Cabot Prime Week Ending April 12, 2019
We’ve Added a New Feature
By request, we have added a new feature to your Cabot Prime Weekly Summary—the Stock Recommendation Tracker. It is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions to the portfolios or any changes to our recommendations over the previous week. We will include this table at the bottom of the Weekly Summary, and provide a link here at the top to the Stock Recommendations Tracker.
Cabot Weekly Review (Video)
In this week’s stock market video, Mike Cintolo discusses another successful “test” for the market last week, as leading growth stocks found support just where they should. Mike’s putting some money to work, though he’s taking things on a stock-by-stock basis given the rotation going on and earnings season that’s getting underway.
Cabot Prime Quarterly Analyst Update & Q&A
Prime & Prime Pro Members | April 17, 2019
SPECIAL FREE WEBINAR OFFER - Hosted by Crista Huff
Great Growth & Value Stocks That Are Poised for Immediate Upside | Thursday, April 18
Cabot Wealth Summit 2019
7th Annual Conference | Wed-Fri, Aug 14-16 | Salem, Mass.
We’ve just added a beginning investors workshop to help you understand the terminology and concepts of investing so you will be better prepared to make more money. The cost of the workshop is $197 but as a Cabot Prime member, once you register for the summit, you can attend the additional workshop for FREE.
Learn More and Reserve Your Place
Cabot Growth Investor
Bi-weekly Issue April 11: While not perfect, the evidence remains very good—the big-picture outlook still points toward us being in the early stages of a new bull phase, and near term, Mike is beginning to see buying power return. Because of our two recent sales, we had built up 27% in cash, but tonight Mike will add two half-sized positions—one in Okta (OKTA), filling out our stake, and another in Carvana (CVNA), which he thinks has great potential. He’s also placing Five Below (FIVE) back on Buy. The cash position will now be around 17%.
Bi-weekly Update April 4: The overall market is still in fine shape, but there have been a growing number of yellow flags, including among growth stocks, which came under fire today. Tonight, Mike is going to sell our position in Ciena (CIEN), leaving us with 27% in cash. He’s also downgrading Workday (WDAY) to Hold.
Other Stocks of Interest April 12: Follow ups to stocks featured November 7, 2018 (issue 1406) to April 11, 2019 (issue 1476). 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
Movers & Shakers April 12: At this point, it’s mostly about following your plan: On the buy side, look for decent entry points and stick with leaders (stocks at or near their highs). And then manage those holdings by honoring loss limits, taking some partial profits on the way up and trailing a stop for the rest. Mike’s buy ideas this week are: Chart Industries (GTLS), Forescout (FSCT), Okta (OKTA) and Workday (WDAY). There are three sells today, RingCentral (RNG), Incyte Corp. (INCY) and Netflix (NFLX).
Weekly Issue April 8: Overall, Mike remains mostly bullish as most of the evidence continues to point up. Not surprisingly, this week’s list has many newer names to the publication as the buying power rotates to other areas. His Top Pick is Wynn Resorts (WYNN), which, along with many gaming peers, looks to have changed character last week. Try to buy on dips.
Cabot Undervalued Stocks Advisor
Special Bulletin April 10: Delta Air Lines (DAL) reported first-quarter adjusted earnings per share (EPS) of $0.96 this morning, above all analysts’ estimates. Crista says that it remains a Strong Buy.
Weekly Update April 9: Since this price action of oil might encourage investors to reexamine their current and future positioning within energy stocks, Crista gives you some information worth contemplating about oil prices, energy demand and renewable energy. There are five portfolio changes today: Martin Marietta Materials (MLM) moves from Hold to Retired, Quanta Services (PWR) moves from Hold to Retired, Southwest Airlines (LUV) moves from Strong Buy to Hold, Voya Financial (VOYA) moves from Buy to Hold and WestRock Company (WRK) moves from Buy to Hold.
Monthly Issue April 2: Crista writes of two unusual changes that are happening within the portfolio stocks today. DSW Inc. (DSW) officially changes its name and stock symbol to Designer Brands (DBI); and Dow Inc. (DOW) begins trading separately from DowDuPont (DWDP). She also has quite a few changes today: Comerica (CMA) moves from Buy to Strong Buy, Dow Inc. (DOW) joins the Growth & Income Portfolio with a Buy recommendation, DowDuPont (DWDP) moves from Strong Buy to Buy, DSW Inc. (DSW) changed their name to Designer Brands (DBI), Schlumberger (SLB) moves from Hold to Buy and Synchrony Financial (SYF) moves from Hold to Strong Buy.
Cabot Stock of the Week
Weekly Issue April 9: The market remains in good health, though selectivity remains important. For today’s recommendation, Tim swings back to the lower-risk side of the market with a recommendation for a well-known airline, Delta Air Lines (DAL). He can tell you from experience with airline stocks that this is highly unlikely to be a long-term investment, but it might be very profitable in the short term. The stock was originally recommended by Crista Huff for the Growth Portfolio of Cabot Undervalued Stocks Advisor. There are two changes today: Rapid7 (RPD) and Voya Financial (VOYA) both move from Buy to Hold.
Cabot Emerging Markets Investor
Bi-weekly Update April 11: As we enter the second quarter, emerging markets are on solid footing in a constructive uptrend as EEM remains just above both 50-day and 25-day moving averages. In light of Carl is positive and increasing his allocation. He is taking a full position in Tencent (TCEHY), which moves from Buy a Half to Buy. TAL Education (TAL) moves from Buy a Half to Hold a Half.
Bi-weekly Issue April 4: Despite a choppy past few weeks, our Emerging Markets remains positive, depicting a continuing intermediate-term uptrend among the sector. The iShares EM Fund (EEM) had two tests of its uptrend during March, but each dip found support near its rising 50-day line, and the fund has pushed back toward its 2019 highs this week. Tonight, Carl’s recommendation is: LexinFintech (LX), a stock that is growing at an incredible rate yet its stock trades at only ten times expected 2019 earnings. LexinFintech Holdings operates as an online consumer finance platform for young adults in the People’s Republic of China.
Cabot Dividend Investor
Weekly Update April 10: Tom writes that many of our defensive positions have gone gangbusters in the past turbulent year. The market still loves them, for now. But several of these stocks are getting pricey and if the defensive orientation of the market shifts with better economic fortunes, they could pull back. He’ll be watching the situation closely but for now he will bow to strong momentum. There are no portfolio changes today.
Monthly Issue March 27: Tom writes that this is a tricky environment. He believes dividend stocks are in the sweet spot of this late stage economic cycle market. The December selloff gave most investors a hangover and increased the appetite for income and recession resistant businesses. His featured stock this month is, Brookfield Infrastructure Partners L.P. (BIP) , a company that owns and operates infrastructure assets all over the world. It particularly focuses on high quality, long-life properties that generate stable cash flows, have low maintenance expenses and are virtual monopolies with high barriers to entry. Tom has three rating changes since last week’s update, General Motors (GM) moves from Hold to Sell, American Express (AXP) from Hold to Buy and UnitedHealth Group (UNH) from Buy to Hold.
Cabot Marijuana Investor
Update April 11: Tim writes that the industry is growing fast, with most companies in our portfolio reporting triple-digit growth from the year before. Consumer attitudes keep improving. Investor projections keep improving. And money continues to flow into the sector, pushing stocks ever higher. Tim is making four adjustments today. The portfolio will now sell a third of its Canopy Growth (CGC) position, sell a third of its Cronos (CRON) position, sell a half of its iAnthus (ITHUF) position and increase its Green Growth Brands (GTBIF) position by 50%.
Monthly Issue March 28: Tim says that CBD is hot, and acquisitions in the cannabis industry seem to occur daily, but the biggest marijuana stocks are cooling, at least for a while. Long-term, however, he remains very bullish on both the companies and the stocks in the industry and is truly enjoying staying on top of the developments. Tim is making one small change in the portfolio by averaging up in Kush Bottles (KSHB), increasing our position by one-third its current size.
Wall Street’s Best Investments
Monthly Issue April 10: The retail environment is changing rapidly due to e-commerce, with most brick-and-mortar stores trying to find new strategies to survive Amazon. However, Nancy’s Spotlight Stock this month, Costco Wholesale (COST), is one retailer that is finding success in both channels. In her Feature article, she explains a bit more about the company’s strategy and its biggest advantage—consumer loyalty.
Daily Alert April 10: Bruker Corporation (BRKR) from Validea Hot List Newsletter
Daily Alert April 9: W. R. Berkley Corporation (WRB) from 2 for 1 Stock Split Newsletter
Daily Alert April 8: Invesco S&P 500 Quality ETF (SPHQ) from Momentum Strategies Report
Wall Streets Best Dividend Stocks
Daily Alert April 12: Fifth Third Bancorp (FITB) from The Prudent Speculator
Daily Alert April 11: The Goldman Sachs Group, Inc. (GS-PJ) from Income Securities Investor
Daily Alert April 10: Superior Industries International, Inc. (SUP) from Cheap Investor
Daily Alert April 9: GNB Financial Services Inc. (GNBF) from Hughes Investment Management
Daily Alert April 8: Fidelity Limited Term Bond Fund (FJRLX) from Fidelity Monitor & Insight
Monthly Issue April 3: Our issue this month begins with Nancy’s Spotlight Stock, Lexington Realty Trust (LXP), a Real Estate Investment Trust that is in the midst of a transformation and whose shares are trading at bargain levels. In her Feature article, Nancy explores the direction in which the REIT is moving, highlighting the opportunities in that sector.
Ask the Experts
Cabot Marijuana Investor
Question: Here’s an impossible question. When do you stop selling a winner? When you get your cost out? When you’re down to a certain portfolio percentage?
I operate under the assumption that if I buy 10 stocks, 4-5 will lose money, 4-5 will make money—usually good money—but the real reason to invest is to get an Amazon, American Solar, Netflix, Presstek, Tesla, and others which dramatically change the landscape, so when I get a hold of one, how much should I hold? Which brings me to your Elixinol (ELLXF). I bot 7,500 shares at 2.57 on 2/4/19, bot 12,500 shares at 2.33 on 2/7 and bot 5,000 shares at 2.66 on 2/15, at which point the stock represented 10% of my account in total (IRA). Taking profits, I sold 5,000 shares at 2.68 on 3/20 and 5,000 shares at 2.96 on 3/22. When you bought more on 3/19, I stopped selling. I’m still long 15k and the stock represents 7.5% of portfolio, with a cost basis of 2.43 [the stock is now at 3.7]
Tim: Those are good questions, and as you know, there are no easy answers. I will say that one difference between the big winners you listed and Elixinol is that the former are all technology companies, which had certain moats, while Elixinol is a CBD company, and I see no moat, just a very fast-growing market with a lot of money rushing into it. That said, one important factor in how you deal with hot stocks and booming profits is your own personality, and everyone is different. You’ve been with Cabot more than 20 years, so you remember my father’s style. If he were into ELLXF today, he’d be averaging up! He could sleep well with 50% of his portfolio in one strong stock, and he could retain his optimism when such stocks sometimes went south. But most of us can not; most of us are more sensitive to downside risk, and thus we work to maintain a balance of risk and reward in our portfolios. ELLXF’s rapid ascent has been very gratifying, and while the stock is certainly out of trend to the upside today, it is still not among the most overvalued in the cannabis sector. Plus, the money continues to rush into both the industry and the stocks, and as we often say, trends tend to last longer and go farther than people expect. So, I’m still optimistic there’s more upside ahead. Lastly, I (and Mike Cintolo) totally agree with the validity of your statement; most of your stocks will be unmemorable, but those big winners can make your year!
Question: Regarding the marijuana stocks, I get the idea of a falling knife, but after hours pondering I don’t have concise criteria. Recently you mentioned Canopy, now at $46 may pull back as low as $26. Would that not fit the falling knife definition? There are a lot of opportunities to average down in the pot biz. I’d like to be better informed when I do it.
Tim: Thanks for asking. The investing adage “Never try to catch a falling knife” generally refers to stocks in major downtrends (either very long or very high volume) where the bottom is impossible to predict. A recent example is Chipotle Mexican Grill (CMG) in 2015-2017. But I don’t think Canopy qualifies, as a look at the chart of the past two years shows that the stock is still in a long-term uptrend. However, the Canopy IS in a correction now, and while that correction might end at the 200-day moving average (currently 40), I can easily imagine a scenario (major market correction) where this, one of the most over-owned marijuana stocks, can pull back to its December low at 26, just to shake out the weakest investors. If you’re looking to buy on pullbacks, I recommend focusing on companies that are less popular than Canopy and thus are able to attract new investors. Last week, for example, I recommended that readers average up in Green Thumb (GTBIF). which had surged higher on big volume in early April and then pulled back on lower volume to a previously identified level, which coincided with the stock’s 50-day moving average.
Cabot’s Ten Best Canadian Small-Cap StocksSpecial Report
Updated March 6, 2019: One of the generally accepted wisdoms over the past couple of years has been that the U.S. stock market is where the action is. But relative performance of ex-U.S. markets is showing that’s no longer the case. There are market-beating returns available to those investors willing to step abroad. And one of the easiest steps to take is just over the border with our neighbor to the north, Canada. For the modestly adventurous investor, I think there are quite a few Canadian stocks worth a look right now.
Cabot’s Best Safe Investments for Uncertain TimesSpecial Report
December 21: This report gives you some suggestions of the safest, productive places to put your money when the market gets bumpy.
A Richer Retirement
Special Report This handbook is designed to help you secure a better, longer, richer retirement for yourself by making the most of your savings both before and during retirement.
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.
Stock Recommendations Tracker
The table below lists all of the stocks held in any Cabot portfolio.
Updated or revised recommendations from the past week are in purple text.
Stocks added to a portfolio are highlighted in green text.
Closed stock positions in the past week are highlighted in red text.
|Stock||Cabot Emerging Markets Investor||Cabot Growth Investor||Cabot Marijuana Investor||Cabot Stock of the Week||Cabot Undervalued Stocks Advisor||Cabot Dividend Investor|
|OKTA||Buy another 1/2|