Search

Despite a frantic week of heavy sector rotation, the indexes managed to hang in there. Essentially, lofty tech valuations in the AI and growth spaces are now in question, and that hot money poured into defensive sectors. In the end, the S&P 500 eked out a +0.08% gain, the Dow rose +0.34%, and the Nasdaq Composite lost -0.45% last week.

Cannabis stocks remain unloved by investors. This makes the group buyable because catalysts are on the horizon.

The tricky part now is that it is more difficult to predict that we may see a catalyst near term, or even when the next one will occur. Patience is required.

Here is a look at the four main potential catalysts.

In my last update on February 14, I suggested cannabis stocks had fallen enough to be buyable ahead of the expected rescheduling catalyst. That was an opportune entry point.

As of the close February 23, the AdvisorShares Pure U.S. Cannabis (MSOS) and the leveraged version, AdvisorShares MSOS 2X Daily (MSOX), were up 12% and 20%, respectively.

Then investors got impatient again with the lack of progress on catalysts. As of the close February 27, 2024, volatile cannabis stocks had given back most of these gains. The MSOS was up 2.4% and the MSOX was up 1.7%. I think cannabis stocks have weakened enough to consider adding again (more on this below).

Cannabis stocks are unloved and in the doldrums.

Typically, in the stock market, that’s the best time to buy.

Neglected stocks offer the best value, as long as there are potential catalysts on the horizon.

I believe that is the case with cannabis. You’ll just have to be patient. I think it is worth being patient for the possibility of 30%-50% gains when a catalyst strikes. There is no guarantee this will happen, but as I discuss below, the odds are good.

From a stock market point of view, I suggest avoiding homebuilder stocks in the coming years. Companies that build single-family homes will be competing with a glut of existing homes on the market.

This month’s issue includes a new addition to the High Yield Tier, updates on all our holdings, and some advice on handling big winners.

A debt ceiling deal appears imminent, though that’s ultimately up to our ever-dysfunctional Congress. If it does get done, another Fed interest rate hike may be right behind it. So, the long-awaited rally may be on hold a while longer. But that doesn’t mean individual stocks (see artificial intelligence and semiconductors) can’t get a move-on, so today we add a small-cap MedTech stock that’s showing a lot of promise in addressing a very common – and thus very lucrative – health problem. It’s a new recommendation from Cabot Early Opportunities Chief Analyst Tyler Laundon.

Stocks had a good week, but dark debt-ceiling clouds are gathering. The closer we get to the early-June deadline without a deal, the more likely we are to see some selling, at least if 2011 is any guide. To prepare for such a scenario, today we add a bit of safety in the form of a master limited partnership (MLP)-adjacent play on America’s infrastructure boom. It’s a recommendation from Cabot Income Advisor Chief Analyst Tom Hutchinson, and it’s hitting new 2023 highs as I write this.

Details inside.

Another interest rate hike and negative second-quarter earnings growth have done little to slow the bull market rally or investor confidence, so this week we add a “Bull Market Stock” to take advantage of the strength. It’s a term coined by our Mike Cintolo, so naturally, today we add Mike’s favorite Bull Market Stock, one he recently recommended to his Cabot Top Ten Trader audience, a company that benefits directly anytime there’s a bull market and the big institutions are buying stocks hand over fist.

Apple (AAPL), as most investors are aware, is now 40% off its high of last year which makes it a bargain in some investors’ books.

This month marks a special time for us at Cabot: The 39th anniversary of the first issue of Cabot Market Letter, our flagship newsletter. In honor of this anniversary, I interviewed Cabot’s publisher and president Timothy Lutts, and Cabot Market Letter’s current steward, Michael Cintolo.

Hain Celestial Group is likely to benefit from the move toward natural and organic foods.

A few months ago, we surveyed you, our Investment of the Week readers, and asked what types of investments you wanted to read about. Small company stocks, technology stocks and oil and gas stocks were all popular choices. However, the investment class with the most votes by far, with 69%...

The growing number of Americans approaching or at retirement age is increasing interest in dividend stocks.