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The market’s growing volatility is a small area of concern on our mind today; if anything, it should cause you to manage your market exposure a little more carefully; buy low and keep losses small. On the other hand, there are still some very strong stocks out there, and as we all know, trends can persist far longer than expected. Four oil stocks anchor this issue of Cabot Top Ten Report, reflecting the fact that the sector is strong, that it held up extremely well in last Friday’s market dump, and that many mid-sized companies in the sector are attracting institutional investors’ money. As long as the trend continues—and we recognize that it may be overdone in the short-term—we like them all. But our Editors’ Choice is one of the two steel companies in the issue, Gerdau. Benefiting from the fast-growing Brazilian economy but diversified into the rest of South America and North America, it’s got a great track record of growth as well as a chart that’s been building a base for the past month.

Stock Name	Price	Buy Range	Loss Limit
BNI (BNI)	0.00	107-114	-
CXO (CXO)	0.00	35-38	-
ENER (ENER)	0.00	54-62	-
GGB (GGB)	0.00	48-53	-
MDU (MDU)	0.00	32-34	-
ME (ME)	0.00	32-34	-
MT (MT)	0.00	98-102	-
TAP (TAP)	0.00	57-59	-
WLL (WLL)	0.00	100-105	-
AGU (AGU)	0.00	88-93	-

While the broad stock market reaches for new all-time record highs, companies that produce oil and natural gas remain heavily out-of-favor. Yet, with Big Oil stock prices down by as much as 60% since oil prices peaked at over $100/barrel in mid-2014, they look like high-yielding bargains.

In this issue, we outline our bullish outlook for six major oil companies.

Thank you for subscribing to the Cabot Undervalued Stocks Advisor. We hope you enjoy reading the February 7, 2023, issue.

We continue our mini-series on the Tech Hype Cycle and Value Investing with a look at what happens to companies after they tumble into the “Trough of Disillusionment.” We also include our perspective on the favorable earnings update from Sensata Technologies (ST).

This week, we changed our rating on State Street Corp. (STT) from Hold to Sell, and our rating on Dow (DOW) from Buy to Sell. Both are quality companies, but their shares have reached our price targets and we see no compelling reason to raise these targets.

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.

Big picture, things still look reasonably good out there. That said, we’ve seen persistent, but not severe, weakness in small-cap stocks since the beginning of September.

This month we are going with a small industrial company that is showing how consistent focus on operational improvement can pay dividends.

Once thought of as a highly cyclical company with management that tended to drop the ball, execution has improved dramatically. In 2022 revenue was up 14% and EPS was up 41%.

With exposure to megatrends like infrastructure and global electrification, I see more upside ahead.

Enjoy!

College remains as expensive as ever, so it’s important to take steps now to save for the future. Here are two ways to start saving for your child’s college education.

I hope you had a great holiday season thus far, and I hope you have an even better New Year.

Just when you start to think this coronavirus crash will never end—it will. And our goal is to have a portfolio of healthy stocks when that day arrives. In the meantime, our selling has increased our cash position significantly—and there are two more recommended sales today.

As for new buying—there aren’t a lot of healthy stocks to choose from, regardless of whether you’re looking for low-risk or high-risk, but one that stands out is today’s recommendation, which benefits from the booming growth in working-from-home (WFH).



Full details in the issue.

The market is looking a little healthier, but it’s too early to call the all-clear yet. Still, many of our stocks are looking better, with several hitting new highs in recent days.
This week’s recommendation is an oil-patch giant that pays a good dividend, is undervalued, and is going up—what’s not to like?

Remain defensive, but stay tuned as we could get a Cabot Tides buy signal as early as tomorrow if the market cooperates. Tonight, we’ll stand pat with our huge (90%-plus) cash position, but we’ll send out a bulletin if we get a green light.

The market is getting hit hard this morning for the first time in a couple of weeks. Even so, we remain bullish because the evidence is mostly positive.

The intermediate-term trend remains clearly up, and the broad market is still in good shape. Moreover, on an individual stock basis, most Top Ten stocks that have retreated have barely given ground.

As investors, it’s easy to get caught up in the 24-hour, Twitter-driven news cycle. Better to keep things simple, starting with this long-term growth stock.

If you’re interested in finding micro- and nano-cap gems that trade OTC, you need to understand how to trade illiquid stocks.

Big swings in price, either up or down, cause the majority of investment stress.

Sector rotation has pushed investors out of tech stocks and into financial stocks. Most banks look undervalued at the moment. I like one in particular.

Uber has already disrupted the taxi industry in 37 countries. Is Uber a good investment?

Not surprisingly this past week had many ups and downs, as the market responded well to bad news early in the week and then gave up some of those gains on Friday. By week’s end the S&P 500 had gained 0.46%, the Dow had risen by 0.79% and the Nasdaq had fallen marginally.