Cabot Prime Week Ending November 24, 2017
Cabot Weekly Review
In this week’s stock market video (recorded on Wednesday morning), Paul Goodwin looks at the general state of the market and sees plenty to be thankful for. The major indexes are in uptrends and the worries, warnings and dire possibilities that always accompany bull markets aren’t making much of an impact. It’s a bull market and Paul encourages you to participate by giving several examples of stocks that are working well. Paul also points out that the Cabot Low Priced Stock Report will be emailed to you on December 14—it’s included in your Prime membership.
Cabot’s 10 Best Marijuana Stocks
November Issue (emailed to Prime Pro members on November 16) If you bought a basket of Tim’s 10 Best Marijuana Stocks when the report was originally published in August, you’re off to a great start. Since that report was written, the average of the 10 stocks is up 38%, with the best up 157% and the worst down just 3%. Even better, if you bought only the eight stocks that he actually recommended (he suggested waiting on two until their charts improved), your average gain was 45%—and you had no losses!
Cabot Growth Investor
Bi-weekly Issue November 21: Mike dives into some education, revealing a long-term chart pattern that bodes well (including one stock that’s at the top of our Watch List now). He also gives his latest thoughts on the market and our recommended stocks, and presents the usual crop of new ideas if you have some cash on the sideline.
Other Stocks of Interest November 21: Follow ups to stocks featured June 21, 2017 (issue 1370) to November 21, 2017 (issue 1381). Since they’re not in the Model Portfolio, you don’t see them followed on a regular basis. However, we are monitoring these stocks, and this listing gives their current momentum status.
Cabot Top Ten Trader
Weekly Issue November 20: This week’s Top Ten has another batch of earnings winners, though many of the stocks are on the small side. Our Top Pick is Splunk (SPLK), long been a fast-growing software provider, the stock is now freewheeling on the upside.
Movers & Shakers Weekly Update November 17: Mike doesn’t see a ton of great setups out there at this time, which isn’t shocking given the run-up in leading stocks and the sluggishness of the broad market. Right now, he’s mainly looking for either (a) powerful breakouts on earnings or some other meaningful news, (b) tightness after a big rally, or (c) a quick, sharp shakeout/knockout action, which could clear the decks for higher prices. Buy ideas: Caterpillar (CAT), MKS Instruments (MKSI), SVB Financial (SIVB), Vishay (VSH) and YY Inc. (YY).
Cabot Undervalued Stocks Advisor
Special Bulletin November 22: GameStop (GME) reported much better-than-expected third-quarter results yesterday afternoon, and investors reacted by pushing the share price up about 8% since the market opened this morning.
Weekly Update November 21: Boise Cascade (BCC) initiated a quarterly dividend, PulteGroup (PHM) moves from Hold to Sell, and Vertex Pharmaceuticals (VRTX) moves from Strong Buy to Hold.
Special Bulletin November 20: The recently-rumored merger between semiconductor companies Marvell Technology Group (MRVL) and Cavium (CAVM) was announced this morning. Marvell will purchase Cavium in a deal valued at approximately $80 per CAVM share. With CAVM at 81, Crista recommends selling.
Monthly Issue November 7: Today’s featured stocks include two new additions to the portfolios—WestRock Company (WRK) and Delek US Holdings (DK)—and Cavium (CAVM), which has ostensibly become a takeover target.
Cabot Stock of the Week
Special Bulletin November 21: Pulte Group (PHM) is now rated Sell, simply because it has come so far so fast. Tim recommends selling now and redeploying the cash in a lower-risk stock, like BB&T (BBT), Nucor (NUE) or Pembina Pipeline (PBA).
Weekly Issue November 14: Tim’s recommendation this week is Signet Jewelers (SIG), an undervalued stock recommended by Azmath Rahiman of Cabot Benjamin Graham Value Investor. Grupo Supervielle (SUPV) moves to Sell and PulteGroup (PHM) moves to Hold.
Cabot Emerging Markets Investor
Weekly Update November 22: The iShares EM Fund (EEM) has rebounded sharply and is well above both its 25- and 50-day moving average. That keeps the Buy signal in the Cabot Emerging Markets Timer shining brightly. Paul has one change tonight: he’s putting Jupai (JP) back on Hold.
Bi-weekly Issue November 16: There has been plenty of action in emerging markets recently, but today’s strong rally pushed the Cabot Emerging Markets Timer to a clear buy signal. Part of this may be the continuing effect of a great Singles’ Day splurge in China, and I write about that. We’re making some adjustments to the portfolio to put the spotlight on the winners and switch out of one laggard, Sina.com (SINA), to make room for Weibo (WB).
Cabot Benjamin Graham Value Investor
Special Bulletin November 22: One of Azmath’s top recommendations, Signet Jewelers (SIG), lost close to 30% on Tuesday after releasing disappointing Q3 earnings results. The quarterly loss was hard to predict because most of the loss was due to unforeseen circumstances.
Weekly Update November 16: The year-over-year (YoY) increase in inflation in October was 2%, slightly below the 2.2% YoY increase in September, as the cost of gasoline and fuel oil eased after the hurricane-related production glut. Berkshire Hathaway (BRK) reported earnings this week.
Monthly Issue November 9: Azmath presents his outlook on the investment climate and the economy, adds two new stocks to the portfolio, Discovery Communications (DISCA) and Signet Jewelers (SIG), and gives updates on our existing stocks.
Cabot Dividend Investor
Weekly Update November 22: Chloe is putting ONEOK (OKE) on Hold today due to weakness in pipeline stocks, but most positions are still rated Buy.
Special Bulletin November 20: Chloe moves Cummins (CMI) to Hold today and recommends waiting until it reverses course to start new positions.
Monthly Issue October 25: Chloe adds ONEOK (OKE), a new 5.3% yielding stock to the High Yield Tier. Most of her other positions are rated Buy as well, and the market is strong, so if you’re underinvested, it’s time to put some money to work. She also review some of her best and worst trades of the past two years, to see what we can learn from them.
Wall Street’s Best Investments
Daily Alert November 22: Signet Jewelers (SIG) from Cabot Stock of the Week
Daily Alert November 21: Franco-Nevada (FNV) from Adrian Day’s Global Analyst
Daily Alert November 20: Boise Cascade Company (BCC) from AlphaProfit Sector Investors’ Newsletter
Daily Alert November 17: CGI Group (GIB-A.TO) from The Successful Investor
Daily Alert November 16: Canada Goose Holdings (GOOS) from Canaccord Genuity Research
Monthly Issue November 15: Most of Nancy’s contributors remain bullish for now, and are still finding pockets of opportunities for our subscribers. This month’s Spotlight Stock is Cognizant Technology Solutions (CTSH), a company that is steeped in a variety of technology channels, including some very disruptive technologies that Nancy discusses further in her feature.
Wall Streets Best Dividend Stocks
Daily Alert November 22: Edison International (EIX) from Dow Theory Forecasts
Daily Alert November 21: Emera (EMA.TO) from The Income Investor
Daily Alert November 20: Occidental Petroleum (OXY) from Capitalist Times
Daily Alert November 17: Energy Transfer Equity LP (ETE) from The Income Millionaire
Daily Alert November 16: Delek US Holdings (DK) from Cabot Undervalued Stocks Advisor
Monthly Issue November 8: Nancy’s contributors remain bullish, but cautious. The Spotlight Stock is Blackstone Group (BX), a Master Limited Partnership that’s primarily an asset manager, with holdings that are increasingly energy investments. The company is growing at double-digit rates and currently yields 5.35%.
This Week’s Q&As
Cabot Growth Investor and Cabot Top Ten Trader
Question: I’ve made great money this year (thank you) but with so many stocks having made such great runs, I’m looking to hedge. What’s the best way to do that?
Mike: I’m not a huge hedging guy, as the problem you run in to is that whatever instrument you use as a hedge is usually imperfect. Said another way, if you bought puts on the S&P 500 or Nasdaq 100, or bought an inverse ETF (that goes up when the market goes down), there’s nothing that says the market can’t rally but your stocks pull back. (We actually see this quite often when investors rotate into different sectors.)
Because of that, if you’re looking to protect your gains, my answer is much more straightforward: Take partial profits, especially in stocks that have been running without interruption for many months and have recently exploded to the upside. I don’t advise selling all your shares, but taking 25% to 35% off the table on the way up to lighten the load, which will of course decrease the pain if/when your stocks correct.
Cabot Emerging Markets Investor
Question: I’m impressed with your call and patience with YY Inc. (YY). However I’m puzzled by the monster move of NetEase (NTES) post-earnings. Could you give me your read on it?
Paul: NTES has been trading sideways (despite its brief June breakout) since February, which means that there have been plenty of occasions for investors to lose patience and sell the stock. So when the good earnings news came out, there was a large backlog of buying appetite. Both individuals and institutions had likely reduced or eliminated their positions.
Everyone likes the story of NTES, so a little good news was the only catalyst necessary to produce the buying stampede. I expect that after a little profit taking, NTES will continue higher.
Question: Which Cabot advisory is likely to perform best next year?
Paul: I don’t have a definitive answer as to which advisory is likely to perform better next year. First, all of Cabot’s growth analysts (most certainly including me) are skeptical about attempts to predict the future. This bull market has gone on for an unexpectedly long time, and has outlasted a continuing barrage of negative predictions and calls for a pullback. My personal opinion is that the economic future is too complicated to be predicted accurately.
As to whether Cabot Growth Investor of Cabot Emerging Markets Investor is likely to have better performance in 2018, the same skepticism applies. Whether markets go up or not, I expect that EM stocks will exhibit higher volatility than U.S. stocks. EM stocks will go up more while the bulls are in charge and will correct more sharply when the bears are in control.
I expect my advisory to outperform U.S. indexes as long as the bull market lasts. Cabot Growth Investor will also outperform, but not as much. But CGI will lose less when things turn sour.
The most important thing is your personal risk tolerance. If you know yourself well enough to predict your reaction to falling stocks, you should be able to make that call yourself.
Question: Any thoughts about getting back into HDFC Bank (HDB)? I have no exposure in India.
Paul: The chart for HDB shows both the reason we bought and the reason we sold. The stock made a huge run from January through July, but has been choppy and sideways since then.
You can see a parallel to the broad India market, shown here as INDA (iShares MSCI India ETF).
I have included both charts because I want you to see that not having any exposure to India isn’t necessarily a bad thing if India isn’t offering superior performance.
When an Indian stock of a company with good fundamentals starts doing well again, I will recommend it (as long as it’s the best opportunity among all emerging market stocks). But don’t worry about not having any exposure to India. The market will sort that out for you.
Guide to Cabot Prime
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