Latest Summary
CABOT EVENTS
Cabot Weekly Review (Video)
In this week’s video, Tyler Laundon covers the market’s wild swings and digs deeper into the potential reasons for Wednesday’s selloff. He highlights small cap stocks as an area of continued outperformance and explains some of the factors behind the strength, as well as what could derail small caps. Tyler then discussed a recent development in the advertising technology space resulting from some strategic decisions at Google and he highlights three small cap AdTech companies poised to benefit.
Stocks Discussed: TTD, APP, PUBM, CRTO, ZETA
Cabot Street Check (Podcast)
This week on Street Check, Chris and Brad discuss Tesla’s (TSLA) latest earnings report and rapid correction, if the rise in volatility and the sell-off in tech is just a rerun of April’s dip, what the massive amount of cash on the sidelines could mean for the market going forward, and whether China’s continuing struggles should have international investors looking elsewhere. Then, they welcome on Nancy Zambell, of Cabot Money Club, to talk all things real estate, how she’s approaching equity investing, and her best practices for picking stocks around earnings.
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 July 17: WHAT TO DO NOW: Today is a horrid day for most growth and AI-related stocks, continuing the rotation that began last week. All in all, there remain lots of crosscurrents, with our market timing indicators now positive, but individual growth stocks remain very hit or miss, all while earnings season is starting to rev up. Thus, we continue to favor holding a chunk of cash on the sideline while taking things on a stock-by-stock basis. In the Model Portfolio, we did some buying earlier this week, adding half-sized stakes in the ProShares Russell 2000 Fund (UWM) and Robinhood (HOOD), though tonight we’re going to sell our remaining small position in Uber (UBER) while placing Pure Storage (PSTG) on Hold as it takes on water with most peers. Our cash position is around 36%, which we’ll hold onto tonight as we watch to see how the rotation progresses from here.
Cabot Top Ten Trader
Weekly Issue July 22: The past few sessions have brought an avalanche of news and rumors involving inflation, rumors of China/Taiwan tensions, a worldwide tech shutdown and, this weekend, a shakeup in the 2024 election, all of which have caused some reverberations. At this point, the top-down measures look fine, but there’s no doubt that leading stocks (especially growth stocks) have gotten very sloppy, with a pickup in breakdowns and distribution. All in all, we’ll move our Market Monitor to a level 6 and stay flexible: A strong rebound and some positive earnings gaps could still launch many new leaders, but we need to see the buyers step up in individual names to get more aggressive.
Another piece of good news is that it’s still not hard to find strong stocks with good stories, as this week’s list has names from a variety of areas. Our Top Pick is a big-cap name that reacted well to earnings last week and looks poised to help lead a fresh upturn in its sector.
Movers & Shakers July 26: The selling that hit the big-cap indexes last week continued this week—the Nasdaq and growth-oriented measures (like the IBD 50 Index) have decisively moved below their 50-day lines, while the S&P 500 is testing that key trend line. Meanwhile, the broad market, while volatile, mostly held up (small caps are up on the week).
Cabot Value Investor
Monthly Issue June 6: Renewable energy stocks have never lived up to their considerable promise, having peaked more than 16 years ago. And yet, there’s rarely been a bigger gap between the stocks’ value and the industry’s growth in the wake of the Inflation Reduction Act. Renewable energy projects – solar in particular – have taken off since President Biden signed that bit of eco-friendly legislation, in August 2022. Most solar companies are reporting record revenues these days. But the stocks haven’t followed suit, trading at 2018 levels.
That seems like a pretty extreme divergence between the industry and its companies’ share prices. So in this month’s issue of Cabot Value Investor, we add a solar company that’s capitalizing on the global investment in alternative energy, but is still woefully undervalued, trading at a mere 0.18x record sales.
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 23: Dog days of summer? Ha!
Not in the midst of a presidential election with enough drama for an entire season of Game of Thrones, rising U.S.-China-Taiwan tensions, a software failure slowing global commerce to a halt (briefly), two major wars still ongoing, and the Olympics just four days away. It’s enough to cause investors to make rash decisions. So let’s make some sane ones instead by selling two obvious underperforming fallen tech stars and adding a low-drama dividend payer that has a long history of outperforming the market.
It’s all part of today’s busy mid-summer issue. Let’s get started.
Cabot Explorer
Bi-weekly Issue July 18: Markets and especially the tech-heavy Nasdaq index led by semiconductor stocks sold off yesterday. Reasons include perceived rising protectionist and isolationist pressures in both Europe and America. Meanwhile, small-cap stocks continue to rally, and some overseas markets were also up.
As one would expect, our tech stocks pulled back somewhat while all three of our dominator stocks gained ground this week.
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 July 3: In 2022 new management took the helm of a small, deli-focused food company that was underperforming its potential. Fast forward a couple of years and management is executing an ambitious growth plan, while consumers are flocking to the deli section like never before.
This month’s Issue tells the story of a micro-cap company that’s hitting its stride a century after the woman it’s named after completed the journey from Italy to Brooklyn, NY.
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 24: The market took a jab to the face last week, but it still looks good. It’s still a strong market. But one that is showing some vulnerability.
After a great first half and a strong July, the market pulled back 2% last week, reversing most of the July gains. The culprit was a Biden administration announcement of new AI chip export restrictions to China. That news also combined with a perceived likelihood of a Trump presidency and the possibility of further trade frictions with China. The technology sector, and semiconductor stocks in particular, took it on the chin.
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 23: Before we get into today’s covered call idea, coming out of July expiration we have a couple positions that we need to address. Let’s dive in …
Pinterest (PINS), Sweetgreen (SG), Howmet Aerospace (HWM) and Hims & Hers (HIMS) all closed below their strike prices on Friday, which means the calls we sold expired worthless, leaving us with our stock positions today. Let’s exit those stock positions ahead of earnings season.
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 16: Wow. Just wow. Not only has this market rally continued to forge on, it’s broadened out too. After a 14.5% gain in the first half of this year, the S&P is putting together an impressive July with a better than 3% gain so far.
The latest leg of this rally has been sparked by a better-than-expected June CPI report. Interest rate optimism abounds. Consensus now expects a Fed rate cut before the end of the year and an increased expectation that overall interest rates have peaked and are likely to trend lower for the rest of the year.
Cabot Turnaround Letter
Monthly Issue June 26: In this month’s issue of Cabot Turnaround Letter, I recommend a company I’ve been fond of all the way back to 7th grade. It’s a household name, but one that’s perhaps been forgotten on Wall Street in recent years. But now, it looks primed for a turnaround.
Weekly Update July 26: Mattel (MAT) reported revenue of $1.08 billion, down 0.7% from last year, and missing the consensus estimate of $1.09 billion by 1%. Earnings per share, however, exceeded the consensus estimate of $0.16 by 18.75%, coming in at $0.19. Key metrics showed mixed performance: Barbie sales fell 5.9% to $266.10 million, Fisher-Price dropped 17.5% to $135.90 million, while Hot Wheels rose 3.9% to $327.40 million, and other brands reached $471.90 million, beating estimates.
Cabot Cannabis Investor
Monthly Issue June 26: Cannabis stocks are unloved and in the doldrums.
Typically, in the stock market, that’s the best time to buy.
Neglected stocks offer the best value, as long as there are potential catalysts on the horizon.
I believe that is the case with cannabis. You’ll just have to be patient. I think it is worth being patient for the possibility of 30%-50% gains when a catalyst strikes. There is no guarantee this will happen, but as I discuss below, the odds are good.
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 Mike: Why not buy SPY, DIA, or QQQ for a short-term play while the major indexes continue to increase, then sell when there is a good growth stock to buy?
Good call on UWM!
Still thinking we should have bought more ONON at 36, but you’re the pro and I’m a retail trader.
Thanks for all your advice. For those of us working, you make it very easy to buy and sell during a work day.
Mike: Thanks for writing, and the kind comments.
Well, we could, and at times we’ve had leveraged long funds of major indexes (SSO, etc.). I have nothing against them, but I guess my bailiwick is more growth and that’s why people are subscribing. That’s also why cash gets high since the options are generally growth names or cash. Don’t get me wrong, I can go into some oil or homebuilding names if I want, but if a bunch of the portfolio was in DIA, I think many would wonder why they’re subscribing.
Averaging down: The reason we avoid it is simply we want to lose small and win big (or bigger), and buying more of stuff you have losses in eventually will result in that weak stock imploding, leaving you with a big loss. I hear you though, it’s something that can work 50% or 60% of the time but in the end can still cost you money. But to each their own. We have a full position in ONON so I am happy it’s bounced.