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CABOT EVENTS
Cabot Weekly Review (Video)
In this week’s video, small-cap expert Tyler Laundon talks about the broad market’s record highs and why small caps haven’t done much in the three weeks since the Federal Reserve cut interest rates. He discusses the valuation of these indices and ties their multiples to expected earnings growth, which is accelerating. Tyler wraps up the video with a quick overview of a dozen cybersecurity stocks, a specialized are of the market where analysts are increasingly bullish.
Stocks Discussed: OSPN, STER, RPD, TENG, RBRK, S, CYBR, GEN, ZS, FTNT, CRWD, PANW
Cabot Street Check (Podcast)
This week on Street Check, Chris and Brad discuss Tesla’s (TSLA) “We, Robot” event and the market’s response to the Robotaxi and the Optimus dancing robots, the latest inflation figures, and whether third-quarter earnings season will move stocks. Then, they welcome on Carl Delfeld, Chief Analyst of Cabot Explorer, to discus the “Great Rebalance,” money moving from U.S. equities to global markets, and how to invest around the world. You can find the promotion mentioned on today’s episode, as well as future promotions, at cabotwealth.com/street.
Cabot 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 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 October 3: The market remains positive, but not powerful, with a lot of growth stocks and especially growth indexes and funds still batting with months-old resistance. Big picture, we think the next major move is up and a lot of the leadership of any coming run has already declared itself; indeed, we think we own some of the best names out there. But we’re not pushing the envelope here, as the market continues to deal with uncertainties (including this week’s Middle East tensions and dockworkers strike). We have no changes again tonight, though we’re staying flexible and are looking to add exposure as opportunities arise.
Bi-weekly Update October 10: WHAT TO DO NOW: Continue to lean bullish. The market’s overall position remains in a similar position—far more good than bad, though still a few flies in the ointment—so we continue to look to add exposure, but to do so carefully, as many stocks and indexes are battling with resistance. Tonight, we’re going to fill out our position in Flutter Entertainment (FLUT), adding another half-sized stake (5% of the portfolio). We’re also placing Argenx (ARGX) on Hold given its recent action. Our cash position will now stand near 25%.
Cabot Top Ten Trader
Weekly Issue October 7: In the market, it’s not the news that counts, but the market’s reaction to the news—and that makes last week’s trading noteworthy: Middle East attacks along with a dockworkers strike (that was quickly put off for a few months) could easily have sent risk-on assets reeling, but instead, most indexes took the news in stride and, somewhat surprisingly, we’ve seen defensive stocks hit the skids. Now, to be clear, there are still flies in the ointment out there, including the possibility of a counterstrike overseas (rumblings of that today), rising Treasury rates, and a lot of indexes, sectors and stocks are still rangebound. There’s no question there remain many stocks that act well (including tons of Top Ten names), but we’re staying in the same stance as we wait for upside confirmation from more of the market—we’re encouraged, but we’re leaving our Market Monitor at a level 7 as we wait for the buyers to truly flex their muscles.
This week’s list is another one with something for everyone in terms of stories and setups. Our Top Pick is a firm that has its hands in many nuclear power cookie jars; the stock just emerged from a multi-month rest on big volume.
Movers & Shakers October 11: The market saw a ton of volatility in July, August and then with a good-sized early pullback in September, but this was the third straight week of quieter action, with most indexes up less than 1% on the week—though, encouragingly, we did see better action among some growth funds and individual stocks.
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 10: Stocks have barely budged for three months.
The S&P 500 is a mere 1.5% above its mid-July highs, while the Nasdaq is actually down 2.5% since its July 10 peak. The Dow has made the most headway, up 2.1% since its July 17 apex. This type of multi-month lethargy is nothing new for an election year.
Cabot Stock of the Week
Weekly Issue October 7: Spooky season is upon us! Yes, the usual October selling has commenced, although it’s been fairly mild thus far. But things feel unsettled, what with the expanding war in the Middle East, a toss-up presidential election less than a month away, and with earnings season getting underway this week. So today, to counter any further turbulence, we trim one modest laggard and add a new, low-beta, dividend-paying European stock that’s been a favorite of Cabot Explorer Chief Analyst Carl Delfeld for some time.
Details inside.
Cabot Explorer
Bi-weekly Issue October 10: JPMorgan (JPM) is due to report results Friday, kicking off bank earnings season. Lately, the market seems to be more focused on earnings than Fed interest rates, and this is a good thing.
As markets move towards the “Great Rebalance”, looking to diversify portfolios with different asset classes and international stocks, the Explorer and I are headed to Europe, Asia, and Latin America during the next year. But today, stick to the U.S. and add a very familiar face to the portfolio.
Bi-weekly Update October 3: China’s benchmark CSI 300 index has surged 25% in the five days following Beijing’s stimulus measures to unleash its economy and financial markets. This has led to some catch-up growth for Explorer stock and fund recommendations.
The action was not limited to just Chinese stocks but also stocks looking to China for growth. I mentioned commodities last week, but another winner was the luxury business.
Cabot Small-Cap Confidential
Monthly Issue October 3: Surging data center demand. Electric vehicles. Heat pump HVAC systems. Severe weather events. Hurricanes. Rising sea levels. North Carolina flooding.
This is just a short list of the drivers behind rising electricity demand, the harsh realities of being behind the curve when it comes to global warming, and the resulting push toward energy efficiency and greenhouse gas emission reductions.
Today’s portfolio addition is a small and still-unknown company that helps solve these challenges, moving the country toward a more sustainable, clean-energy future.
I think you’ll find it interesting.
Weekly Update October 10: The small-cap indices (Russell 2000 and S&P 600) have been totally uninspiring over the last three weeks, which is sort of odd given that the Fed cut interest rates by 50 basis points almost exactly three weeks ago.
Theoretically, lower rates should benefit small caps given higher exposure to variable rate debt, which requires lower interest payments as rates decline.
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 2:The third quarter ended with the market looking good. The S&P 500 was up 2% in September after a rough start, 4.3% for the third quarter and over 20% YTD. Can the good times last?
Cabot Early Opportunities
Monthly Issue September 18: Welcome to fall! The September Issue of Cabot Early Opportunities is heavy on software and industrial names, two areas of the market where I continue to see plenty of emerging opportunities and potential for share prices to benefit from lower rates.
Cabot Profit Booster
Weekly Issue October 8: Despite plenty to worry about in the market including the rising tensions in the Middle East and the short-lived port strike, impressively the S&P 500, Dow and Nasdaq all rose marginally last week.
Cabot Income Advisor
Monthly Issue September 24: A new era has begun.
Most of the last two years have been an environment of rising and high interest rates and technology sector dominance. Now, we are entering a period of falling interest rates and a slowing economy. The new stage will bring different winners and losers.
The previously beleaguered interest rate-sensitive stocks and defensive stocks ignited and began to lead the overall market higher as technology pulled back. Since the summer, this new trend has been confirmed. And it is unlikely to be a mere short-term gyration but rather the beginning of a new environment that should last for some time.
In this issue, I highlight a great monthly income stock. The yield is massive, and it provides a high income in an uncertain market. The stock also can provide great price performance when the interest rate cycle goes its way. This point in the cycle provides a great opportunity to get a high income and total return on the right side of a pronounced market shift ahead.
Weekly Update October 8: After another up week and a record close last Friday, the market is grappling with mixed signals.
Last week’s highly anticipated jobs report came in much better than expected. The previous two weak jobs reports had roiled the market as they stoked recession fears. But not this one. The market was initially thrilled but is now thinking twice about the situation.
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 11: In today’s note, we discuss the acceleration—and potential for overcrowding—of the China stock momentum trend, specifically how it relates to our position in Alibaba Group Holding (BABA).
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 October 9: Cannabis now has its highest election-year profile ever.
Both presidential candidates have highlighted their favorable positions on cannabis reform, obviously because voters in all the key swing states favor reform. Cannabis reform appears on the ballot in referenda in several states – most notably Florida.
Cabot Money Club
Monthly Magazine September: Despite emphasis on closing the gender wealth gap, women in (and approaching) retirement still face significant challenges. Not only do women live longer than men and thus need to stretch their retirement dollars further, they also have, on average, half the retirement savings and can expect to receive a smaller amount from Social Security. This month, we’ll tackle strategies that everyone can use to build a bigger nest egg, cut down on expenses, and achieve their retirement goals.
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 Chris: Capital One Financial (COF): Why the weakness? Thoughts?
Chris: I don’t think there’s any particular reason for the weakness other than that COF had a big run from 132 to 153 in August/September, and it seems like the sellers are coming for stocks with “meat on the bone” right now as the customary October pullback develops. I wouldn’t worry too much about it. COF shares are still well above their August lows and their September lows, and a pattern of higher highs and higher lows is a good trend. The real test will come later this month (October 24), when the company reports earnings. And even if those disappoint … it still has the trump card of the Discover Financial merger out there, and that could be finalized in the next 3-6 months.