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The market weakness has been spreading in recent weeks, and as a result, we have three sell recommendations in today’s issue, as well as three downgrades to Hold.

As for the new recommendation, it’s a major retailer with a stable of familiar names that has transitioned its business very successfully through the pandemic, and it pays a nice dividend!



Details inside.

Cyclical stocks have been getting clobbered over the past month amidst virus concerns. But I think the recent action is creating an opportunity.

The inflation and Fed contraction issues, which are good for energy and financial stocks, will outlast this latest virus strain. The virus will fade away before too long, but the other problems are much stickier. Certain stocks are being knocked back temporarily ahead of a very promising new year.



In this issue I highlight one of the very best financial stocks on the market. It’s has pulled back recently and is about 15% below the 52-week high, yet the company is poised for a fantastic 2022.

The market has had some wobbles after a strong three-week run, and finding good buy points and keeping an eye on earnings reports remains vital. But overall, most of the evidence remains bullish, so we do, too. Most of the stocks we own are acting well, though we’re still wading through earnings season and will react if need be. In the meantime, we’re still aiming to add exposure, and are buying a half-sized position in an old friend tomorrow.

With the short holiday week and only three trading days since last week’s update, we will go directly to a new recommendation. Markets welcomed the nomination of Jerome Powell as head of the Fed for another term, believing that he will keep interest rates low through early next year. As for our stocks, Cloudflare (NET) had a down day yesterday but we have no change in recommendation.

Have a great Thanksgiving holiday.

Today, I’m adding an American petroleum contract drilling company, Helmerich & Payne, Inc. (HP).

For the past several weeks, we have bought oils and commodity stocks. Today, I’m going to diversify our portfolio a bit, adding American semiconductor supplier, Onsemi (ON).

With the market bouncing strongly last week, we leave our previously cautious stance behind and jump on a fast-growing, young chipmaker today.
And we’re not selling a thing, because after the February weakness, which saw a lot of irrational panic selling, the buyers are now back in charge and stocks are moving higher.


Details inside.

The overall market may have a challenging year as it grapples with inflation and uncertainty about the Fed tightening.
While most companies struggle, energy and financial stocks actually thrive with inflation and rising interest rates. But there are also lesser-known areas that are also benefitting from this current bend in the road.


In this issue, I highlight a company from the shipping sector. The industry had struggled for the last decade. But the current environment is much more hospitable. Shipping rates have soared in the pandemic recovery. And these rates are likely to stay high in one particular area, container shipping.

Overall, nothing has changed yet with the major evidence out there, but we continue to think a bottom-building process is playing out in decent fashion so far: Last week, the major indexes sank below their January lows on news of the Russian invasion, but then rallied hugely to close the week all while showing small positive divergences in the broad market (fewer stocks hitting new lows on the Nasdaq, fewer below their 200-day lines, etc.). Moreover, there’s little doubt that sentiment is getting pretty bearish, and believe it or not the intermediate-term trend of growth funds actually isn’t far from a green light. Thus, there are some positives as it attempts to etch a low area to this three-plus-month downturn, so we’re nudging up our Market Monitor, but we need to see the market build on these baby steps before thinking the downtrend may be over.



This week’s list is very heavy on the commodity complex, as that’s clearly where the big money has been flowing. Our Top Pick is a natural gas-heavy play with as good a cash flow story as there is.

With so much going on in the world the trends are a bit messy. That said, I have noticed an uptick in several of the small-cap MedTech players on my watch list.

These businesses could be poised for a nice recovery in 2022 and 2023 as COVID-19 recedes. And the one that tops my list is posting massive growth as its revolutionary treatment for BPH has just gained full Medicare backing and is rolling out into U.S. hospitals.



With revenue set to grow by multiples in the coming years and the stock trading at an apparent steep discount to peers, we’ll jump in now.



Enjoy!

Today, I’m adding Barrick Gold (GOLD). The company engages in the exploration, mine development, production, and sale of gold and copper properties

With the market under pressure because of the war in Ukraine (not to mention lurking inflationary influences), defense continues to be important.
Today the portfolio is selling two stocks and downgrading two to hold.


But there’s always something to buy, and today it’s energy stocks, as I add our third energy stock to the portfolio.


Details inside.

Despite a Ukraine conflict that’s roiled markets, Explorer stocks had a good week. And while Sea (SE) reported a mixed and disappointing quarter, Ford (F) made a big announcement as it moves into a new era.

The bull market remains intact, so I continue to recommend that you be heavily invested in stocks that help achieve your investing goals.
Today’s featured stock is a small company that’s growing fast and that has huge growth potential as the market for intelligent vision systems booms.
As for the current portfolio, most of our stocks look good, and many are hitting new highs, but I have two sells, Supreme Brands (SPB) and Trulieve (TCNNF).


Details inside.

Note: Because of the Independence Day holiday, next week’s issue of Cabot Stock of the Week will be published on Tuesday July 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 young and small medical stock that few investors have heard of, but it’s growing fast and the stock is going the right way!



As for the current portfolio, we’re parting company with super-safe Realty Income (O), mainly because something’s got to go.



Details inside.



Also, I hope you’ll join me for the 9th Annual Smarter Investing, Greater Profits Online Conference, August 17-19. We have an incredible line-up of experts ready to share their best picks.

The market’s main trend remains up and thus I continue to recommend that you be heavily invested, always working to “upgrade” your portfolio by selling weak stocks and buying healthier ones.

Today’s recommendation is a well-known big technology stock that’s spent the past eight months going sideways, despite the fact that revenue growth has been accelerating. To me, it’s a very attractive setup.



As for our current holdings, there are no changes. After selling two stocks last week, everything looks good today.



Details inside.

The market as a whole is looking healthier, though there are still symptoms of a broad unfolding market top. But our stocks look healthy and all have the potential to move higher from here, so the only change in our portfolio today is the downgrade of DKNG to Hold.

As for today’s recommendation, it’s a company with a great growth story (in the insurance industry) that just came public last May.



Details inside.

The bull market rolls on (though never in a straight line, of course) and Cabot analysts continue to discover great new investments.

Today’s featured stock is an established company that manufactures a very wide variety of sensors for industry, with the automotive industry being number one. Growth prospects are good, and the stock is a bargain.



As for the current portfolio, Broadcom (AVGO) is upgraded to buy, and we’re taking profits in Barrick Gold (GOLD).

I hope you enjoyed the long weekend!

Investors in our stocks certainly did, as more and more of them have been hitting new highs. In fact, they’re doing so well that I’m selling none today.



As for today’s recommendation, it’s a young growth stock trading 50% off its recent high—a great opportunity for aggressive investors.



Details inside.

Growth stocks remain under pressure in the market; we sold two last week and I’m recommending selling three more today. When it comes to growth stocks, cutting losses short (and taking profits while you have them) is important.

Still, the market as a whole remains in an uptrend, so I remain bullish long-term. Plus, Cabot’s analysts continue to find plenty of attractive stocks, using a variety of methods. Today’s recommendation is actually a growth stock, boasting both accelerating revenue growth and an attractive chart pattern. This may be an ideal buying point.



Details inside.