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When investors sit around and tell stories of their favorite stocks, it’s always nice to hear about a company that took on a bigger rival and won by re-imagining a business model that everyone took for granted. And that’s exactly what happened with Netflix, Inc. (NFLX, Nasdaq), the little company...

From StreetAuthority MarketAdvisor: “First Trust Nasdaq CEA Smartphone Index Fund (FONE) — Last month, First Trust launched a specialized fund designed to cash in on the smartphone revolution. Ordinarily, I would say...

Fundamentally, all is well in the marijuana sector as the industry’s leaders continue to grow, both organically and by acquisition. The average rate of revenue growth for the plant-touching companies in our portfolio in the most recent quarter was an amazing 132% from the previous year.

Fundamentally, all is well in the marijuana sector as the industry’s leaders continue to grow, both organically and by acquisition. The average rate of revenue growth for the plant-touching companies in our portfolio in the most recent quarter was an amazing 132% from the previous year.

The market remains in a normal consolidation phase, and most of our stocks look fine.

Accolade (ACCD) reported Q1 fiscal 2022 results after the bell yesterday that beat on the top line and missed on the bottom line. Revenue was up 66% to $59.5 million (beating by $3.7 million) while adjusted EPS of -$0.87 missed by $0.47. Management raised full-year guidance to $300 million - $305 million (from $260 million - $265 million) due to positive momentum and benefits from acquisitions.

Last week’s economic reports delivered good news, presuming that you are rooting for a stable or strong U.S. economy. June retail sales rose 0.4% vs. May, when economists expected an 0.2% increase; and retail sales also rose 3.4% vs. a year ago.

In the November Issue of Cabot Early Opportunities we lean into the strengthening market with a group of companies doing everything from providing security for new AI applications to paving roads in the Sun Belt to making packaged foods for health-conscious consumers, and more.

As always, there’s something for everybody!

The stock market isn’t done rising. Nevertheless, it’s certainly okay to begin accumulating cash with which to buy low during the next stock market correction. The way I personally handle that is when I sell a stock, I put half of the proceeds into my brokerage account’s money market fund, and I buy shares of stock with the other half. In that manner, I get to participate in the market’s bull run while also “saving for a rainy day”. The best antidote to a stock market correction is having money available to buy low!

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the April 2021 issue.

This month we look at defense industry stocks. These stocks have been left aside as investors rush to capture post-pandemic winners, and as the market has doubts about the Biden administration’s commitment to defense spending. Yet, these concerns appear overdone, and investors aren’t considering the possibility of a ramp-up in response to rising global tensions. We discuss six interesting stocks.



We also look at high yield bonds. Our call in February 2020, that “the Sun May Be Setting On High Yield Bonds,” appears to be the right one once again. Yield levels and spreads have returned to remarkably low levels. Our discussion also outlines what favorable and unfavorable conditions look like.



Our feature recommendation is pet health company Elanco Animal Health (ELAN). This company has produced mediocre operating and stock price performance since its 2018 spin-off from Eli Lilly. Yet, changes appear to be coming with the arrival of a credible activist that is reshaping the board of directors.



We also include comments on recent price target and rating changes, including our recent Sell recommendations on Valero Energy (VLO) and Volkswagen AG (VWAGY).



Please feel free to send me your questions and comments. This newsletter is written for you. A great way to get more out of your 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.

While the market action has been somewhat exciting this week (though in the wrong direction), it was fairly dull for Cabot Undervalued Stocks Advisor recommended stocks in terms of news. This news drought will fade as five companies report later this week, with six more the following week.

During the July-through-September period, we often saw the major indexes lag (the S&P 500 went nowhere from mid-May through mid-October) while growth leaders surged. Now, though, we’re starting to see the opposite—the broad market’s health has improved, and many groups have come to life, but just about any stock that’s had a huge run in recent months is under pressure. We don’t advise panicking out of all your winners, but set your stops and consider booking partial profits. On the flip side, there are many less well-known names that are acting great, including a bunch that have recently broken out on earnings, and that’s where any new buying should be focused.

This week’s list has a nice collection of those type of names. Our favorite is United Rentals (URI), a company we’ve long liked, and now the stock is getting going after an eight-month rest.

Stock Name	Price	Buy Range	Loss Limit
Whiting Petroleum (WLL)	0.00	65-68	58-59
United Rentals, Inc. (URI)	0.00	63-65	59-60
Nu Skin Enterprises Inc. (NUS)	46.07	110-115	98-100
ServiceNow (NOW)	341.86	54-56	48-50
Northrop Grumman (NOC)	0.00	104-107	96-97
Noble Energy (NBL)	0.00	74-75	69-70
Illumina Inc. (ILMN)	289.74	90-92	84-85
Gentex Corp. (GNTX)	0.00	27.5-29.5	24-26
Five Below (FIVE)	134.58	46.5-49	43-44
Align Technology (ALGN)	316.20	54-56	46-48

The stock market remains very strong, and a third of S&P stocks hit new 52-week highs on Friday. The Dow traded over 26,000 for the first time ever yesterday, although all the major indexes then pulled back to end the day lower. Interest rates continue to rise, causing more pain for REITs and utilities, and earnings season has begun in earnest.

Last week was the worst week of the market’s recent retreat, and it’s fair to say many pieces of evidence are now at or approaching key levels: Most major indexes closed in on their 50-day lines, many individual potential leaders are in a similar boat, and both the broad market and the growth-vs.-defense dynamic are healthy but showing a bit of wear and tear. Ideally, this three-week dip leads to a resumption of the January rally—but the next few days should tell the tale. Right now, given the late-Friday firmness and today’s bounce, we’ll leave our Market Monitor at a level 6, but we’re watching closely.

Despite the market action, we actually think this week’s list has a bit more juice than the prior couple of weeks. Our Top Pick looks like a fresh leader in the chip sector; it’s extended, so try to buy on a shakeout.

We’re on the tail end of earnings seasons for companies that wrapped up their quarters in March. Almost every one of our portfolio companies that reported earnings delivered an upside earnings surprise, especially in the integrated oil and construction materials industries.