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Weekly Summary February 1, 2019

Cabot Prime Pro Week Week Ending February 1, 2019

Cabot Weekly Review (Video)

In this week’s stock market video, Mike Cintolo discusses yet another week of positive market action, with the major indexes scoring new recovery highs, more leading stocks consolidating properly and/or breaking out and a general lack of selling pressure. There are a few reasons to think a rest period could come soon, but the overall evidence continues to improve, and Mike highlights a variety of names that are setting up nicely for higher prices.


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Advisory Services

Cabot Growth Investor

Bi-weekly Issue January 31: The market has been acting in a near picture-perfect manner for the past few weeks, and Mike has responded by steadily adding to our exposure—he put 15% of our cash to work in early January, another 20% last week when our Cabot Tides turned positive, and tonight he’s adding one new (but familiar) name to the Model Portfolio, Exact Sciences (EXAS), leaving us with around 35% on the sideline. There are still headwinds (like our Cabot Trend Lines being negative), so he’s not flooring the accelerator, but as the evidence has improved, he’s grown more optimistic.

Bi-weekly Update January 24: Mike says to do some more buying. Our Cabot Tides has flashed a new buy signal, and while the near term could easily see some retrenchment, the evidence is building that the worst of the market’s downturn is over and that another bull phase could be starting. Tonight he’s buying a 10% position (i.e., full-sized initial position) in Planet Fitness (PLNT) and buying another 5% position in both Ciena (CIEN) and ProShares Ultra S&P Fund (SSO), bringing us up to “full” positions in each. The cash position will now be around 45%.

Other Stocks of Interest February 1: Follow ups to stocks featured August 29, 2018 (issue 1401) to January 131 2019 (issue 1412). 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 February 1: It’s been another positive week for the markets. We know the focus has been on the various news items—the Fed’s decision and statement, the U.S.-China trade talks this week and, today, the jobs announcement—but it’s all about the action of the market, which continues to back up the view that the sellers are out of ammo and the buyers are taking control. Mike’s Buy ideas this week are: Crocs (CROX), Etsy (ETSY),LGI Homes (LGIH), and ServiceNow (NOW). There is only one sell today, Vanda Pharmaceuticals (VNDA) looked to be setting up nicely, but while the market rallied this week, the stock has dropped back below its 50-day line.

Weekly Issue January 28: The intermediate-term trend remains pointed up and, in general, the market and leading stocks continue to act how they “should” if the sellers have run out of ammo. Mike remains optimistic, and thinks many names will be good buys if he does see some more retrenchment. Tonight’s list has a great batch of mostly growth stocks, albeit from a variety of industries. Mike’s Top Pick is Lululemon (LULU), which, after a great six-month run and fourth-quarter correction, is showing terrific strength.

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 Earning Update February 1: ON Semiconductor (ON) will report earnings Monday before the open. With the stock trading at 20.8, the options market is pricing in a move of $1.50 this MONTH, or 19.3 to the downside and 22.3 to the upside.

Cabot Options Trader Alert February 1: Sell Half of Existing Position: Sell Half your ON Semiconductor (ON) April 20 Calls for $1.95 or more.

Cabot Options Trader Position and Market Update January 31: The next stock on Jacob’s radar for a new position may be Canopy Growth (CGC). Yesterday and today traders have been accumulating a large call position. For now he is going to sit tight on any new buying and will wait to see how the market reacts to the January Jobs Report tomorrow morning before adding another stock to the portfolio.

Cabot Options Trader Alert January 31: Buy the Starbucks (SBUX) June 70 Calls (exp. 6/21/2019) for $3.60 or less.

Cabot Options Trader Position Update January 31: After chopping below resistance at 46 for a couple of weeks, Zscaler (ZS) has broken out to the upside and is trading higher by 6.5% today at 48.5. Into this move traders are buying upside calls.

Cabot Options Trader Earnings January 31: Amazon (AMZN) will report earnings today after the close. With the stock trading at 1692.5, the options market is pricing in a move of $94, or 1598.5 to the downside and 1786.5 to the upside.

Cabot Options Trader Stocks on Watch January 30: Jacob reports that three semiconductor stocks, ON Semiconductor (ON), Intel (INTC) and Analog Devices (ADI), are seeing interesting bullish option activity today.

Cabot Options Trader Earnings January 30: Jacob evaluates the earnings set-ups for the following companies: Facebook (FB) earnings today after the close, Microsoft (MSFT) earnings today after the close, ServiceNow (NOW) earnings today after the close, Paypal (PYPL) earnings today after the close, Tesla (TSLA) earnings today after the close and General Electric (GE) earnings tomorrow before the open.

Cabot Options Trader Earnings - AAPL January 29: Jacob is aware that a decent percentage of his subscribers have stock and/or options positions in a handful of stocks, including Apple (AAPL), which will report earnings later today. Because of your interest in the stocks, he digs a bit deeper into what the options market is “projecting” for the stock.

Cabot Options Trader Earnings January 29: Advanced Micro Devices (AMD) reports earnings today after the close and Boeing (BA), Alibaba (BABA) and McDonald’s (MCD) report before the open tomorrow. Jacob gives you his take on all four.

Cabot Options Trader Stock on Watch January 28: Roku (ROKU) popped back on Jacob’s radar recently as it jumped higher in the first week of 2019, and has slowly tacked on gains since, trading at 43.5 today. And into the stock strength a trader executed a large call buy today looking for more upside. ROKU is on the top of his watch list for a new position.

Cabot Options Trader Market Update January 28: The S&P 500 and Nasdaq are trading lower by more than 1.25% this morning following disappointing earnings from Caterpillar (CAT) and an earnings warning from Nvidia (NVDA). And Jacob gives you an earnings outlook for Pfizer (PFE), who will report earnings tomorrow before the open.

Cabot Options Trader Weekly Market Update January 28: The Chicago Board of Options Exchange Volatility Index (VIX) closed the week at 17.42, or lower by 2%. This 17-19 level continues to be very sticky, and Jacob anticipates that this will remain the case this week as traders will be overwhelmed with the heart of earnings season as well as a Federal Reserve meeting and the January Jobs Report.

Cabot Options Trader Pro Weekly Market Update January 28: Jacob has six long positions: CIEN, ON, PE, RF, TWTR and ZS, one position not impacting his decision making, PSTG and one short position, QQQ.

Cabot Undervalued Stocks Advisor

Special Bulletin January 31: Delek U.S. Holdings (DK) moves from Buy to Strong Buy. Baker Hughes (BHGE), Blackstone Group (BX), DowDuPont (DWDP) and WestRock (WRK) reported quarterly results this morning.

Special Bulletin January 30: Apple (AAPL), CIT Group (CIT) and Knight-Swift Transportation (KNX) all please the market with their quarterly earnings releases.

Special Bulletin January 29: GameStop (GME) moves from Hold to Sell. CIT Group (CIT) and Knight-Swift Transportation (KNX) report strong earnings beats. Apple (AAPL) reports earnings after the close.

Weekly Update January 29: Crista says the stock market recovery continues in a slightly better style than she had hoped for. She had expected big upswings followed by pullbacks, which is normal for a recovery. What she hadn’t expected is that there are lots of great stocks trading out of synch with each other; some peaking within trading ranges while others are bottoming within trading ranges. Here are today’s portfolio changes: DowDuPont (DWDP) moves from Buy to Strong Buy, Marathon Petroleum (MPC) moves from Hold to Buy and Universal Electronics (UEIC) moves from Hold to Strong Buy.

Special Bulletin January 28: Apple (AAPL) and Knight-Swift Transportation (KNX) each move from Hold to Buy in advance of tomorrow’s earnings releases.

Monthly Issue January 2: Crista is adding Apollo Global Management, LLC (APO) to the Growth & Income Portfolio today, due to the extraordinary dividend yield and the eventual capital gain opportunity. Here are today’s portfolio changes: DowDuPont (DWDP) moves from Strong Buy to Buy,Southwest Airlines (LUV) moves from Strong Buy to Hold, Voya Financial (VOYA) moves from Strong Buy to Hold and WestRock (WRK) moves from Strong Buy to Buy.

Cabot Stock of the Week

Weekly Issue January 29: Market trends remain quite positive, and Tim continues to recommend that you work to get more invested. Today’s recommendation, Delek U.S. Holdings (DK), is a dirt-cheap dividend-payer in the energy industry that may not get going right away, but downside risk looks minimal and all the fundamentals argue that it will eventually be higher. There are no portfolio changes today.

Cabot Emerging Markets Investor

Bi-weekly Update January 31: Emerging markets (EEM) continue to gain ground, and just today moved above their 200-day average. Since the S&P 500 index bottomed the day after Christmas, the EEM has risen 14% to reach a seven-month high. The Emerging Markets Timer remains positive, so Carl continues to lean bullish and thus is moving Alibaba (BABA) from a Hold a Half to a Buy a Half.

Special Bulletin January 28: Vale SA (VALE), rated a hold in the portfolio, said Monday it had suspended dividend payments and share buybacks as the miner faces spiraling losses over its dam that burst leaving hundreds of people missing and presumed dead in southeast Brazil. Thus Carl recommends you Sell your shares.

Bi-weekly Issue January 24: The Emerging Markets Timer remains positive, as the buyers are slowly wresting control from the sellers. The iShares EM Fund (EEM) has participated in this year’s nascent rally, briefly pushing to its highest level since early October before a little giveback this week. With EEM well over its lower (now 50-day) moving average, the intermediate-term trend is up. Today’s recommendation Brasil Foods (BRSF), is the largest exporter of poultry in the world and supplies food products to McDonalds, Pizza Hut and Burger King. The company is also Brazil’s largest maker of frozen microwave dinners and meats. Carl has no portfolio changes today.

Cabot Small-Cap Confidential

Special Bulletin February 1: Bottomline Technologies (EPAY) reported results for its second quarter of fiscal 2019 last night and shares are trading down double-digits today. The quarterly results were just fine and there was an improvement in bookings, which was the primary area of concern last quarter. Tyler is moving EPAY to Hold. He’ll follow up with more details early next week.

Monthly Issue February 1: Today’s stock, Avalara (AVLR) is a cloud-based provider of sales and indirect tax compliance software. Its motto is “tax compliance done right.” To achieve its vision of being part of every transaction in the world the company has developed solutions that help customers become more efficient and accurate with respect to sales tax calculations, returns filing and remittance. Following this Issue is the full text of Tyler’s 2019 Small Cap Outlook.

Special Report: 2019 Small Cap Outlook

Weekly Update January 25: The S&P 600 Small Cap Index is back above its 50-day line and at the low end of the 900 to 975 range where the index traded for most of the first half of 2018. Tyler would like to see the index camp out in this same range for a while as I think it’s a healthy area for small caps to consolidate, and would set us up well for a sustained rally into the back half of the year. There are no portfolio changes today.

Cabot Dividend Investor

Monthly Issue January 30: Right now Tom is favoring the more recession-resistant, safe stocks. His featured stock this month is, AbbVie Inc. (ABBV), a Chicago-based biopharmaceutical company formed in 2013 when it was spun off from Abbott Laboratories (ABT). The spinoff has already eclipsed its old parent in size and is now the eighth-largest pharmaceutical company in the world. There has been one rating change since last week’s update: STAG Industrial (STAG) was upgraded from a HOLD to a BUY. The reason for the change is momentum and performance. The stock is consistently outperforming the market on both the upside and the downside.

Weekly Update January 23: Tom believes the market will likely trend higher but not by a lot, favoring the more recession-resistant plays. That’s the story right now but things can change. As always, he’ll keep you posted. There are two rating changes today, Altria (MO) was lowered from a BUY to a HOLD and American Express (AXP) was changed from a HOLD to SELL HALF.

Cabot Marijuana Investor

Monthly Issue January 31: The portfolio’s cash level is in the high teens, and Tim would like to reduce that, ideally on a substantial correction by the sector. For now, that cash will sit. What he will do is sell a third of Canopy Growth (CGC) and Cronos (CRON) tomorrow, using the average price of the day, and reinvest the proceeds equally in Cresco Labs (CRLBF) and KushCo (KSHB) and new addition Elixinol (ELLXF).

Update January 23: Time writes that we are in the midst of a cultural shift, but still far from through it. Marijuana is still far from universally accepted, and until it is, the sector will continue to have great growth potential. That’s how investing works. In this update he reviews all the sales, full and partial, of the Cabot Marijuana Investor Portfolio since inception and gives you the results.

Wall Street’s Best Investments

Daily Alert February 1: Netflix, Inc. (NFLX) from Canaccord Genuity Research
Daily Alert January 31: Vanguard Total Stock Mkt Idx Inv (VTSMX) from The No-Load Fund Investor
Daily Alert January 30: Thermo Fisher Scientific Inc. (TMO) from Dow Theory Forecasts
Daily Alert January 29: Hussman Strategic Growth (HSGFX) from Bob Carlson’s Retirement Watch
Daily Alert January 28: Sell: Nike, Inc. (NKE) from 2 for 1 Stock Split Newsletter
Daily Alert January 28: Andrew Peller Limited (ADW-A.TO) from Internet Wealth Builder

Top Picks Issue January 16: In this issue, Nancy recaps the big winners from last year. For our Top Picks 2019, she has a huge variety of investments for your review.

Wall Streets Best Dividend Stocks

Daily Alert February 1: Enterprise Products Partners L.P. (EPD) from Positive Patterns
Daily Alert January 31: Eastman Chemical Company (EMN) from IQ Quality Trends
Daily Alert January 30: TransCanada Corporation (TRP) from Conrad’s Utility Investor
Daily Alert January 29: First American Financial Corporation (FAF) from DRIP Investor
Daily Alert January 28: Vanguard Dividend Appreciation ETF (VIG) from Moneyletter

Top Picks 2019 Issue January 9: In this issue, Nancy recaps our big winners from last year, and has a very nice—and diversified list—of a group of stocks that promise great potential for 2019.

Ask the Experts

Cabot Options Trader

Question: Have you ever played around with adding a confidence factor to your recommendations? I imagine it is probably very difficult to do. I know you review your trades each year.

Jacob: That is an interesting question, and something I’ve thought about in the past. However, I have decided against it as I’ve seen trades that I had full confidence in such as EA and PAGS not work, while trades that I had slightly less confidence in such as CSCO and AAXN work spectacularly well. At the end of the day, I really only send my best trade ideas. And because of that, almost all of my trades have my full, or almost full, confidence.

Cabot Marijuana Investor

Question: Since this is such a fast moving market, have you considered a weekly report on the marijuana stocks like some other Cabot services?

Tim: I have frequently told my readers that investing in this sector is a marathon, not a sprint. I want to own the big winners 5 and 10 years from now, so short-term trading isn’t my goal. In fact, YTD, the Cabot Marijuana Investor is up 27% as I write, simply by doing nothing. As to publication frequency, I do put out updates when I think I have something useful to say, as I did last week, but I don’t see any value in doing updates every week if there’s nothing worth saying.

Cabot Emerging Markets Investor

Question: What is the stock for under or about $1 per share that you say is so hot in reference to Rare Earth metals?

Carl: Since Lynas is an Australian-listed stock, I’m not formally going to add it to the portfolio since the portfolio is limited to U.S. listed stocks. However, I will follow it closely and still like it. In addition, UBS and several other respected investment firms also think it represents good value. As the report points out, the key issue and driver is the supply and demand for rare earths. This story needs some time to play out. Regarding, REMX, I still like it but I would not buy more. I have it rated as a buy half position. If I move it to full position, this will be your cue to buy more. While REMX has gone down a bit, it has done well relative to many China stocks. Today China and EM stocks are having a tough day. Keep in mind that in the REMX ETF basket are primarily Chinese companies as well as Lynas. I see Lynas is up a bit today and holding pretty solid so far this year. I’ll have more on the overall EM situation in my update on Thursday.

Cabot Undervalued Stocks Advisor

Question: Which of these three oil stocks is likely favorable to buy and at what price: Valero (VLO), Marathon (MPC) or Royal Dutch (RDS.A)?

Crista: If it were me, I’d buy Marathon Petroleum (MPC) at the current price (64-65). It has stronger projected earnings growth, a lower P/E, and potentially bigger capital gain potential than Royal Dutch Shell (RDS.A), although those numbers are decent at Royal Dutch Shell. However, if my primary stock investment goal was dividend income, I’d choose Royal Dutch Shell, which is yielding over 6%. I would not choose Valero Energy (VLO) at this time because as an importer of crude oil, they will be harmed by the Venezuelan oil sanctions. Otherwise, Valero is a great company.

Premium Reports

Cabot’s 10 Best Stocks to Buy and Hold for 2019

Special Report

January 3: Crista has designed this portfolio of 10 stocks to compete with the S&P 500 during the coming year, with no trading, no buying and no selling whatsoever.

Cabot’s Best Safe Investments for Uncertain Times

Special Report

December 21: This report gives you some suggestions of the safest, productive places to put your money when the market gets bumpy.

Cabot’s 10 Favorite Low-Priced Stocks for 2019

Special Report

December 13: Welcome to Cabot’s 10 Favorite Low-Priced Stocks for 2019, our annual pick of some little-known stocks that, for one reason or another, have a great shot of tacking on some great gains in the short-term (and, if things go well, longer-term, too). Of course, the market environment hasn’t been following the usual script—instead of a strong November-December, the market is scuffling. That will require some patience and picking your spots on the buy side, but ideally will work to our advantage (creating more advantageous entry points), too.

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.