This month we’re jumping into a small MedTech company that represents a picks and shovels play on the cell and gene therapy market. It makes biopreservation media and storage solutions for cutting-edge treatments, including Kite’s (owned by Gilead) CAR T-cell therapies YESCARTA and TECARTUS.

It’s a high growth company with exposure to both clinical trial and commercial-stage therapies. Covid-19 therapies and vaccines are part of the mix too. And there is an M&A angle that’s increasingly relevant.



The stock appears to have huge upside over the coming years. And we’ll get an update from management almost immediately after you read my reports since the company reports Q3 earnings after the close today.



All the details are inside. Enjoy!

Thank you for subscribing to the Cabot Undervalued Stocks Advisor. We hope you enjoy reading the November 2020 issue.

We briefly discuss the soon-to-evaporate election cloud, the merits of holding value stocks when growth/momentum stocks tumble, and highlight one of our portfolio stocks that had some earnings issues along with several others that reported strong earnings that lifted their share prices meaningfully.



Earnings season is in full swing. Six portfolio companies report later this week. We encourage subscribers to visit the reporting companies’ websites to review their earnings-related slide presentations and listen to the post-earnings conference call. These are all available to the public under the “Investor Relations” tab. Sometimes what portfolio companies actually do can seem murky – a quick visit to their website can help clarify, and (at least to me, a certified investment geek) provide some fascinating reading.



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.



I’m best reachable at Bruce@CabotWealth.com. I’ll do my best to respond as quickly as possible.

If you’ve ever searched for instructions for tackling do-it-yourself tasks, there’s a good chance you’ve turned to today’s recommendation for ideas.

Current Market Outlook


The market had been under some pressure since early October, but last week was a different animal, with the sellers coming out of the woodwork and cracking numerous leading stocks and major indexes. Longer-term, this is still a bull market, with the past two months being a (very) tedious up-and-down consolidation period following the huge March-August advance; we still think the next major move is up. Near-term, though, stocks are back in the soup, and while the headlines will be coming fast and furiously this week (earnings and the election), the onus is on the buyers to step up. Until that happens, we advise a cautious stance—holding a good chunk of cash makes sense, while keeping new positions on the small side and honoring your stops and loss limits. We’re pulling down our Market Monitor another notch to a level 5.

Meanwhile, it’s easiest to spot strength in a down market, so the next couple of weeks should be telling. This week’s list has a broad array of stocks and sectors on it, and our Top Pick is Pinduoduo (PDD), one of many resilient Chinese names that’s actually picking up steam while the market sags.

Stock Name	Price	Buy Range	Loss Limit
Bunge Ltd (BG)	57.98	56-58.5	49.5-51
Cloudflare (NET)	51.96	49-52	42.5-44.5
Five9 (FIVN)	144.12	136-140	124-127
Martin Marietta Materials (MLM)	270.94	263-273	238-243
Mattel, Inc. (MAT)	13.95	13-13.5	11.5-11.8
Novocure (NVCR)	112.15	110-115	99-102
Pinduoduo (PDD)	91.62	86-90	77-79
Pinterest (PINS)	58.56	53-56	45-47.5
Quanta Services (PWR)	66.45	62-65	55.5-57
Ultragenyx Pharmaceutical Inc. (RARE)	95.53	90-94	83-85

With the election tomorrow, the biggest cause of uncertainty will soon be behind us, leaving investors able to focus once again on what’s important—growth and valuation.

In the meantime, it’s worth noting that the market’s technical strength deteriorated last week, turning our intermediate-term timing indicator negative once again. For that reason, among others, we have a couple of sell recommendations today.



As for today’s recommendation, it’s one of America’s most well-known companies, and selling for a bargain price as management steers the big old beast into what could be an exciting future.

Markets are choppy, which is normal considering uncertainty is high and we’re less than a week from the presidential election. Today I look at what history can teach us about politics and markets and why it might be a bit different this time. The Ant Technology giant IPO moves forward as China flexes its muscle, and it’s a signal for coming events. Today’s new idea is an electric vehicle play from Canada that is under the radar of even the trends of most avid supporters.

The past month has brought great performances from many of our marijuana stocks, but right now, there’s a risk that the market is turning down, preparing to take some of our profits.

Long-term, however, trends toward increased legalization mean prospects for the marijuana sector are brighter than ever; next week’s election will tell us a lot about what the next few years might bring.



How do we balance this short-term risk with this long-term opportunity? By remaining invested in the best-performing stocks, of course.

These are crazy times. This pandemic-riddled year isn’t done with us yet. In fact, Covid cases are rising and many states are reinstating new batches of lockdown restrictions. At the same time, we’re less than a week away from an election with a high risk of a contested result and the ensuing uncertainty.

At some point, we will get past the election and the pandemic. The economy should boom and the market will be free to rise. But things could still get awfully dicey in the weeks and months before we get to the Promised Land.



In this issue, I highlight a high-income stock that is ideal for the current situation. The business is benefitting mightily from the pandemic. It’s a defensive stock that should continue to perform well amidst the volatility. Yet, it should also be a star in the post-pandemic market.



Not only does this stock pay a high dividend, but it attracts high call premiums as well. It is one of the very few stocks that is well worth buying in the current situation.

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the November issue.

This month we look at the oil refining industry. Unlike many technology stocks, this group is the opposite of “priced for perfection.” The industry’s products will remain relevant for a long time, despite investors’ enthusiasm for a shift to electric-powered vehicles. Also, the pandemic will eventually pass and demand for refined products (gasoline, diesel, heating oil and jet fuel) will return, lifting these company’s earnings and stock prices. We acknowledge the tax and regulatory risks but see real value in the higher quality and better-financed refinery companies.



We also look at technology turnarounds. Successful tech turnarounds are rare, so our discussion briefly explores why this is the case and identifies six that have interesting turnaround potential.



Our feature recommendation is the oil refining company Valero Energy (VLO), offering what we see as the best risk/reward traits among a group with strong cyclical turnaround potential.



The letter also includes a summary of our recent sale of Amplify Energy (AMPY) and our change to a Sell rating on Consolidated Communications (CNSL), as well as the full roster of our current recommendations.



Please feel free to send me your questions and comments. This newsletter is written for you. A great way to get more out of your letter is to let me know what you are looking for.



I’m best reachable at Bruce@CabotWealth.com. I’ll do my best to respond as quickly as possible.

This week’s covered call idea is a play on an old-fashioned car company that has been taking bold steps to change the company, and investors’ perceptions of the stock.

The iShares EM Fund is holding up in fine style, holding well above its 25-day moving average, so our Buy signal remains in place. While our stocks are generally holding up well, there has been a slight increase in volatility.

The week has brought some impressive rebounds, and I’m putting two stocks back on Buy today. That brings our total number of Buy-rated positions to six (plus our bond ladder), a slightly more constructive stance than we’ve taken in recent weeks.

There’s a lot on my mind lately: hurricanes, child-rearing, college freshmen, human tragedy and Dollar Tree (DLTR).

The market didn’t change much over the past week but it feels like it’s on more solid ground. Perhaps that’s because it’s been three weeks since we were on the brink of a bigger leg down. Or because earnings-related volatility is calming down. Or because after two weeks of gains, a week of consolidation feels like the right next step.

In this Weekly Update, I summarize the latest news for one company. I also include pertinent questions from subscribers with my responses.

Growth stocks and many indexes perked up nicely during the past couple of weeks, but the intermediate-term trend is effectively neutral and we still haven’t seen much big-volume buying. We’re optimistic, but advise you to continue being selective on the buy side and holding a chunk of cash on the sideline.

Last week’s action still improves the market picture a bit, but yesterday’s panic shows we’re not out of the woods yet. I’m making one portfolio change today.

In this Weekly Update, I summarize the latest news for five companies.

The iShares EM Fund is holding up well, staying comfortably above its 25-day moving average, so our Buy signal remains in place. While our stocks are holding up well, there’s a lot of sideways movement in the portfolio. We have no changes to the portfolio tonight.

If you want to build a buy-and-hold portfolio of attractive takeover targets, look no further than undervalued small- and mid-cap growth stocks. Presuming normal stock market action, you’ll reap the benefits associated with owning growth stocks, and you’ll periodically reap the additional exciting benefit of owning takeover stocks.

The market continues to be a bit sketchy, and the S&P 600 Small Cap Index is still trading right around the 820 level, which has served as a rough support line thus far this year.

In this Weekly Update, I summarize the latest news for eight companies. Max Buy and Min Sell Prices are the recent price targets appearing in the Cabot Enterprising Model Issue 277E, for which you received the link on August 10.

This medical device company beat analysts’ earnings estimates by $0.08 last quarter.

Further bad news on the U.S.-China trade front prompted another sharply lower open today, and unlike Monday, the buyers never showed up. At day’s end, the Dow had fallen 473 points and the Nasdaq plunged 160 points.

Analysts expect this consulting company to grow by 16.9%, annually, over the next five years.

This semiconductor supplier beat analysts’ estimates by $0.47 last quarter.

One portfolio stock reported a great first quarter and moves from Strong Buy to Hold.

Overall, cannabis/marijuana stocks still look fine, even though the stocks were generally soft yesterday, so I’m not doing a full update, but there has been action, both good and bad, in a few stocks worth mentioning.

This e-sports company is expected to grow at a rate of more than 40% annually over the next five years.

Chefs’ Warehouse (CHEF) reported last night and the results were just fine.

One portfolio stock announced a corporate conversion, and three others reported first-quarter results.

We’re selling one-third of the shares and holding the rest of one stock in the portfolio. The move will boost the Model Portfolio’s cash position to 21%.

11 analysts have raised their EPS estimates for this investment banking firm in the last 30 days.

Two of the portfolio stocks each reported first quarter results that beat expectations.

A few Cabot Options Trader subscribers have asked me about ways to protect gains in their portfolios, so I thought I would write to everyone with a couple of strategies using options to hedge your portfolio.

A subscriber recently asked me if I keep a journal of my trades. Many traders keep journals so they can look back at their trades and evaluate what they did right and what they did wrong.

Want to know how the big institutional investors use options? Here is an example of how one trader spent $132 million on three technology stocks.

Options trading has its own vernacular. To know how to do it, you need to know what every options term means. Here are some of the basics.

Our Cabot Top Ten Trader’s market timing system consists of two parts—one based on the action of three select, growth-oriented market indexes, and the other based on the action of the fast-moving stocks Cabot Top Ten features.