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Cabot Prime Pro Week Ending April 16, 2021

Cabot Prime Pro Week Ending April 16, 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, Tyler Laundon illustrates how the broad market has put together another encouraging week and he digs into a few ETFs that show pocket of particular strength. Tyler covers some M&A developments in the MedTech space and discusses how recent strength mega-cap tech stocks could portend good things for small and mid cap software stocks. Particular focus is provided on three software names that Tyler thinks are compelling buys right now. Stocks and ETFs discussed: XLF, IHI, TMO, PPD, DHR, RGEN, MSFT, AMZN, GOOG, SPT, ALTR, UPWK.


Cabot Prime Members Meeting with the Analysts: 2nd Quarter 2021

FREE WEBINAR FOR PRIME MEMBERS ONLY: April 21, 2021 Sign up now.

3 Micro-Cap Stocks that Could Triple in the Next Year

FREE WEBINAR FOR PRIME MEMBERS ONLY: April 22, 2021 Sign up now.

Advisory Services

Cabot Growth Investor

Bi-weekly Update April 14: Continue to go slow but have your shopping list ready. Growth stocks are gradually improving their standing, with more popping toward their highs, many holding their gains and a few finding some good-volume buying. That said, most potential leaders are still sitting on the runway, so we’re content to stand pat tonight and look for decisive strength to pull us into a heavily invested position. Our cash position stands at 45%. Mike is moving Uber (UBER) back to a Buy.

Bi-weekly Issue April 8: During the past week or two, there’s no question the evidence has improved—our Cabot Tides have remained positive throughout the correction thanks to the broad market’s strength, and now the Nasdaq has rejoined the party as many growth stocks have improved their positioning as well. So how do you slice and dice this environment? The lack of selling pressures and improving action of many growth names has us doing some buying tonight … but given the lack of power, we suggest going slow and looking to pile in only if things start really popping on the upside. In the Model Portfolio, we’re adding half-sized positions in Floor & Décor (FND) and SelectQuote (SLQT) tonight, while placing Pinterest (PINS) back on Buy. Our cash position will be a still-hefty 45%.

Cabot Top Ten Trader

Movers & Shakers April 16: This remains an “on the one hand, on the other hand” type of market. On the one hand, we continue to see more and more setups among growth stocks along with a lack of major selling, and starting on Wednesday, even some of the stalled-out cyclical names (especially metals and energy) began to find buyers. Mike has five buy recommendations.

Weekly Issue April 12: It certainly hasn’t been a buying panic, but last week was another step in the right direction, with growth stocks avoiding selling pressure even as they approach (or in some cases, sneak out to) new highs—a marked change in character from the prior few weeks. Mike’s Top Pick is United Therapeutics (UTHR), which recently staged a big-volume breakout on news.

Cabot Options Trader and Cabot Options Trader Pro

Note that the current week’s Weekly Update, earnings updates, position updates and stocks on watch are posted on the website in the Market Update section, which is deleted each week.

Cabot Options Trader Basic & Pro Trade Alert April 15: Roll Existing Position: Against Ford (F) Stock, Buy back your April 12.5 Call, and Sell the May 13 Call (exp. 5/21)

Cabot Options Trader Pro Trade Alert April 14: Adjust Existing Position: Against your XLF June 31 Call, Sell the June 37 Call (exp. 6/18) for $0.40 or more.

Cabot Options Trader Basic & Pro Trade Alert April 14: Covered Call: Buy Canopy Growth (CGC) Stock and Sell the May 27.5 Call (exp. 5/21) for a net price of $26 or less.

Cabot Options Trader Pro Weekly Update April 12: Long positions: FCX, SONO, XLF, PINS, UBER, DKNG, F, GPS

Cabot Options Trader Weekly Update April 12: The robust stock market rally last week pushed the Chicago Board of Options Exchange Volatility Index (VIX) to a new post-pandemic low. For the full week the VIX dropped 3.7% to end Friday at 16.69, its lowest close since Valentine’s Day 2020.

Cabot Undervalued Stocks Advisor

Weekly Update April 14: Earnings season has started. If you have the time and inclination, listen to the management call that accompanies each report. You can find these under the company’s “Investor Relations” tab on their website. The calls are webcast and open to the public. Most are available for a few weeks or longer for those not able to listen to the live webcast. Bruce has one portfolio change: U.S. Bancorp (USB) is moving from Buy to Hold.

Monthly Issue April 7: As one might expect in a value-oriented investment advisory, we focus a lot on a company’s valuation. We want to understand what the company is worth, both today and in the foreseeable future, and then buy its shares at some discount to that value. Determining a company’s underlying value is difficult, and more of an art than a science. There are many valuation approaches, including using a price/earnings multiple, discounted cash flow, EV/EBITDA multiple and net asset value. Bruce has one portfolio change: Tyson (TSN) is moving from Buy to Hold.

Cabot Stock of the Week

Weekly Issue April 12: The leading indexes continue to hit record highs, telling us the bull market that began over a year ago, though it is showing some signs of age, remains intact. Thus Tim continues to recommend that you be heavily invested in stocks that can help you reach your investing goals. Tim’s featured stock Sonos (SONO), was the first company to introduce multi-room wireless audio solutions. It’s smart speakers, amplifiers, ports, and other audio accessories are easy to set up and offer a premium sound experience, without all the expense and hassle of running wires throughout a home. Tim has no portfolio changes.

Cabot Explorer

Bi-weekly Issue April 15: Markets seem to be pausing a bit, with some stocks losing momentum while a few show surprising strength. Carl’s sense is that the market is looking at numbers with a more skeptical eye these days. Just as they’re beginning to take off in Asia, SPACs (Special Purpose Acquisition Companies) have definitely cooled a bit here, for several reasons. One is that the novelty has worn off a bit. Carl’s new recommendation is Altimeter Growth Corp. (AGC). Carl has two portfolio changes: Atlas Corp. (ATCO) moves from Hold to Sell and QuantumScape (QS) moves from Buy to Sell.

Bi-weekly Update April 8: With the exception of the surge by Sea (SE), Explorer positions were relatively quiet this week. Nearly 95% of companies in the S&P 500 are now trading above their 200-day moving average, according to Dow Jones Market Data, the highest percentage since May 2013. As if we didn’t have enough to worry about, as of late February, investors had borrowed a record $814 billion against their portfolios. That was up 49% from one year earlier, the fastest annual increase since 2007, during the frothy period before the 2008 financial crisis. Carl has one portfolio change: Atlas Corp. (ATCO) Moves from a Buy to a Hold.

Cabot Small-Cap Confidential

Weekly Update April 15: It’s been another mostly constructive week as many of our stocks inch higher and the economic picture continues to improve. Today’s news that retail sales jumped nearly 10% in March illustrates the combined positive impact of stimulus checks, vaccinations and reopening of the economy. It’s wise to assume other sectors are enjoying a rebound as well. Today’s jobless claims numbers are also incrementally positive, even though they remain historically high. Tyler has one portfolio change: Inspire Medical (INSP) moves from Hold to Buy.

Monthly Issue April 1: Tyler’s new recommendation, Revolve (RVLV) is an e-commerce fashion retailer that focuses on Millennial and Gen Z consumers (ages 18 to 39) through two differentiated websites, REVOLVE and FORWARD. The company has a portfolio of 24 owned brands, each of which has unique attributes and is supported by independent marketing and relationships with influencers. Additionally, Revolve continuously finds new brands and designers to feature on its websites. Revenue growth from 2017 through 2019 averaged 25%, with revenue up 21% to $601 million in 2019. Revolve has been consistently profitable; 2019 adjusted EPS rose 14% to $0.50. The pandemic had a negative impact in all quarters of 2020, driving sales to drop 3% to $581 million and a 1% reduction in active customers. Management made operating adjustments to maintain profitability, and EPS rose 58% to $0.79.

Cabot Dividend Investor

Monthly Issue April 14: This is an unusual environment to say the least. The market is looking ahead to the highest GDP growth in decades as vaccines end the lockdowns and restrictions. And forecasts continue to rise. At the same time, trillions in government stimulus will flood into the economy. Tom’s featured stock AGNC Investment Corp. (AGNC),is a mortgage real estate investment trust (mREIT) that invests predominantly in U.S. Government backed residential mortgages. It pays a high dividend yield, currently 8.4%, and makes dividend payments on a monthly basis.

Weekly Update April 7: How about this market? Even with the technology sector still in a funk and the huge energy sector rally abating, the S&P 500 just made a new all-time high anyway. The studs are out of the game, but no problem. The rest of the team is getting the job done. The cyclical rally is still proceeding even though energy stocks are consolidating. Sectors like finance, materials, consumer discretionary and industrials didn’t get as overextended as energy and are still on the vaccine bender. Tom has one portfolio change: Altria (MO) moves from Hold to Sell Half.

Cabot Marijuana Investor

Weekly Update April 14: Given that the broad market is still healthy, with major indexes hitting new highs very recently, and that the Marijuana Index is now a massive 48% off its high (our average stock is off 24%), it seems very likely that the marijuana sector will attract buyers around these levels. So today Tim is going to put half the cash back in. Specifically, the portfolio will now buy equal dollar amounts of current holdings Cresco Labs (CRLBF), Curaleaf (CURLF), Green Thumb (GTBIF), GrowGeneration (GRWG), TerrAscend (TRSSF) and new addition Columbia Care (CCHWF).

Monthly Issue March 31: Fourth quarter results are in for all but one of our companies (Jushi) and they were terrific, showing average revenue growth from the year before of 167%—a number that would be even higher without the presence of Turning Point and Village Farms, two stocks that have brought the portfolio lower-risk diversification. And prospects for growth in the sector remain high, as New Jersey and now New York are working on the details of creating legalized markets—though just as with Covid vaccine rollouts, every state’s got to do it their own way, which takes time. Tim is making one change today, selling our final piece of Village Farms (VFF) and holding the cash.

Cabot Early Opportunities

Special Bulletin April 15: We’ve seen a big improvement in the way many growth and early-stage stocks are acting over the last two weeks. Many of our stocks that sold off in March have been gaining some altitude back, and many of those that were acting well continue to do so. With all that in mind, here are a few upgrades, downgrades and notes today.

Monthly Issue March 17: One year and one day ago, on March 16, 2020 the S&P 500 had one of the worst days in history, falling nearly 12%. Of course, that was just one in a horrible stretch of trading days that slashed the index by 35% over the course of six weeks. This advisory service was relatively new at the time and we were just starting to get into a groove when things went crazy. Tyler’s Top Pick is Eargo (EAR), produces high-quality, small, well-fitting and easy-to-use hearing aids, at a reasonable cost. Eargo’s solution ticks all the boxes. It is nearly invisible (fitting completely in the ear canal) and has a lot of technology (including 16 hours per charge) packed into a small form factor.

Cabot Profit Booster

April Expiration April 15: The expiration of our April covered calls is tomorrow, and our positions are working very well, though several are now trading below the strike price of our covered call options. If these stocks close out the week on Friday below the strike, the calls will expire worthless, and we will keep 100% of the premiums earned. If that is case you won’t need to act, and early next week we will most likely sell those stock positions and move on. Meanwhile, one position is trading well above our covered call strike and is likely to be called away.

Weekly Issue April 13: This Friday is the expiration of our six April Covered Call positions. Jacob would categorize these six positions as a good, but somewhat mixed bag, as only one trade looks like it will expire for its full profit potential (ANF), while four (TRIP, SUM, AMKR, AZEK) are in good shape but may need attention in the week to come, and one (ZI) which is mostly trading at a breakeven. Jacob’s new stock recommendation is Goodyear Tire & Rubber (GT).

Cabot Micro-Cap Insider

Monthly Issue April 14: Rich’s new recommendation Atento SA (ATTO), is a Latin American customer relationship management (CRM) business that is growing, generating positive free cash flow, and is an acquisition candidate. It’s majority owned by sophisticated private equity investors who are restricted from selling the company until May 2022. At that time, Rich expects a sale of the company for more than 100% above Atento’s current price. It is currently trading at 3.6x forward EBITDA. This is truly a distressed valuation that is usually associated with a company that is on the verge of bankruptcy.

Weekly Update April 7: After a volatile March, the market has found its footing. Month to date, the S&P 500 is up 2.8%, and is back to an all-time high. Our open recommendations are up 80% on average from when they were initially profiled. In total (including closed recommendations), our picks are up 70% since being initially profiled. This week, Rich has material updates for Liberated Syndication (LSYN), P10 Holdings (PIOE), and Aptevo Therapeutics (APVO).

Cabot Income Advisor

Weekly Update April 14: This is an incredible market that just keeps creeping higher. The promise of a booming recovery with trillions in stimulus ahead continues to pull stocks to new all-time highs. Even normally pessimistic economists are calling for the strongest GDP growth in decades. And estimates are rising. Goldman Sachs is forecasting 8% GDP growth in 2021. That would be the highest since 1951. The average expectation for S&P 500 earnings growth in the first quarter is 25%.

Monthly Issue March 24: Cyclical stocks are hot and technology stocks are not. Wait a minute. Cyclical stocks are moving lower and technology is roaring back. That’s been the story over the past month. Of course, energy stocks are due for a pullback or consolidation after such a huge move higher. It’s normal. And the prognosis for the sector is still good for the rest of the year. It also isn’t clear if technology stocks are finished correcting or not. While those sectors are having all the fun, most S&P 500 sectors haven’t been doing much. Tom’s first featured stock U.S. Bancorp (USB), is the fifth largest bank in the United States and the country’s largest regional bank with over 3,000 bank branches in 25 states in the western and northern U.S. Tom’s second featured stock KKR & Co. (KKR), Formerly Kohlberg Kravis Roberts Co., is a leading global alternative asset manager.

Cabot Turnaround Letter

Weekly Update April 16: Wells Fargo (WFC) reported on Wednesday. Next week has Xerox (XRX), Baker Hughes (BKR), Credit Suisse (CS), Mattel (MAT) and Biogen (BIIB) reporting earnings. There were no ratings or price target changes this past week. Click here to listen to the podcast.

Monthly Issue March 31: In the excitement to capture the momentum in post-Covid economic re-opening stocks, investors seem to be leaving aside the defense contractors. These companies produce large-scale weapons and related equipment for the United States and allied governments. Several factors may be behind this neglect, including uncertainty regarding the Biden Administration’s priorities, possible spending limits imposed by the surging federal budget deficit and avoidance by investors who emphasize favorable environmental, social and governance (ESG) traits. Also, the defense industry is generally slow-growth, sending investors elsewhere to look for faster growth. Bruce’s has one buy recommendation: Elanco Animal Health (ELAN) and two sell recommendations: Valero Energy (VLO) and Volkswagen AG (VWAGY).

Ask the Experts

Cabot Top Ten Trader

Question: Hi Mike, I have had Dynatrace, Inc. (DT) for 2 months now and I am even on it. I’m a small investor so its frustrating holding something that’s not going anywhere although every-time I sell it takes off or so it seems. Just trying to make some money. Any ideas or thoughts when in such a position?

Mike: Thanks for writing. Well, I’m a big believer in following the plan, as the market/stocks don’t usually move on our preferred timing. That doesn’t mean just holding and hoping, as you can adjust your plan over time, of course. But in DT’s case, I would say it’s tedious, and still has work to do, but the overall base-on-base formation is still intact and it’s perking up a bit. I would tend to hold on but probably have a stop in the 46-48 area, as a failure from here would look worse. As for the ups and downs – that’s what is likely to happen if you invest during a correction. Not many stocks are going to go up consistently, instead chopping around. DT has done that – not an excuse, but just something to keep in mind.

Quarterly Cabot Analyst Meeting

The recording of the Cabot Prime Members Meeting with the Analysts from January 20, 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 Pro member benefits.

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.

StockCabot Small-Cap ConfidentialCabot ExplorerCabot Growth InvestorCabot Marijuana InvestorCabot Stock of the WeekCabot Undervalued Stocks AdvisorCabot Dividend Investor
ABBVHold 2/3
BFTBuy 1/2
BIPBuyBuy 2/3
BMYStrong Buy
CGCSee Advisory
CRLBFSee Advisory
CRNCHold 3/4
CURLFSee Advisory
DKNGBuy 1/2Hold
FNDBuy a Half
FVRRHold 1/2
GRWGSee Advisory
GSHDHold 3/4
GTBIFSee Advisory
IIPRSee Advisory
JUSHFSee AdvisoryHold 2/3
LLYHold 2/3
MOHold Half
NETHold 1/2
PGXHold 1/2
QCOMHold 2/3
SEBuy 1/2Buy
SLQTBuy a HalfBuy
SPCEHold 1/2Take Partial Profits
TCNNFSee AdvisoryHold
TPBSee Advisory
TRSSFSee Advisory
TSMBuy 1/2
TWLOHold 3/4
XELBuy 2/3