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Ahead of a potential monster week for the market, with plenty of volatility, last week was fairly quiet for the indexes. The S&P 500 gained 0.7%, and the Dow and Nasdaq were mostly unchanged.

With the first month of 2024 in the books, cannabis stocks are trouncing the markets and have even more promising catalysts on the horizon.

Ahead of a potential monster week for the market, with plenty of volatility, last week was fairly quiet for the indexes. The S&P 500 gained 0.7%, and the Dow and Nasdaq were mostly unchanged.

Focusing on a sector can miss the real picture, which is why I dive deeper into the “themes” powering the best stocks, like these three undiscovered software stocks.

In today’s note, we discuss the recent earnings reports from Janus Henderson Group (JHG) and Polaris (PII). Our note also includes the monthly Catalyst Report and a summary of the February edition of the Cabot Turnaround Letter, which was published on Wednesday.

Shares of Pinterest (PINS) are selling off today after Q4 earnings came in slightly below expectations (food and beverage weakness a culprit), though the big-picture story remains one of a company that’s made a number of operational adjustments and launched a series of growth initiatives that should drive higher revenue and EPS growth in 2024. I think the recovery story is intact and the stock’s worth owning. Keeping at buy half.

WHAT TO DO NOW: Hold some cash and take things on a stock-by-stock basis. The market is getting whacked today as inflation remains higher than expected, which has interest rates rallying sharply and expectations of Fed rate cuts sliding. That said, the trends of most indexes and stocks are still fine, and with 30% in cash coming into today, we’re not overreacting—but we will sell one-third of our Arista Networks (ANET) position, which is one of many tech names getting whacked after a good-not-great quarterly report, while placing PulteGroup (PHM) on Hold. That will leave us with around 33% in cash, which we’ll hang on to as we see how this pullback plays out.

Shares of Shopify (SHOP) are giving up last week’s gains (plus a little) today after the company reported Q4 results before the market opened. Revenue growth of 24.5% to $2.16 billion was solid (beat by 3.7%) as was Gross Merchandise Value (GMV) growth of 23% (roughly 10 points faster than broad eCommerce growth) and adjusted EPS of $0.34 ($0.04 better than expected).

WHAT TO DO NOW: Hold your strong stocks, but near-term, it’s OK to sit on your hands a bit and see how things shake out. The overall evidence remains bullish, but there have been some yellow flags of late and yesterday’s broad, sharp decline is likely to have some near-term reverberations. We took partial profits in Arista (ANET) yesterday, selling one-third of our shares, and placed Pulte (PHM) on Hold, leaving us with around 33% in cash—and some great performers. We’ll stand pat tonight, though if things settle down for a couple of days, we could put some of our cash back to work.

After its recent performance, it’s no wonder traders are looking for the next Nvidia (NVDA). Could it be the AI/software company stock Palantir (PLTR)?

The market had accumulated some short-term yellow flags of late, some of them simply due to the market’s success (big, prolonged run), but also due to the relative narrowness of the advance (even the equal-weight S&P 500 is unchanged during the past two months, net-net) and a bit of frothiness that popped up (some AI names are acting like meme stocks). That led into Tuesday’s worse-than-expected inflation report and a broad (something like 90% to 95% of all volume traded in stocks that fell on the day), across-the-board decline.

We are recommending shares of CNH Industrial (CNHI) as a new Buy. The company is a major producer of agriculture (80% of sales) and construction (20% of sales) equipment for customers around the world and is the #2 ag equipment producer in North America (behind Deere). It also provides related supplies, services and financing.

Dividend Champions are companies that have proven they have enough cash flow to reward shareholders through decades of market ups and downs. Here are three that stand out, according to Sure Dividend.

We are smack dab in the heart of earnings season for this portfolio. With the market sputtering along without much conviction, individual stocks are taking center stage, and earnings are a major part of that.

Quarterly and annual earnings will be reported this week from AbbVie Inc. (ABBV), Alexandria Real Estate Equities (ARE), American Tower Corporation (AMT), Marathon Petroleum Corporation (MPC), and Qualcomm Inc. (QCOM). The reports could be a hugely important factor in determining the near-term direction of these stocks.

Our Cabot Cannabis Investor portfolio is up 35% this year. That’s more than 10 times the 3% gain for the S&P 500.

The broader cannabis sector has done well too, but not quite as well as our Cabot Cannabis Investor portfolio of the 12 best names in the space.

The New Cannabis Ventures Global Cannabis Stock Index and the ETFMG Alternative Harvest exchange traded fund (MJ) are up 14.5%. We’re up more than twice as much.

Our Cannabis Plus Insider Portfolio is up 39.3% since I launched it on March 29 last year. Here we have outperformed the market by threefold. The 39.3% advance compares to gains of 12.7% for the Russell 2000 index, and 22.3% for the S&P 500 over the same time. The smid-cap Russell 2000 is a more appropriate comp than large-cap names in the S&P 500. This portfolio invests in cannabis related companies that have the right kind of insider buying, and do not touch the plant.

It’s been another up week for the market, though as of this morning, the gains have been relatively muted, generally up 1% or less.


Even so, that keeps all of the primary evidence intact: The intermediate-term (and longer-term) trends of the indexes, along with most stocks and sectors, are pointed up, and the action of most leading stocks (especially on the growth side of things) has been excellent, with many names kiting higher. Thus, we remain bullish and are holding most of our strong, profitable stocks.

In this week’s video, Mike Cintolo talks about the market’s under-the-surface improvement that he’s seeing; no indicators have changed, which will need to happen for him to extend his line in a big way, but there’s no question most stuff has seen improvement and more stocks are beginning to act properly. Mike did a little buying this week and is hoping to add more should the market be able to build on the recent action.