Latest Summary
CABOT EVENTS
Cabot Weekly Review (Video)
In this weeks video, small cap expert Tyler Laundon explains why market volatility exploded on Wednesday, what the Fed’s rate cut means and why the market doesn’t love the uncertainty of a looming government shutdown. Tyler then gets into three stock stories, starting with shifting dynamics in the aerospace industry. He then covers a red hot recent IPO before wrapping up the video with a review of an AI networking specialist that looks fantastic.
Stocks Discussed: LOAR, FTAI, BA, TTAN, ALAB
Cabot Street Check (Podcast)
This week on Street Check, Chris and Brad discuss the Dow’s 10-day losing streak, an uncharacteristic Jerome Powell press conference following the latest rate cut, and the subsequent market sell-off. Then, they welcome on Steve Reitmeister of WallStreetZen to discuss quantitative trading, his rating metrics and how to use them, and his assessment of the current state of the market and where he’s most bullish going forward. For immediate access to Steve’s new “Stock of the Week” picks, visit cabotwealth.com/street.
Cabot Webinar
Quarterly Cabot Analyst Meeting
The recording of the Cabot Prime Members Meeting with the Analysts is now available for you to listen to at your convenience—click here for access. This private call with our analysts is one of your exclusive Cabot Prime Core member benefits.
RECENT BUY AND SELL ACTIVITY
This table lists stocks bought or sold in the most recent Issues or Updates.
PORTFOLIO UPDATES THIS WEEK
Cabot Growth Investor
Bi-weekly Issue December 26: First off, this being our last issue of the year, all of us at Cabot wish you and yours a very happy, healthy and prosperous New Year. We’ll be back with a regular update next Thursday after the calendar flips.
As for the market, it’s been a fantastic year, with leading growth titles letting loose on the upside, and we’re happy to have made hay while the sun is shining—the year isn’t quite done but it’s looking like our second-best returns of the past 18 years, when I took over. We’re glad to have done right by you.
That said, we always deal with the here and now, so we’re riding into year-end in a cautious stance, as growth stocks have wobbled and our Cabot Tides and Two-Second Indicators are waving yellow flags. We’re definitely flexible, as some of the recent selling may have cleared the decks for another leg up, but given the evidence, we want to see strength first before embarking on another major buying spree. In this issue, we highlight more than a few names we could jump into if things go well, while sharing more details on our remaining stocks and the recent action.
Bi-weekly Update December 19: First and foremost, all of us here at Cabot wish you a very Merry Christmas and a happy holiday season. Just a heads up that we’ll be publishing our last issue of Growth Investor this year next Thursday (December 26).
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WHAT TO DO NOW: Remain close to shore. Given the huge run, elevated sentiment and some cracks in growth stocks, we pared back fairly aggressively a couple of weeks ago, coming into this week with 37% in cash. And today we’re paring back further as the under-the-hood selling has come to the surface this week—we’ll take the rest of our profit in Cava (CAVA) and cut our loss in ProShares Russell 2000 Fund (UWM), which will leave us with around half in cash. We are flexible and could do a little buying if the bulls pounce on this dip, but right now we’re OK being cautious. Details below.
Cabot Top Ten Trader
Weekly Issue December 23: First and foremost, this is our last issue of 2024—next Monday is one of our two weeks off all year—so we want to wish you and yours a very Merry Christmas, Happy Holidays and a healthy and prosperous New Year. We’ll be back at it with a fresh Top Ten issue on January 6.
As for the market, things finished up with a nice rally last Friday, but that doesn’t undo the action of the prior couple of weeks as a whole, which saw many leaders take hits and many major indexes crack their intermediate-term uptrends. To be clear, we remain flexible, and if the buyers pounce on the recent weakness for a few days, we think there will be lots of “resumption” patterns among individual stocks. Still, given the near- and intermediate-term selling we’ve seen, we want to see buyers show up in a meaningful way first before putting a bunch of money back to work. We’ll leave our Market Monitor at a level 5.
This week’s list is once again very growth-y, which we do find encouraging. Our Top Pick showed exceptional power in November and has now rested for three weeks, offering up a solid entry point, though we advise starting small given the environment.
Movers & Shakers December 27: First, a reminder that there will be no Top Ten issue next Monday—it’s one of our two weeks off all year—though we’ll send out a Movers & Shakers update next Friday. Being our last missive of 2024, we want to wish you and yours a very happy, healthy and prosperous New Year.
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As for the market, we’ve seen the Santa Claus rally kick in a bit in recent days—for the week as a whole, most every major index and growth measure is up by 1% to 2% on the week.
Cabot Value Investor
Monthly Issue December 5: The market party is on, but someone forgot to tell healthcare stocks.
They’re the only one of the 11 S&P 500 sectors that is actually down in the month since the presidential election. That has everything to do with these five letters: RFK Jr. But are concerns about Trump’s controversial pick to lead the Health and Human Services Department overblown? It appears Wall Street is starting to think so, as the sector has been in steady recovery after an initial sell-off. Still, as a whole, healthcare stocks have been the weakest performers of any major sector this year. And that spells opportunity for value investors.
In today’s issue, we add a big-name, undervalued healthcare stock to our Buy Low Opportunities portfolio. It’s a company whose name you likely know – and that’s showing signs of more consistent profit growth.
Details inside.
Weekly Update December 26: It was a better year for value stocks, as the Vanguard Value Index Fund (VTV) is up 14.6% year to date with just a few days still to go in 2024. Barring a complete implosion this week, it will be the best year for the VTV since 2021 and the third best in the last decade. That’s good … but the last decade is quite the grim comparison.
Cabot Dividend Investor
Monthly Issue December 11: It’s been a great year in the market with the S&P up 27%. And there is good reason for optimism about 2025.
We are in a bull market that began in October of 2022. Bull markets don’t usually run out of gas after just two years, especially recent ones. The Fed has begun a rate-cutting cycle that is likely to last for the next two years. Plus, the economy is solid and expected to get stronger. Rate cuts in a strong economy are unusual, but the combination should be great for stocks.
One sector may have a better 2025 prognosis than the overall market: Financial stocks have been on a tear since the summer. The Financial Select Sector SPDR Fund (XLF) is up 33% YTD and 22% since early August. Despite the recent spike, many financial stocks are still cheap after a decade and a half of underperformance.
Financial stocks are dependent on yield spreads, economic growth, and relaxed regulations. All those areas are improving or expected to improve as a result of the election.
In this issue, I highlight one of the highest-growth companies in an industry that is on the rise. It is the leading all-digital bank in the country. Unlike many other industry-leading stocks, it is still well below the high because of a recent temporary stumble which has likely only delayed its price spike.
Weekly Update December 18: It looks like the election euphoria has run out of gas. The market has digested the election and is now back to business as usual.
The Dow Jones Industrial Average has lost ground for nine consecutive sessions. Most of the S&P 500 sectors have been down over the past month. Of course, the S&P is still within a whisker of the high. It hasn’t pulled back. But it hasn’t gone up in a while either.
Cabot Early Opportunities
Monthly Issue December 18: We wrap up a fruitful year with a December Issue of Cabot Early Opportunities highlighting five names spanning everything from bottled water to social media to bitcoin mining.
I like the diversity of this Issue, which has something for everyone.
Cabot Income Advisor
Monthly Issue December 17: By most measures, 2025 looks pretty good for stocks.
The Fed has begun a rate-cutting cycle that should last for the next two years. Historically, stocks do well when the Fed is cutting rates and there is no recession. And the economy has been solid. This bull market is just 25 months old and has returned 65%. Bull markets usually don’t just run out of gas after two years. In fact, the average bull market has lasted 50 months and returned 152%.
But stocks are expensive. The S&P currently sells at 22.3 times forward earnings compared to an average of 16 times over the last twenty years. The market returned 26% in 2023 and about 28% this year with two weeks to go. It might be tough for stocks to deliver another consecutive year of 20%-plus returns.
It may be that a lot of the easy upside is behind us. Stocks can still perform well, but they’ll probably have to earn it in 2025.
In this issue, I highlight a stock that is poised for a strong earnings rebound in 2025. It is a stock that bounces a lot between the highs and lows. And it is currently well below the high. It is also one of the best healthcare companies on the market at a time when the population is older than ever before and aging at warp speed.
Weekly Update December 10: The post-election bounce is over. But stocks could still finish the year higher. These are good times. The S&P 500 is up about 30% year to date. This adds to a 26% return for the index in 2023.
Cabot Turnaround Letter
Monthly Issue December 18: Many are surprised to learn that the concept of telehealth wasn’t a direct result of the Covid pandemic in 2020. Indeed, the practice of online consultations between patients and medical personnel has been practiced for over 20 years, and this month’s featured company is arguably the first one to bring it to global prominence.
Weekly Update December 27: In today’s note, we discuss developments and institutional ratings upgrades for some of the stocks in the portfolio, including Fidelity National Information (FIS), Paramount Global (PARA) and Starbucks (SBUX).
The famed “Santa Claus Rally” is underway and, assuming a successful conclusion, portends a bullish early part of the coming New Year.
Cabot Money Club
Monthly Magazine January: Inflation is still a problem for many Americans, and it feels unavoidable when it shows up every day at the dining room table. We may not be able to control the price of goods, but this month we’re fighting back against inflation by spending smarter with nine tips that can help keep inflation from busting your budget.
Stock of the Month December 12: The markets reacted strongly—and bullishly—to the results of the presidential election and also found favor after the Federal Reserve’s quarter-point rate reduction.
As of today, they’ve pulled back a bit, awaiting the latest inflation report.
However, the economy continues rolling along. Unemployment remains steady, and consumer sentiment is positive. And while the housing market continues to be challenged by low inventory and rising prices, on the local level, I’m seeing improvement in both categories.
ASK THE EXPERTS
Prime Question for Chris: Hi Chris: I try to allocate nearly equal dollar amounts of each stock that I purchase.I have already purchased my ‘normal’ amount of Cigna Group (CI) at the time you recommended it.The price has dropped dramatically. I am concerned about the future of this company. At the same time I am tempted to deviate from my equal dollar allocations and purchase additional shares of Cigna.I am reluctant to chase falling prices as they continue to drop. This is generally a poor approach.Should one stick with current paper losses or attempt to reduce my cost-basis by purchasing more at a significantly lower price? Can you offer any advice?
Chris: Very good question. Yes, Cigna is not off to the best start for us. But, it’s early yet, and this level of selling seems overdone. Like you say, I wouldn’t “try to catch a falling knife” – I’d wait for CI to establish a clear bottom, and preferably start going up again, before adding to your position. I think purchasing more at a lower price is not a bad approach. But I think you can wait to do that until the current relentless selloff has passed, and the stock looks like it wants to go up again.
Hope this helps.