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CABOT EVENTS
Cabot Weekly Review (Video)
In this week’s video, Mike Cintolo remains overall bullish but isn’t flooring the accelerator, as the Nasdaq (and most leading growth stocks) are doing more chopping than trending of late. That’s not a red flag, but as Mike says, the green light has gotten a bit dimmer, so he’s focused on fresher names, holding his winners, and remaining patient all while keeping his eyes open for new leadership-- including one sector he mentions that’s just starting to get moving.
Stocks Discussed: EXP, AZEK, FRPT, OKTA, DKNG, KKR, APO, IBKR, NXT, UBER, PLTR, PLAY, AXON, XOP, OIH, FANG, SCCO, STLD
Cabot Street Check (Podcast)
This week on Street Check, Chris and Brad break some actual news about changes coming to real estate commissions after a National Association of Realtors proposed settlement before discussing rotation and resistance in the bull market, the outperformance of hybrid automakers (and underperformance of EV stocks) and whether Boeing’s (BA) safety issues should give airline investors pause. Then, they talk strategies for doing some “spring cleaning” in your portfolio, taking profits on winners, paring back losers and how the rules of thumb vary for value investors, momentum investors, and option traders.
Cabot Webinar
February 29, 2024 Webinar: 3 Ways to Profit from Declining Interest Rates
Quarterly Cabot Analyst Meeting
The recording of the Cabot Prime Members Meeting with the Analysts from October 18, 2023 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 March 7: The market remains in a solid uptrend, though there’s no question some sellers are beginning to step up, with more volatility in the Nasdaq seen in the past month and, outside of chip stocks, some churning in the leading stocks. That’s not bearish, per se, as we’re still riding our winners, but for new buying we’re being more selective and looking for fresher leaders that have recently emerged with some power. In the Model Portfolio, we sold one stock in the past two weeks while starting a half-sized stake in one of those fresher leaders, and tonight, we’re averaging up in that name and starting another new position, too.
Bi-weekly Update March 14: WHAT TO DO NOW: Remain bullish, but keep some dry powder on the sideline. Most of the evidence remains positive, but the choppy, churning action among some leading stocks (as well as the Nasdaq itself) is still in place. To be fair, many fresher names are acting well, but we’re content to hold some cash and our strong performers and see how things play out. After putting some money to work last week, we’ll stand pat tonight with a cash position of around 27%.
Cabot Top Ten Trader
Weekly Issue March 11: Starting a month ago, we began to see some leaders chop around, then we saw more short-term froth appear followed by Nvidia’s monstrous reversal last Friday. We’re not making any grand declarations here, but overall, most of the “extended” leaders are being tested, with more than a few wobbling and zeroing in on intermediate-term support and a few already cracking. Now, with that said, most of the other evidence remains fine, whether it’s for the overall market or for “fresher” leadership names, which continue to act well. We’re leaving our Market Monitor at a level 7, but how things play out over the next few sessions will be key.
This week’s list mostly lives outside the tech arena, with many names that have recently taken off and some that are pulling into areas of support. Our Top Pick is blasted off in late January, enjoyed a big run and is now shaking out normally.
Movers & Shakers March 15: It’s been another choppy week with not much net movement in the indexes. As of this morning, the S&P 500, Nasdaq and NYSE Composite are all flat on the week—though in the bond market, there was a big move, with five- and 10-year Treasury yields up 0.2% to 0.25%.
Cabot Value Investor
Monthly Issue March 5: Thank you for subscribing to the Cabot Value Investor. We hope you enjoy reading the March 2024 issue.
We discuss the similarities between poker and value investing. This past month we moved two stocks from Buy to Sell – Allison Transmission (ALSN) as it reached our price target, and Sensata Technologies (ST) as its management continues to take a path that is not shareholder friendly.
Please feel free to send me your questions and comments. This newsletter is written for you and the best way to get more out of the letter is to let me know what you are looking for.
Weekly Update March 12: With the completion of the Super Tuesday primaries, the final grid for the 2024 U.S. presidential election appears to be set. While it is always possible that some surprise will lead to a different lineup on one or both cards, our country is now on track for a rematch of Biden v. Trump. The election date of Tuesday, November 5, is less than eight months away.
Cabot Stock of the Week
Weekly Issue March 11: Stocks finally had a down week, though the damage was modest. Is it the start of a longer retreat, or a rare speed bump in a relentless bull market? This week could tell us a lot, especially with more inflation data set to print. To better fortify our portfolio against any potential turbulence, today we add an industrial stock that’s a strong value play that is a new addition from Bruce Kaser to his Cabot Value Investor portfolio.
Cabot Explorer
Bi-weekly Issue March 14: Bitcoin is sometimes referred to as “digital gold,” but investors should also have some of the real stuff. As J.P. Morgan put it, “Gold is money. Everything else is credit.” So today, with gold prices on the rise, we add exposure to the yellow metal in the form of a low-risk streaming and royalty company.
Bi-weekly Update March 7: Luxury leader LVMH Moët Hennessy (LVMUY) CEO Bernard Arnault has a mantra that can be applied to business and investing: “In times of uncertainty, be patient.”
I would add that this requires playing both defense and offense.
For offense, Super Micro Computer’s (SMCI) share price was up another 40% this week and is now up 300% since the start of the year. Sea (SE) had a good first week in our portfolio as well after an encouraging financial report.
Cabot Small-Cap Confidential
Monthly Issue March 7: Half of all people need cataract surgery. But even though messing with your eyes is a massive decision, the Big 3 MedTech players in this market don’t have the best solution out there.
This is where today’s company comes in. It has developed cutting-edge technology that drives better outcomes for patients needing cataract surgery. The key? Its lens can be customized once in the eye!
All the details are inside the March Issue of Cabot Small-Cap Confidential.
Weekly Update March 14: Small-cap stocks continue to underperform their larger peers though, with the exception of this morning, the S&P 600 Small-Cap Index ETF (IJR) has been inching higher toward resistance at 110.
It’s possible that with expectations for the first rate cut being pushed out to June (currently, subject to change) that my expected small-cap rally has been similarly delayed. I have been surprised that this asset class hasn’t seen more momentum.
Cabot Dividend Investor
Monthly Issue March 13: The rich get richer. Now, you can too.
Growing businesses with big ambitions need large amounts of money to grow and expand to the next level. But these enterprises can’t get the necessary capital from stodgy and risk-averse bankers. And they are still too small to access the capital markets by issuing stock or bonds. Thus, they are forced into the domain of wealthy individuals and institutions that have money and are itching to reap high returns.
These venture capitalists provide desperately needed money to up-and-coming businesses that can’t get it anywhere else. Thus, they are in a position to negotiate very favorable terms for themselves.
As financial markets have grown in sophistication, venture capital investing is no longer the exclusive domain of the wealthy. There is a little-known class of security that enables regular investors to mimic the very same moneymaking strategies employed by the rich and famous. These securities are called Business Development Companies (BDCs).
In this issue, I highlight one of the most successful BDCs on the market. It pays dividends every single month, has a long and consistent track of raising payouts, and has delivered fantastic total returns.
Weekly Update March 6: The market rally is forging ahead and making fools of the doubters, despite the Tuesday pullback. The S&P 500 is up 20% since late October and 7.5% so far this year as of Monday’s close.
Cabot Early Opportunities
Monthly Issue February 21: In the February issue of Cabot Early Opportunities, we take something of a barbell approach, reviewing a couple of phenomenal large-cap stocks poised for the next big chapter of their lives while also uncovering a handful of much smaller companies, one of which is just getting its business off the ground (literally)!
Cabot Profit Booster
Weekly Issue March 5 : As we plow into March, the overall story remains mostly the same for the market—the primary evidence remains strong, with the trends of the major indexes up, most leading stocks in good shape and with hundreds of stocks hitting new highs.
Cabot Income Advisor
Monthly Issue February 27: The Goldilocks scenario of falling inflation and a still-strong economy is unlikely to last. Interest rates will have to come down before long or the recession that the market is dismissing might be just a little further down the road. But recent higher-than-expected inflation is making lower rates less likely.
Sure, the rally could last for a while. The economy always seems to be more resilient than people expect. But the circumstances behind the rally since October are unlikely to last. This environment will change. For that reason, it doesn’t make sense to chase stocks that have been working so far this year. It’s better to position ahead of a new dynamic that is likely coming.
Change creates opportunity. There are many great income stocks that are not benefiting from this rally. Yet these stocks are selling at historically very cheap valuations with high yields. These stocks also can thrive in a slowing economy. In this issue, I highlight two stocks in particular that are cheap and high-yielding ahead of a period of likely market outperformance.
Weekly Update March 12: Earnings season is over, and the market’s main focus is on the February inflation numbers that come out this week.
Stocks were able to continue to build on last year’s late rally in January and February. Mixed Fed and interest rate news was overcome by strong earnings, particularly in technology. Signs that artificial intelligence is continuing to drive strong demand and sales lifted the sector and the market.
Cabot Turnaround Letter
Monthly Issue March 6: Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the March 2024 issue.
In this issue we look into the bear case for the energy sector and discuss why energy stocks might provide some tonic for sober investors in an otherwise tech-intoxicated stock market. We highlight a selection of six energy stocks worthy of at least a sip.
This month’s Buy recommendation, VF Corporation (VFC), is a major apparel and footwear maker whose shares have collapsed 83% and now trade at their 2006 price. The new CEO, an unusual selection from outside the industry, is undertaking a complete overhaul of the company, with some early signs of progress.
Weekly Update March 15: In today’s note, we discuss the recent earnings reports from Kohl’s (KSS), Kopin Corp (KOPN) and Volkswagen AG (VWAGY).
We are moving shares of LB Foster from a BUY to a SELL. The turnaround continues to grind forward, but the stock has moved above our 23 price target and we see little reason to increase it. The likelihood of the company reaching its 2025 guidance is fairly high, so the only upside would be from earning a higher valuation multiple. We’ll take our certain profit today instead of letting it ride on the possibility of more profits in the future, balanced by the possibility of a backward slide. The shares have generated a 79% return since our July 2023 recommendation.
Cabot Cannabis Investor
Monthly Issue February 28: In my last update on February 14, I suggested cannabis stocks had fallen enough to be buyable ahead of the expected rescheduling catalyst. That was an opportune entry point.
As of the close February 23, the AdvisorShares Pure U.S. Cannabis (MSOS) and the leveraged version, AdvisorShares MSOS 2X Daily (MSOX), were up 12% and 20%, respectively.
Then investors got impatient again with the lack of progress on catalysts. As of the close February 27, 2024, volatile cannabis stocks had given back most of these gains. The MSOS was up 2.4% and the MSOX was up 1.7%. I think cannabis stocks have weakened enough to consider adding again (more on this below).
Monthly Update March 13: Since I last wrote to you on February 28, cannabis stocks have fallen nearly 14%, using the AdvisorShares Pure U.S. Cannabis (MSOS) as a proxy for the group.
There are certainly good reasons why “the doubts” have crept back into the minds of cannabis investors, which I will explain in a second. But my take is that by now, the concerns may be fully priced in, so the group looks like a solid buy.
Cabot Money Club
Monthly Magazine March: Passive real estate investing is surging in popularity as it promises the wealth-building power of real estate without the headache of managing properties and tenants. This month’s issue features the pros and cons of passive real estate investing, the types of opportunities available to investors, and what you need to know before you get started.
Stock of the Month March 14: The markets saw mostly sideways action in the past month—the soothsayers are still debating when the Fed will begin reducing interest rates.
Growth stocks held on to their leadership position, although value stocks are beginning to show life in 2024.
Ask the Experts
Prime Question for Tyler: Hi Tyler. Quick question for you about Enovix (ENVX) – I know you bought in June ’22 at 20 (per share), and still have it as a Buy. I just bought some at 9.90, but it continues to drift down to 9.30. Are you still convinced it has a big move in it, or if you were close to breakeven as I am, would you sell and re-deploy?
Tyler: I’m still a believer. This is the year when they should get to high volume manufacturing and, assuming that happens, the story should get much, much more interesting. And the company/stock should get a lot more coverage. I don’t think it will be a smooth and steady stock any time soon, but I do think the considerable upside is worth sticking with it. That’s why I plan to keep ENVX as a Buy in the portfolio for the time being.