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Cabot Prime Pro Week Ending May 21, 2021

Cabot Prime Pro Week Ending May 21, 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 talks about the market’s show of support this week, which he considers a nice first step after a dreadful past two weeks. He’s not changing his stance yet, but reviews just what he’s looking for (some upside power through resistance levels in indexes and leading stocks) as a sign to become more constructive. Stocks mentioned include RBLX, ALGN, MXIM, UPS, W, SNAP, CRWD, NVDA, UPST and CURLF.

UPCOMING CABOT EVENTS:

Cabot Retirement Club Member Call

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Cabot Micro-Cap Insider Member Call

FREE WEBINAR FOR PRIME PRO MEMBERS ONLY: June 10, 2021 Sign up now.

Contrarian Stocks for a Momentum World

FREE WEBINAR FOR PRIME PRO MEMBERS ONLY: June 17, 2021 Sign up now.

Advisory Services

Cabot Growth Investor

Bi-weekly Issue May 20: It’s been a downer of a three months for growth stocks, so we want to start with a positive note, partially in response to some worried questions we’ve started to get as the sellers really dug in their heels last week: Longer term, we remain as optimistic as ever that this bull market (yes, even in growth stocks) has a long way to run. Part of that is our still-bullish Cabot Trend Lines (bullish for more than a year now), but a lot of it comes from a study we write about later in this issue.

Bi-weekly Update May 13: Overall, the levee has broken when it comes to growth stocks—while many had set up nicely ahead of earnings, this has been one of the worst earnings seasons (in terms of stock reactions) that we can remember, with even solid beat-and-raise reports bringing major gaps lower. We’ve been north of 45% in cash for months, and we’ve continued to ditch stocks in the portfolio and are up to around 70% on the sideline.

Special Bulletin May 12: The market remains in the dumps, and while some beaten-down growth names have found support, many are still getting hit on earnings and we’re even seeing selling spread to the broad market. Today’s bulletin is in regards to SelectQuote (SLQT), whose good-not-great quarterly report is causing a big break today—we’re forced to bail here and make sure a bad situation doesn’t get worse. We’re also placing Floor & Décor (FND) and Five Below (FIVE) on Hold as the selling spreads. Our cash position is now a large 70%.

Cabot Top Ten Trader

Movers & Shakers May 21: After a brutal couple of weeks for growth (especially) and the broad market (a bit near the end), this week finally saw a bit of encouraging action. No, the major indexes haven’t lit up the sky (the S&P 500 is flat and the Nasdaq is up around 1% on the week), but we have seen some support appear—the market fell Monday and Tuesday and gapped down sharply on Wednesday, but most stuff has bounced nicely since then. Mike has two buy recommendations: Snap On (SNA) and United Therapeutics (UTHR).

Weekly Issue May 17: Last week, the selling that had been concentrated in growth names spread to the rest of the market through Wednesday, though a late-week bounce helped a bit. Still, not much has changed with the overall environment—growth stocks remain in the dumps, and while bounces are possible (many fell 20% to 30% in just the past three weeks), there’s a lot of damage to repair. Mike’s Top Pick is International Game Technology (IGT), which is benefiting from both the reopening of casinos and also the growth wave in sports betting.

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 Pro & Basic Stocks on Watch May 20: Yesterday, for the first time in weeks, option activity was mixed/slightly bullish. This is a slightly encouraging sign as the hedge funds/institutions have been buying puts hand over fist for almost a month. This put buying, and lack of call buying, has kept us largely on the sidelines for weeks.

Cabot Options Trader Pro & Basic Trade Alert May 19: Adjust Existing CGC Position (also a note about Ford): Against CGC Stock, Buy Back the May 27.5 Call and Sell the June 27.5 Call (exp. 6/18).

Cabot Options Trader Pro & Basic Trade Alert May 18: Roll Existing Position: Against your Ford (F) Stock, Buy Back May 13 Call, and Sell June 13 Call (exp. 6/18)

Cabot Undervalued Stocks Advisor

Weekly Update May 19: Investors have started to see a cloud or two in an otherwise sunny stock market sky. We don’t focus much on short-term market moves, but we have noticed that the weather is shifting, at least slightly. Since mid-February, the equal-weighted S&P 500, as measured by the Invesco S&P500 Equal Weight ETF (RSP), has surged about 11%, leaving the regular S&P 500’s 6% return in the rearview mirror. A spread this wide is unusual. Sloppy performance by heavily-weighted mega-cap tech stocks is holding back the broad index, but is having little effect on the equal-weighted index. Bruce has no portfolio changes.

Monthly Issue May 5: While the year-to-date 11.8% surge in the S&P 500 (helped by a 5.3% jump in April) has been impressively strong, the 40% annualized pace seemed unlikely to continue, at least without interruption. May hasn’t started out quite so exuberantly, with an early pull-back in the high-momentum tech stocks dragging down the broader indexes. The immediate catalyst appears to be Treasury Secretary Yellen’s comments on Tuesday that interest rates may need to increase to ward off inflation. Bruce has no portfolio changes.

Cabot Stock of the Week

Weekly Issue May 17: Tim’s featured stock is HubSpot (HUBS), which was born in Cambridge, Massachusetts in 2005. The company is a cloud-based provider of inbound marketing tools for website content management, blogging, email campaigns, SEO, social media monitoring, CRM and more. It currently has a market cap of $23 billion. Tim has four portfolio changes.

Cabot Explorer

Bi-weekly Update May 20: Markets are a bit jittery despite strong earnings and expected strength as America opens up its post-pandemic economy. China is already at a 5% growth path while India, Japan, and other important economies struggle to get the pandemic under control. It has been extraordinary to see Larry Summers pushing back on President Biden’s stimulus and infrastructure plan as well as the Fed’s expansionary policy. Since his opinions carry weight, this will be a real fight. Although Fed officials have said the economy is still in recovery mode and requires stimulus from the central bank, that prospect has led tech stocks and other riskier assets to wobble in recent weeks.

Bi-weekly Issue May 13: Consumer prices surged in April by the most in any 12-month period since 2008. The surge came against the backdrop of a loose monetary policy and constrained production, and rising demand as the Covid-19 pandemic eases. Carl’s new recommendation Cabot Corporation (CBT), operates 45 manufacturing facilities in 21 countries around the world with strong growth in emerging markets. Carl has two portfolio changes.

Cabot Small-Cap Confidential

Weekly Update May 20: While still very choppy, this past week has been much better than the two weeks prior as the selloff in growth stocks has cooled and more investors have begun to think longer term. While the risk of inflation is still an overhang on high-multiple stocks, the passage of time allows global supply chains to re-adjust and for people/companies/policy setters to get a better handle on what the legitimate inflation risk is. As/if the pendulum swings from “high inflation” to “transitory” the outlook for higher growth names gets better, all else being equal. Tyler is moving Arena Pharmaceuticals (ARNA), Avalara (AVLR) and Kornit Digital (KRNT) back to a Buy.

Special Bulletin May 19: Porch Group (PRCH) reported Q1 results that were good enough to give the stock a 6% bump yesterday and keep it relatively strong today. The improved performance comes after a short report was published last month, and now has PRCH trading near its 50-day line.

Special Bulletin May 14: BioLife Solutions (BLFS) reported yesterday afternoon and Q1 results beat expectations. Revenue was up 38.6% to $16.9 million (beating by $800K) while adjusted EPS of $0.01 beat by a penny. Management also bumped up full-year guidance, with revenue now expected in the $106 to $115 million range. Tyler is moving Biolife Solutions (BLFS) to a Sell.

Monthly Issue May 6: Tyler’s new recommendation Thunderbird Entertainment (THBRF), is a Canada-based multi-platform, media production, distribution, and rights management company. The company’s programs span a variety of genres, but it is particularly focused on children’s productions, scripted comedy and drama, and non-scripted (factual) content. Thunderbird’s programs are currently available on broadcast and cable channels within the U.S., Canada and other countries, as well as on most of the major digital platforms, including Apple TV+, Disney+, Netflix, HBO Max, Hulu, Netflix, Peacock and PBS Kids.

Cabot Dividend Investor

Weekly Update May 19: The market’s relentless march ever higher is being interrupted. What’s going on? The market sold off the first three days of last week and then recovered in the last two sessions. But it’s back to its old tricks again this week, as the indexes sold down the first two days and are lower so far today. It certainly isn’t a big deal yet. The S&P 500 is down just a little over 3% from the all-time high. But there is concern. Tom has two portfolio changes: Broadcom Inc. (AVGO) and U.S. Bancorp (USB) move from Hold to Buy.

Monthly Issue May 12: Despite the past couple of days, the market indexes are still close to all-time highs. Stocks have soared at an amazing pace over the last year and the past several months. A promising environment of a booming economy complemented by trillions in stimulus still lies ahead. But how much of that wonderful news is already priced in? Tom’s featured stock ONEOK Inc. (OKE), is a large U.S. midstream energy company specializing in natural gas. Tom has two portfolio changes.

Cabot Marijuana Investor

Weekly Update May 19: The five “real” plant-touching stocks that look healthy here are Columbia Care (CCHWF), Cresco Labs (CRLBF), Green Thumb (GTBIF), Jushi (JUSHF) and TerrAscend (TRSSF). TerrAscend looks strongest of all, as it is above both its 25- and 50-day moving averages. Going forward, if more stocks fall below that low, Tim may recommend more selling. But right now, he is standing pat, with the portfolio 29% in cash, and optimistic that the stage is being set for the next advance.

Monthly Issue April 28: One of the many adages about investing in stocks says, “Never sell a dull market short.” The theory, basically, is that if the market isn’t going up or down, it’s likely to go up, given that that’s the long-term trend of the market and that a “dull” market is eventually likely to be followed by an exciting market. Well, the marijuana sector has been “dull” for only a few weeks, but before that the sector had a broad decline that pulled the marijuana index down 50% in just 10 weeks, so it’s logical that the sector’s next major move will be up. Additionally, the broad market is still acting well, with major indexes hitting record highs frequently, so it makes sense that the marijuana sector should turn around and rejoin the party, eventually taking the industry leaders out to new highs.

Cabot Early Opportunities

Monthly Issue May 19: If you want to strike up conversation at your next social gathering just utter one of two sentences. “Hey, have you guys heard about lumber prices? Holy cow!” Or, “Man, I think inflation is here to stay. Prices on everything are going up and there’s no end in sight.” Tyler’s Top Pick Fox Factory Holdings (FOXF), makes suspension and other parts, including side-by-side vehicles, all-terrain vehicles, snowmobiles, motorcycles, and other specialty vehicles.

Special Bulletin May 14: This may just go down on record as one of the worst earnings seasons ever for growth stocks. Two weeks ago, things were “fine.” Since May began, not. Inflation is the bogeyman spooking investors and his shadow has crept out from below desks and up the walls of those with growth-heavy portfolios. The sell orders picked up steam early this week, and while the last two days have been far better, the divergent action between growth stocks (cloud, MedTech, Internet, etc.) and other areas of the market is crystal clear.

Cabot Profit Booster

May Expiration May 20: The expiration of our May covered calls is this Friday, and several of our positions are trading below the strike price of our covered call options (CLF, LEVI, HOG), though it’s a close call, and a totally fine situation. If these stocks close tomorrow below the strike, the calls will expire worthless, and we will keep 100% of the premium sold. In that case you won’t need to act, and early next week we will most likely sell those stock positions and move on.

Weekly Issue May 18: Despite the market coming under pressure in the last several weeks, the Cabot Profit Booster portfolio continues to perform spectacularly! And heading into expiration this Friday, our five May covered calls are all in terrific shape, and potentially on track to their full profits. As is always the case, Jacob will update you where we stand with these positions on Friday morning. The “secret” to our success continues to be buying the best stocks, and keeping the portfolio as diversified as possible. Jacob’s new stock recommendation is International Game Technology (IGT).

Cabot Micro-Cap Insider

Weekly Update May 19: While the market looks expensive, there are many individual stocks that are cheap on a normalized basis and will benefit from a booming economy in 2021 and 2022. The most obvious example is Dorchester Minerals (DMLP) which trades at 13x free cash flow, pays an 8% dividend and will benefit from a recovery in oil/gas markets. But many other names on our recommendation list including Greystone Logistics (GLGI), BBX Capital (BBXIA), and Drive Shack (DS), trade at cheap valuations yet will benefit from the cyclical recovery.

Special Bulletin May 18: U.S. Neurosurgical Holdings (USNU) recently filed a 10-Q to report first-quarter earnings. The quarter looked amazing with revenue growth of 42% and EPS in the quarter of $0.07 due to higher revenue per patient. However, the company disclosed that it lost its contract with NYU, its only customer. As a result, the company will explore options to move its gamma knife business to a new location with a new customer or to combine its business with another entity. Rich U.S. Neurosurgical Holdings (USNU) is moving to a Sell.

Monthly Issue May 13: Rich’s new recommendation Drive Shack (DS), is a modern take on driving ranges. Each Drive Shack Venue features expansive, climate-controlled, suite style bays with lounge seating; augmented-reality golf games and virtual course play; a restaurant and multiple bars; an outdoor patio with lawn games; and arcade games. See below for the view from a bay at a Drive Shack location. Drive Shack’s traditional and entertainment golf businesses are set to boom in 2021. Given substantial recent cost cuts, operating leverage should drive earnings growth in 2021 and beyond. Longer term, growth will be driven by new Puttery Venues, which have high potential.

Cabot Income Advisor

Weekly Update May 19: The market is still in an uptrend and not far from the highs. But things are changing. The market had a fairly steep selloff over the first three days of last week but then recovered over the last two days. This week it’s been wobbly. The issues are supply problems and inflation. While the economy is delivering on the booming growth, supplies can’t keep up. Businesses can’t find workers to hire. Housing supply is at a four-decade low. Industry-wide chip shortages are hurting technology and automobile sales.

Monthly Issue April 28: The market is still creeping higher and is near the all-time high. But skepticism is rising. The S&P 500 has risen 28% since the beginning of November and over 80% since the lows of last year. Sure, the likely economic boom ahead, complemented by trillions in stimulus, is a compelling catalyst. But when is that priced in? The market anticipates. It started flying after the vaccine announcement but before the economy took off. At some point it will anticipate beyond the full economic recovery.

Cabot Turnaround Letter

Weekly Update May 21: We review earnings from the two companies reporting this past week, including Macy’s (M) and Vodafone (VOD) and provide some numbers from last week’s Toshiba (TOSYY) report. The next earnings report is Duluth Holdings (DLTH), which reports on June 3. Click here to listen to the podcast.

Special Bulletin May 12: We are moving Mohawk Industries (MHK) from Buy to Sell. The company’s turnaround from its modest difficulties yet overly-depressed stock appears complete, and the shares have reached our 220 price target, although they have modestly retreated today. From here, this cyclical company would likely need several things to go right: enduring recovery in the residential market, stronger rebound in the commercial market, no more input cost inflation, no/minimal capacity increases within the flooring/ceramic industries, and no operational, legal or other problems over the next few quarters, at least. Some of these will no doubt go right, but needing all of them to go right is a bit too much to ask. Based on mid-day prices, the investment produced a 54% profit.

Monthly Issue April 28: With the stock market continuing to reach record highs, and with most stocks either participating in the rally or facing structural, fundamental challenges that they won’t likely overcome, finding new ideas can be a challenge. As contrarians, we want to look for stocks in places that others find too unconventional or uncomfortable, as bargains may be found there. One such place is in stocks with low share prices, generally under $10. Bruce’s has one buy recommendation: Dril-Quip (DRQ).

Quarterly Cabot Analyst Meeting

The recording of the Cabot Prime Members Meeting with the Analysts from April 21, 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
ABBVBuy
ACCDBuy
AGCBuy
AGNCBuy
ARCOBuy
ARNABuy
AVGOHoldBuy
AVLRBuy
AVVIYBuy
BIPBuyBuy 2/3
BLFSSold
BMYStrong Buy
BSCLHold
CBTBuy
CDLXSold
CCHWFBuy
CGCSee Advisory
CRLBFSee Advisory
CRNCHold
CSCOBuy
CURLFSee Advisory
CVXBuy
DFLYFSold
DLRBuy
DOWHold
DVNBuy
EPDBuy
EVBGBuy
FIVEHoldHold
FNDHold
FSRBuy
FVRRSold 1/4
GMHoldHold
GOLDBuyBuy
GRWGSee Advisory
GSHDSold
GTBIFSee Advisory
HTHTHold
HUBSBuy
IIPRSee Advisory
IBMBuy
INSPSold 1/4
JUSHFSee AdvisoryHold 2/3
KOBuyBuy
KRNTBuy
LLYHold 2/3
MRKBuy
MRVLBuy
NEEBuyBuy
NETHold 1/2
NGLOYHold
NVCRBuy
NVDABuy
OBuyBuy
OKEBuy
PGXHold 1/2
PINSSold
PRCHBuy
PSFESold
QCOMHold
QTWOHold
RGENBuy
RVLVBuy
SEBuy 1/2Buy
SLBBuy
SLQTSoldSell
SONOSell
SPCEHold 1/2Sell
SPTBuy
SSOBuy
STBuy
STAGHold
TAPHoldBuy
TCNNFSee AdvisoryHold
TPBSee Advisory
TRSSFSee Advisory
TSLAHold
TSMBuy 1/2
TSNHold
UBERSold
USBBuy
VLOHold
VZHold
XELBuy 2/3