Cabot Prime Pro Week Ending June 19, 2020
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, In this week’s video, Tyler Laundon shares his view on the current market and discusses why growth investors should get out of small-cap index funds and move into individual small-cap stocks. He also talks about the pros and cons of secondary stock offerings and how they can be a bullish signal for growth stocks.
UPCOMING CABOT EVENTS:
Cabot Wealth Summit Online — August 18-20, 2020
Take Advantage of our Prime Member Discount
Cabot Retirement Club
FREE WEBINAR FOR PRIME MEMBERS ONLY: Thursday, June 25, By Tom Hutchinson, Chief Analyst of Cabot Income Advisor Sign up now.
Cabot Micro-Cap Insider Member Call
FREE WEBINAR FOR PRIME PRO MEMBERS ONLY: Thursday, July 9, By Rich Howe, Chief Analyst of Cabot Micro-Cap Insider Sign up now.
Cabot Prime Members Meeting with the Analysts: 3rd Quarter 2020
FREE WEBINAR FOR PRIME MEMBERS ONLY: Wednesday, July 15 Sign up now.
Three Stocks for Three “Blue Ocean” Global Trends
WEBINAR: Wednesday, July 22, By Carl Delfeld, Chief Analyst of Cabot Global Stocks Explorer Sign up now for FREE.
Cabot Growth Investor
Bi-weekly Issue June 18: Continue to follow the plan—holding your strong performers and putting money to work as opportunities arise. In the Model Portfolio, Mike is adding a full position in Wingstop (WING) today, which looks to be at a solid entry point. Our cash position will now be around 10%. He’s also moving Teladoc (TDOC) from Hold to Buy.
Bi-weekly Update June 11: Remain bullish, but pick your spots. Today was a very brutal day, but it hasn’t changed the evidence, at least not yet—our trend-following measures are still bullish and, along with the recent blastoff indicators, tell us the odds still favor higher prices ahead (though further short-term weakness wouldn’t shock us at all). Growth stocks have been trickier, but breakdowns have been few and far between. All in all, Mike remains optimistic, though he’s holding onto our 18% cash tonight. The only change is the switch of Vertex (VRTX) to Hold.
Other Stocks of Interest June 18: Follow ups to stocks featured February 13, 2020 (issue 1439) to June 18, 2020 (issue 1448). Since many of the stocks written about in Other Stocks of Interest don’t make their way into the Model Portfolio, you won’t see them followed on a regular basis in the issues. However, we are monitoring these stocks, and this listing gives you a quick view of our latest thoughts.
Cabot Top Ten Trader
Movers & Shakers June 19: When you look at the weight of the evidence, there’s no question it continues to point up—the intermediate-term trend of all the major indexes is still pointed up, Cabot’s Aggression Index (relative performance of the growth-y Nasdaq vs. the defensive consumer staples sector) is firmly positive and, even with the on-again, off-again broad market, the number of stocks hitting new lows is minuscule. Mike’s buy recommendations today are: Neurocrine Bio (NBIX) and Marvell Technology (MRVL). Today’s sells are: Atlas Air (AAWW), Pinduoduo (PDD) and TG Therapeutics (TGTX).
Weekly Issue June 15: 2020 has been all about staying flexible, and right now isn’t a time for complacency; it’s always possible the 11-week advance is going to lead to a sharper correction or consolidation. Thus, you should be open to any possibility, but right now, the evidence remains bullish, so Mike advises remaining heavily invested. This week’s list has a bunch of growth-oriented titles that are showing attractive setups. Mike’s Top Pick is Lululemon (LULU), which could pull in further after earnings, but his guess is that this dip will give way to higher prices in the weeks ahead.
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 Position Update June 18: Snap (SNAP) is trading at a new 52 week high this morning. Cabot Options Trader’s October calls are now at a profit of 100%, and Cabot Options Trader Pro subscribers bull call spread is at a profit of 90%. Jacob is going to continue to hold the position looking for greater profits as the stock looks great and option activity is wildly bullish. Our ON Semiconductor (ON) June covered call position that will expire tomorrow, you will not need to adjust this position tomorrow and come Monday we will not own a ON stock or option position.
Cabot Options Trader Basic and Pro Trade Alert June 16: Buy the JD.com (JD) November 62.5 Calls (exp. 11/20) for $7.70 or less.
Cabot Options Trader Position Update June 15: After initially selling off this morning the market has rebounded, largely led by growth stocks. One of the stocks leading this rally is Peloton (PTON), which is trading at a new all-time high today above 50. Because of the stock strength and option activity Jacob is going to continue to hold the position looking for even greater profits.
Cabot Options Trader Pro Weekly Update June 15: Jacob has six long positions: GLUU, GILD, ON, PTON, SNAP and XLF, one position not impacting his decision making: QQQ July Bear Call Spread and one short position: QQQ December Puts.
Cabot Options Trader Weekly Update June 15: This week’s watch list is made up of two stocks that Jacob has debated buying in the last several weeks, though one of these stocks continues to attract as much bearish option activity as bullish. He continues to like the way Square (SQ) stock trades and have been close to adding the stock to the portfolio. Also, should the market again strengthen he would anticipate adding JD.com (JD) to the portfolio.
Cabot Undervalued Stocks Advisor
Special Bulletin June 19: Yesterday, after the market closed, rumors emerged that Marathon Petroleum (MPC) is once again in talks to sell their Speedway gas stations. Canada’s Alimentation Couche-Tard has been cited as a potential buyer. The stock rose to at least 41 in after-hours trading. It remains a Buy.
Weekly Update June 17: Crista occasionally hears investors excitedly claim that the stock market is rising because “the economy is back to normal” or because “small investors are investing a lot at Robinhood.” Those are interesting ideas, but her wager is on the Federal Reserve as being this month’s Top Stock Market Influencer. Here are today’s portfolio changes: Alexion Pharmaceuticals (ALXN) moves from Hold to Retired, Baker Hughes (BKR) moves from Hold to Sell, General Motors (GM) moves from Hold to Strong Buy, Netflix (NFLX) moves from Buy to Strong Buy, NV5 Global (NVEE) moves from Hold to Retired, NVIDIA (NVDA) moves from Hold to Strong Buy andVoya Financial (VOYA) moves from Buy to Strong Buy.
Special Bulletin June 15: Today’s news: Adobe Systems (ADBE) reported good second-quarter results and moves from Hold to Buy.
Monthly Issue June 3: Three of today’s featured companies seem most obviously ready to begin or continue run-ups in the coming days: Equitable Holdings (EQH), Mercury General Group (MCY) and Tyson Foods (TSN). The fourth featured company, Bristol-Myers Squibb (BMY), is sitting at the bottom of a steady trading range, offering attractive opportunities for growth investors, dividend investors and traders. Here are Crista’s portfolio changes: Dow Inc. (DOW) moves from Buy to Strong Buy and Quanta Services (PWR) moves from Hold to Buy.
Cabot Stock of the Week
Weekly Issue June 15: Last week’s sharp market selloff may have made headlines, but far more important than any one day’s action are patterns and trends, and today the patterns and trends Tim looks at are still positive. Still, diversification remains a key factor in successful portfolios, so today’s recommendation Brookfield Infrastructure Partners (BIP), swings back to the conservative side; it’s a big global company with a healthy 4.8% dividend. As for the current portfolio, while Tim sold two stocks last week just before the big drop, today he has no changes.
Cabot Global Stocks Explorer
Bi-weekly Update June 18: Today Carl writes that U.S. and global markets continue to be fueled by substantial amounts of liquidity washing over the world. According to Lipper, the amount in American money market funds has reached $4.6 trillion. This is a record going back to 1992. Carl has two portfolio changes today: Alibaba (BABA) moves from the Watch List to a Hold recommendation and Global X Cybersecurity ETF (BUG) moves from Buy a Half to Hold.
Bi-weekly Issue June 11: At the beginning of 2020, Carl was anticipating a resurgence in emerging markets, but the upheaval over the past few months has thrown all predictions to the wind. Emerging markets, which lagged big tech and big data in coming off March lows, have snapped back recently and our emerging markets timer (EEM) is now decisively positive. That said, emerging markets are a bit like biotech stocks – either hot or cold. Carl’s recommendation today is VanEck Vectors Rare Earth/Strategic Metals (REMX), an exchange-traded fund (ETF) launched in 2010. It is fairly concentrated with 21 holdings; the top 10 holdings represent 61% of assets and more than half of the holdings are Chinese companies. There are no portfolio changes today.
Cabot Small-Cap Confidential
Weekly Update June 18: The market continues to recover from last week’s short but intense decline. In our portfolio there’s been a dearth of news flow. That’s fine with Tyler. He thinks we could all use a little less stimulation and step back from our computers and mobile devices a bit more. He has two portfolio changes today: Inspire Medical (INSP) and Everbridge (EVBG) both move from HOLD to BUY.
Monthly Issue June 4: This month, Tyler is breaking into a familiar market by going back to the insurance industry. But today’s addition is very different from our other rapid growth insurance companies in a major way. The stock, Palomar Holdings (PLMR), is acting strong and the fundamentals remain great, despite COVID-19.
Cabot Dividend Investor
Weekly Update June 17: While the market can be impossible to predict in the short term, there is an increasing level of downside risk. Sure, the market can continue to run higher, and it might. But last week is a warning that the market is becoming increasingly sensitive to bad news. Because of a deteriorating risk/return tradeoff in the near term, a portion of several portfolio positions were sold in last week’s monthly issue. It is hugely important for this advisory to protect your downside. Tom will do so at the risk of missing some further upside. In the meantime, enjoy the strong market and he will, as always, continue to keep you posted. There are no rating changes today.
Monthly Issue June 10: There are bargains and high yields out there. But you have to be careful to find those with a safe dividend. Stocks still selling at bargain prices that pay high yields that are safe represent the best buying opportunities in the market right now. In this issue, Tom highlights one of the few diamonds in the rough. He has seven portfolio changes today, Community Healthcare Trust (CHCT) moves from HOLD to SELL, STAG Industrial (STAG) from HOLD to SELL 1/2, Altria (MO) from HOLD to BUY, Crown Castle International (CCI) from HOLD to SELL 1/2, Innovative Industrial Properties (IIPR) form BUY to SELL 1/3, Qualcomm Inc. (QCOM) from HOLD to SELL 1/3 and Valero Energy Corp. (VLO) from HOLD to SELL 1/2.
Cabot Marijuana Investor
Update June 10: The marijuana sector looks increasingly healthy, as the leading companies continue to post triple-digit growth rates and the leading stocks continue to climb higher. One exception, however, is Canopy Growth, which two weeks ago released a disappointing quarterly report that saw its stock drop sharply in response. The stock has recovered a bit since then, and Tim is going to take this opportunity to sell half our position. He’s also going to sell half of our position in Innovative Industrial Properties (IIPR), mainly because he thinks the growth potential is better elsewhere. The funds from both will be redeployed equally among current holdings Cresco Labs (CRTLBF) and Green Thumb Industries (GTBIF) and new addition Akerna (KERN)—which overall will shift the portfolio weighting slightly more from Canada to the U.S.
Monthly Issue May 27: Own the leaders. Sell the losers. And remember that someday, when marijuana is declared legal across the U.S., the institutions will come running. You who are here now, are early. The portfolio averaged up in four of our stocks two weeks ago and is now down to 13% in cash, and that’s where Tim will keep it, waiting for a fresh buying opportunity.
Special Report: April 29, 2020U.S. Vertically Integrated Multistate Operators (MSOs)
Cabot Early Opportunities
Special Bulletin June 18: Yesterday we decided to sell Enphase (ENPH) due to lackluster performance over the last month. Unfortunately, the timing of this decision coincided with a shoddy short report that pummeled the stock, sending it down over 25% yesterday. To be 1,000% clear … our sell notice was NOT because Tyler believes the short report to be valid.
Monthly Issue June 17: This month’s Issue of Cabot Early Opportunities features a fresh group of stocks that all have their own merits, but which have remained reasonably strong through the recent volatility. Tyler has a newly public company selling health insurance directly to consumers, a rapid growth software company enabling automation for small businesses, an emerging MedTech innovator and a company benefitting from surging demand for boats. His top pick is Purple Innovations (PRPL), one of several emerging bed-in-a-box companies.
Cabot Profit Booster
June Expiration June 18: Tomorrow is the expiration of June options and we are going to close five positions for full profits ranging from 9.75% to 17.64%. Meanwhile, we have one position that will be interesting to see where the stock closes tomorrow. Jacob gives us the details.
Weekly Issue June 16: The Stock – Peloton (PTON) On the surface, Peloton is just a maker of fancy exercise bikes (and, now, treadmills), but we think it’s much more than that—it’s really the leader in the connected fitness movement, where instead of marching to the local gym 10 or 20 minutes away, you’re able to get a high-quality workout from top-notch instructors from your own home (which, let’s face it, makes it more likely you’ll actually use the thing). The Covered Call Trade Buy Peloton (PTON) Stock at 48, Sell to Open July 50 Strike Call (exp. 7/17) for $2.75, or a Net Price of $45.25 or less.
Cabot Micro-Cap Insider
Weekly Update June 17: This week, Rich has a couple of changes that he wants to highlight. First, he is moving Recro Pharma (REPH) to Sell above 5.00. The stock has rebounded from its post earnings selloff but will be in “purgatory” for the next couple of quarters until its business regains positive momentum. Second, he is downgrading P10 Holding (PIOE) to HOLD as the stock has appreciated above his buy range. He may raise his buy limit in the future, but he’s comfortable with a hold rating for now.
Monthly Issue June 10: This issue, Rich profiles Liberated Syndication (LSYN), an under-the-radar podcast hosting company in secular growth that is about to announce the results of a strategic review. Our micro-cap recommendations have performed well in aggregate. Nonetheless, he believes his open BUY recommendations remain significantly undervalued as they have been left behind in this surging market. He has no portfolio changes.
Special ReportA Defensive Healthcare Stock with 100% Upside
Special ReportThe Best Way to Play the Oil Market Dislocation
Cabot Income Advisor
Weekly Update June 17: If the market continues to rise, Tom writes that we can still generate a strong income with covered calls, albeit with less appreciation than just owing the stock. If the market pulls back, we can still collect dividends and call premiums and probably be able to write more calls on the same stocks in the future (as they won’t get called away). Today he has a “Special Alert” for the writing of a call in our Altria (MO) position, Sell MO July 31 $42 call at $1.60 or higher.
Monthly Issue May 25: Welcome to the very first issue of Cabot Income Advisor. The purpose of this newsletter is to provide you with investment ideas that generate a very high level of current income. The goal is to provide you with a double digit annual income with a reasonable level of risk, whereby you can maintain and grow your nest egg over time. Chief Analyst, Tom Hutchinson has found three strong investments that he is recommending as a BUY in this inaugural issue. I foresee this portfolio eventually having 10 to 15 different investments. Whatever you may want to allocate to this newsletter portfolio should be spread over 10 or more stocks. We will start with three. You don’t have to invest all at one time.
Special Report:Off the Radar Cash Generators
Special Report:The Covered Call Income Machine
Wall Street’s Best Investments
Daily Alert June 19: Matthews China Small Companies Fund (MCSMX) Moneyletter
Monthly Issue June 18: Advisors and consumers are back on the bullish track, as you’ll see in our Barometer, as well as Market Views. Despite the market’s rise, there are still plenty of undervalued stocks in the marketplace. And Nancy begins this issue with our Spotlight Stock, Okta, Inc. (OKTA), a technology company that is gaining market share in the highly competitive field of cybersecurity—in this case, specializing in ID authentication for employees and customers. Her feature article explores the industry in more depth, as well as additional reasons for adding the Spotlight Stock to your portfolio.
Daily Alert June 18: Vail Resorts, Inc. (MTN) Ian Wyatt’s Million Dollar Portfolio
Daily Alert June 17: Applied Materials, Inc. (AMAT) DRIP Investor
Daily Alert June 16: Sell: Community Healthcare Trust Incorporated (CHCT) Cabot Dividend Investor
Daily Alert June 16: Altria Group, Inc. (MO) Cabot Dividend Investor
Daily Alert June 15: Telus Corporation (TSX: T.TO, NYSE: TU) Internet Wealth Builder
Ask the Experts
Cabot Profit Booster
Question: Thanks for the today’s Profit Booster update. I have a question on another idea that is not covered by you yet.I thinking of doing a covered call on the Nikola stock(NKLA) which has a lot of option activity. I was thinking of buying the NKLA stock at around $64 and sell to open $70 strike call (expiring June 26th) for $2.70, or a net price of $61.3. The maximum return per contract would be 14.3% in one week. I noticed that I can get the similar >10% return every week with this hot NKLA stock. What would be your recommendation? Does it sound like a good idea? Do you think it’s a safe and good strategy?
Jacob: Safe no, and risky yes. But you are getting paid a nice premium to take that risk. In essence you are selling insurance into an oncoming hurricane.Truth be told in a hot stock like NKLA I could see the stock $40 lower, or $40 higher .. you just never know. Playing covered calls in these stocks aren’t my favorite, but that does not mean your trade idea won’t work.
Question: Thanks for this summary, great results! Just a question about one of my positions. I was actually called away on my LSCC position yesterday, 6/17, rather than at tomorrow’s expiration. I didn’t mind, as I locked in a gain of about 10% in just over a month, but just curious how often something like that happens. Any insight is appreciate. Thanks as always
Jacob: From time to time a trader will exercise his calls early ... for what reason I don’t know. Though if I were to speculate the trader wants to take ownership of the stock position, so he exercises his right to buy the stock from you. That being said, it doesn’t matter to you as it essentially locks in your profit a day or two early.
Quarterly Cabot Analyst Meeting
The recording of the Cabot Prime Members Meeting with the Analysts from April 15, 2020 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.
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.
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.
|Stock||Cabot Small-Cap Confidential||Cabot Global Stocks Explorer||Cabot Growth Investor||Cabot Marijuana Investor||Cabot Stock of the Week||Cabot Undervalued Stocks Advisor||Cabot Dividend Investor|
|IIPR||See Advisory||Hold 2/3|