, for the first time in a while, we’re starting to see a little broadening in leadership: AI-related names remain strong, and now more medical and online names are starting to shape up along with some more cyclical plays. Today, we’ll stick with our current stance—Market Monitor at a level 7—though we could tweak that if we continue to see more names emerge.

This week’s list has something for everyone, from strong Ai-related names to cyclical outfits, and from those in strong uptrends to those with nice setups. Our Top Pick has the look of a potential liquid leader and after seven weeks of choppy action, is starting to break out nicely.

This was an encouraging week for Explorer stocks with almost all making gains and Novo Nordisk (NVO) shares up 10%. Chile’s lithium and food fertilizer play, Sociedad Química y Minera de Chile S.A. (SQM), also got off to a nice start in its first week as an Explorer recommendation.

And today, we get into America’s decline as a food superpower - and reveal which emerging market is filling the void.

Knowing what to look for when investing in stocks will help you focus your attention and lead you to better investment decisions.

Lawmakers’ return from holiday recess could put SAFE banking back in the news and set up a trading opportunity in cannabis stocks.

Thank you for subscribing to the Cabot Undervalued Stocks Advisor. We hope you enjoy reading the December 2020 issue.

We briefly share our thoughts on the surging stock market and run through some valuation math that looks out a few years. Our conclusion: the market’s earnings growth, even side-stepping the pandemic’s effects, doesn’t look that impressive, while the market’s valuation is on the high side of average. It is starting to look like a good time to be pickier about which stocks to own.



With this thought in mind, we are moving Broadcom (AVGO) from a Hold to a Sell, as the shares have essentially reached our price target.



It’s been a fairly active month for a value-oriented newsletter, adding three new names and selling six, including Broadcom. This leaves the holdings list at 12 names. We anticipate expanding this roster over the next month or two, as there are many interesting value ideas out there.



We also tweaked the descriptions under the portfolio titles to more accurately reflect what types of stocks we look for. This should also help add some clarity to the differences between the two categories.



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.



I’m best reachable at Bruce@CabotWealth.com. I’ll do my best to respond as quickly as possible.

Investing in precious metals is normally seen as a good inflation hedge, but a strong dollar has held them back. That could be changing.

This week tech stocks looked better while First Republic Bank continues to struggle to gain its footing. It was a relatively quiet week for Explorer stocks as movement up or down was minimal. However, the news on the global electric vehicle (EV) race is coming fast and furious.

Preparing for retirement typically includes reducing aggressive holdings, the best balanced funds for retirement can help.