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Weekly Summary January 11, 2019

Cabot Prime Pro Week Week Ending January 11, 2019

Cabot Weekly Review (Video)

In this week’s stock market video, Mike Cintolo discusses the market’s encouraging action since the low, from the persistent upmove in the major indexes to the powerful broad market, which bodes well down the road. Thus, Mike’s started to put some money back to work, but with the market’s trends still pointed down, he’s starting slow and keeping the onus on the bulls to prove the uptrend is the real McCoy.

Advisory Services

Cabot Growth Investor

Bi-weekly Update January 9: Mike says to do a little buying. The market’s trends are still pointed down, so he still thinks going slow and stepping lightly makes sense. But much of the recent action—including the flashing of a rare blast-off signal today—hints that the worst may be behind us. In the Model Portfolio, he’s restoring Buy ratings on FIVE and TWLO (try to buy on dips), and in a slightly unusual move, he’s going to buy half-sized positions in three stocks—Ciena (CIEN), ProShares Ultra S&P 500 Fund (SSO) and Workday (WDAY), with each position being about 5% of the portfolio to start. Our cash position will now be around 67%. Please Note: Due to a variety of scheduling factors, going forward, all Cabot Growth Investor issues and regular updates will be sent THURSDAY instead of Wednesday. Thus, your next issue will be sent to you next Thursday (January 17).

Bi-weekly Issue January 3: In tonight’s issue, Mike has no changes, but he does talk about one simple sell tool he’s adding to our arsenal, dives into three intriguing stocks and updates our expanded watch list.

Other Stocks of Interest January 4: Follow ups to stocks featured August 1, 2018 (issue 1399) to January 3, 2019 (issue 1410). 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 January 11: It’s been an encouraging week in our books for the market, partly due simply to the continued rebound in the major indexes—even after this morning’s dip, the S&P 500 (up 2.4%) and Nasdaq (up 3.2%) are up solidly so far on the week. Mike’s Buy ideas this week are: Atlassian (TEAM), Elastic (ESTC) and Pinduoduo (PDD). There are no outright sells today, though Mike is keeping a close eye on Deckers Brands (DECK), Cooper Tire (CTB), Franco-Nevada (FNV) and Starbucks (SBUX).

Weekly Issue January 7: This week’s list has a broad mix of stories and charts, but all of them look like they want to head higher if the market cooperates. Mike’s Top Pick is Chipotle Mexican Grill (CMG), which, after a massive shakeout, looks primed to continue its turnaround. You should still keep plenty of cash on the sideline, but Mike’s not opposed to adding some small positions in potential leaders and seeing how things progress. He’s nudging our Market Monitor up a notch.

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 January 11: The one stock that fits Jacob’s ideal scenario of a strong stock, combined with bullish option activity, is PayPal Holdings (PYPL). For weeks, even during the market malaise, traders have been buying upside calls in PYPL. While not overwhelming, it was enough action to get his attention.

Cabot Options Trader Position Updates January 10: This morning two of our stocks received upgrades. Twitter (TWTR) was raised to buy at Bank of America Merrily Lynch and given a $39 price target. On Semiconductor (ON) also received positive commentary today from research firm Craig Hallum who called the risk/reward hard to ignore and cited a recent conference in which ON noted that they are struggling to keep up with demand – despite China weakness.

Cabot Options Trader Pro Alert January 9: Hedge: Buy the Nasdaq ETF (QQQ) June 155/145 Bear Put Spreads (exp. 6/21/2019) for $3.25 or less.

Cabot Options Trader Basic Alert January 9: Hedge: Buy the Nasdaq ETF (QQQ) June 155 Puts (exp. 6/21/2019) for $8.25 or less.

Cabot Options Trader Alert January 9: Sell HALF of Existing Position: Sell Half your Zscaler (ZS) May 44 Calls for $6.70 or more.

Cabot Options Trader Trade Update January 8: Jacob has not yet been filled on his order to sell Zscaler (ZS) calls at $6.70. The current market on the calls is $6.40 - $6.70 so there is a chance it will happen in the closing minutes. However, should the trade not fill by the close of trade his order will cancel and he will re-evaluate a sale price tomorrow.

Cabot Options Trader Alert January 8: Sell HALF of Existing Position: Sell Half your Zscaler (ZS) May 44 Calls for $6.70 or more.

Cabot Options Trader Alert January 7: Sell Half of Existing Position: Sell HALF your Ciena (CIEN) April 36 Calls for $2.50 or more.

Cabot Options Trader Weekly Market Update January 7: The Chicago Board of Options Exchange Volatility Index (VIX) closed the week at 21.38, lower by 24%. And while the positive news Friday sent the market soaring, and may have reduced the downside risk to the market in the short term, there is little doubt that traders who own volatility continue to be on the right side of the trade.

Cabot Options Trader Pro Weekly Market Update January 7: Jacob has five long positions: CIEN, ON, RF, TWTR and ZS and one position not impacting his decision making: PSTG.

Cabot Undervalued Stocks Advisor

Special Bulletin January 11: SYNNEX (SNX) reports fourth quarter earnings beat; moves from Strong Buy to Buy. Crista outlines the numbers so that those of you who love numbers can extract a stock market lesson and employ it in the future as you manage your portfolios.

Special Bulletin January 8: SYNNEX Corp. (SNX) joins the Buy Low Opportunities Portfolio, two days in advance of an earnings release and a likely dividend increase; D.R. Horton (DHI) moves from Hold to Buy and Crista has some additional near-term trading opportunities.

Weekly Update January 8: Crista writes that this will be a busy week for Wall Street as analysts speak with the companies within their stock purviews and write updated research reports. She expects to relay lots of changes in consensus earnings estimates in next week’s update. There are no portfolio changes.

Special Bulletin January 7: Commercial Metals (CMC) reports first-quarter earnings beat and revenue miss, and forecasts a strong second quarter, Apple (AAPL) pre-announces first-quarter results and Delta Air Lines (DAL) pre-announces fourth-quarter results; moves from Strong Buy to Buy.

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 9: December’s market bottom has held so far, and we’ve seen a couple of days of impressive upside action in recent weeks but there’s still a very good chance of a retest of that recent low, a process that could take months. Nevertheless, there are stocks that are acting well, and today’s selection is one of them, Deckers Brands (DECK), combining a solid growth story with a healthy chart. It was originally recommended by Mike Cintolo in Cabot Top Ten Trader. Tim has two portfolio changes today: McCormick & Company (MKC) goes from Hold to SELL. and MiX Telematics (MIXT) from Buy to HOLD.

Cabot Emerging Markets Investor

Bi-weekly Issue January 10: In the first week of 2019, a better overall stock market, weaker U.S. dollar, bargain hunting, and hopeful signs of a temporary truce in the U.S.-China trade war have all helped push our Emerging Markets Timer back into a bullish mode. As with our prior signals, Carl is not advising you to jump in with both feet since there is still a fair amount of uncertainty out there and the iShares EM Fund (EEM) needs to demonstrate staying power and work through some resistance. Still, he’s extending our line a bit with our two new buys in today’s issue: VanEck Rare Earths/Strategic Metals (REMX) and TAL Education Group (TAL). Both are rated Buy a Half.

Bi-weekly Update January 3: Cabot’s Emerging Markets Investor new Chief Analyst Carl Delfeld reviews the basics of investing in emerging markets and updates us on all the stocks in the portfolio. Today he is recommending two stocks to be Sold. Autohone (ATHM) moves from Hold a Half to Sell and BilliBilli (BILI) from Hold to Sell.

Cabot Small-Cap Confidential

Weekly Update January 11: Tyler’s best advice on how to handle things at this stage is to do what he’s heard from every Cabot analyst—don’t get too excited because we don’t know if we’re out of the woods just yet. That’s sensible advice when the long-term trends have broken and the main engines of growth—accommodative fiscal policy and a synchronized global growth—are running on fumes. That said, there seems to be a lot of opportunity out there right now. There are no portfolio changes today.

Monthly Issue January 7: Today’s stock, CareDx (CDNA), is another specialized medical device company. It plays in the highly specialized market for organ transplant surveillance. It has all the attributes of a good stock—it’s expanding its end market potential with new products, is almost profitable, and the chart looks great!

Cabot Dividend Investor

Weekly Update January 9: Tom writes that we might be in a cautious market for quite a while. Consequently, this advisory will continue to favor safer, more recession-resistant stocks and investments for the foreseeable future. This selloff may be over. There is a good chance the market will be strong again in the first half of this year. But the 2018 selloff may have been a warning bell of things to come rather than a false alarm. There is just one rating change. He’s changing the rating on New York City utility Consolidated Edison (ED) from BUY to HOLD because of lackluster relative performance.

Monthly Issue December 19: Chloe writes that it’s time for her to move on, but Cabot Dividend Investor isn’t going anywhere. She’s excited to pursue new opportunities in the New Year, and she’ll be leaving you in great hands. Tom Hutchinson, the new Chief Analyst of Cabot Dividend Investor, introduces himself in this month’s issue, with his take on the market and an exciting new stock pick. Here are today’s portfolio changes: BB&T Corp (BBT) Hold to Sell, Broadridge Financial Solutions (BR) Hold to Sell, CME Group (CME) Buy to Hold, Dunkin’ Brands (DNKN) Hold to Sell Half, Invesco Preferred ETF (PGX) Buy to Sell Half and UnitedHealth Group (UNH) Buy to Hold. Tom’s featured stock this month is: Altria Group (MO) is the largest U.S. domestic cigarette maker and one of the largest in the world.

Cabot Marijuana Investor

Update January 4: Stocks in the marijuana sector are off to a flying start this year. Our portfolio is already up more than 7% since the close of 2018—after being up 15% last year—and one of our latest buys, Cresco Labs, is up 32% since our late December purchase. As Tim mentioned previously, his position in Cronos (CRON) was overweight and he’s been looking to sell at a higher point—and he thinks this is it. So he’ll sell half of CRON today and hold the cash, which will bring our portfolio cash level to nearly 20%.

Monthly Issue December 27: In today’s issue, there are no new buy and sell recommendations, but you’ll find updates on all the stocks, including the two stocks Tim added to the portfolio last week. And as we head toward the end 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

Top Picks Daily Alert January 11: Update: LightPath Technologies, Inc. (LPTH) from The Inger Letter
Top Picks Daily Alert January 11: Advanced Micro Devices, Inc. (AMD) from The Inger Letter
Top Picks Daily Alert January 10: Ciena Corporation (CIEN) from Cabot Top Ten Trader
Top Picks Daily Alert January 9: TreeCon Resources, Inc. (TCOR) from S. A. Advisory
Top Picks Daily Alert January 8: Sleep Number Corporation (SNBR) from Cabot Undervalued Stocks Advisor
Top Picks Daily Alert January 7: Advanced Micro Devices, Inc. (AMD) from Shortex Market Letter

Monthly Issue December 19: Nancy’s Spotlight Stock Matador Resources Company (MTDR), is an independent energy company that explores, acquires, develops, and produces crude oil and natural gas resources in both the Delaware portion of the Permian Basin in southeast New Mexico and the Eagle Ford shale in Texas. In her Feature article, Nancy writes that energy stocks have lagged other categories in 2018, but with oil prices estimated to recover somewhat, we should see companies like Matador—who has consistently beat earnings forecasts and is increasing production—show some price appreciation in the new year.

Wall Streets Best Dividend Stocks

Daily Alert January 11: Sun Life Financial, Inc. (SLF) from Argus Weekly Staff Report
Daily Alert January 10: Sell: Phillips 66 Partners, L.P. (PSXP) from Forbes Dividend Investor
Daily Alert January 10: Air Products & Chemicals, Inc. (APD) from Forbes Dividend Investor

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.

Top Picks Daily Alert January 9: Altria Group, Inc. (MO) from Positive Patterns
Top Picks Daily Alert January 8: Kimco Realty Corporation (KIM) from Forbes Real Estate Investor
Top Picks Daily Alert January 7: Innovative Industrial Properties, Inc. (IIPR) from Cabot Marijuana Investor

Ask the Experts

Cabot Undervalued Stocks Advisor

Question: Is it time to buy KLX Energy Services (KLXE -- Hold)?

Crista: I personally believe that the price chart looks fantastic, indicating an imminent breakout.

Question: I am itching to put my toe back in with Supernus (SUPN). Any thoughts on this? Will this still be on your BUY list?

Crista: I’m going to wait for the price chart to show a little more support before giving it a Buy recommendation. The EPS and PE still look great. You could buy now, but I would personally wait a few weeks. The price chart is simply not stable yet.

Cabot Options Trader

Question: Hi Jacob, I’m relatively new to your service so I don’t hold all of the bullish positions. I do hold CIEN and ZS. I don’t plan to buy the QQQ put because I have relatively small positions in CIEN and ZS. However, I am interested in understanding the QQQ put. Let’s assume I held 10 contracts of every long position in the portfolio. How would I decide on how many contracts of QQQ to buy to hedge my position. If QQQ closes on June 21 above 155 then the “insurance premium” that I paid for QQQ will expire. I then expect my long positions will have appreciated much more than my premium cost in order to make this a profitable decision. Is this the right thought process?

Jacob: I’m glad to see the first two trades you executed have started off nicely!! Now on to the questions. So let’s start here ... sizing hedges is tough. If you only hedge 15% of the portfolio, well then you should have hedged 25%. If you hedge 50%, you should have hedged 10%. That is just trading and life ... we never get it perfectly. However, to give you a bit more on this subject I will include in an attachment an options education article I found on the CBOE years ago that does a good job of explaining how to hedge a portfolio. Back to this hedge. The worst case scenario for you if you owned CIEN and ZS calls and a QQQ put would be these stocks chop around or drift marginally lower. If that is the case all would lose money as the options would decay. Best case scenario is I have picked two great stocks in ZS and CIEN that continue to outperform and go higher and Nasdaq chops around. In that scenario we make money on ZS and CIEN, and lose small on QQQ. More likely scenario is much like you wrote. Market goes higher bringing ZS and CIEN with it and those positions continue to make money while the QQQ put loses less money.

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.