Search

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.

The market remains in good health and trending higher, though the rotation out of the leading Nasdaq glamour stocks may have further to go—or may be just a false alarm.



In any case, it’s the stocks YOU own that matter, and if you’ve been choosing from our portfolio, you’ve been doing pretty well!



Today’s recommendation is a well-known and well-run company in the apparel business that should benefit from the trend toward more casual clothing. And according to our Cabot expert, it’s undervalued!



As for the current portfolio, there are two changes, a sell recommendation for Beyond Meat (BYND), which has lost momentum and a move to hold for Big Lots (BIG).



Full details in the issue.

What is a Value Stock Worth to Your Portfolio, and How Do You Know When You’ve Found One? Keep reading on cabotwealth.com to find out.

The future of NAFTA is up in the air, but that hasn’t done much to slow the momentum in one particular Mexican stock. Just look at the chart.

WHAT TO DO NOW: The market’s action continues to take steps in the right direction, with more bullish character changes among big-picture measures and, more importantly, leading stocks. Tonight, we’re going to add some exposure—we’re going to add another 5% stake in ProShares Ultra S&P Fund (SSO), buy another half-sized stake in Uber (UBER), and start a fresh half position in DoubleVerify (DV). That will leave us with just over half in cash—still plenty of cushion if the rally falters, but also lots of dry powder to pounce on new leaders should they continue to firm up.

If you like the idea of buying low and calmly hanging on...this is the right advisory for you.

With U.S. stocks trading at historically high valuations, now’s a good time to look to our neighbors to the north for undervalued opportunities.

We all saw U.S. stock markets exhibit exuberance on December 3 and then fear on December 4. I anticipate another strong upward move during the remainder of this week.

Several of our portfolios stocks are rising this week, so I want to reiterate some trading suggestions in case the stocks reach price targets before the next weekly update of Cabot Undervalued Stocks Advisor.

The election is practically right around the corner, and if you’re concerned about how the market will react to whoever ends up back in the White House, you can hedge your portfolio with options.

If you’re worried about the outcome of the presidential election (or the market in general for the next seven months) here’s how to hedge your portfolio with options.

European stocks are lagging the performance of their American counterparts, and have been for years. But that performance gap offers attractive valuations for investors looking to add portfolio diversification.

We don’t spend much time thinking about the news. Instead, we look at the market itself.

Current Market Outlook


The market cracked its intermediate-term uptrend last week, with all the major indexes diving below their 50-day lines decisive fashion, and it appeared they could be ready to go over the falls. But as has been the case for months, the market reversed, with a decent-looking bounce to end the week. Overall, the trend of the major indexes remains effectively sideways, with no net progress for five-plus months at this point. And for individual stocks, it’s mostly the same story—we’re still seeing many that are holding up well, but few are going up, so no real money is being made. We’re still game for holding your strong, resilient stocks, especially if they’ve already taken some hits and held support. But we also think it’s best to mostly lay low, holding plenty of cash and being choosy on the buy side until the buyers flex their muscles. We’re dropping our Market Monitor down to level 5.

This week’s list has a good number of names that have recently shown strong accumulation and have held most of their gains, despite the soft environment. Our Top Pick is RingCentral (RNG), which announced a game-changing deal last week that lit a fire under the stock. Dips would be tempting.

Stock Name	Price	Buy Range	Loss Limit
Coupa Software (COUP)	262.20	143-147	126-128
Edwards Lifesciences (EW)	228.06	222-226	204-206
Lennar (LEN)	61.85	57-58.5	52-53
Medicines Company (MDCO)	56.98	57-58.5	52-53
Proofpoint (PFPT)	113.79	128-131	117-119
RH Inc. (RH)	252.93	168-172	152-155
RingCentral (RNG)	238.73	164-170	144-148
Seattle Genetics (SGEN)	150.85	83-86	75-77
Visteon (VC)	89.82	76-79	70-71
ZTO Express (ZTO)	28.84	20.2-21	18.8-19.3

Current Market Outlook


The market’s correction was in full force a week ago, with the S&P and Nasdaq falling to new correction lows and many resilient stocks beginning to give up the ghost. But since then stocks have turned on a dime—whatever the reason (Fed, less-heated trade rhetoric, Mexico deal), the market has soared amidst a vacuum of selling pressure, with the major indexes, the broad market (most number of stocks hitting new highs in months) and many growth stocks all kicking into gear. That said, the intermediate-term trend has not yet turned positive (it’s very close, but not quite there yet) and many stocks are now either extended or running into resistance, so we don’t advise throwing caution to the wind. But there’s no question that the action is encouraging —we’re bumping up our Market Monitor to a level 7 tonight.

This week’s list has a nice batch of stocks, including a few that are hot and others that are just emerging. Our Top Pick is Zillow (Z), which has changed character over the past few weeks and looks like a leader should the market’s rally continue.

Stock Name	Price	Buy Range	Loss Limit
Ciena (CIEN)	44.25	42.5-44.5	38.5-40
Coupa Software (COUP)	262.20	118-124	104-107
The Walt Disney Company (DIS)	144.76	135-138	125-127
Kirkland Lake Gold (KL)	51.30	36-38	32.5-33.5
MongoDB (MDB)	156.56	165-170	149-152
PagSeguro Digital (PAGS)	35.09	34.5-36	30.5-32
UniQure (QURE)	74.08	72.5-75.5	63-65
Vulcan Materials Company (VMC)	137.10	131-135	121-124
Zillow (Z)	76.64	44.5-46.5	40-41.5
Zoom Communications (ZM)	155.83	95-102	81-85