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With the broad market making new highs in the face of renewed tariff threats, it seems investors are willing to shrug off macro concerns, at least for now.

We’ll heed the bullish action by stepping into three new positions this month, but hedge our bets by making one of them a half-sized position. We also add two new names to our Watch List.

March Madness starts today. It’s my favorite sporting event of the year, as the possibilities and unpredictability of a 68-team basketball tournament involving 18-to-23-year-olds never fail to deliver on its “madness” moniker. It’s messy, it’s volatile, and you never know what’s going to happen next. Sort of like the stock market in the era of Trump, tariffs and angst-ridden Fed announcements like yesterday.

It’s amazing what a halfway decent inflation report can do.

On Wednesday, the Consumer Price Index (CPI) came in both lower than expected and better than the previous month at 2.8%. Economists were looking for a 2.9% year-over-year gain, down a tick from the 3% gain in January. Instead, it’s down two ticks and up just 0.2% from January – again, a tick less than the 0.3% month-over-month gain that was estimated. So, Wall Street rejoiced, at least for a few hours. All three major indexes were up more than 1% in early Wednesday trading, a welcome reprieve after weeks of getting pummeled into either correction status (the Nasdaq) or near-correction territory (S&P 500 and the Dow). Yes, the thing that’s been feeding this forceful sell-off – tariffs, and an ever-escalating trade war with multiple countries – is still raging. But higher inflation is a big reason people fear tariffs in the first place. And for one month at least, inflation came in cooler than expected.

Clean energy is the future. But not for a while.

This country and the world still rely heavily on fossil fuels for more than 80% of energy needs, and these conventional energy sources will likely remain dominant for decades. Meanwhile, many stocks of companies that benefit have strong earnings and great value.

Fossil fuel proportions are expected to move toward natural gas in the years ahead. A recent study estimates that global natural gas demand will soar 34% between 2022 and 2050 with the strongest growth in the natural gas realm to be liquid natural gas (LNG), with demand expected to more than double in the same time frame.

In this issue, I highlight one of the best natural gas companies on the market. It is a newly formed company in the business of exporting abundant and cheap American natural gas overseas. It’s big business. In a short time, this company has become one of the world’s largest natural gas exporters.

Today’s addition is a familiar story – a small software company with a purpose-built solution that works better than the patchwork of legacy solutions many companies still rely on, but which don’t work very well.

But there is another angle. This company is transitioning from an on-premise to a Software-as-a-Service (SaaS) business model. The switch should accelerate growth and make the stock a lot more attractive to investors.



Shares did very well in 2019. And there should be plenty more gas left in the tank.



All the details are inside.

This month’s Issue of Cabot Small-Cap Confidential features a newly public company that’s trying to do what seems impossible – make the healthcare system work better.

It’s essentially a big data software company for this highly complex market. But it has a services and consulting segment too that’s central to the growth story because so many clients need help getting organized before they can even implement a software system.

Revenue growth tops 30%. And the story remains relatively unknown. All the details are inside the December Issue of Cabot Small-Cap Confidential.

Our portfolio has soared over the past week right along with the market. Our average gain is 3.2%, and our stocks are beating their benchmark by around 20%.

The market was up big today, and a couple of our stocks hit new highs—which is impressive considering the recent crash—but the market’s major pattern is one of bottom-building, and that takes time.
In the meantime, the action of the best growth stocks gives us a clue as to developing leadership, and the best value stocks are absurdly cheap. Plus, many are paying huge dividends! That’s the case with today’s recommendation, a giant in the oil industry.


As for the rest of the portfolio, it’s acting well (with a couple of very strong stocks in the mix), and thus I have no changes today.


Full details in the issue.

The stock market has perked up considerably since the Liberation Day turmoil in early April, igniting shares of stocks across the market cap spectrum.

We look under the hood of five names that span the risk spectrum this month, including a couple of old names that might be familiar and a new one that’s been hard to ignore.

The explosive growth of artificial intelligence, electric cars, and manufacturing is causing an explosion in the demand for electricity in this country.

After nearly two decades of stagnant growth, electricity demand is expected to soar in the years ahead. This year alone, electricity demand is growing 81% more than it did last year. Electricity demand is expected to grow at nearly twice the past rate for the rest of this decade.

The new demand transforms certain previously stodgy and boring utility stocks into growth investments.

In this issue I highlight one of the very best and fastest-growing electricity producers in the country. This company is in an ideal position to benefit from the increasing electricity demand from data centers and other sources. AI may be the cutting edge of technological innovation. But it doesn’t work without electricity. While most investors are running around chasing the same AI stocks, we can reap the rewards of the tremendous new opportunity from Thomas Edison’s invention.

There are a number of ways to reduce your mortgage rate, but the “right” way depends on several factors. Let’s break down three options to see which is best.

Joann Stores (JOAN) reported Q4 results after the bell yesterday that beat on the bottom line and missed on the top line. Revenue was down 13% to $735.3 million (missing by $17 million) while adjusted EPS of $1.16 beat by $0.12. Adjusted EBITDA of $88.9 million was below consensus of $94.2 million and adjusted gross margin of 48.9% was in line (up 1.9% from the year-ago quarter).

Nippon Steel continues to push for an acquisition of U.S. Steel (X), so let’s explore what it means for investors or those considering buying shares.

The broad market sold off today, but odds are it’s just a normal pullback in the renewed bull market. Overall, our market-timing indicators tell us the trends are up. However, eternal vigilance is the price of success in investing, so today I’m recommending selling two stocks that have recently broken down.

The 10-year yield has been quiet ahead of the announcement, trading sideways since Monday morning. That’s given utilities a bit of a reprieve, at least in the short term.

Remain mostly bullish as our trend-following indicators are still positive and most leading stocks are in solid uptrends. We have no changes in the Model Portfolio tonight as we are keeping some cash (17%) on the sidelines.

The big-picture story out there continues to be the battle between bad news (rising infections, high unemployment, too many crumbling businesses) and good news (progress toward vaccines, therapeutics, etc.; accommodative policies from the Fed; improving fundamentals for some businesses arising from the pandemic). Then there’s all the uncertainty around the upcoming election that further confounds the mind.

Things look good for 2024. Inflation is down, interest rates have likely peaked, and there is no sign of recession. But you never know. It’s a tough game to predict the future of the market. However, certain trends are likely to persist.

It’s a good bet that interest rates have peaked. Sure, they could edge higher from here. But they are unlikely to soar to new highs past 5% for the 10-year Treasury. The situation would have to completely reverse for that to happen. Meanwhile, stocks that have been dragged lower by rising interest rates have come alive again.

These stocks, which have strong track records of market outperformance, are at historically cheap valuations, have established upward momentum, and are positioned ahead of a likely slowing economy.

Also, artificial intelligence is here to stay. Businesses must spend on it not only for competitive advantage, but as a matter of survival. The new technology will continue to be a strong growth catalyst for technology stocks. And the trend will continue regardless of what the Fed does, or the state of the economy, or who is elected president.

In this issue, I highlight a fantastic dividend stock whose long record of strong performance has been interrupted these last two years. It’s also a company that focuses on technology and will surely benefit from the proliferation of AI in the years ahead. The timing for this stock should be outstanding.

This month we’re jumping back into the pure-play software space with an up and coming SaaS company that has remained under the radar since going public in December, just a few months before the market tanked.

It specializes in social media management solutions, which are increasingly important as the trend toward digital transformation strategies gets stronger. Organizations increasingly recognize they must market to consumers through social networks.



Revenue growth is hovering around 30% and first profits are still a couple years away, meaning we’re still early to the table.



All the details are inside this month’s Issue. Enjoy!

Artificial intelligence is a massive catalyst that is changing the market. It is spreading beyond technology and transforming other industries.

Utilities are companies that provide water, energy, and electricity to homes and businesses. They operate monopolies or near monopolies in their areas and the rates they charge are usually determined by regulatory bodies.

They usually pay strong dividend yields and provide highly defensive earnings that continue in any kind of economy. But, aside from the dividend and defensive characteristics, they’ve typically offered little else. Good stocks tend to outperform the indexes in flat or down markets and underperform them in bull markets. They are the market sector that most closely resembles bonds.

But skyrocketing electricity demand, mostly from data centers supporting AI, is changing that sector for the better. The phenomenon is making electric utilities growth businesses as well. The changing environment is adding another hugely positive dimension to these underrated stocks.

In this issue, I identify a beneficiary of that positive change that’s ahead of the pack. It’s an opportunity that has never existed before in modern times. The combination of defense and growth is the best of both worlds.