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CABOT EVENTS
Cabot Weekly Review (Video)
In this week’s video, Mike Cintolo says the market remains positive, though he wouldn’t describe it as powerful, with some selling on strength in growth stocks seen this week and with the possibility of a pullback (or some trickier trading) coming in the near-term. Even so, he likes what he owns and goes over a bunch of stocks from a variety of sectors that are acting well and are potentially buyable, especially if we do see a normal exhale.
Stocks Discussed: EXP, XAL, GEV, EXP, RDFN, CART, DASH, ANET, COHR, HOOD, FXI, KWEB, IBIT, NOW, HALO
Cabot Street Check (Podcast)
This week on Street Check, Chris and Brad discuss EVs, the latest stimulus moves from China’s central bank, a resurgence in value stocks, and recent data pointing to a high level of retail investor cash still on the sidelines (and what it will take to move that into the market). Then, Tyler Laundon, Chief Analyst of Cabot Small-Cap Confidential, joins to talk all about small-cap stocks, how he expects the Fed’s new rate posture to affect them going forward, and the small-cap sectors that look likely to outperform. For the Small-Cap Confidential promotion for new subscribers mentioned on the episode, visit 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 September 19: The market has been volatile in recent weeks, but the two biggest pieces of evidence to us have been the continued longer-term uptrend, as well as the buoyant action among many individual growth stocks, a few of which we own; while they can get tossed around, they have tended to bounce back strongly as soon as the pressure comes off the indexes. That said, there are still some flies in the ointment out there, with many broad growth measures just so-so we’re not cannonballing into the pool, but we are putting some more money to work tonight, averaging up in a current holding and adding one more potential leader.
Bi-weekly Update September 26: WHAT TO DO NOW: Remain optimistic, but pick your spots. The evidence remains more good than bad, and many growth stocks are acting well—that said, the flies in the ointment we’ve repeatedly mentioned are still hanging around and, near term, many stocks are extended to the upside. We’re still leaning bullish, but tonight we’re going to stand pat, holding what we have and seeing how the market and stocks behave in the days ahead. Our cash position remains in the neighborhood of 30%.
Cabot Top Ten Trader
Weekly Issue September 23: Between the late-July/early-August market plunge and the relatively sharp post-Labor Day selloff, more than a few weak hands were likely kicked out of their positions. That paved the way for the past two weeks, which have been very encouraging, with the major indexes certainly improving and with many of those same leaders acting well, including a bunch that moved to new high ground. It’s all to the good, though a lot of the same flies in the ointment that we’ve written about are still out there, too. There’s definitely more good than bad out there, but we continue to pick our spots. We’ll leave our Market Monitor at a level 7 today.
This week’s list has something for everyone, from high-tech to infrastructure to stocks leveraged to asset prices. Our Top Pick is a potential liquid leader that, after a few months of choppy action, looks to have finally broken out on the upside.
Movers & Shakers September 27: It’s been a quieter but mostly positive week, with most major indexes up in the 0.5% to 1.5% range, though much of the broad market was relatively flat.
Cabot Value Investor
Monthly Issue September 5: The Fed is on the precipice of cutting interest rates for the first time in years; when that happens, homebuilder stocks tend to benefit first. But that’s not the only reason to be bullish on the sector. Homebuilders have changed the way they do business in recent years to become more like car makers, only with greater upside and higher internal rates of return. With both those short- and long-term winds at their sails, homebuilder stocks are a good – and still undervalued – bet. And today, we add a big name in the space that has the best combination of growth and value.
Enjoy!
Weekly Update September 26: Value stocks are starting to play catch-up.
The Vanguard Value Index Fund ETF (VTV), a good proxy for value stocks, is up 9% since the first week of August, more than half its year-to-date gain of 16.6%. While value stocks still trail the S&P 500 (+20.9% YTD) and growth stocks (the Nasdaq is +22.4% YTD), the gap is narrowing. Now that the Fed is finally cutting interest rates from multi-decade highs, perhaps this “in name only” bull market will spread to more corners of the market beyond just the Magnificent Seven, artificial intelligence stocks, and the other mostly tech-related plays that have carried this 23-month rally.
Cabot Stock of the Week
Weekly Issue Our national high-interest-rate nightmare is over, as the Fed has (finally) started slashing short-term rates in a big way, cutting by 50 basis points last week. The market likes the aggression, sending two of the three major indexes to new all-time highs. Is it the beginning of a new – and more egalitarian – leg of the bull market? Could be. Regardless, let’s strike while the iron is hot, adding shares of the leading company in one of the hottest new U.S. markets: sports betting. It’s a recent recommendation from Mike Cintolo in his Cabot Top Ten Trader advisory.
Details inside.
Cabot Explorer
Bi-weekly Issue September 26: The MSCI World Index now has a remarkable 72% market value weighting in U.S. stocks.
In other words, 72% of the market value of stocks trading around the world represent companies headquartered in America.
This begs the question: Should investors be this concentrated in a single market?
Bi-weekly Update September 19: The Federal Reserve has voted to lower interest rates by a half percentage point, the first since 2020 and more than many expected. The overwhelming Fed board vote suggests more rate reductions are likely this year. This Fed move was clearly already baked into markets but keep in mind that the Fed only controls overnight interbank interest rates. Nevertheless, this action will help support the market and boost interest rate-sensitive stocks such as real estate and utilities.
Cabot Small-Cap Confidential
Monthly Issue September 5: Everybody is talking about the potential of generative AI. But a lot of organizations haven’t yet organized their digital data in such a way that they can leverage it for AI, let alone protect it once AI applications gain access.
Today we’re jumping into a steady-growth software company that helps solve this problem.
Weekly Update September 26: Small caps have bounced around this week, taking a break from the rally that began on September 11 and continued through the 19th.
Behind the scenes, analysts have been increasing their earnings expectations for the asset class. This is largely because rates are falling, but also because the economy is holding up.
Cabot Dividend Investor
Monthly Issue September 11: We are in the early stages of a new cycle in the market.
The environment is changing from one of high inflation and high interest rates to one of falling inflation and interest rates in a weakening economy. 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.
Interest rates may fall quickly or more slowly depending on whether the economy remains buoyant or slips towards recession. But rates will fall much more significantly than they have in years.
The cycle reversal will create new winners and losers. Certain interest rate-sensitive stocks have been laggards for a long time and have a lot of catching up to do. They are still cheap, high yielding, and now have momentum.
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 September 25:The market is hot stuff again. The S&P made a new high this week after making up all the early September losses and then some. It is the 40th record close for the index, which is now up 20% YTD with another quarter left.
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 September 24: Aided by a strong week for the market following the Federal Reserve interest rate cut, our three September covered calls (SFM, CPNG, SG) expired for profits ranging from 4.62% - 6.25%.
This week we turn our attention to the October expiration cycle via a covered call sale in a grocery delivery play that is breaking out to new highs.
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 September 17: The Fed’s moment has finally arrived.
The Fed raised the Fed Funds rate at the steepest pace since the 1980s in 2022 and 2023, from 0% to 5.5% over just an 18-month span. The Fed Funds rate has remained at a multi-decade high of 5.50% for more than a year. The Fed is expected to begin cutting the rate this week and will likely continue to do so for the next two years.
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 September 27: In today’s note, we discuss the recent developments concerning Tyson Foods (TSN) and Alibaba Group Holding (BABA), with a particular emphasis on exit strategies for both stocks.
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 September 11: Back on August 28 and September 3, I suggested buying cannabis stocks in the severe weakness that put a lot of cannabis investors in a deeply distressed state. I cited the excessive negativity and the potential for a bullish update from presidential candidate Donald Trump on his cannabis policy.
On September 9 we got the Trump update, and it was very bullish for the sector. Cannabis stocks moved up sharply.
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 September 12: What a month! Markets have had some pretty wild moves since last month, gyrating with significant volatility, and that looks like it may continue for a while. But that’s okay as the volatility is now serving up some pretty exciting discounted opportunities for investing.
Economically speaking, inflation abated somewhat, with core inflation falling to 3.2% for August, its lowest point in three years. And that sets the stage for an estimated 25 basis point reduction in interest rates when the Federal Reserve meets next week, according to the latest economist polls. The rate gurus now think that we may see a total of three rate cuts before the end of the year.
Ask the Experts
Prime Question for Mike: Mike, what about Super Micro Computer (SMCI)? It is volatile and had run up to incredible gains, though even at $1,000 a share, it had a reasonable P/E ratio. Now at $447, P/E is 15.76. Apple’s P/E is twice that, so are MSFT’s and Oracle’s! My understanding is that SMCI’s sales growth is amazing. How low does the P/E have to get for SMCI to be a bargain?Is SMCI on your radar? Do you avoid it because of its volatility?
Mike: Thanks for writing. Well, I’m not a bargain guy – yes, I look at valuation from a distance, but I don’t buy because of it as I’m not a value guy and, for growth sectors, it usually doesn’t work that well.Now – do I think SMCI looks reasonably valued? Yes. And earnings estimates, while having come down, are still pretty peppy. So I smell what you’re cooking, and if the market/growth stocks get going, I certainly wouldn’t be shocked to see SMCI do well.
But right now, the stock is very weak, likely for a reason – that big investors don’t believe the estimates and think things might get worse, and they don’t think 20x earnings is that cheap for a maker of drives/servers. Or maybe competition is picking up, etc.
That doesn’t mean the stock is going to zero, of course – or that you need to see it back at 1,000 to be interested in it. But I’d like to at least see some volume support and for the stock to show some sort of life; right now it’s below all moving averages and the latest big move was a huge collapse at the end of August. Short-term, a move back above 640 would be something noteworthy I think.
Obviously nothing wrong with a lottery ticket, but in terms of a good-sized position, I’d rather wait – odds favor the stock will need more time at the very least to repair the damage, and that stronger names out there will do better if/when the market finally kicks into gear.