Latest Summary
CABOT EVENTS
Cabot Weekly Review (Video)
In this week’s video, Mike Cintolo talks about the broad market’s dramatic strengthening late in the week, egged on by a dip in rates and a tame inflation report. At this point, it’s encouraging, but Mike’s really keying on the next few days -- and seeing if some of the many launching pads that are out there (created by the sideways environment for most stocks during the past 1.5 to 4 months) can result in big breakouts, especially as earnings season gets underway.
Stocks Discussed: PAAS, AEM, EVR, JEF, CRDO, TER, ASML, GLW, ITB, KBH, URI, PDD, NBIX, ALNY, KRYS, UBER, HOOD
Cabot Street Check (Podcast)
This week on Street Check, everybody’s bullish! Chris and Brad welcome on Michael Brush, Jacob Mintz, Tyler Laundon and Tom Hutchinson to offer up their perspectives on the current state of the market. They talk sentiment and market indicators, signals from the options market, small cap outperformance, REITs, dividend stocks and more.
Cabot Webinar
July 18, 2024 Webinar
2 Cyclical Stocks Poised for a MAJOR Turnaround
Join investing expert Matt Warder, Chief Analyst of Cabot Turnaround Letter, 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 Pro 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 June 27: Outside of a few mega-cap names, the market remains stuck in neutral, with the vast majority of stocks (including growth stocks), sectors and indexes meandering sideways, resulting in plenty of trendless, tedious action. Of course, many areas are within shouting distance of new high ground, so we’re not negative--but while we’d love to put some money to work (a couple of names on our watch list are fairly enticing), we think less is essentially more, at least until the market shows its hand. We’re again standing pat tonight, though remaining flexible for what may come.
Long-term, the market’s picture remains bright, with our most reliable indicator (Cabot Trend Lines) firmly positive, which we write more about in today’s issue, as well as one name that’s probably at the very top of our watch list. All in all, we’re ready to make some moves, but right now, patience is the best course.
Bi-weekly Update July 3: WHAT TO DO NOW: The evidence remains mostly the same, with trendless, choppy action among the vast majority of stocks and sectors out there—we’re still overall bullish (especially longer-term), but for now, less seems to be more when it comes to taking action. In the Model Portfolio, we cut bait with Pulte (PHM) earlier this week as the stock broke down, leaving us with 37% in cash, and tonight we’re placing On Holding (ONON) on Hold, as the stock has turned weak. We are seeing more setups out there, so if the buyers can show up, we’ll likely put at least a little money to work, but today we’ll sit tight and see what comes after the holiday.
Cabot Top Ten Trader
Weekly Issue July 8: Two of the past three weeks have had odd mid-week holidays, which combined with the time of year, has led to some pretty slow trading since the tail end of June. We’re now seeing more tightness and legitimate setups out there, so if the buying pressures spread we think there could be a surprising number of names that provide solid entry points. While there are some signs that could be starting, earnings season is set to ramp, and as always, that will likely tell the intermediate-term story. For now, given that the market’s decent-but-tricky evidence hasn’t changed much, our advice isn’t changing, either. Our Market Monitor remains at a level 7.
This week’s list has another batch of intriguing setups that could go if the market cooperates. Our Top Pick has always had a good story and great numbers, and now the stock seems to be ready to move as its sector comes back to life.
Movers & Shakers July 5: It’s been more of the same in this holiday-shortened week, with the Nasdaq up a couple of percent, the S&P also sporting gains, but most of the rest of what we look at is flat to down on the week.
Cabot Options Trader and Cabot Options Trader Pro
Cabot Options Trader Pro Weekly Update
Cabot Options Trader Weekly Update
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 11: If it feels like value stocks are missing the bull market party this year, take comfort in knowing they’re not alone.
Thanks to the Magnificent Seven and a few other mega-cap tech stocks and red-hot artificial intelligence plays, the S&P 500 and the Nasdaq have posted very strong returns through the first half of 2024, up 17.6% and 24.8%, respectively. But most other indexes and funds have had very average years. The Dow is up a mere 4.2%. The Russell 2000 (small-cap stocks) is up 0.8%. And the Equal Weight S&P 500 index is up 3.7% and is well off its late-March peak.
Cabot Stock of the Week
Weekly Issue July 9: Stocks began the second half of 2024 exactly the way they behaved for much of the first half: at all-time highs, but with only a couple handfuls of mega-cap tech stocks and artificial intelligence plays doing most of the heavy lifting. It remains both a bull market and a stock picker’s market, so today we pick a stock that’s been attracting a lot of institutional attention of late. It’s a tech stock, but it’s no mega-cap; it’s a small-cap, space-related title that Tyler Laundon recommended to his Cabot Early Opportunities audience last month. Its shares have exactly doubled this year and yet still trade 40% below their 2021 highs.
Details inside.
Cabot Explorer
Bi-weekly Issue June 20: Explorer stocks had a good week led by Super Micro (SMCI) up 20% and Cloudflare (NET), up 9%, as PayPal (PYPL) has struggled a bit as it launches a new, higher-margin digital ad business. The S&P 500 is up 14% so far this year but the 10 biggest stocks recently represented almost 37% of the index’s total value, the highest since September 2000, according to FactSet. Use caution and take partial profits if you have some of these in your portfolio.
We have been discussing some great companies and breakthrough technologies, but it is easy to overlook that energy is the foundation of economic and technological development. It is also at the core of how countries secure and project national power.
So today, we add a U.S. renewable energy company that is a leader in an alternative energy source that’s making a comeback.
Bi-weekly Update July 11: Explorer stocks put in a solid performance this week as Federal Reserve Chairman Jerome Powell was on Capitol Hill for two days of testimony. His remarks were parsed as if he were an oracle, but the takeaway seems that we are moving towards a rate cut dependent on labor markets cooling off a bit more.
I really don’t like paying too much attention to macro issues like interest rates and would rather focus on new ideas that most investors are not following closely. Right now, in a market so dependent on a small number of leading stocks, you can reduce your portfolio’s overall risk profile by adding some stocks in countries and sectors where expectations and downside risk are low.
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 11: At the index level, small-cap performance has been unremarkable (though stable) for a while, but under the hood, there continue to be plenty of performing names, and we’ve been fortunate enough to be in a number of them.
That said, there’s been some shifting of the deck this week with a few growthy stocks (TMDX, RXST) taking a bit of a hit. On the flip side, continued performance from the likes of ENVX and new addition (from June) AORT is very nice to see.
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 3: Well, the results are in for the first half of the year. And they’re very good. The S&P 500 soared an impressive 14.5% in the first six months of 2024. That’s a 29% annual pace. And it follows a 22% market return in 2023.
But I believe it is unlikely that the S&P will finish the year up 29%. That would be an epic year, but there are still a lot of challenges, like interest rates near the highest level in two decades. That means market returns must at least flatten out somewhat going forward. It’s also true that the technology rally has petered out in the last few weeks.
Cabot Early Opportunities
Monthly Issue June 20: In the June Issue of Cabot Early Opportunities, we continue to lean into AI themes while taking a swing at a speculative space communications company. We’re also trying to keep things real here on earth with a picks-and-shovels-type infrastructure play, and we pull back the curtain on a real rarity in 2024, a software stock with a nice chart!
As always, there should be something for everybody.
Cabot Profit Booster
Weekly Issue July 9: The holiday-shortened week was mostly quiet outside of the AI/Semiconductors plays, which once again rose nicely. As for the rest of the market, by the numbers below it was a good week, though under the surface it feels like not many stocks are truly rallying.
For the week, the S&P 500 gained 1.35%, the Dow rose marginally, and the Nasdaq added another 2.9%.
Cabot Income Advisor
Monthly Issue June 25: AI is the catalyst driving the technology sector, which is driving the market higher. Over the last month, the tech sector is up 10.42% while the S&P is up 2.95%. Seven of the 11 sectors are negative for the past month.
But technology stocks may be running out of gas. Without the heavy lifting from technology, it’s easy to see the overall market trending sideways or down, at least for a while.
Income is king in markets like this. The register still rings when the market stumbles. There’s also an opportunity right now. With the S&P and many stocks near their 52-week highs, it’s a good time to get high call premiums. Also, you can lock in strong total returns from these stocks if they are called.
Even the best bull markets have ups and downs. We can play the increased likelihood of a flat or down market by priming the income pump to pay us through the rough patch. In this issue, I target another covered call that will enhance the already exquisite income of a monthly dividend stock.
Weekly Update July 9: This market rally keeps forging on no matter what. Technology cooled off but, no problem, other sectors are picking up the slack.
Interest rates have likely peaked. The chances of a Fed rate cut before the end of the year have increased. And the economy is still solid. Sectors rotate, headlines come and go, but as long as the main ingredients of future lower rates and a still-decent economy prevail, the market should be good.
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 12: Wells Fargo (WFC) kicked off the Cabot Turnaround Letter earnings season today, showing solid EPS of $1.33/share, which exceeded estimates by 4 cents. WFC also beat revenue estimates by $410M, coming in at $20.69B, but the stock is trading lower this morning as the company posted a 9% YoY decline in net interest. We moved this one to HOLD back in the May 27 issue at 60, and it just hasn’t quite been able to clear that prior high.
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 July: We may hate to talk (or even think) about it, but we all understand the importance of proper estate planning. And if you’ve spent a lifetime accumulating assets to pass down to those you love, the next best thing you can do is to make sure you’ve taken the right steps to avoid leaving your heirs with a headache on top of their inheritance. This month, let’s explore the steps you can take right now to help make sure your wishes are honored and that your family doesn’t spend months or even years duking it out in court.
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 Jacob: Jacob, if you are in a long stock position, do you like the strategy of buying a cheap out-of-the-money put before earnings as a hedge?
Jacob: I have no issue with that strategy at all if you think the stock could tumble on earnings. Think of this put buy as an insurance policy, that you hope doesn’t pay out.