Latest Summary
CABOT EVENTS
Cabot Weekly Review (Video)
In this week’s video, Mike Cintolo sees more good than bad in the market and is certainly encouraged by the market’s resilience in the face of some bad headlines during the past two weeks. That said, he can’t ignore the sideways trend in every index and most stocks out there--many are near new high ground, but continue to see selling near their prior peaks. Thus, he continues to hold some cash while being selective on the buy side, looking for earnings season to reveal more leaders.
Stocks Discussed: NFLX, C, GS, DOCS, EXPE, TEAM, GTLB, TTWO, HLT, RCL, TEM, IBIT
Cabot Street Check (Podcast)
This week on Street Check, Chris and Brad welcome a round table of Cabot analysts to offer their perspectives on the market. Jacob Mintz shares his thoughts on what may be a rolling bull market, Mike Cintolo talks growth stocks, market resilience and Palantir (PLTR), Tyler Laundon discusses small-cap stocks, macro conditions and the impact of tariffs, and Clif Droke sheds some light on the strength in gold, bank lending standards and Deere & Co. (DE). For the offer mentioned on this week’s episode, visit www.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 February 6: The market has been resilient in the face of some bad headline news during the past two weeks, but just about every major index and most stocks and sectors are essentially neutral--the evidence is as mixed as it can be. That’s not a bearish thing, per se, and we’re actually making one small new buy today in a peppy growth stock. But until we see more decisive action among growth titles (possibly as earnings season continues to ramp up), we recommend holding a good amount of cash (45% after our move tonight).
Bi-weekly Update January 30: WHAT TO DO NOW: It’s been a typically volatile January, with this week’s huge convulsions among AI stocks the latest crosscurrent to deal with. Overall, the top-down evidence is mostly neutral at this point, and leading stocks are in a similar boat as last week—improving, but without much decisive buying so far. To be fair, we’d like to put some money to work and could do so soon (next day or two) if we get the right setup, but tonight we’ll stand pat and look for signs big investors are getting involved. In the Model Portfolio, we cut our loss in Marvell (MRVL) on a special bulletin Monday, though most of our stocks are acting well and tonight we’re placing On Holding (ONON) back on Buy as it looks to be resuming its overall uptrend. Our cash position is right around 50%.
Cabot Top Ten Trader
Weekly Issue February 3: The news today is all about the tariffs, but to this point, most things are simply hacking around in a range, so we’re fine holding resilient titles and ditching those that crack. Our biggest thought beyond the headline news or daily reactions is that, unless you’re hopping in and out of things every couple of days, there’s no real money being made of late, with selling on strength seen and headline news causing big moves up and down most days. To be clear, that’s more descriptive than predictive, but until something changes, we favor keeping new positions on the small side, holding some cash and practicing patience waiting for this ping-pong action to stop. We’re leaving our Market Monitor at a level 6 today.
We will say, however, that this week’s list is encouraging—it’s very growth heavy, and even after today’s pothole, many names are in position to get going if the market allows it. Our Top Pick is in the midst of a solid-looking nine-week rest after a huge comeback in the second half of last year.
Movers & Shakers February 7: It’s hard not to be at least encouraged by the market’s resilience of the past couple of weeks—last Monday, one of the big leading sectors (AI infrastructure) was clobbered on the DeepSeek-related uncertainties, and then this Monday, the market took a hit on tariff fears (including some that actually went into effect). Certainly, if the market wanted to sell off a few percent, it could have, but instead things held together—and bounced back.
Cabot Value Investor
Monthly Issue February 6: Less than two years removed from the dual implosions of Silicon Valley Bank and Signature Bank, the U.S. banking industry is thriving again, boosted by a resilient economy, declining inflation, and lower borrowing costs. No sector has reported better earnings growth in the fourth quarter than financials, with banks leading the way. And yet, bank stocks remain cheap. So today, we add a big name in the banking industry to our Growth/Income portfolio – one that’s growing fast, and cheaper than most of its peers. I think it could reach new all-time highs within a matter of months.
Details inside.
Weekly Update January 30: There are a lot of things the stock market can handle.
In 2024 alone, stocks advanced more than 20% despite two major overseas wars raging, high interest rates, stubborn inflation, escalating unemployment, a toss-up presidential election in which one of the candidates changed midsummer, tepid consumer confidence, etc. That’s because, aside from Kamala Harris replacing Joe Biden as the Democratic candidate less than four months before the election, most of these potential headwinds were known. What Wall Street fears most is the unknown. And that’s why DeepSeek rattled markets on Monday.
Cabot Dividend Investor
Monthly Issue January 8: While the outlook for 2025 is positive, things are changing.
Sure, this bull market has driven the S&P 500 nearly 70% higher. But most of the gains are from technology stocks. Until this past summer, nearly all the bull market returns were driven by technology. The rest of the market had done very little.
But the rest of the market is waking up. While artificial intelligence (AI) will likely continue to be a powerful growth catalyst, its dominance over everything else might not be as pronounced in 2025 as it has been in the past. Earnings for other stocks are catching up.
The earning growth difference between the “Magnificent 7” companies and the other 493 S&P 500 companies is expected to plummet from 27.8% last year to 8.3% this year. The rest of the market is cheap, has momentum, and will likely get hot this year as stocks experience an earnings growth spike that could last for years.
In this issue, I highlight a healthcare stock that looks highly promising in 2025. It is poised in front of the aging population megatrend, which makes a successful pick so much easier, and it will likely experience a sizable earning spike in the years ahead. It is an existing portfolio stock of which half the shares were sold last year. It’s a great time to buy back the other half.
Weekly Update February 5: The market is continuing its bumpy ride higher. Despite a barrage of concerns, 10 of the 11 S&P 500 stocks sectors are higher year to date.
Cabot Early Opportunities
Monthly Issue January 15: Our first Issue of 2025 highlights a variety of solid growth names that have been acting well despite the recent dip in the market. As always, this Issue should have something for everyone.
Cabot Income Advisor
Monthly Issue January 28: January was shaping up to be another stellar month for stocks. The S&P 500 closed last week 3.73% higher for the month.
But stocks came crashing down on Monday when a Chinese start-up claimed that its highly popular AI assistant performs equally as well as leading models at much cheaper prices and using far less data. It calls into question the anticipated demand growth for AI.
But the selloff is probably an overreaction. This is the problem with high-flying stocks. Any bad news gets dramatically amplified because euphoria is so easy to disappoint. The AI catalyst is still very real. But it may have gotten ahead of itself. A day like Monday was bound to happen. It also creates opportunity.
In this issue, I highlight one of the best technology stocks on the market. It was riding high for good reasons, rapidly growing profits. Monday’s overreaction prompted the worst selloff of the stock in years. There is likely to be a bounce back and the stock can generate very high-priced calls.
Weekly Update February 4: It’s one thing after another. But stocks keep inching higher.
January featured the interest rate scare, as the ten-year Treasury hit the highest level since 2023, and the DeepSeek news, which called AI spending into question and sent related stocks reeling. Yet the S&P 500 finished the month up 2.7% with 10 of the 11 sectors higher for January. This week features more potential market-moving issues.
Cabot Turnaround Letter
Monthly Issue January 29: Lost in the frenzy surrounding all things AI are companies that fall under the “boring but important” category. This includes producers of everyday things we often take for granted but which are nonetheless crucial for the smooth functioning of countless segments of the economy. To be fair, these otherwise “boring” industries quite often provide investors with outsized opportunities for profit due to their under-the-radar nature.
Weekly Update February 7: In today’s note, we discuss pertinent developments for some of the stocks in the portfolio, including Alcoa (AA), Janus Henderson Group (JHG), Paramount Global (PARA), Starbucks (SBUX) and Teladoc Health (TDOC).
Cabot Money Club
Monthly Magazine February: The use of digital wallets is expanding rapidly across the globe but the U.S. is lagging the rest of the world in adoption. This month, let’s explore everything you need to know about digital wallets—from what they do and how they work to which options are the best for consumers and how they keep your money safe—before they complete their takeover of the payments world.
Stock of the Month January 10: Welcome to our 2025 TOP PICKS issue! Our Cabot analysts have kindly shared their top stock ideas for this year. And you’ll find that they include a variety of companies that should be attractive to investors of all styles—growth, value, dividend payers, and companies on the cusp of turning around—as well as small, mid, and large-cap stocks. I hope you’ll find one or more to your liking!
But first, let’s take a look at the economy and the markets and talk about what’s in store for this year.
ASK THE EXPERTS
Prime Question for Jacob: Hi Jacob. First, I want to say thank you for all of the education and recommendations you give on options being part of Cabot’s team. I just joined late last year and have been impressed. I’m still relatively new to options trading so it is nice to follow along and learn from someone with so much confidence.
I wanted to ask a simple question: Some of your daily covered call ideas require a significant outlay of capital (at least for me at this point) to purchase 100 shares of the corresponding stock. Is there any way to execute these trades without that significant an investment? Would something like a bull call spread work in that situation?
Jacob: Thanks for the kind words and I’m glad you are enjoying the service.
In regards to your question, yes, there is a way to execute the covered call ideas (and they are just ideas, not trades we are tracking) via a strategy called a “poor man’s covered call.
“Essentially, you would buy a deep in-the-money call, which would act almost exactly like a stock purchase, but it would cost a fraction of the price of buying the stock, and then sell the at-the-money call.
So based on this mornings idea, here was the trade I noted, and then I will show you how to execute a poor man’s covered call ...
Buy Franklin Resources (BEN) Stock at 22.5, Sell March 22.5 Calls for $0.75
Static Return: 3.44%
Breakeven: 21.75
Covered Call Return (if assigned): 3.44%
Instead of buying the stock at 22.5 and paying $2,250 to buy 100 shares, you could ...
Buy the BEN March 15 calls for $7.50, and then sell the March 22.5 call for $0.75.
So instead of paying $2,250 for the stock, you would pay $750 for the call, which will act exactly like the stock.
Let me know if you have any further questions, or if you want to run a trade idea by me to get your “feet wet.”