Latest Summary
CABOT EVENTS
Cabot Weekly Review (Video)
In this week’s video, Tyler Laundon explains why the market has sold off following the Fed’s meeting on Wednesday, highlighting weakening jobs numbers as the primary culprit. Is the Fed behind the curve? Tyler gives some context. He then moves on to talking about the big earnings theme of the week, capital investments for AI from big tech. Then Tyler wraps things up by covering three small and mid-cap stocks that have exposure to the rapidly growing data center market, but that few investors know about.
Stocks Discussed: MOD, LMB, WLDN
Cabot Street Check (Podcast)
This week on Street Check, Chris is out on vacation so Brad flies solo through some market news as the VIX hits multi-year highs, jobs disappointment contributes to an ongoing market correction and earnings season heats up. Then he’s joined by special guest Producer Madison to talk all about how to save for college for your kids (or grandkids). They talk about advantages and disadvantages of UGMA/UTMA accounts and 529 accounts, how college expenses are actually moderating (for some families) and some of the practical considerations that come into play when you’re setting aside money for kids.
Cabot Webinar
3 Winning Trading Strategies for OUTSIZED Profits
Join options trading expert Jacob Mintz, Chief Analyst of Cabot Options Trader, Cabot Options Trader Pro and Cabot Profit Booster, for this exclusive live event!
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 Plus 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 July 25: The top-down evidence remains mostly positive out there, but growth stocks have been hit very hard--taking things on a stock-by-stock basis has us with more than 50% in cash and, given the breakdowns out there, we’re holding that cash tonight. That said, we’re remaining flexible, too, as the major indexes aren’t in bad shape, the broad market’s resurgence has held so far and we’re heading into the meat of earnings season; given it all, we still think some fresh breakouts could occur if things go well. Thus, for now, we’re cautious, but we’re keeping our eyes open for opportunities.
Bi-weekly Update August 1: WHAT TO DO NOW: Growth stocks remain very weak and, today, we saw the broad market get whacked as well. Overall, it remains a split environment, but our Growth Tides and Aggression Index are negative, and growth as a whole is under pressure. The Model Portfolio is more than half in cash, and while we’re not in our storm cellar, we’re standing pat tonight, keeping stops on our positions and taking it day to day. We have no changes tonight.
Cabot Top Ten Trader
Weekly Issue July 29: The top-down evidence remains decent, with the broad market holding its gains and testing new recovery highs. The issue, though, is the formerly strong tech stocks that included a ton of the market’s liquid leadership—frankly, many of these names have decisively cracked intermediate-term support and look vulnerable to further selling. As we’ve written a few times now, there are still a decent number of setups out there, but for now, we think it’s better to play things a bit cautiously: We’re leaving our Market Monitor at a level 6.
This week’s list has some early earnings winners and includes some ideas outside of traditional growth. Our Top Pick is another real estate play that appears to be lifting out of a longer-term consolidation.
Movers & Shakers August 2: It’s been another mostly sour week, with continued selling in the growth area of the market early on, followed by a big show of support on Wednesday, only for that move to go up in smoke on Thursday. On the week so far, the big-cap indexes are down less than 1%, though broader indexes are down 1% to 2% and growth measures are down much more—and this morning of course looks likely to bring more losses.
Cabot Value Investor
Monthly Issue August 1: Two years after the yield curve inverted, there’s still no U.S. recession in sight. As a result, financials – beaten to a pulp during the double whammy of the 2022 bear market and the March 2023 bank collapse – have become the fastest-growing non-tech sector of the market. It’s also one of the most undervalued. So in this month’s issue, we add a very recognizable big bank that does a little bit of everything – and seems to be everywhere. It’s growing at a healthy clip and yet is cheaper than even the average financial at the moment.
Details inside.
Weekly Update July 25: Value stocks are starting to gain traction.
No, they’re still not outperforming growth stocks. But the 10.5% year-to-date gain in the Vanguard Value Index Fund (VTV) puts it on track for its best year since 2021, and potentially its third-best year in the last decade. That’s progress. And much of the progress has come this month, as the previously thin bull market rally has spread to the myriad unloved non-tech sectors. Value stocks are up more than 3% this month, outperforming growth stocks (as measured by the QQQ ETF), which are flat in July.
Cabot Stock of the Week
Weekly Issue July 29: A Midsummer Night’s Scream? That’s what the second half of July has felt like, with stocks (especially tech stocks) plunging and volatility exploding. Now comes another week of Fed speak and massive earnings reports, so don’t expect the choppy waters to settle just yet. But it’s important to remember that it’s still a bull market, and for a variety of reasons, I think the selling will be short-lived. So, today we’re taking another big swing by adding a recent IPO recommended by Mike Cintolo. If you’ve gone to Europe in the last two to three years, it’s possible you’re quite familiar with this company.
Details inside.
Cabot Explorer
Bi-weekly Issue August 1: Explorer stocks gained ground this week as market sentiment improved along with the odds of a Fed rate cut this fall.
I’ve been encouraging you to lighten up on some of the Magnificent Seven stocks over the last month or so. In just the last two weeks, these stocks have lost over $1.6 trillion in market value as market enthusiasm has waned and insiders have sold some stock.
What’s behind this trend?
Here are three possible reasons why big tech is facing a tough market.
Bi-weekly Update July 25: This was a difficult week for stocks. Yesterday the S&P 500 sank 2.3% while the tech-heavy Nasdaq declined 3.6%. Collectively, the so-called “Magnificent Seven” lost $768 billion in market value.
America does face some uncertainty but overall has a strong economy but, as I have highlighted, the stock market has become too concentrated at the top and debt is building up too rapidly. China, on the other hand, faces economic issues such as weak consumption, a property slump, 20% youth unemployment, and a struggling stock market in the red so far in 2023. Given the size and importance of China’s economy, this impacts all markets.
Cabot Small-Cap Confidential
Monthly Issue August 1: Infrastructure has been a hot topic for the last couple of years given passage of a bipartisan bill to finally spruce up the U.S. and try and address climate change.
This month we’re jumping into a pure-play infrastructure company that owns railroads and deep-water ports supporting crude oil and clean fuel shipments, as well as a modern power plant that’s getting tons of calls from AI data centers.
One thing – the company reports quarterly results after the bell today!
Weekly Update July 25:Small caps have been up and down over the last week with the net result being that there was almost no change since last Thursday (through 10:25 AM ET today).
That doesn’t sound too meaningful until you consider that the S&P 500 is down 2.6% over the same period and that small caps have outperformed in all sectors except for consumer staples, energy and utilities.
Cabot Dividend Investor
Monthly Issue July 10: Clean energy is the future. But not for a while.
This country and the world still rely heavily on fossil fuels for more than 80% of energy needs, and these conventional energy sources will likely remain dominant for decades. Meanwhile, many stocks of companies that benefit have strong earnings and great value.
Fossil fuel proportions are expected to move toward natural gas in the years ahead. A recent study estimates that global natural gas demand will soar 34% between 2022 and 2050 with the strongest growth in the natural gas realm to be liquid natural gas (LNG), with demand expected to more than double in the same time frame.
In this issue, I highlight one of the best natural gas companies on the market. It is a newly formed company in the business of exporting abundant and cheap American natural gas overseas. It’s big business. In a short time, this company has become one of the world’s largest natural gas exporters.
Weekly Update July 31: The market is going from wobbly to ominous. As of Tuesday’s close, the S&P is negative for the month of July after having been up 3.5% in the first few weeks of the month.
It’s technology. The weakness in the sector that began in the middle of July is continuing. The worry started with the report of AI chip export restrictions to China and has grown into fears of sector overvaluation and slowing growth. But it’s the heart of earnings season. And earnings will confirm or deny those fears.
Cabot Early Opportunities
Monthly Issue July 17: In the July Issue of Cabot Early Opportunities, we continue to lean into the strong market and focus our attention on the small end of the market cap curve.
We have small and mid-cap players in the software, semiconductor, green energy, industrial tech and AdTech spheres, each of which has compelling reasons propelling shares higher.
Cabot Profit Booster
Weekly Issue July 30: Going into last week we knew it had the potential to be a wild five-day stretch, and the market didn’t disappoint as the indexes swung violently, and sector rotation was intense. By week’s end the S&P 500 had fallen 1.55%, the Dow had rallied 0.5%, and the Nasdaq had lost 3.8%.
Cabot Income Advisor
Monthly Issue July 23: The S&P spent most of the first half of July setting new highs. But that changed last week. The technology sector sold off on news of new AI chip export restrictions to China. The S&P fell about 2% for the week, giving up most of the gains for July. It may be a blip. It probably is. But the market is high, and stocks showed vulnerability to bad headlines.
A flatter or down market going forward makes income more valuable. The cash register continues to ring regardless of short-term market gyrations. At the same time, many income stocks are still cheap, and interest rates are likely to trend lower from here.
Some of the very best income stocks are in the energy sector. After recent price shocks and other problems in the energy sector, investors are coming around to realizing energy is a strong business that isn’t going anywhere for a long time.
In this issue, I highlight one of the best natural gas companies on the market. It is a newly formed company in the business of exporting abundant and cheap American natural gas overseas. It’s big business. In a short time, this company has become one of the world’s biggest natural gas exporters.
Weekly Update July 30: The market seems to have regained its footing since the selloff last week. It’s still flat for the month of July, but it isn’t down, which is encouraging.
Technology hit a snag with bad news from China. We’ll see if earnings can overcome that weakness as the AI catalyst comes front and center again. But the bigger story in July was the broadening rally. An improving interest rate prognosis prompted a strong rally in the previously beleaguered interest rate-sensitive stocks in REITs and utilities.
Cabot Turnaround Letter
Monthly Issue July 31: As I mentioned in my first installment of the Cabot Turnaround Letter, the most valuable lesson I have learned in my professional career as a price forecaster is that the rate of change – of just about any metric – tells us everything we need to know about the immediate future. When the rate of change accelerates, it tends to continue accelerating. When it decelerates, it tends to continue decelerating. And the resulting push and pull is a large part of what comprises the business cycle.
Weekly Update August 2: In today’s note, we discuss the recent earnings reports from Agnico-Eagle (AEM) and Janus Henderson Group (JHG). Our note also includes the monthly Catalyst Report and a summary of the August edition of the Cabot Turnaround Letter, which was published on Wednesday.
Cabot Cannabis Investor
Monthly Issue July 31: Cannabis is a highly politicized sector because it is extensively regulated.
The political news has been very good for cannabis. But cannabis investors have been slow to recognize this.
A late-July Fox News poll showed that Vice President Kamila Harris has caught up to and surpassed Donald Trump in five key swing states.
Cannabis stocks should have advanced on the news. Not only is Harris a better cannabis advocate than President Joe Biden, she’d obviously be more favorable to the sector than Trump.
Monthly Update July 10: Old-school value managers like Benjamin Graham and Warren Buffett used to have a funny way of describing their investing style.
They said value stocks were like cigar butts on the sidewalk that had a few puffs left in them.
I’d like to offer an updated version of this metaphor. I think cannabis stocks have a few more puffs left in them between now and the end of the year.
Cannabis names are thoroughly unloved and abandoned once again.
Cabot Money Club
Monthly Magazine August: Exchange-traded funds (ETFs) are a popular low-cost alternative to mutual funds that can help investors achieve their diversification goals, gain exposure to asset classes and sector trends they’re interested in, and save money while they do it. This month, we’ll dive into the pros and cons of investing in ETFs, how to identify the funds that match your investing style, and how to evaluate their risks and potential. In short, we’ll explore everything you need to know to make more money investing in ETFs.
Stock of the Month July 11: Sideways appears to be the rule of the markets these days—at least until the election is over and the Federal Reserve begins lowering rates. No rate cut this time, and now Fed watchers are saying we’ll be lucky to see just a one-quarter-point reduction this year.
Inflation—at 3.3%—is on the right track but has still not reached the Federal Reserve’s target rate of 2%, so the Fed is not anxious to begin reducing interest rates.
Ask the Experts
Prime Question for Tyler: Thoughts on why market reversed today?
Tyler: Growth concerns and geopolitical risk. On growth, another weak ISM manufacturing reading and uptick in jobless claims. More on jobs tomorrow morning w/July employment report report. Some talk of soft consumer on earnings calls.
On Fed. Some concern they are late. Bank of England cut today. Fed didn’t yesterday. Are they behind the curve? Some debate.
On geopolitical, not understood what the fallout from Israel’s assassinations will be yet.
So some sense that we’re moving into a bad news is bad news phase, especially if Fed is behind the curve. Market now expecting three cuts (i.e., 75 bps total) this year, and maybe a 50bps cut in Sept, which would imply Fed should have cut yesterday.
Tomorrow a good test.