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Perpetua Resources (PPTA) Gets Green Light

Nova (NVMI) Moves to Sell Half

There is a brand new industry just coming of age.

New industries only come along once in a while and they almost always present an array of investments that will be superstars of tomorrow. We dream of going back in time and buying Microsoft (MSFT) or Starbucks (SBUX) or Netflix (NFLX) when they were new, upstart companies. But we might get another bite of a similar apple in 2020.

With the Juneteenth Holiday this week and our last update just three business days ago (and right after the FOMC meeting), there is very little to talk about today. So, I’ll keep things short and sweet and we’ll jump right into company-specific updates, of which there are hardly any.

In other words, enjoy a break in the action! They rarely last long.

Thursday marked the first day of somewhat significant turbulence in our portfolio in what seems like forever, but indications are that Friday will be back to business as usual, at least for the first part of the day.

The bull market is alive and well, but the growth stock environment remains tricky at best, with more names either testing or cracking intermediate-term support during the past couple of weeks. Eventually, there will be another run in growth, possibly soon given the many stocks that have built launching pads during the past two-plus months; we do have an expanding watch list of solid setups. But for now, we’re playing things cautiously, trying to give our positions a chance but also holding a good chunk of cash until the meat-grinder environment shifts.

These are harrowing times to be an investor but we’re always on the hunt for emerging opportunities, regardless of market conditions. As always we’re spreading things around this month, with the focus on two defensive names (including one larger company), two beaten and battered names that seem miss-priced (depends on what happens) and one stock that seems to be in high demand, despite the market conditions. Suffice to say, there’s little incentive to place big bets right now. But we’d be remiss not so send some ideas your way. These new names will come with a short leash!

The market was hit hard last week, so all trends are down, and increased caution is advised.
In the portfolio this week, we’re selling four stocks, which will both reduce risk and raise cash.


As for the new recommendation, it’s one of the world’s leading uranium companies, which has a great growth story thanks to growing negative attitudes toward Russian energy and growing positive attitudes toward carbon-free energy.


Details inside.

The market has rallied like crazy over the past seven weeks. It’s up over 30% from the low in March. The market is already looking beyond the coronavirus to a strong economic recovery.

But stocks are trading on a rosy scenario that may not come true. While the market is always difficult to predict in the near term, there is at least a good chance of disappointment going forward. The overall market may have gotten ahead of itself and it is prudent to prepare for the possibility of more turbulence ahead.



For those reasons, the Cabot Dividend Investor portfolio is only buying very selectively. While the overall market may be shaky at this point, certain companies are thriving during the pandemic. There are niches where business is actually booming.



In this issue I highlight two stocks that are selling at bargain prices, have businesses barely affected by the pandemic, and stand to thrive in the post-Covid-19 market as well.

In today’s note, we discuss pertinent developments for some of the stocks in the portfolio, including Agnico Eagle Mines (AEM), Centuri Holdings (CTRI), GE Aerospace (GE), Intel (INTC), Paramount Global (PARA), SLB Ltd. (SLB) and UiPath (PATH).


Centuri Holdings (CTRI) remains a strong performer in light of the tariff backdrop and thanks also to recent award wins.

The market’s primary evidence remains in good shape, and that’s especially true for leading growth stocks continue to act very well, and after two-plus years in the wilderness, we’re optimistic that the best names can continue to do well. That said, near-term, risks are rising for some sort of change in character (pullback, rotation, etc.) as there’s a growing divergence and some of the action out there is frothy. Because of that, we’re mostly riding our winners, but we sold a couple of laggards earlier this week and--for now--are holding about 30% in cash.

All that said, stay tuned: We could put some money back to work in the days ahead as earnings season continues to roll on, but for now, we’ll stay a bit closer to shore than we have been and see how things play out.

The title says it all—overall, the trend remains up for the major indexes and most stocks and sectors, and so our Market Monitor remains in bullish territory. But there’s also no question that the environment is whippy; big moves happen almost daily, and earnings season continues to bring a bunch of big moves in both directions. None of this is bad, per se, but it does mean you have to be more discerning with your buys and make sure your timing is right and your stops aren’t too tight.

This week’s list has yet another impressive crop of stocks with good stories and charts that have shown large recent buying power (usually on earnings). Our favorite is Yelp (YELP), a relatively recent IPO that has a great, sustainable story, rapid sales growth and a stock that just exploded higher on earnings.

Stock Name	Price	Buy Range	Loss Limit
Yelp (YELP)	41.30	29-31.5	26-27
Trulia (TRLA)	0.00	33-35	29.5-30.5
Seagate Technology (STX)	0.00	39.5-41.5	36-37
Parexel Corp. (PRXL)	0.00	42-44	39-40
IntercontinentalExchange, Inc. (ICE)	0.00	165-170	156-158
Hertz Global Holdings, Inc. (HTZ)	0.00	23-24.5	21-22
Hornbeck Offshore (HOS)	0.00	49-50.5	44-45
Guidewire (GWRE)	90.60	39.5-41	35-36
Gilead Sciences (GILD)	75.10	51-54	47-48
EQT Corporation (EQT)	0.00	73-75	67-69

In this Month’s Issue of Cabot Early Opportunities I reveal a few tips to help you buy into IPOs at reasonable prices and we look at some compelling data that suggests the 150 to 180 day period after IPO just might be one of the ideal times to buy.

We also go inside five companies that look great right now, including a few software stocks, a consumer goods company and a MedTech stock that’s flying under the radar now, but not for long!

With weeks of churning action and complacent sentiment, the market was flirting with trouble for a while, and now it’s hit the intermediate-term tripwire. Thus, we mostly advise defense here—after a big run-up and the aforementioned churning, the odds favor more short-term downside testing and/or pain ahead. That said, the odds also favor a resumption of the longer-term uptrend down the road, so it’s best not to get too holed up in your bunker, either. Tonight, we’ll leave our Market Monitor at a level 6, and the main message is to hold a good chunk of cash, honor stops and be very selective on the buy side.

This week’s list is another broad mix of stocks, with something for everyone in terms of stories, sectors and setups. Our Top Pick is a reliable grower in the infrastructure area that’s pulling back toward support. Given the market, keep new buys on the small side.

Here at Cabot we try to find out which way markets are trending and manage our portfolios accordingly.

Here are the answers to a few questions that I have not been asked very often.

Jerome Powell’s press conference yesterday, which followed the FOMC’s March policy decision (hold) and updated Summary of Economic Projections (SEP), went better than expected.

Many investors were primed for Powell to dial back expectations for three rate cuts later this year. Yet the SEP maintained that stance, which was set in the December SEP. That’s despite a slightly higher PCE inflation rate and GDP forecast than was expected three months ago.

As the market continues to strengthen, we are very close to having all of our market timing indicators back on the bullish side. In the meantime, most of our stocks look good, with many hitting new highs in recent days. In fact, I can find none to sell today.

As for today’s recommendation, it’s a fast-growing Chinese stock with a product you’re probably familiar with. It’s not a low-risk stock, but with the right timing, it could be a home run.

Stock buybacks continued to climb last year. But are dividend-paying stocks better investments? Let’s weigh the pros and cons.

Markets are a bit jittery despite strong earnings and expected strength as America opens up its post-pandemic economy. China is already at a 5% growth path while India, Japan, and other important economies struggle to get the pandemic under control.