Cabot Prime Week Ending November 3, 2017
Guide to Cabot Prime
This Guide to Cabot Prime will help you make the best use of your Prime membership to create a strong personal portfolio.
Cabot Prime Quarterly Market Report
In this Cabot Prime Quarterly Market Report, Cabot President Timothy Lutts offers his read on the stock market, looking back at Q3 2018.
Cabot Prime Quarterly Analyst Teleconference
Watch the October 18 Quarterly Prime Teleconference, in which Cabot Analysts answer members’ questions live.
Cabot Weekly Review
In this week’s stock market video, Mike Cintolo discusses his overall bullish view on the market—he’s nearly fully invested at this time—though he also talks about the importance of keeping your feet on the ground and sticking to your plan. Mike relays some very interesting (and long-term bullish) action in one group, and goes through his usual array of high-potential stocks and lower-risk entry points.
Cabot’s 10 Best Marijuana Stocks
Special Update (emailed to Prime subscribers on October 30) Today, Constellation Brands (STZ), with a market capitalization of $42 billion, announced that it had acquired 10% of industry leader Canopy Growth (TWMJF). Canopy stock jumped 18% on the news (on high volume) and is now up 68% since Tim’s August recommendation.
October Update (emailed to Prime members on October 9): If you bought a basket of Tim’s 10 Best Marijuana Stocks when the report was originally published on August 22, you’re off to a good start. Since that report was written, the average of the 10 stocks is up 21%, with the best up 49% and the worst down just 6%.
Cabot Growth Investor
Bi-weekly Update November 1: Mike is buying a 10% position in Autodesk (ADSK) and putting GrubHub (GRUB) back on Buy, leaving us with around 4% in cash.
Other Stocks of Interest October 27: Follow ups to stocks featured May 24, 2017 (issue 1368) to October 25, 2017 (issue 1379). 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.
Bi-weekly Issue October 25: Mike has no new buys or sells in the Model Portfolio, though most of our stocks are acting well; we’ll follow our usual plan as we wade through earnings season, including looking for new leadership. Elsewhere in tonight’s Cabot Growth Investor, we talk about using earnings gaps to spot new leadership, including describing the rules and tools we use to separate the wheat from the chaff.
Cabot Top Ten Trader
Movers & Shakers Weekly Update November 3: with the majority of the market’s primary evidence pointed up, you should remain bullish, giving your best stocks a chance to continue higher and looking to leap on new opportunities as they appear. Buy Ideas: Five Below (FIVE), iRhythm Technologies (IRTC), Meritor (MTOR) and Spirit Aerosystems (SPR).
Weekly Issue October 30: This week’s Top Ten includes many recent earnings winners, with our Top Pick is First Solar (FSLR), a liquid stock that just blasted out of a very flat base as part of its powerful turnaround.
Cabot Undervalued Stocks Advisor
Special Bulletin November 3: Earnings reports from Apple (AAPL), Molina Healthcare (MOH) and Universal Electronics (UEIC). MOH moves from Strong Buy to Hold, and UEIC moves from Buy to Strong Buy.
Special Bulletin November 2: Boise Cascade (BCC) moves from Buy to Hold, plus earnings reports from Cavium (CAVM), Martin Marietta Materials (MLM), Quanta Services (PWR) and Vulcan Materials (VMC).
Special Bulletin October 31: BP plc (BP) and Boise Cascade (BCC) have third quarter earnings beats and Crista writes about Alexion Pharmaceuticals (ALXN) and Mattel (MAT).
Weekly Update October 31: Many stocks are rising—either toward former highs, or surpassing recent highs—because the companies are growing profits very well. Crista says it’s not “Trump,” nor “irrational exuberance” nor “a lack of other good investment markets.” It’s simply strong earnings growth. No portfolio changes.
Special Bulletin October 30: Ameriprise Financial (AMP) moves to Sell, Vertex Pharmaceuticals (VRTX) moves to Strong Buy, XL Group (XL) moves to Buy, and Apple (AAPL) shares are rising.
Monthly Issue October 3: Today’s featured stocks are Bank of America (BAC), Schlumberger NV (SLB) and Nucor (NUE). BP plc (BP) and Legg Mason (LM) move to Hold and Schnitzer Steel (SCHN) moves to Sell.
Cabot Stock of the Week
Weekly Issue October 31: Tim leaned back toward the conservative side of the spectrum to choose today’s stock. Wynn Resorts (WYNN) is a dividend-paying stock with strong growth prospects that’s trading at the lower end of its recent range.
Cabot Emerging Markets Investor
Bi-weekly Issue November 2: Emerging market stocks in general strengthened this week, keeping our Cabot Emerging Markets Timer firmly on the positive side. Our new stock is ZTO Express (ZTO), an express delivery company with a China-wide network that covers 96% of China cities and towns. We have ratings changes on two of our stocks, Alibaba (BABA) from Hold to Buy and Baidu (BIDU) from Buy to Hold.
Cabot Benjamin Graham Value Investor
Weekly Update November 2: Azmath updates his position on Biogen (BIIB), EQT Midstream (EQM), LKQ Corporation (LKQ), T. Rowe Price Group (TROW), Alphabet (GOOG), Gilead Sciences (GILD), Alliance Resource Partners (ARLP) and Stifel Financial (SF).
Monthly Issue October 12: Azmath begins the transition of stocks from Roy Ward’s Value and Enterprise Models to his new, more consolidated Prudent Model. Azmath’s top recommendation is Gentex (GNTX).
Cabot Dividend Investor
Weekly Update November 1: Several of our holdings reported earnings this week, and Chloe gives all the details. She’s also moving ConEd (ED) back to Hold due to the stock’s recent advance, and adding the second half of the ONEOK (OKE) position today.
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 3: Baron Emerging Markets Fund (BEXFX) from Ian Wyatt’s Million Dollar Portfolio
Daily Alert November 2: SPDR S&P Global Natural Resources ETF (GNR) from The Income Investor
Daily Alert November 1: Chemours (CC) from DRIP Investor
Daily Alert October 31: MKS Instruments (MKSI) from The Investment Letter
Daily Alert October 30: iShares MSCI Germany ETF (EWG) from Internet Wealth Builder
Monthly Issue October 18: This month’s Spotlight Stock is Advance Auto Parts (AAP), a household name that ran into some challenges that put a dent in its stock price. But now with a new management team and favorable industry trends, the turnaround looks promising, and the stock price is certainly discounted—and attractive.
Wall Streets Best Dividend Stocks
Daily Alert November 3: Agrium (AGU) from Positive Patterns
Daily Alert November 2: Stanley Black & Decker (SWK) from The Wealth Advisory
Daily Alert November 2: Sell Juniper Networks (JNPR) from The Wealth Advisory
Daily Alert November 1: Schlumberger (SLB) from Cabot Undervalued Stocks Advisor
Daily Alert November 1: Sell Invesco (IVZ) from Cabot Undervalued Stocks Advisor
Daily Alert October 31: Sun Life Financial (SLF.TO) from Dividend Advisor
Daily Alert October 30: Weyerhaeuser (WY) from Real Wealth Report
Monthly Issue October 11: Our Spotlight Stock this month is representative of thriving stock markets. CME Group (CME) owns and operates exchanges for stocks, options, futures and derivatives. It has grown leaps and bounds, both internally and by acquisition, and numerous opportunities for expansion remain. Nancy’s feature further explores those opportunities.
This Week’s Q&As
Cabot Growth Investor and Cabot Top Ten Trader
Question: I was reading through the tax reform bullet points and there seems to be lots of stuff that that could hit various sectors, like home builders (mortgage deduction being lessened) or debt-heavy firms (less interest write-offs). How do you recommend playing this?
Mike: Well, in short, I don’t, at least not yet. First off, while perception is reality in the stock market, this week’s unveiling of the tax bill is step 1 of many that Congress will have to take to pass it. I don’t think it’s a stretch to say that the odds of anything passing is far from 100%, and I think most investors factor that in to their thinking.
Second, though, even if the bill (or something similar) does become law, it’s best to simply base your decisions on the market’s action. While any changes could have a big effect, they might not, or any effect might be outweighed by other factors. I’m not saying any bill won’t have a big impact, but it’s best to focus less on the news itself (much of which right now is speculation) and, instead, on the reaction to any news as it comes.
Right now, the market is acting well, as are groups like the homebuilders, which are in firm uptrends. So we remain bullish.
Cabot Undervalued Stocks Advisor
Question: What’s happening with Alexion Pharmaceuticals (ALXN) and Vertex Pharmaceuticals (VRTX)?
Crista: Pharma/biotech industry stocks are suffering from bad news at a few companies, including Celgene (CELG) and Merck (MRK). There is no apparent problem at Alexion (ALXN) or Vertex (VRTX), so I think those stocks will bounce back rather quickly (as opposed to languishing for several months). I would consider their recently-lower prices to be a buying opportunity.
Cabot Emerging Markets Investor
Question: I’m writing in response to your last update where you recommended selling ATHM.
I realize there’s been some weakness in the Chinese stocks and I see that there’s been a slight downtrend in this particular stock recently. I’m wondering, if I’m comfortable with some volatility, whether the stock’s long-term prospects make it strong enough to hold through this weakness? I’m aware that this may not be in line with the goals of the portfolio, but aside from that?
Paul: I’m perfectly okay with being patient with a stock for which you have longer-term hopes. Just make sure that you set a loss limit (a mental stop, not a hard stop) so you don’t let your conviction keep you holding the stock longer than you should.
Cabot Benjamin Graham Value Investor
Question: My wife and I have 750 shares of Avigilon (AIOCF) cost $10.60 in two accounts. I trust you are following the stock. When should we add to our position?
Azmath: I do not follow the stock and I think the earnings are too unpredictable to come up with a reasonable conclusion on its value. I would personally not buy the stock, or if I already owned it, I would not hold more than 1% to 2% of my portfolio.
Question: I have been a long-standing client of Roy’s and look forward to an equally rewarding relationship with you.
Are you planning to follow the Toronto market? I ask this since I am an 86 year old Canadian citizen and tend to be a value investor. Trump’s apparent intentions regarding NAFTA gives me some concern. This agreement has served all three countries well over the years and I see nothing but problems if it is canceled.
One of my specific concern is how this will impact Magna (MG/MGA). I have noted that you have it as a buy and yet I worry that it will be adversely affected should NAFTA be scrapped and would appreciate your comments.
Azmath: Anticipated uncertainty in NAFTA is definitely a concern, but in the long-run, it may not cause a lot of trouble to Magna. For instance, out of 149 manufacturing facilities, 55 are in U.S. while only 50 are in Canada and 30 in Mexico. Out of 27 development and sales center, 13 are in the US, 1 in Mexico and 11 in Canada. Magna although a Canadian company, has a significant presence in the U.S. In addition, Magna’s presence in the Asian market is rising at a much faster rate than that of its growth in North America. This will give some cushion in case there is a revamp of NAFTA agreement.
In the large scheme of things, say in 15 years or so, if autonomous driving kicks in, automobiles will be highly commoditized. Magna can be a potential supplier of fully built automobiles to potential tech companies. At a current P/E of 11x, Magna seems to be a bargain. I would continue to hold it.