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Weekly Summary May 15, 2020

Cabot Prime Pro Week Ending May 15, 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, Mike Cintolo talks about the market’s selloff this week, which has put the intermediate-term trend on the fence. On the flip side, though, leading stocks continue to act well, with many still rising and others pulling back normally. Overall, Mike advises against ignoring the market’s weakness, but also not to overreact to it -- many names could actually be good buys on dips, but flexibility remains key.


Rebalancing Your Portfolio After Coronavirus + Two Good Stocks to Buy Now

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Advisory Services

Cabot Growth Investor

Bi-weekly Update May 14: The market’s evidence has worsened some this week—our Cabot Tides are now on the fence as the broad market has softened. Growth stocks are still in generally good shape, so Mike is happy to hang on, but he’s going to take a couple of chips off the table tonight—specifically, he’s selling one-quarter of our remaining shares in both Dexcom (DXCM) and DocuSign (DOCU). He does have a few stocks he’s watching to buy if he sees better entry points, but tonight he has just the two partial sales, which will give us around 40% in cash.

Bi-weekly Issue May 7: Mike has stood pat in the Model Portfolio for the past couple of weeks, and happily most of our names are in great shape. Tonight he’s adding another old friend to the portfolio—Twilio (TWLO), who soared out of a huge launching pad after earnings today, and he’ll buy a full position tonight. Our cash position will be around 36% after the buy.

Other Stocks of Interest May 8: Follow ups to stocks featured December 19, 2019 (issue 1435) to May 7, 2020 (issue 1445). 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 May 15: To respect the action of the indexes and the intermediate-term trend being neutral, Mike will likely nudge our Market Monitor down a notch or two come Monday. But having avoided getting too crazy on the way up, he doesn’t advise getting overly panicked as we pull in, especially if you own the market’s best leading stocks. Mike’s buy ideas today are: Chewy (CHWY), Ciena (CIEN), and PayPal (PYPL). As for outright sells, American Tower (AMT) and Gilead (GILD) are being kicked out today, though Mike could have some more on Monday.

Weekly Issue May 11: Many indexes (small- and mid-caps) and sectors look OK, nothing great, but growth oriented stocks are lighting up the sky, with more big earnings-induced breakouts last week than we’ve seen in a very long time. In the near-term, these hot stocks might be a bit too hot; some potholes could certainly be on the table. But we also think that, assuming the general market holds up, the first retreats in many of these names are likely to provide solid entry points, as the fresh breakouts bode well overall. We’re moving our Market Monitor up to level 7. This week’s list has many of last week’s most powerful gaps and a few others with solid setups and/or persistent uptrends. It was hard to settle on one, but Mike will go with Chegg (CHGG) for his Top Pick, as it just emerged from a picture-perfect consolidation on earnings.

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 Position Update May 15: (JD) reported earnings this morning that beat expectations. In afternoon trade today the stock is trading higher by 3% at 50.5. At these levels our June 39/47 Bull Call spread is worth $6, with the potential to be worth $8 or a profit of 216% should the stock close above 47 on June expiration. Jacob is going to continue to hold the position as the stock looks great and traders continue to buy calls looking for greater gains.

Cabot Options Trader Position Update May 15: (JD) reported earnings this morning that beat expectations. In afternoon trade today the stock is trading higher by 3% at 50.5. At these levels our June 39 Calls are worth $12.20, or a potential profit of 240%. Jacob is going to continue to hold the position as the stock looks great and traders continue to buy calls looking for greater gains.

Cabot Options Trader Pro Alert May 15: Sell Existing Position: Sell your Zillow (Z) May 50/55 Bull Call Spread for $0.05 or more.

Cabot Options Trader Earnings Update May 14: (JD) will report earnings tomorrow before the open. Having taken more profits yesterday, Jacob is going to hold his position through the earnings announcement. However, if you do not want to take that risk, you must Sell to Close before the end of the trading day today.

Cabot Options Trader Position Update May 13: VERY quickly our Nasdaq ETF (QQQ) puts that were bought yesterday are at a potential profit of 28% as the QQQs fell 2% yesterday, and are down another 1.7% today. Jacob is going to continue to hold is puts as the market, all of a sudden, looks very suspect.

Cabot Options Trader Pro Alert May 13: Sell Half of Remaining Position: Sell Half of your (JD) June 39/47 Bull Call Spread for $5.40 or more.

Cabot Options Trader Basic Alert May 13: Sell Half of Remaining Position: Sell Half of your (JD) June 39 Calls for $9 or more.

Cabot Options Trader Basic and Pro Alert May 12: Buy the Nasdaq ETF (QQQ) December 220 Puts (exp. 12/18/2020) for $18 or less.

Cabot Options Trader Pro Weekly Update May 11: Jacob has 6 Long positions: JD, GILD, ON, SNAP, XLF and Z and 1 short position: QQQ July Bear Call Spread.

Cabot Options Trader Weekly Update May 11: The Chicago Board of Options Exchange Volatility Index (VIX) closed the week at 28, or lower by 25%. As the VIX bleeds back below 30 and the market has been on a meteoric rise, I am certainly considering adding a hedge to the portfolio. That being said, I have yet to see any option action that has me terribly worried about the market leaders and the leading indexes.

Cabot Undervalued Stocks Advisor

Weekly Update May 13: The stock market continues to exhibit a willingness to rise in the near term. Crista is seeing constructive price chart patterns on both the S&P 500 index and on many individual stocks. Here are today’s portfolio changes: Apple Inc. (AAPL) moves from Buy to Hold, Netflix (NFLX) moves from Hold to Buy, NVIDIA (NVDA) moves from Strong Buy to Buy and VanEck Vectors Oil Refiners ETF (CRAK) moves from Buy to Strong Buy.

Special Bulletin May 12: Today’s news: Alexion Pharmaceuticals (ALXN) rises on activist investor agitation and Brighthouse Financial (BHF) soars on great first quarter results.

Special Bulletin May 11: Today’s news: LGI Homes (LGIH) moves from Strong Buy to Buy, Voya Financial (VOYA) moves from Buy to Strong Buy, Crista writes about Portfolio Stocks Beginning Run-ups and includes a Portfolio Stock Summary.

Monthly Issue May 6: As the stock market recovers from the steep downturn in March, Crista would like to stress that this downturn bears no resemblance to any previous stock market downturn. It wasn’t created by corporate excesses or a housing bubble or any specific financial problem. And while she had certainly warned investors, beginning in December 2019, that we were due for a normal correction, simply because the S&P 500 index had risen so rapidly beginning in late October, the eventual downturn had far more to do with the global virus pandemic than anything else. She is more convinced than ever that the U.S. is in for rough seas ahead. Here are today’s portfolio changes: NVIDIA (NVDA) moves from Buy to Strong Buy and Total S.A. (TOT) moves from Hold to Strong Buy.

Cabot Stock of the Week

Weekly Issue May 11: The overall market continues to look healthy—though we haven’t yet received an “all-clear” signal from our long-term trend indicator—and our stocks are certainly behaving well, with several hitting new highs and none behaving badly. So the only sell recommendation Tim has today is a bit of short-term profit-taking in one of my recent recommendations—a stock that is due for a bit of a rest. Today’s recommendation, Verizon Communications (VZ), is a very well-known U.S. telecommunications company with a solid yield that has not only held up well in recent months but that has good growth prospects as the communications revolution continues.Tim has one portfolio change today: BlackLine (BL) moves from Hold to Sell.

Cabot Global Stocks Explorer

Bi-weekly Issue May 14: Markets have pulled back a bit over the last few days as investors hit the pause button to digest a Nasdaq in the black for 2020 while the real economy struggles to reopen. Our emerging market (EEM) momentum timer has turned positive by the slightest of margins. Carl’s recommendation today is: Group (TCOM), a contrarian recommendation that is known as the “Expedia of China” and, as you might guess, its stock has been struggling since January. Today’s one portfolio change is to Sell Ping An (PNGAY).

Bi-weekly Update May 7: Carl writes that emerging markets, and many developed international markets, have not bounced back anywhere near what the Nasdaq or S&P 500 have during the past couple of months. This gap is an opportunity for us, but risk is still high so we need to be selective and try to wait for uptrends to develop. He has two portfolio changes today: Direxion Daily S&P 500 Bear (SPDN) moves to Sell and Ping An (PNGAY) Moves from Buy to Hold.

Cabot Small-Cap Confidential

Weekly Update May 14: But for right now, until we get at least a little consolidation phase in stocks, Tyler sees little reason to get overly aggressive. That means there are not a lot of buy ideas in our current portfolio, which is a little frustrating for him. But it is what it is. He has to go with the evidence in front of us, and for now, with most of our stocks, that just means sitting on his hands for a bit. Tyler has one change this week: Cardlytics (CDLX) moves from Buy to Hold.

Special Bulletin May 13: Health Catalyst (HCAT) reported after the close yesterday with results that beat lowered expectations. Revenue was up 28% to $45.1 million, beating by $1 million. Tyler likes the company and the idea of health care data but fails to see enough positives to get the stock moving materially higher over the coming months. He thinks the money can be better put to work elsewhere. SELL REMAINING HALF

Special Bulletin May 12: Cardlytics (CDLX) reported earnings last night and is a buy today for aggressive investors. The report and management’s commentary was good enough to rule out a worst case scenario, for now. Management said its purchase intelligence data is extremely helpful to marketing clients in this environment. As predicted revenue from retail, travel and restaurants has been hard hit. But an uptick in direct-to-consumer and internet retail in areas like sporting, pet supplies, grocery, beauty, etc. has helped offset those declines. Buy.

Monthly Issue May 7: This month Tyler is adding a high-growth biotech name that has just begun to commercialize a unique compound for fighting aggressive cancers and other diseases including, potentially, COVID-19. Karyopharm Therapeutics (KPTI) just began booking revenue from its first cancer treatment. That launch significantly de-risks the stock and raises the potential for future approval of the same compound for other indications.

Cabot Dividend Investor

Monthly Issue May 13: Cabot Dividend Investor portfolio is only buying very selectively. While the overall market may be shaky at this point, certain companies are thriving during the pandemic. There are niches where business is actually booming. In this issue Tom highlights two stocks that are selling at bargain prices, have businesses barely affected by the pandemic, and stand to thrive in the post-Covid-19 market as well. He has one portfolio change today, Innovative Industrial Properties (IIPR) moves from HOLD to BUY.

Weekly Update May 6: Tom writes, the economy and the market will come back from this, but probably not before more trouble. The path to economic strength and a booming market is ahead, only with more bumps in the road than the market seems to be currently anticipating. If the market does take another drubbing, it will probably be short lived. Don’t fear it. Expect it. And prepare to exploit it. There are no rating changes today.

Cabot Marijuana Investor

Update May 13: Continuing to work to get back toward full investment (but only in the best stocks), the portfolio will now sell half its position in Cronos (CRON), which is going the wrong way, and then use half our cash (the CRON proceeds plus existing cash) to buy equal portions of Curaleaf (CURLF), Green Thumb Industries (GTBIF), Grow Generation (GRWG) and Trulieve (TCNNF). Also, Innovative Industrial Properties (IIPR) is upgraded to Buy.

Monthly Issue April 29: Tim’s advice is to aim long-term, and remember that the best way to complete a long trip is to make a smart start. Try to buy on dips. Diversify, spreading your investments both geographically and among business models. As both the marijuana sector bear market and the flash coronavirus bear market recede into history, and investors again look forward to economic progress, it’s appropriate to put some of our cash to work. The portfolio will now use a third of its cash to buy equal dollar amounts of Aphria (APHA), Cresco Labs (CRLBF), Green Thumb Industries (GTBIF) and Tilray (TLRY). This will take our cash position down to roughly 30%.

Special Report: April 29, 2020

U.S. Vertically Integrated Multistate Operators (MSOs)

Cabot Early Opportunities

Special Bulletin May 13: Growth stocks have defied gravity lately. Who knows if this afternoon’s retreat is going to send them back to earth, but Tyler doesn’t want to wait too long to lock in some of our hard-earned gains. Today, he’s taking the following actions: Livongo (LVGO)—SELL HALF, Deciphera (DCPH) —SELL and Five9 (FIVN) —SELL A QUARTER.

Monthly Issue April 15: This isn’t to say it’s time to get super-aggressive. There are still big hurdles to get over. But the trends suggest we could be in the early to middle stages of a market recovery, complete with expected bouts of volatility, and that means continue to average into select opportunities. So, this month’s Issue of Cabot Early Opportunities features a variety of stocks across the risk spectrum. Tyler has a company working on immune medicines, including antibody testing for COVID-19, as well as a conservative MedTech stock that’s been punished but should bounce back. The month’s Top Pick, Datadog (DDOG), is a way to play surging demand for a specific type of cloud computing technology.

Cabot Profit Booster

Update May 14: Tomorrow is the expiration of May options, and it’s been a spectacular month for our covered call strategy. We have six positions that will expire tomorrow and Jacob breaks down each one. One will need action (CHWY), while most others will expire for full profits tomorrow and we will not need to adjust.

Weekly Issue May 12: The Stock – Chegg (CHGG) From its modest beginning as an online textbook hub, Chegg grew into a multi-pronged educational platform. The company still offers textbooks (and e-textbooks) and allows students to buy/sell them online, but that’s a small part of its business and it operates it at breakeven. The real growth driver is the company’s student learning platform, which offers online tutoring and test prep, homework help (including a library of 37 million pieces of content and 31 million expert Q&A answers) and an online internship and job search platform. The Covered Call TradeBuy Chegg (CHGG) Stock at 61, Sell to Open June 65 Calls (exp. 6/19/2020) for $2, or a Net Price of 59 or less.

Cabot Micro-Cap Insider

Monthly Issue May 13: If you have not already, Rich recommends that you read his Cabot Micro-Cap Insider Guide. It will help you get the most out of your Cabot Micro-Cap Insider membership, and make your investing decisions easier and more profitable. It will also explain much of the shorthand we use in Cabot Micro-Cap Insider, and explain our ratings. His newest recommendation is: Medexus Pharmaceuticals (MDP.V), a Canadian specialty pharma company that is growing at a rapid clip.

Special Bulletin May 11: This morning, Recro Pharma (REPH) reported Q1 2020 revenue of $21.8 million, ahead of consensus expectations of $19.4 million. Rich is changing his BUY rating to HOLD.

Weekly Update May 6: Rich launched Cabot Micro-Cap Insider just last week, and while there hasn’t been much news, a couple of stocks (USNU and HPTO) have already moved significantly higher. As a result, he’s moved his ratings on them to HOLD. All other open recommendations remain BUY rated subject to the limits that he has indicated.

Special Report

A Defensive Healthcare Stock with 100% Upside

Special Report

The Best Way to Play the Oil Market Dislocation

Wall Street’s Best Investments

Daily Alert May 15: Pfizer Inc. (PFE) Internet Wealth Builder
Daily Alert May 14: Deere & Company (DE)
Daily Alert May 13: General Motors Company (GM) Cabot Undervalued Stocks Advisor
Daily Alert May 12: Extendicare Inc. (EXE.TO) Contra the Heard
Daily Alert May 11: SVB Financial Group (SIVBP) Income Securities Investor

Monthly Issue April 16: Nancy’s Spotlight Stock this month, Amazon (AMZN), certainly fits the growth category. One of the FANG stocks, the company is seeing expansion on all levels, including e-commerce, streaming, and its web services. This month, she also has a second opinion on the stock, also very positive. And her Feature article is a bit more numbers-based as to why she believes this company will continue to be a major online force.

Ask the Experts

Cabot Growth Investor

Question: Hi Mike, First of all, I wanted to say thank you for your detailed analysis of the market and your recommendations in the Growth Advisory newsletter. Your team is fantastic and has been spot on with the market. I would be curious to get your thoughts on a price target for COUP. I am planning to let this one run until your team says otherwise. Thank you in advance!

Mike: Thanks for writing, and the kind comments. We’ve had some good luck of late, and while I’m sure there will be potholes, we’ll just try to stay on the right side of things. As for price targets – that’s not my style. COUP has decisively moved to new highs, though I wouldn’t say volume has been impressive, not that such a factor has stopped it. They will have earnings in early June, something to consider. If it were me, I’d probably move my stop to breakeven here or a bit above (assuming you have a good profit) and see how it handles its first pullback. But so far, so good.

Cabot Options Trader

Question: If I wanted to take puts on the spy ending the month of June where would you buy as well as longer-term say 3 to 6 months.

Jacob: If I was looking for June SPY puts I might target the June 284 puts for around $12. In terms of 3-6 months, perhaps the November 283 puts for around $25. Of note, we bought QQQ puts yesterday. Though clearly that will hedge more tech exposure, while SPY puts will hedge general market risk.

Premium Reports

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.

StockCabot Small-Cap ConfidentialCabot Global Stocks ExplorerCabot Growth InvestorCabot Marijuana InvestorCabot Stock of the WeekCabot Undervalued Stocks AdvisorCabot Dividend Investor
APHASee Advisory
BIPBuy 2/3
BMYStrong Buy
BSCLBuy 1/2
BUGBuy 1/2
CGCSee Advisory
CHCTHold 1/3
CHWYBuy 1/2
CRAKStrong Buy
CRLBFSee Advisory
CRONSee Advisory
CURLFSee Advisory
DBSDYBuy 1/2
DOCUSell 1/4
DOMOHold 1/2
DXCMSell 1/4
EQHStrong Buy
EVERHold 1/2
FANUYBuy 1/2
GMStrong Buy
GRWGSee Advisory
GSHDHold 3/4
GTBIFSee Advisory
IIPRSee AdvisoryBuy
MPCBuyStrong Buy
NEEHoldHold 1/2
NETBuy 1/2Buy 1/2
NVEEStrong Buy
PGXHold 1/2
SEHold 1/2Hold
SPCEHold 1/2Hold
TCNNFSee AdvisoryBuy
TCOMBuy 1/2
TOTStrong Buy
TPBSee Advisory
VOYAStrong Buy
XELHold 2/3