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Weekly Summary May 8, 2020

Cabot Prime Pro Week Ending May 8, 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 talks about why he’s getting a little more cautious on high-growth tech and MedTech stocks after a flurry of earnings reports sent several of these companies to new all-time highs. Tyler revisits a number of companies he highlighted on April 10 and which are up an average of 34% since.


Cabot Micro-Cap Insider Monthly Member Call

FREE WEBINAR: Thursday, May 14 at 2 pm Eastern. By Rich Howe, Chief Analyst of Cabot Micro-Cap Insider
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Rebalancing Your Portfolio After Coronavirus + Two Good Stocks to Buy Now

FREE WEBINAR: Tuesday, May 19 By Nancy Zambell, Chief Analyst of Wall Street’s Best Investments
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Advisory Services

Cabot Growth Investor

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.

Bi-weekly Update April 30: Remain optimistic, but keep some powder dry, too. The overall market continues to look good, though this week Mike has seen most growth stocks take hits as money has flowed into the broad market. Still, to this point, the action is normal, with leading stocks holding key support. He could have new buys next week if growth stocks stabilize, but tonight, he has no changes on the buy or sell side. Our cash position stands at 47%.

Other Stocks of Interest April 24: Follow ups to stocks featured December 5, 2019 (issue 1434) to April 23, 2020 (issue 1444). 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 8: Because of the divergent action and sluggishness from many stocks and sectors, Mike wouldn’t be flooring the accelerator here; it’s still best to slowly and steadily extend your line as you make profits. But big picture, he takes most of his cues from the trend of the indexes (up) and the action of leading stocks (very good), so he remains optimistic higher prices are on the way. Mike’s buy ideas today are: Atlassian (TEAM), Five9 (FIVN), and Vertex (VRTX). As for outright sells, Bilibili (BILI)nicked our stop at 25 to the penny and has bounced. If you still own it, feel free to hold with a stop just below 25, but Mike is following the rules and will have it as a sell.

Weekly Issue May 4: Mike is watching things closely, but he has no change in his stance right here, thinking the path of least resistance remains generally up, but potholes and news-driven moves (especially on earnings) are likely given the recent run-up and the overhead resistance from February. It’s fine to do some buying, but don’t go wild until the buyers really flex their muscles. He’s keeping our Market Monitor at a level 6. This week’s list has a bunch of intriguing stories, though a few have earnings coming up soon. Mike’s Top Pick is Bandwidth (BAND), a lesser-known outfit whose offering is key to many fast-growing companies.

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 Earnings Update May 8: ON Semiconductor (ON) will report earnings Monday before the open. Our covered call position is in good shape headed into the event as the stock is trading at 16.60, or just below the 17 strike that we sold. Jacob is going to continue to hold his position through the event as the stock is acting fine.

Cabot Options Trader Basic Trade Alert May 8: Sell Existing Position: Sell your Zillow (Z) May 50 Calls for $5 or more.

Cabot Options Trader Pro Trade Alert May 8: Adjust Existing Position: Against your Zillow (Z) May 50 Calls, Buy Back the May 65 calls and Sell the May 55 Calls.

Cabot Options Trader Earnings Update May 7: Zillow (Z) will report earnings tonight after the close. The stock is trading higher by $3.50 today at 47 as many growth stocks have exploded higher following earnings in the last several days. Because Jacob has profits in the bank on half, and because the environment has turned more positive for hyper-growth stocks he is going to continue to hold his position through earnings and take the risk.

Cabot Options Trader Pro Trade Alert May 6: Bear Call Spread: Sell the Nasdaq ETF (QQQ) July 245/250 Bear Call Spread (exp. 7/17/2020) for $0.75 or more.

Cabot Options Trader Pro Trade Alert May 5: Buy the Snap (SNAP) October 18/23 Bull Call Spread (exp. 10/16/2020) for $1.65 or less.

Cabot Options Trader Basic Trade Alert May 5: Buy the Snap (SNAP) October 18 Calls (exp. 10/16/2020) for $2.75 or less.

Cabot Options Trader Pro Weekly Update May 4: Jacob has 5 Long positions: JD, GILD, ON, XLF and Z.

Cabot Options Trader Weekly Update May 4: The Chicago Board of Options Exchange Volatility Index (VIX) closed the week virtually unchanged at 37. Interestingly, on Wednesday at the lows for the week in the VIX the “fear index” came close to breaking through 30, which was a multi-month low. That sell-off was short-lived as the VIX spiked back to life above 38 on Friday as the market sold off. Going forward Jacob can’t envision a scenario where the VIX trades below 25 in the coming month, or maybe even longer, as earnings season ramps up, the economy is a mess, and the virus headlines are unlikely to go away.

Cabot Undervalued Stocks Advisor

Special Bulletin May 8: Today’s news: Bristol-Myers Squibb (BMY) reported great first-quarter results and moves from Hold to Strong Buy, Equitable Holdings (EQ) reported good first-quarter results, NV5 Global (NVEE) reported good first-quarter results, Quanta Services (PWR) reported good first-quarter results and Universal Electronics (UEIC) reported a first-quarter earnings and revenue miss.

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.

Special Bulletin May 6: Today’s newsAlexion Pharmaceuticals (ALXN) reported first quarter results, General Motors (GM) reported first quarter results, moves from Hold to Strong Buy and Voya Financial (VOYA) reported first quarter results.

Special Bulletin May 5: Today’s news: Alexion Pharmaceuticals (ALXN) acquires Portola Pharmaceuticals (PTLA), LGI Homes (LGIH) reported first quarter results and moves from Buy to Strong Buy and Marathon Petroleum (MPC) reported first quarter results and moves from Buy to Strong Buy.

Special Bulletin May 4: Today’s news: (AMZN) reported first-quarter results, Apple Inc. (AAPL) reported second-quarter results, Mercury General (MCY) reported first-quarter results and Tyson Foods (TSN) reported second-quarter results. Crista also gives us her take on Oil Majors and Airline Stocks. There are no portfolio changes today.

Weekly Update April 29: Crista has been receiving questions recently that essentially ask, “Why did this stock go up when the company reported bad news?” and “Why did this other stock go down when the company reported good news?” Those are valid questions that serve to emphasize a point that you frequently hear: over the short-term, a stock price can do literally anything. She gives you her take on these questions. Here are today’s portfolio changes: Broadcom (AVGO) moves from Hold to Buy, Equitable Holdings (EQH) moves from Buy to Strong Buy, LGI Homes (LGIH) moves from Hold to Buy and NV5 Global (NVEE) moves from Hold to Strong Buy.

Cabot Stock of the Week

Weekly Issue May 4: In Tim’s opinion, diversification is the single most important element of an investing system, as well as one of the easiest to achieve (given sufficient funds), and that’s one of the reasons he loves helming Cabot Stock of the Week. It enables him to recommend all kinds of companies! Last week he dipped into small-cap speculative territory with a little marijuana company and this week he swings back to a dividend-paying mega-cap old-economy brand that is currently undervalued. The stock, Tyson Foods (TSN), was originally recommended by Crista Huff for the Growth Portfolio of Cabot Undervalued Stocks Investor. Tim has one portfolio change today: Vertex Pharmaceuticals (VRTX) moves from Hold to Buy.

Cabot Global Stocks Explorer

Special Bulletin May 8: Cloudflare, Inc. (NET)—NET was up 18.3% yesterday in anticipation of earnings that were released after the market closed. The top-line revenue and gross margin numbers are impressive but expectations were higher and futures indicate that the stock will give some of these gains back today. Carl says that NET is still a buy.

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.

Bi-weekly Issue April 30: Today, Carl follows up last week’s focus on big tech and big data with a cybersecurity theme and two new investment ideas. His recommendations today are: Global X Cybersecurity ETF (BUG) and Cloudflare, Inc. (NET), they’re both rated Buy a Half. Today’s one portfolio change is to Sell LexinFintech (LX).

Cabot Small-Cap Confidential

Special Bulletin May 8: Avalara (AVLR) reported Q1 results yesterday afternoon that came in better than expected and remains a Hold and Arena Pharmaceuticals (ARNA) gave a Q1 business update yesterday that supports the attractive big picture story and keeps the timeline of potentially stock-moving events in 2020 and 2021 intact. Tyler is keeping at 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.

Special Bulletin May 7: Fiverr International (FVRR) reported Q1 results this morning that topped management’s guidance from just a few weeks ago when it pre-announced revenue would be $33 million on the high side. It remains a Hold. Q2 Holdings (QTWO) reported yesterday afternoon and results topped expectations and management discussed the pluses and minuses of COVID-19 on demand for digital banking software. It also remains a Hold. Ping Identity (PING) reported Q1 results yesterday with revenue up 22% to $61.4 million (beating by $1.08 million) and adjusted EPS of -$0.05 beating by $0.08. Tyler is moving it to Sell.

Special Bulletin May 6: Everbridge (EVBG) is surging roughly 20% today after a killer Q1 report that beat on both the top and bottom lines and Repligen (RGEN) is trading roughly 8% higher mid-day Wednesday after beating on the top and bottom lines. Both remain at Hold. Inspire (INSP) is trading modestly higher after Q1 results missed expectations by a small margin. Tyler is moving INSP to Hold.

Special Bulletin May 5: EverQuote (EVER) has exploded over 25% to all-time highs following a beat and raise Q1 that seemed in the cards, but still comes very much as a surprise to Tyler. It remains a Hold. AppFolio (APPF) reported Q1 result yesterday that beat expectations by a modest amount. It also remains a Hold.

Weekly Update April 30: The market continues to remain strong in the face of economic data that’s anything but. As Tyler has already discussed at great length, this is because the market is forward looking and there’s been enough potential positive news around treatments and the timeline to a vaccine that the path of least resistance has been higher. Here are his changes this week: Fiverr (FVRR), Ping Identity (PING) and Q2 Holdings (QTWO) all move to Hold.

Cabot Dividend Investor

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.

Monthly Issue April 8: While Tom believes the economy and the markets will recover, there is a good chance of another down leg in the market. In this issue, he seeks to take advantage of that possibility by targeting great companies to buy at below current prices. These are fantastic companies to own that are only ever cheap in bear markets like this. He has one portfolio change today, Verizon (VZ) moves from HOLD to BUY.

Cabot Marijuana Investor

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)

Update April 16: The long-term prospects for the sector look great from here, both because the stocks have fallen so far, and because the fundamental growth in the industry is still exceptional. For example, in the latest reported quarter, the average revenue growth of the companies in the portfolio was up 120% from the year before. Also promising—many of these companies are now solidly profitable on an operating basis. But Tim is not adding any new stocks to the portfolio yet (he did a little averaging up three days after the bottom).

Cabot Early Opportunities

Special Bulletin May 8: Tyler has remained steadfast and heavily invested through the crash and subsequent recovery. He’s pulling back just a little bit today by taking the following actions: Stocks Moved to SELL: BellRing Brands (BRBR), SurveyMonkey (SVMK) and Conmed (CNMD). Stocks Moved to HOLD: Five9 (FIVN) and Freshpet (FRPT).

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

Weekly Issue May 5: The Stock – Lattice Semiconductor (LSCC) Lattice Semiconductor makes low power programmable semiconductor chips for the communications, computing, industrial, automotive and consumer markets. The stock is strong today thanks to a solid quarterly report last week; earnings came in at $0.15 per share, beating analyst estimates by a penny (the third time in the last four quarter it’s topped expectations) and up 36% over last year. The Covered Call TradeBuy Lattice Semiconductor (LSCC) Stock at 21.80, Sell to Open June 22.5 Calls (exp. 6/19/2020) for $1.10, or a Net Price of 20.70 or less.

Cabot Micro-Cap Insider

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.

Monthly Issue April 28: Welcome to Cabot Micro-Cap Insider! This inaugural issue is a little different than future editions. In this issue, Rich Howe has profiled his initial five recommendations. In future issues, he will profile one new idea in depth, and provide updates on all open recommendations.

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 8: Tootsie Roll Industries, Inc. (TR) Weiss Ultimate Portfolio
Daily Alert May 7: The Coca-Cola Company (KO) Argus Weekly Staff Report
Daily Alert May 6: Electronic Arts Inc. (EA) Sure Dividend
Daily Alert May 5: ChannelAdvisor Corporation (ECOM) Upside
Daily Alert May 4: Raytheon Technologies Corporation (RTX) DRIP 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 Stock of the Week

Question: Hi Tim, I’ve been subscribing to your newsletters for a number of years now, I also read a lot of your daily publications, along with Mike and Tyler’s weekly videos, all great information. I live in Canada, recently retired (54 yrs. old) with pension plan from my company. I have to at some point transfer my money from Canada Life to my bank, this means taking it out of the market for a time, then reinvesting with the bank. (this transaction has been in the works since Dec.13/19. Just now receiving my package, and have to decide when to make the transaction, the bank says it could take a couple weeks, maybe a bit longer. (it’s taken nearly 4 ½ months just to get the package). So likely longer, maybe a month. I can leave my money where it is until the market is less volatile. I know you can’t time the market, but wondering how you might handle this. Would it be better to wait until this market volatility is over? It just seems more volatile at the present, until at least the country opens again? My portfolio was $510,000, lost approx. 30% in the month of March, recouping about half that in April. The last 3 weeks has been as good as any in the last century, Thus the reason for the hesitation, should I go ahead with the transaction, or wait for the sleepy part of the year, (June/July)? I know there is no right or wrong answer, only consequences. Thanks in advance

Tim: Thanks for asking. One strategy, if it’s available to you, is to diversify the investment over time. Put it back in over a period of weeks, or even months. That way you’re less affected by the day-to-day volatility. Barring that, here’s my thought on timing in the months ahead. The market’s rebound from the March low has been better than the average rebound from waterfall declines of the past century, and thus the odds favor a cooling off of the market somewhere (before it goes higher later) so my recommendation is to make the switch soon. If you’re lucky, you’ll put it back in at a lower level. There are many other factors of course, and optimists and pessimists can argue fundamentals either way until the cows come home, but to me, playing the odds is best. Good luck with your retirement!

Cabot Options Trader

Question: Hi Jacob! I’m a staunch follower of your newsletter. I appreciate what you do your subscribers. I am premium member and follow Mike too. Is it ok that sometimes stocks Mike recommends can be bought in the form of long dated options since it’s less of a capital investment as long as one actively manages it?
Also what is the safety net for time duration in options? Normally I try to go 3 months or longer.

Jacob: Thanks for the kind words, and yes absolutely you can execute longer term call buys on Mike’s stocks. Plenty of Mike subscribers, who also subscribe to my stuff, execute options trades. And they often run those ideas by me before they execute. Some Buy Calls, some Sell Puts, basically any strategy they are comfortable with using Mike’s stocks. So feel free to do so.

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.

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.

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
CRLBFSee Advisory
CRONSee Advisory
CURLFSee Advisory
DBSDYBuy 1/2
DOMOHold 1/2
EQHStrong Buy
EVERHold 1/2
FANUYBuy 1/2
GMStrong Buy
GRWGSee Advisory
GSHDHold 3/4
GTBIFSee Advisory
HCATHold 1/2
IIPRSee AdvisoryHold
LGIHStrong Buy
MPCBuyStrong Buy
NEEHoldHold 1/2
NETBuy 1/2Buy 1/2
NVDABuyStrong Buy
NVEEStrong Buy
PGXHold 1/2
SEHold 1/2Hold
SPCEHold 1/2Hold
TCNNFSee AdvisoryBuy
TOTStrong Buy
TPBSee Advisory
XELHold 2/3