Latest Summary
CABOT EVENTS
Cabot Weekly Review (Video)
In this week’s video, Mike Cintolo talks about the overall strong market, albeit with some short-term uncertainties and a couple of minor yellow flags. Because of that (mostly earnings season), Mike’s being selective on the buy side, but he’s holding his winners and reviews many names that could be decent entries on recent dips, as well as a few that could re-emerge on earnings.
Stocks Discussed: SG, RBRK, NTRA, MELI, Z, SHOP, COHR, ANET, ISRG, VST, IOT, FOUR, IBIT
Cabot Street Check (Podcast)
This week on Street Check, Chris and Brad are joined by a rotating cast of Cabot analysts. Jacob Mintz opens the episode talking options and the market setup heading into the election, Clif Droke highlights promising turnaround possibilities and gold, Tyler Laundon weighs in on small-cap stocks, and finally, Michael Brush provides an update on cannabis stocks, investor sentiment, and McDonald’s (MCD).
Cabot Webinar
Next Webinar Coming Soon!
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 October 17: After some choppy action the prior two or three weeks with defensive stocks leading, growth stocks and many major indexes have improved their standing - including the strongest names continuing to zoom higher. Now, near-term, there are some uncertainties, with earnings season and the election coming up, and there are still areas (including the Nasdaq itself) that are still battling with old resistance. Thus, we wouldn’t be shocked if extended names shook out a bit. But overall, we’re still leaning bullish, though are picking our spots; tonight we’re starting one more half-sized stake in a familiar name we think can do very well should the bulls remain in charge.
Bi-weekly Update October 24: WHAT TO DO NOW: The market remains in good shape, though we have seen the indexes and many individual titles exhale a bit of late as many short-term uncertainties (earnings season and the election) and headwinds (rising interest rates) weigh. We’re bullish overall, but are being selective on the buy side—tonight, we’re standing pat, holding our 20%-ish cash position and collection of relatively strong performers.
Cabot Top Ten Trader
Weekly Issue October 21: It remains pretty much the same story out there as we’ve seen for at least three weeks, if not longer. First, when it comes to the top-down evidence, it’s solid, with the intermediate-term trend of most everything pointed up; second, looking at things from a bottoms-up perspective, the evidence is encouraging, as many fresher breakouts have emerged in the past month or so; and third is more of a heads up, as near-term sentiment is very elevated and earnings season for most leading titles is ramping up, so some tricky trading (volatility, especially among extended stocks) is possible. Thus, we’re staying flexible, but given the overall positive vibes, are leaving our Market Monitor at a level 8.
This week’s list actually has many big-cap titles but there’s plenty for everyone. Our Top Pick appears to have finally left behind a multi-year consolidation after its Q3 report. Ideally you can get in on modest weakness if the market dips.
Movers & Shakers October 25: It’s been a bit of a wobbly week, with most major indexes in the red and more than a few leading stocks easing lower after solid runs. Coming into today, the big-cap indexes are off less than 1%, growth measures are generally off 1% to 2% and some broader indexes (small caps, etc.) are off a bit more.
Cabot Value Investor
Monthly Issue October 3: Between the expansion of the war in the Middle East, a U.S. dockworker strike that could slow the supply chain again, and the uncertainty of a too-close-to-call presidential election next month, there are a lot of headwinds out there serving to counterbalance the good vibes created by last month’s Fed rate cut. Add in the fact that we’re in the traditional “spooky season” of October – the month in which the market has bottomed in each of the last four years – and it’s a good time to add some security to your portfolio.
So today we do just that … by adding a well-known home security company to our Buy Low Opportunities Portfolio. It’s been in business for a century and a half but has only been a public company for the past seven years. And with profits accelerating, the stock has become cheap.
Details inside.
Weekly Update October 24: October hasn’t been accompanied by the type of stock selling we’ve witnessed the last two years, when U.S. markets fell sharply in October and reached a second-half-of-the-year bottom both times. Instead, this October has wrought a more subtle disappointment: rising interest rates.
Indeed, despite the Fed’s 50-basis point cut to the federal funds rate in mid-September ringing in a new era of rate slashing, 10-year Treasury yields have risen steadily since the calendar flipped to October, going from 3.80% to 4.24% – their highest level since July. In fact, Treasury yields are up 15% since September 18, the day the Fed cut rates for the first time in four and a half years.
Cabot Dividend Investor
Monthly Issue October 9: There is a colossal housing shortage in this country.
A decade of underbuilding in the housing industry following the financial crisis has left the industry unable to meet the needs of the growing population. It is estimated that the demand for homes exceeds the current national supply by a whopping 4.5 million.
The jilted supply/demand dynamic has caused the median U.S. home price to soar a staggering 40% just since the pandemic. In addition, mortgage rates have soared to the highest level in two decades. The prices and mortgage rates are making housing unaffordable for vast numbers of potential buyers. Sellers are unwilling to trade up and get a higher mortgage rate.
There aren’t enough new homes, and existing homes aren’t coming on the market either. Buyers can’t buy and sellers won’t sell. But there is reason to believe the housing problems will get a lot better in the years ahead.
While the situation is likely to improve, the supply/demand imbalance will likely remain for several years. That’s a problem for the housing market and economy to work through. But it’s good news if you’re a homebuilder. New homes should be in high demand for years to come, and sales should increase with the improving conditions.
In this issue, I highlight the premier luxury home builder in the U.S. The stock has the best track record of all large homebuilders, and the company is in an ideal position to benefit from high demand and increasing buying in the years ahead.
Weekly Update October 23: The market has been generally very good, although it’s wobbling this week so far.
The bull market that started two years ago has returned more than 60% in the S&P 500. The index is up about 23% year to date. The market rally has also broadened since the summer to include many other stocks and sectors besides technology.
Cabot Early Opportunities
Monthly Issue October 16: In the October Issue of Cabot Early Opportunities, we go deeper down the software rabbit hole, jump into a new grocery chain stock I suspect you’ve never heard of, dabble with a hot AI semiconductor stock and consider the potential of an EV stock that’s exploded on news of a big DOE loan.
As always, there should be something for everyone!
Cabot Income Advisor
Monthly Issue October 22: This country has a massive shortage of housing.
It is estimated that the current demand for homes exceeds the national supply by a whopping 4.5 million. The shortfall has caused the median U.S. home price to double since 2011 and soar a staggering 40% just since the pandemic. In many areas, prices have increased a lot more.
High prices combined with the highest mortgage rates in decades have made housing unaffordable. Zillow estimates that only 15.1% of current non-homeowner households can afford a typical mortgage.
But there is reason to believe the housing problems will get a lot better in the years ahead.
Mortgage rates are falling. The average U.S. 30-year fixed mortgage rate has fallen to 6.6% from 7.2% this past May and 7.8% a year ago. And rates are likely to continue to trend lower from multi-decade highs in the years ahead. Prices are coming down too. The average U.S. home price has declined about 7% since the beginning of last year.
While the situation is likely to improve, the supply/demand imbalance will likely remain for several years. That’s a problem for the housing market and economy to work through. But it’s good news for homebuilders. New homes should be in high demand for years to come, and sales should increase with the improving conditions.
In this issue, I highlight one of the best homebuilders on the market. The stock has been a stellar performer as investors realize the opportunity. But it is still reasonably valued and has momentum. It should provide a covered call opportunity soon.
Weekly Update October 15: The bull market is now two years old and shows no signs of stopping.
Since the bear market low in October of 2022, the S&P 500 has risen more than 60%. It has been powered by the artificial intelligence catalyst, a surprisingly resilient economy, and the peaking of interest rates. Overall earnings are projected to be strong, and the market could get a further boost from AI-specific earnings this quarter.
Cabot Turnaround Letter
Monthly Issue September 25: For much of the last two years, the white-hot semiconductor space was the industry group least likely to yield any meaningful turnaround candidates. But that dynamic changed following this summer’s tech sector sell-off, which brought many of the previously high-flying chip stocks back to earth (or at least further away from the firmament).
Weekly Update October 25: In today’s note, we discuss a flurry of key news developments for several of our portfolio positions, including Baxter International (BAX), B2Gold (BTG), Intel (INTC), Polaris (PII), Solventum (SOLV), Viatris (VTRS) and Vodaphone (VOD).
We’re adding two new stocks to the portfolio, providing us with exposure to the white-hot silver mining sector as well as the seasonally strong food services industry.
Cabot Money Club
Monthly Magazine November: Your finances touch almost every aspect of your life in some way or another, and that can make tackling them feel overwhelming. This month, we’ll lay out a monthly “to-do” list that can help you save money on taxes, set aside more money, and plan for the future. Plus, the monthly breakdown will help make sure you won’t miss financial deadlines that you never saw coming.
Stock of the Month October 10: The markets have continued to flirt with new highs—pulling back and then moving forward—for the past month.
The Fed’s 50-basis-point rate cut inspired investors, home buyers, and those folks wanting to refinance their homes. The Mortgage Bankers Association reported that refinancing applications rose 20% right after the rate cut!
ASK THE EXPERTS
Prime Question for Tyler: Tyler, I have several of your picks including KVYO, VLTO, MAMA, WLDN which all have their noses above water but not by much. LOAR, ULS are slightly under and seem a bit stuck in the mud. My concern is that tax-loss season, which seems to come earlier every year, is getting close at hand. I expect that you’ll be inclined to stay the course. (As for) myself, I’m not so sure. Some of these stocks I’m thinking could be prime candidates for adios’ing and taking the loss by investors. I’d like to get your thoughts, what I’m missing, and other options that perhaps I’m overlooking.
Tyler: As a non-accountant only looking at this through my own lens, I think it’s tough to want to say goodbye to most of those stocks so soon after buying them. At least given the current trend in their charts. KVYO, VLTO, WLDN and ULS are all looking really strong to me. MAMA and LOAR, not quite as much, but again the trend with both is generally up and to the right, albeit with some squiggles. All of those stocks are in the black, some up 10% or 13%. And it’s only been a few months. When I think of tax-loss harvesting concerns, I tend to think more about stocks like RIVN, which are down quite a bit for a lot of investors and therefore more susceptible to tax-loss harvesting. These stocks are trading near highs and don’t have losses for most investors, so they’re not great candidates, IMO. That said, there might be other reasons to sell, for portfolio management reasons, profit taking or just concern about the election, or whatever. That I get. But not the tax-loss thing. I hope that makes sense.