Latest Summary
CABOT EVENTS
Cabot Weekly Review (Video)
In this week’s video, Tyler Laundon explains why the week’s batch of economic data and the FOMC meeting has kicked off a little market rally. He explains why those data releases have helped the all-important 10-year yield fall sharply. Tyler thinks the market can continue to firm up and possibly head a little higher here. He wraps things up by running through details for four companies that have reported and are seeing their stocks move higher.
Stocks Discussed: VRT, TMDX, TDW, FTAI
Cabot Street Check (Podcast)
This week on Street Check, Chris and Brad discuss the latest consumer confidence numbers, increasing expectations for rate cuts after this morning’s unemployment print and the sustainability of the rally in cannabis stocks following reports that rescheduling is coming. Then, they pick their favorite “summer stocks” ranging from energy and travel names to consumer goods, drinks and entertainment.
Cabot Webinar
May 2, 2024 2:00 PM ET
2 High-Potential Little-Known Stocks Every Investor Should Own
Quarterly Cabot Analyst Meeting
The recording of the Cabot Prime Members Meeting with the Analysts from January 24, 2024 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 May 2: The market has hung in there during the past couple of weeks, which is good to see, but there hasn’t been enough strength — from the major indexes or from growth stocks — to tell us the buyers have retaken control. At the same time, nothing has changed with the big picture, either, which leaves us with the same thoughts we had two weeks ago: Right now, it’s best to be cautious as the correction plays out and as earnings season goes along, but you want to be prepared to move when the tide turns back up.
For our part, we’re holding a good chunk of cash and standing pat tonight, but we have an expanded watch list as we monitor earnings season for signs of future leadership.
WHAT TO DO NOW: Remain cautious, though remain flexible. The market’s initial bounce this week was good to see but it didn’t offset the recent weakness, and today’s Meta-inspired selloff didn’t help the cause. All told, our Cabot Tides remain negative, and most growth stocks are still in rough intermediate-term shape—though the long-term picture is still positive. After selling the rest of our Arista (ANET) position last Friday, our cash position is 44%—we’ll sit tight tonight with our remaining names and our cash and see how earnings season continues to play out.
WHAT TO DO NOW: Remain cautious, though remain flexible. The market’s initial bounce this week was good to see but it didn’t offset the recent weakness, and today’s Meta-inspired selloff didn’t help the cause. All told, our Cabot Tides remain negative, and most growth stocks are still in rough intermediate-term shape—though the long-term picture is still positive. After selling the rest of our Arista (ANET) position last Friday, our cash position is 44%—we’ll sit tight tonight with our remaining names and our cash and see how earnings season continues to play out.
Cabot Top Ten Trader
Weekly Issue April 29: As we like to say “up is good,” so last week’s snapback from the major indexes and many stocks and sectors is certainly a good thing, and we like that many stocks have actually built six- to 10-week launching pads. Thus, if the rally can continue, there should be plenty of names to sink our teeth into assuming earnings season goes well. However, first things first: The market and most stocks aren’t out of the woods yet, having “only” rallied back into resistance, and earnings season is still in full swing. We’ll leave our Market Monitor at a level 6, but we’ll change that quickly if the bulls show some follow-on buying.
This week’s list is a hodgepodge of earnings winners, resilient growth names and some commodity ideas as well. Our Top Pick is a volatile chip equipment maker with a system that’s perfectly suited for the AI revolution. Earnings are due next week, so keep it small here and see what the quarterly report brings.
Movers & Shakers May 3: It’s been a very volatile week in the market, but thanks to this morning’s worse-than-expected jobs report (which is driving interest rates lower), it’s looking like a positive one—as of this morning, the big-cap indexes and most growth measures are flat to up 1% on the week, while broader indexes are up 1% to 1.5%.
Cabot Value Investor
Monthly Issue May 2: The dark clouds of persistent inflation and high interest rates continue to hover over the market. But with a record amount of capital on the sidelines and little to no movement in most stocks over the last two-plus years, I’m optimistic that better days are ahead, assuming the inflation/Fed clouds eventually part. Thus, I continue to seek out companies that are essentially growth stocks at value prices. And today, we add another one to our portfolio in the form of a big-name company that’s benefitting greatly from a return to normalcy in a post-Covid world … but whose shares are trading at barely half their pre-pandemic peak.
Enjoy!
Weekly Update April 25: Tesla (TSLA) has had a rough start to the year. Entering Wednesday, TSLA shares were down nearly 42% year to date thanks to a bitter cocktail of sagging revenues, narrowing margins, and increased competition, especially in China. At the start of this week, TSLA shares had dipped to 142, a 52-week low, and were trading at their cheapest valuation on a price-to-earnings basis since last May and on a price-to-book-value basis since 2019.
Cabot Stock of the Week
Weekly Issue April 29: The buyers finally stepped up after a brutal first three weeks of April, and suddenly the bull market feels back on again. One week doesn’t make a rally – not if the Fed (which rears its ugly head again this week) has anything to say about it. But for now, the selling has ceased, with an assist from a better-than-expected earnings season. Today’s addition isn’t exciting – it specializes in things like pipes, valves and water meters – but it’s a practical – and potentially quite profitable – way to play America’s geyser of infrastructure spending. It was newly recommended by Mike Cintolo to his Cabot Top Ten Trader readers.
Cabot Explorer
Bi-weekly Issue April 25: The week was ticking along pretty well until this morning’s first read of GDP (1.6% vs. expectations of 2.2%) came out and shot a small hole in the “at least the economy is doing well” argument that’s helped the market hold up despite persistent inflation data.
Embedded in the GDP report were Q1 core and headline PCE inflation, both of which were a little hotter than expected and up from Q4 of 2023. March PCE data will be out tomorrow and is expected to be the biggest macro news event of the week.
Bi-weekly Update May 2: “The whole world is under-followed relative to the Magnificent Seven…Whether you’re looking at a place like Japan… emerging markets… commodity sectors… there’s really a ton of opportunities that people just refuse to look at.”
-Richard Bernstein, CEO and CIO, RBAdvisors
Cabot Small-Cap Confidential
Monthly Issue May 2: The digital marketing world has been turned upside down as new privacy measures make it more challenging to track consumers across online and in-app activities.
But one company has been building out a unique opt-in data set and the backend technology to do just that. It sells this information to the biggest companies in the world so they can reach consumers with personalized marketing messages. With the new privacy measures, business is strong.
All the details are inside the May Issue of Cabot Small-Cap Confidential.
Weekly Update April 18: The market continues to struggle with the rapid jump in interest rates (10-year at 4.63% after hitting 4.7% on Tuesday).
I think we’re still fluctuating somewhere between a code yellow and a code orange situation (was code green a few weeks ago!) so long as that yield doesn’t go over 4.7% and all hell doesn’t break loose in the Middle East.
Cabot Dividend Investor
Monthly Issue April 10: While the financial news obsesses over what the Fed might have vaguely implied in the latest statement, the world is morphing into a different place. The demographic of humanity is rapidly transforming in a way that will massively affect the flow of money for the rest of our lives. The world is currently undergoing a technological revolution that is transforming society and everyday life.
The aging population and the technological revolution are megatrends that will dominate the investment landscape for years to come regardless of what the Fed does, or GDP in the next few quarters, or whoever gets elected president. It’s not an accident that the best performing stocks in the Cabot Dividend Investor portfolio are in healthcare and technology. Nor will it be an accident that these same stocks continue to dominate from this point forward.
In this issue, I highlight the massive opportunity to position yourself in front of a tsunami that could provide the best investments of your lifetime.
Weekly Update May 1: What had been a tug-o-war between the souring interest rate narrative and earnings excitement is showing signs of veering in yet another direction.
The news on both inflation and the economy has been worse. The Fed’s favorite inflation gauge, the Personal Consumption Expenditures Index (PCE), came in higher than expected at 3.7% last week. Inflation continues to creep higher this year. And that’s with interest rates already at the highest level in decades.
Cabot Early Opportunities
Monthly Issue April 17: In the April Issue of Cabot Early Opportunities we take heed of the market’s recent volatility by digging into a wider-than-normal range of emerging opportunities.
We have gold mining, AI website development tools, healthy fast-casual dining and a few things in between!
As always, there should be something for everybody.
Cabot Profit Booster
Weekly Issue April 30 : After falling 4-6% two weeks ago, the S&P 500 and Nasdaq bounced back by 2-3% last week. Quite the whipsaw! By week’s end the S&P 500 had gained 2%, the Dow had risen marginally, and the Nasdaq had added 3.3%.
Cabot Income Advisor
Monthly Issue April 22: The rally sputtered. And it’s all about interest rates.
Investors had been factoring in falling interest rates and a soft landing. But now, investors are increasingly expecting no landing and continued high rates. Recent strong economic numbers, along with higher-than-expected inflation, are changing the perception.
It looks like these high rates will stick around for a while. And most stocks don’t like high rates. But not all. There are some companies that actually thrive with higher interest rates. And that creates opportunity. In this issue, I highlight a stock that pays a massive dividend generated by these high interest rates. As income investors, we can reap the bounty.
Weekly Update April 29: The market is in a tug-o-war between the bummer that rates are likely to stay higher for longer and excitement about the earnings season and artificial intelligence.
The launch of this earnings season has so far saved the market from a selloff that began at the beginning of April when the interest rate prognosis soured. Sticky inflation and a Fed that appeared to lose its resolve to cut rates this year spoiled a five-month rally. But earnings are reviving the market.
Cabot Turnaround Letter
Monthly Issue April 24: In twenty years of price forecasting, the most valuable lesson I have learned is that the rate of change tells us everything we need to know about the immediate future. When it accelerates, it tends to continue accelerating. When it decelerates, it tends to continue decelerating. And surprisingly, this tends to be the case no matter what metric we choose to examine.
This month’s Buy recommendation, Barnes Group (B), is an aerospace and industrial components maker that is stepping up its efforts to become more valuable, helped by a new CEO and urged on by pressure from a credible activist investor that recently gained several board seats.
Weekly Update May 3: Gannett (GCI) reported after the bell yesterday, beating on revenue but missing earnings expectations by 21%. The company posted an $84M loss on $635M in income but reiterated guidance to 10% growth in its digital division, keeping overall revenue declines to the low to mid-single digits. CEO Michael Reed reiterated the focus on digital transformation, with revenues from that side of the business likely to comprise 50% of Gannett’s income by 2025.
Cabot Cannabis Investor
Monthly Issue April 24: Cannabis stocks have fallen sharply since the beginning of April. The AdvisorShares Pure U.S. Cannabis (MSOS) is down 15.4% since April 1. There are two reasons.
First, investor enthusiasm for stocks overall has waned, creating significant declines across indices. Because cannabis is perceived as a riskier sector, cannabis stocks decline more than most stocks when investors move into risk-off mode.
Second, many analysts and investors had hoped for visible progress on key catalysts by now – chiefly rescheduling and cannabis banking reform. They have been disappointed.
Monthly Update April 10: Cannabis stocks are generally flat since I sent you the March 27 issue of Cabot Cannabis Investor.
Given the potential magnitude of near-term catalysts, I suggest continuing to hold exposure to the group, and accumulating on weakness. If you have zero exposure, consider buying some now. If you have full exposure, consider adding on any substantial weakness of 2%-4% or more in this highly volatile group.
Cabot Money Club
Monthly Magazine May: Household debt is rising, and consumers are feeling the squeeze of higher interest rates everywhere, from mortgages to auto loans to credit cards. In this month’s issue we’ll share ten warning signs that signal financial trouble ahead and the ten bad financial habits you need to drop now to avoid it.
Stock of the Month April 11: It was more of the same for the markets this past month—some momentum, but ultimately, we ended up in just about the same place.
Investors are a little gun-shy as most were expecting Fed rate cuts to begin in the latter half of the year. But as the inflation beast is proving harder to tame than expected, Fed Chair Powell has indicated it may take longer before we see a rate cut.
Naturally, the markets had an issue with that.
However, they seem to have absorbed that information and gone back to business.
Ask the Experts
Prime Question for Chris: Tesla is the major portion of my entire holdings . . . and I don’t have to tell you that I am down over 50%. I still have some fast-eroding profit, as I bought in very early. Tim (Lutts) used to refer to it as “a forever stock,” but my “forever” has somewhat shrunk, since I recently turned 90 !
What I am reading in the Wall Street Journal is drastic for the short term. (I’m) trying not to get hysterical and regret a drastic exit down the road a couple of years. As I used to say to Tim, “Talk to me as though I were your grandmother.” I got burned badly in ’08 by holding on too long, afraid to dump in haste. Am facing the same quandary again, but with possibly not another decade plus to re-coup.
Any words of wisdom will be gratefully accepted.
Chris: Tesla’s not doing so hot these days, as you noted. It’s still a Hold in the portfolio, but I’m not advising that anyone buy it at the moment if they don’t already own it. Not while the stock’s in free fall. Given its history of bouncing back when it’s been left for dead before – remember, the stock was as low as 113 in January 2023 before it came roaring back, more than doubling in the ensuing six months – I don’t anticipate selling it in Stock of the Week anytime soon. There’s probably more upside than downside at this point given how far it’s fallen. But I certainly understand your queasiness about hanging on to it after such a sharp drop.
I’d still consider it a “forever stock” – it’s the Coca-Cola, Nike or McDonald’s of electric vehicle makers, and the EV industry is only going to grow in the coming years, not shrink.