Cabot Prime Pro Week Ending December 7, 2018
Cabot Weekly Review (Video)
In this week’s stock market video, Mike Cintolo discusses the market’s wild (and mostly negative) week—the nascent uptrend from last week has fallen by the wayside, and with the major trend still down, he’s sticking with a mostly defensive stance. That said, Mike is also seeing more and more stocks resist the decline; it’s possible the best stocks have already bottomed, though it’s best to wait for the market to actually get going before any major buying.
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Cabot Growth Investor
Bi-weekly Issue December 5: Mike is still OK doing a little buying if you have a ton of cash on the sideline—he added Exact Sciences (EXAS) and Twilio (TWLO) last week, though the Model Portfolio remains more than 70% in cash. From here, as always, our next moves will be determined by the market’s action. In tonight’s issue, Mike reviews our three stocks and dives into a bunch of names we’re watching. He also discusses one prior big winner that seems set up for higher prices—if the market cooperates.
Bi-weekly Update November 28: Remain defensive, but stay tuned as Mike says we could get a Cabot Tides buy signal as early as tomorrow if the market cooperates. The action of the past month has actually been decent, with most indexes successfully retesting their October lows, some positive secondary measures flashing and a very encouraging rally in recent days.
Other Stocks of Interest November 9: Follow ups to stocks featured June 6, 2018 (issue 1395) to November 7, 2018 (issue 1406). 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 December 7: This has been one of the wilder weeks we can remember, with huge swings up (Monday), down (Tuesday), reversals (Thursday) and big overnight movements (last night and this morning). All told, though, the sellers did plenty of damage—as Mike writes this, the S&P 500 and Nasdaq are both lower by 3.3% on the week. Here are this week’s buy ideas: Alteryx (AYX), Guardant Health (GH), MongoDB (MDB) and Starbucks (SBUX), and this week’s sells: Ollie’s Bargain (OLLI), Tractor Supply (TSCO) and Ulta Beauty (ULTA).
Weekly Issue December 3: This week’s list has another batch of stocks coming from a variety of sectors. The Market Monitor has moved up a notch with the recent market action, but it’s best to be patient and go slow with any new buying. Mike’s Top Pick is Workday (WDAY), which he thinks can be a liquid leader of any sustained advance that potentially develops.
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 Stocks on Watch December 7: One sector that had been under immense pressure nearly all year, and continues to be hit is the Oil Services (OIH) which is down 35% year-to-date. However, into today’s market declines a trader has started to build an interesting call position in the OIH looking for a rebound to start next year.
Cabot Options Trader Market Update December 6: Given the uncertainty surrounding if/how China will respond in the coming days, or how the market will react to the Jobs Report tomorrow, Jacob is not inclined to make many moves right now. That said, the upside to days like Tuesday and today is that amidst the carnage you can find a handful of stocks that are holding up far better than the market. And every one of the stocks on Jacob’s list are recent earnings winners.
Cabot Options Trader Education December 4: As Jacob recommended Monday morning, he would not chase gap-ups in the current trading climate. That said, for now he does think the odds favor a move higher in the market into year end. And one way to buy a stock, but with protection, is a Protective Put strategy. Jacob give you an options education article on this strategy.
Cabot Options Trader Market Update December 4: While the Cabot Options Trader portfolio of stocks are holding up really well today, and we are still defensively positioned with very few longs and a hedge, Jacob is sure there are readers who may be looking for more hedging/shorting ideas. When evaluating how best to hedge, I would recommend looking at your portfolio and assessing where your risk is greatest.
Cabot Options Trader Weekly Market Update December 3: Jacob expects wild trading today following this past weekend’s G-20 summit and meeting between President Trump and China’s Chairman Xi. Then, quickly traders will turn their attention to Friday’s November Jobs Report which will be the last major data point ahead of the expected interest rate hike on December 19th.
Cabot Options Trader Pro Weekly Market Update December 3: Jacob has four long positions: ON, RF, TWTR and XLNX and one short position: QQQ Bear Put Spread.
Cabot Undervalued Stocks Advisor
Special Bulletin December 5: KLX Energy Services (KLXE) reports third quarter results; it remains at Hold. And Crista gives us a list of the six best “buy low” opportunities among our portfolio stocks.
Monthly Issue December 4: Crista expects December to deliver a nice stock market rebound, which will be somewhat restrained by tax-loss selling, especially among some of the very popular FANG stocks. Then in January, as long as something big and unexpected does not occur, she expects the S&P 500 to retrace its September highs. That could actually happen in December, but January seems more realistic to me.Today’s featured stocks include DowDuPont (DWDP), which moves to Strong Buy. General Electric (GE), General Motors (GM) and United Technologies (UTX). Though Christ is not adding GE, GM or UTX to the portfolios.
Weekly Update November 27: Crista continues to anticipate a significant January rebound as selling pressure subsides. If you’re bargain-hunting, please focus on quality companies. There’s no reason to buy shares of companies that lack earnings growth—e.g. General Electric (GE) and Facebook (FB) – when so many excellent stocks offer strong earnings growth in tandem with low prices. Today, there are two portfolio changes: CIT Group (CIT) moves from Hold to Buy and Southwest Airlines (LUV) moves from Hold to Strong Buy.
Cabot Stock of the Week
Weekly Issue December 4: Today’s recommendation, Arena Pharmaceuticals (ARNA) is a biopharmaceutical company that develops novel, small-molecule drugs with optimized receptor pharmacology designed to work across a wide range of therapeutic areas. It was recently recommended by by Tyler Laundon in Cabot Small-Cap Confidential. Here are Tim’s Portfolio changes: Synchrony Financial (SYF) from Hold to Sell and Ulta Beauty (ULTA) from Buy to Hold.
Cabot Emerging Markets Investor
Bi-weekly Update December 6: Trade war uncertainties have nipped our young buy signal in the bud, but the situation is highly fluid, so Paul will be making portfolio choices on a stock-by-stock basis. The only change in the portfolio today is that he’s dropping Huya (HUYA) from the Watch list.
Bi-weekly Issue November 29: Our Emerging Markets Timer has flashed a new buy signal, a sign that, for the first time in months, the intermediate-term trend is turning up. Paul’s recommendation today is NIO Corp. (NIO), a brand new issue, with only scant sponsorship by the investment giants who may take a little more time and research before getting comfortable buying in size. The potential market for the company’s cars is enormous and their one product is attractive. It’s rated WATCH. Here are tonight’s portfolio changes: Alibaba (BABA) moves from Hold a Half to Buy a Half, Bilibili (BILI) from Watch to Buy, Tencent Holding (TCEHY) from Watch to Buy a Half and Vale (VALE) from Buy to Hold.
Cabot Small-Cap Confidential
Monthly Issue December 7: Today’s recommendation, Codexis (CDXS), is an industrial biotechnology stock. And the secret to its success lies in a proprietary technology platform that uses artificial intelligence and machine learning to create new proteins for use in various industries. Tyler is buying a half position. There is only one portfolio change this week, Chefs’ Warehouse (CHEF), moves to Hold.
Weekly Update November 30: We’ve just received a modest buy signal for small caps as the S&P 600 jumped above its 25-day line on Wednesday (and held above it yesterday). This isn’t a screaming buy signal. But when combined with similar evidence of short-term strength in other indices (and emerging markets) it appears that appetite for stocks, including the “riskier” ones, is returning. This isn’t to say you should throw on your rally cap and load up on stocks. Caution is still warranted. But it’s time to start thawing out, reduce the amount of cryoprotectants pumping through our veins, and look to step into some rays of light emerging from the market. This week Tyler made changes to these stocks: Everbridge (EVBG) moved to buy, Goosehead Insurance (GSHD) moved to buy and Rapid7 (RPD) moved to buy.
Cabot Dividend Investor
Weekly Update December 5: With its mix of conservative, growth-oriented and high-yield investments, our portfolio continues to do well. Most of our non-Safe Income stocks are still on Hold, so it’s time to start thinking about becoming more aggressive, if the market becomes more constructive. But we don’t want to get ahead of the market, so Chloe doesn’t have any rating changes for now.
Monthly Issue November 28: Today Chloe is adding one more utility to the Safe Income tier, NextEra Energy (NEE). The market has stabilized a bit, and Chloe is moving the rest of the Safe Income holdings back to Buy: Ecolab (ECL) and UnitedHealth (UNH). Riskier investments are still in limbo though, and in the high yield tier she is selling another third of our ONEOK (OKE) shares, due to the stock’s continued decline.
Cabot Marijuana Investor
Update December 3: Tim has a quick update on Aphria (APHA) and MedMen (MMNFF). He also talks about the strategy of averaging up, rather than averaging down.
Monthly Issue November 29: In today’s issue, Tim has no new buy and sell recommendations, but you’ll find updates on all the stocks. And as we head toward the last of 2018, he’s very optimistic that the sector will have another great run in 2019—just when most investors least expect it!
Wall Street’s Best Investments
Daily Alert December 7: Oshkosh Corporation (OSK) from New Century Report
Daily Alert December 6: Sell: Acadia Healthcare Company, Inc. (ACHC) from Upside
Daily Alert December 6: MSG Networks Inc. (MSGN) from Validea Hot List Newsletter
Daily Alert December 5: General Electric Company (GE) from Internet Wealth Builder
Daily Alert December 4: Quanta Services, Inc. (PWR) from Cabot Undervalued Stocks Advisor
Daily Alert December 4: Sell: Altair Engineering Inc. (ALTR) from Cabot Stock of the Week
Daily Alert December 3: Macom Technology Solutions Holdings, Inc. (MTSI) from Pivotal Point
Monthly Issue November 14: Nancy’s Spotlight Stock Comcast Corporation (CMCSA), is pushing growth via mergers and acquisitions, including its recent $40 billion acquisition of the 39% percent of the company owned by Twenty-First Century Fox. In her Feature article, Nancy says that Comcast looks undervalued at a P/E of just 7.47. Yet, the company is forecast to grow its earnings some 23% this year and another 10.3% in 2019. Add in the dividend yield, and the future looks bright for Comcast investors.
Wall Streets Best Dividend Stocks
Daily Alert December 7: Valero Energy Corporation (VLO) from Sound Advice
Daily Alert December 6: Peak Resorts, Inc. (SKIS) from The Wealth Advisory
Daily Alert December 5: CorEnergy Infrastructure Trust, Inc. (CORR) from The Intelligent REIT Investor
Daily Alert December 4: People’s United Financial, Inc. (PBCT) from Sure Dividend
Daily Alert December 3: Macerich Company (MAC) from Schaeffer’s Investment Research
Monthly Issue November 7: This month’s Spotlight Stock, Brookfield Property Partners (BPY-UN.TO, BPY), is a diversified global real estate company. It owns, operates, and develops a large portfolio of office, retail, multifamily, industrial, hospitality, triple net lease, self-storage, student housing, and manufactured housing assets. In her Feature article, Nancy writes that it’s not only residential real estate that has seen phenomenal growth since the recession. Commercial real estate (CRE) is also booming, and is expected to grow 5% annually and reach revenue of $4 trillion over the next four years.
Ask the Experts
Cabot Options Trader
Question: I was wondering if your scanner picked up on unusual options activity on RHT in October? And if so, did you take a position in it? Somebody who knew must have taken advantage of that one-day 50 point move.
Jacob: There was zero unusual option activity ahead of RHT. Though my wife used to work there, so yes we had some exposure to RHT stock. We have been long XLNX calls for the past two months which has been a MONSTER winner. Also, long TWTR calls which is more of a single/double. But mostly we have had very light exposure as I was good, or lucky, and smelled out the market swoon before it happened.
Question: Let me first say this concern isn’t because of the markets recent volatility. In brief, it is based on geopolitics, the amount of global private and public sector debt and the duration of the current bull market. Based on the above facts I feel there is going to be a repeat/rhyme of the 2008 crash at some point in the next 2yrs. I have been trying to look at potential short targets with a 1-2 year time frame, reasonable cost, and still near their highs. On my list currently are SBUX and BRK-B. I have also entertained HYG and JNK but the fact that they are ETFs is concerning. Was hoping you would share your insight regarding your market outlook and potential suggestions of shorts and appropriate expiration dates ie Jan 2020 or Jan 2021? Thank you for your time
Jacob: If I thought the market had a major wipeout ahead of itself, I probably wouldn’t target individual stocks. I say this as I’m unlikely to be able to predict which stocks will get hurt worst. Will it be a Financial? Software? Cloud? Oil? Who knows. And it would be crushing to me if I the market fell apart, and I was short the wrong stock. With that in mind, I would keep it simple and buy SPY or QQQ Puts. I say this as there is no way those puts wouldn’t work if market fell apart. Maybe SPY January 260 Puts (exp. 2021) for $23. These puts are the longest duration available, and would allow the short thesis to work out, even if the timing isn’t right. As they say in the trading world “Keep it Simple Stupid” (KISS) (I’m NOT calling you stupid).
Cabot Dividend Investor
Question: Where are a good places to “park cash” when reducing exposure to stocks in a model portfolio (i.e. Growth Investor and Emerging Markets). Is SHY (ETF) a reasonable place to “park the cash” until redeploying it into the model portfolio again?
Chloe: For short-term security, there’s nothing like cash, but a short-term treasury bond ETF like SHY is the next safest option. It can lose value (as you can see on a chart of SHY over the past year) but more than a couple percent would be unusual.
Cabot Marijuana Investor
Question: Timothy Lutts, in your latest issue of Cabot Marijuana Investor, you said to never average down. Would you explain that statement and why? Would not averaging down yield a lower cost basis?
Tim: Averaging down is fine for value investors, who are trying to buy undervalued stocks that they “know” will be higher in the future. Generally, these are established companies whose stocks are temporarily down, so buying lower to reduce your average cost is good. But for growth-oriented investors, where the future is less certain, the general rule is to focus on the stocks that are behaving best, which means putting more money into your winners. No one knows the future for sure, but generally the market is smarter than any one person, and thus it’s better to reward the leaders than the laggards. In Cabot Marijuana Investor, for example, I sincerely hope that MedMen can surmount its recent troubles and resume its growth trend, but there is no certainty of that. So I will not put more money into MMNFF until we have a profit and the stock is moving up. Long ago, Jesse Livermore, who won and lost several fortunes investing, wrote, “Markets are never wrong; opinions are.” That, plus many decades of experience, are why I trust the charts more than I trust my own beliefs. Hope that helps.
Cabot Emerging Markets Investor
Question: MOMO - What is your take on this stock? I know you don’t have it in your portfolios but it has been there in the past. They reported decent earnings today but the stock tumbled big time. Secondly, what is your take on the trade war and leverage position of the US? If this trade war is settled, do you see China stocks recovering quickly or will it take a long time?
Paul: In this kind of a market, the momentum of the broad market can trump the news about an individual stock. It’s not a good sign that the stock has dropped below the double bottom that it formed in October and November and that trading volume is quite high. It’s a good illustration of the old rule that it’s the reaction to earnings you should watch and not the numbers. Right now, I think the trade war is the single biggest influence on the day-to-day movement of the stock market. Brexit is also on people’s minds, but it’s secondary. The trade war actually has the power to knock a point or two off the global GDP growth rate, and that’s a huge deal given the degree to which institutional investors rely on economic forecasting to adjust their longer-term strategies and holdings. But through it all, the only thing we have to do is to watch our stocks and adjust our cash positions. That’s the only real advantage we have over the whales.
Premium Reports
Cabot’s 10 Best Canadian Small-Cap Stocks
Special ReportAugust 31: 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 there are market-beating returns available to investors willing to step abroad too. And one of the easiest places to find them is just over the border with our neighbor to the north, Canada.
10 Monthly Dividend Stocks to Buy for Year-Round Income
Special ReportAugust 9: Dividend-paying stocks are favorites of retirees and other investors who live off income from their investing portfolios. Like bonds, dividend-paying stocks provide a steady income stream that you can spend without eroding your principal. Unlike bonds, many stocks increase their dividends over time, so your income stream can actually rise each year. This report includes profiles of Chloe’s 10 favorite monthly dividend payers, each of which offers a unique mix of yield, capital appreciation and safety. If you’re looking for monthly income, you’re sure to find at least one that’s right for you.
Cabot’s 10 Best REITs to Buy Now
Special ReportJuly 18: Nancy has always loved real estate; in fact, she owns a small real estate franchise. But she loves the idea of a diversified real estate portfolio and REITs fit the bill. They have been excellent investments for her subscribers over the years as they offer the perfect opportunity to buy real estate with very little capital. And she believes the boom cycle in real estate is far from over. With that in mind, she set out to find the 10 Best REITs for today’s economy and market. She looked at growth, valuation, dividend yield, and fundamental and technical strength.
Cabot’s 10 Best Covered Calls on Dividend Stocks
Special Report April 12: With interest rates just coming off of historically low levels, income investors have been desperately searching for alternative sources of yield. Dividend stocks are the obvious answer. But there’s an even better way to create yield: by executing a covered call strategy on stocks that pay dividends.
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 Pro
This Guide to Cabot Prime Pro will help you make the best use of your Prime membership to create a strong personal portfolio.