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Cabot Prime Plus Week Ending December 17, 2021

Stock Recommendation Tracker

The Stock Recommendation Tracker 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 or any changes to our recommendations over the previous week. We 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 goes into detail about the growth stock meltdown, but he also sees a little resilience outside of growth and mentions a couple of shorter-term bright lights. Overall, he’s defensive, but he’s also fine tuning his watch list and goes over many stocks and themes that continue to resist the selling.


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Cabot Growth Investor

Bi-weekly Issue December 16: The rally after the early-December low has clearly come under pressure, especially with growth stocks, most of which are in shambles; our Cabot Tides remain negative and we’re remaining cautious in the Model Portfolio, with 50%-ish cash for the past three weeks.

Special Bulletin December 16: After a solid post-Fed bounce yesterday, growth stocks are coming unglued again today, with the selling pressures not letting up. We had nearly 50% in cash (or more) for the past two weeks, but today we have two changes—first, we’re going to sell the rest of our Cloudflare (NET), which can’t get off its knees, and second, we’re going to Hold on Ambarella (AMBA), which was looking great a week ago but could be joining the rest of the growth stock crowd. Our cash position will now be around 55%.

Bi-weekly Update December 9: After a solid three-day rally, stocks sold off again today—the Dow was actually up a point but the Nasdaq fell 270 points (1.7%) and most growth stocks were down in the 3% to 5% range.

Cabot Top Ten Trader

Movers & Shakers December 17: Last week we wrote about some encouraging signs from the market, and to start on a positive note, some of those things still hold true—the 80% up-volume cluster on the NYSE (three of four days off the early-December low) seems to be helping indexes like the S&P 500 and NYSE Compositive, both of which remain miles above their prior lows. The same goes with some cyclical areas (financials, transports, industrials, housing)—they’re obviously not plowing ahead, but they’re mostly chopping around.

Weekly Issue December 13: The market’s action last week, while far from perfect, was about as good as you could have hoped for given the prior damage—all the indexes raced higher by 2.5% to 3.5%, with the big-cap ones testing their prior highs and the broader indexes pushing back toward their 50-day lines. Mike’s Top Pick Ciena (CIEN) has been dead money for a while, but staged a very impressive breakout on earnings last week. You can start small here or (preferably) on dips.

Cabot Undervalued Stocks Advisor

Weekly Update December 15: Private equity is this cycle’s Masters of the Universe. We discuss why we believe the crown is headed for a fall. We also include comments on Bristol-Myers Squibb’s (BMY) sensible 10% dividend increase and new share repurchase plan and on other recommended stocks.

Monthly Issue December 1: A week ago, we wrote how the stock market appeared to be shifting to a post-Covid economy. This economy would feature slower/normalized/sustainable growth following the bulge from the pandemic stimulus programs and pent-up demand, along with the effects of higher interest rates and a relenting of supply-chain issues. The emergence of the Covid Omicron variant has temporarily upended this view, for now.

Cabot Stock of the Week

Weekly Issue December 13: Tim’s featured stock Visa (V), is a global payments technology company that provides a digital currency instead of cash and checks to individuals and businesses in more than 200 countries and over 160 currencies. It is the largest payment processor in the world. Its systems can process 65,000 transactions per second.

Cabot Explorer

Bi-weekly Update December 16: It’s been a challenging week for growth investors as the stocks that climbed the fastest are getting hit the hardest, such as our Cloudflare (NET) position, despite still posting strong numbers. On the other hand, Oracle (ORCL), where expectations are more modest, jumped from 89 to 104 this week on earnings that beat expectations.

Bi-weekly Issue December 9: Carl’s new recommendation Nu Holdings (NU), a financial services and payment company, claims more than 48 million customers in a country and region where fintech is flourishing. Fintech should be seen across all the business it impacts such as transportation, food service, retail and telecommunication industries as well as financial services.

Cabot Dividend Investor

Weekly Update December 15: The Central Bank came with its December announcement this afternoon. The market has been anxiously anticipating this meeting. And it’s a little nervous, as well it should be. Inflation is soaring out of control. The consumer price index came out at 6.8% in November, the highest in 39 years. The Producer Price Index, which measures wholesale prices on the way to the consumer, was a higher-than-expected 9.6%, the highest since that number has been reported.

Monthly Issue December 8: Tom’s featured stock Visa (V), is a global payments technology company that provides a digital currency instead of cash and checks to individuals and business in more than 200 countries and over 160 currencies. It is the largest payment processor in the world. Its systems can process 65,000 transactions per second.

Cabot Marijuana Investor

Update December 15: We own all the leading companies in the industry. Revenues at our companies grew an average of 64% from the previous year in the latest quarter. And increasing numbers of our companies are reporting real profits, as economies of scale kick in.

Monthly Issue November 17: The chatter at the moment is centered on South Carolina Republican Representative Nancy Mace, who this week introduced the States Reform Act, which would remove marijuana from the Controlled Substances Act while ensuring that businesses in states where marijuana is currently legal can continue to operate unimpeded by changing federal rules, and would establish a federal tax rate of 3%, down from 3.75% in an earlier version, and significantly lower than competing Democratic proposals.

Cabot Early Opportunities

Special Bulletin December 17: Rivian (RIVN) reported its first quarter as a public company yesterday. Adjusted EBITDA loss was -$727 million, slightly below consensus of -$690 million, while revenue of $1 million was slightly above consensus. The company ended Q3 with $5.2 billion, but we need to add $13.5 billion from the IPO to get a more accurate balance. Minus cash burn since the close of Q3 Rivian probably has around $16 billion now.

Monthly Issue December 15: While there is a lot we could talk about this month – the relative outperformance of mega-cap tech (MSFT, AAPL, GOOGL, NVDA), thus far a “normal” correction in software stocks (happens once or twice a year) and seemingly positive data around vaccine effectiveness against Omicron – in the immediate term investors are most focused on interest rates. Tyler’s top pick is Allbirds (BIRD).

Special Bulletin December 14: It’s another ugly day out there as the market remains in wait-and-hear mode pending commentary from Fed Chairman Jerome Powell, who will update us on his latest thinking tomorrow.

Special Bulletin December 8: SentinelOne (S) is one of our newer positions and has been hit hard during the recent market retreat. Part of this is because it is a recent IPO, part is because the broader group of security stocks has sold off (NET, ZS, OKTA, CRWD, etc.).

Cabot Profit Booster

Update December 16: Tomorrow is the expiration of our December covered calls, and I’m not going to sugar coat it—this month has not been kind to our stocks/trades. As @StockCats sarcastically said on Twitter, “It’s a stock picker’s market as long as you only pick the 7 stocks holding up the indexes.”

Weekly Issue December 14: Investors came into last week a bit on edge due to the new COVID-19 variant, and ahead of an important read on inflation. However, by the end of the week both scares were digested and investors once again were able to climb the wall of worry. Jacob’s new stock recommendation is Ciena (CIEN).

Cabot Income Advisor

Weekly Update December 15: All eyes are on the Fed. Sure, there’s inflation and Omicron and some other stuff. But Wall Street types mostly care about the Fed. Today, there was the ugliest inflation reading yet. The Producer Price Index showed an increase of 9.6% for November. That was much higher than expected and the highest such reading ever recorded.

Monthly Issue November 24: This great and epoch market recovery might be finally running out of gas. The S&P 500 is up over 100% since the bottom in March 2020. That means the market has gained as much value since that bottom as it had accumulated from the beginning of time until March of last year. It’s also up about 40% from the high before the pandemic and 10% just since early October. Such returns simply cannot continue.

Cabot Turnaround Letter

Weekly Update December 17: Note and 5-minute podcast: Jana Partners’ standstill agreement with TreeHouse Foods (THS) has expired, likely leading to more aggressive changes or a sale. Jaw-dropping declines in former high-flyers – we outline two strategies to find potential turnarounds in this group. Our recommended names held up well in yesterday’s selloff. We highlight Organon (OGN) and Credit Suisse (CS), and Bristol Myers Squibb (BMY) from the Cabot Undervalued Stocks Advisor.

Special Bulletin December 16: We are moving shares of GCP Applied Technologies (GCP) to a Sell. Earlier this month, the company announced a definitive agreement to be acquired by French construction materials company St. Gobain for $32/share in cash. This price is 14% above our $28 price target. Activist investor Starboard Value’s sizeable ownership stake and oversight of GCP drove the auction process and successful sale.

Monthly Issue December 1: Our featured recommendation this month is The Western Union Company (WU). Shares of this global money transfer company have remained unchanged (actually, down 10%) since their spin-off in 2006. The company has sizeable challenges as it faces strong fintech competitors, but it continues to have stable/rising revenues, generate sizeable free cash flow and is backed by a healthy balance sheet.

Ask the Experts

Cabot Top Ten Trader

Question: Home Builder prospects look good, and you mentioned Toll Brothers (TOL) in your latest issue. How is Builders FirstSource (BLDR)? Can you compare BLDR and TOL?

Mike: Thanks for asking. BLDR looks fine, and it’s a housing supplier (not a builder per se). So that’s the difference. I think we favor (maybe) the builders because they’re fresher – possibly just getting going from multi-month bases, whereas BLDR has been running for a while. But I have nothing against BLDR either.

Quarterly Cabot Analyst Meeting

The recording of the Cabot Prime Members Meeting with the Analysts from October 13, 2021 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 member benefits.