Cabot Prime Pro Week Ending November 23, 2018
Cabot Weekly Review (Video)
In this week’s stock market video, Mike Cintolo talks about his continued defensive stance, but also details a couple of secondary indicators that are looking better, shares a couple of stocks that actually look ready to go (if the market turns around) and talks about one simple chart method you can use these days to see what growth stocks are showing resilience. Happy Thanksgiving!
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Cabot Growth Investor
Bi-weekly Issue November 20: Remain defensive. Yesterday’s growth stock massacre knocked us out of Okta and Teladoc, leaving us with just one stock (FIVE) in the Model Portfolio and a cash position above 90%. Mike could put some of that back to work if the market finds its footing, but tonight, he’ll stand pat.
Special Bulletin November 19: In the Model Portfolio, Okta (OKTA) and Teladoc (TDOC) were caught up in today’s selling, with both plunging through long-term moving averages. It’s possible the stocks could bounce nicely if the current retest process seen in the Nasdaq is successful. But Mike has given these partial positions every chance to hold up in recent weeks, and today’s big-volume selling through key levels forces him to Sell.
Bi-weekly Update November 14: Remain defensive. There’s been plenty of volatility in recent weeks, but nothing has really changed with the market (trends are down) or our stance (highly defensive). Mike is not heading to our Panic Room, though, as a strong rally from here could actually produce a Cabot Tides buy signal. In the Model Portfolio, Mike has no changes tonight (though we have TDOC on a tight leash), with three stocks and a cash position of around 76%.
Other Stocks of Interest November 9: Follow ups to stocks featured June 6, 2018 (issue 1395) to November 7, 2018 (issue 1406). 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
Weekly Issue November 19: This week’s list has another batch of resilient stocks, which are providing a ray of light. Mike’s Top Pick is Canada Goose (GOOS), which he thinks can be an institutional favorite once this market downturn ends. Due to the Thanksgiving holiday, there will be no Movers & Shakers update this Friday nor any issue next Monday (one of our two weeks off all year). Mike is, however, planning on sending a brief update a week from today (November 26) to keep in touch.
Movers & Shakers Weekly Update November 16: Mike remains open to anything, and you should, too. It’s important to avoid preconceived notions of what the market can or can’t do going forward. At this point, the evidence remains negative, of course, but a few good days could actually result in an intermediate green light, which would prompt us to put some (not all) money to work. Today’s buy ideas are Cadence Design (CDNS), Omnicell (OMCL), and Tesla (TSLA). There are four sells today: Acadia Pharm. (ACAD), Kirkland Lake Gold (KL), Nordstrom’s (JWN) and Pacira Pharm. (PCRX).
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 November 21: ON Semiconductor (ON) options, especially further out in time, are not very liquid. What Jacob means by this is that the typical market on these calls might be 1.55 – 1.65. But because the market has been so volatile all options, especially calls in a smaller stock such as ON, are going to have the markets widen out. Because of that, the market on our calls was wider than usual at 1.55 – 1.70. Thus he was forced to “overpay” a touch.
Cabot Options Trader Alert November 21: Buy the ON Semiconductor (ON) April 20 Calls (exp. 4/18/2019) for $1.70 or less.
Cabot Options Trader Market Update November 20: Our Xilinx (XLNX) position is within striking distance of Jacob’s mental stop, and the close will determine how he manages this position. His plan, which is subject to change, is to try to give the position more time if the stop is close, as the stock continues to look fantastic in comparison to its technology peers. That said, if we are forced to sell XLNX, he may also sell our hedge which is fortunately or unfortunately at a big profit as well.
Cabot Options Trader Market Update November 19: We have VERY light exposure right now in the portfolio, and Jacob is not in a rush to add, given today’s carnage. There will be a time to buy, but right now he is going to sit with our few bullish positions and continue to hold our hedge. Also, Pure Storage (PSTG) will report earnings after the close today.
Cabot Options Trader Weekly Market Update November 19: The Chicago Board of Options Exchange Volatility Index (VIX) closed the week at 18.15, or higher by 4.5%. Big picture, I feel the VIX remains fairly priced and sticky in the 17-20 range.
Cabot Options Trader Pro Weekly Market Update November 19: Jacob has four long positions: PSTG, RF, Twitter and XLNX and one short position: QQQ Bear Put Spread.
Cabot Undervalued Stocks Advisor
Weekly Update November 20:The S&P 500 index continues to bounce near recent lows, as it slowly works its way through its second 10% U.S. stock market correction of 2018. It’s unusual to have two market corrections like this in the same year, and it doesn’t help that the depressed prices are being encouraged by tax-loss selling. Crista expects a significant January rebound as selling pressure recedes. Today, there are three portfolio changes: Commercial Metals (CMC) moves from Hold to Buy, Delek U.S. Holdings (DK) moves from Hold to Buy and WestRock (WRK) moves from Buy to Strong Buy.
Special Bulletin November 13: Voya Financial (VOYA – yield 0.1%) issued a press release this afternoon, shortly before the start of its Investor Day. The company is announcing higher profit goals through 2021, a plan to increase the dividend yield to 1.0% by mid-2019 and a commitment to ongoing share repurchases. Crista is moving the rating from Buy to Strong Buy. Also, Baker Hughes, a GE Company (BHGE – yield 3.0%) and its majority owner, General Electric (GE) have agreed to various business changes that will decrease General Electric’s ownership in Baker Hughes sooner than originally planned. Continue to Hold BHGE.
Monthly Issue November 6: Crista continues to expect many stocks to remain low through year end, possibly followed by quite a bull run in January. Today’s featured stocks include Martin Marietta Materials (MLM) and Synchrony Financial (SYF) and a new addition to the Buy Low Opportunities Portfolio, Apple Inc. (AAPL). Today’s portfolio changes are: BB&T (BBT) and WestRock (WRK) both move from Hold to Buy.
Cabot Stock of the Week
Weekly Issue November 13: Today’s recommendation, Alexion Pharmaceuticals (ALXN) is a biopharmaceutical company that researches and manufactures treatments of severe and rare health disorders. It was recently recommended by Crista Huff, in Cabot Undervalued Stocks Advisor. Here are Tim’s Portfolio changes: Altair Engineering (ALTR) moves from Hold to Buy, Match.com (MTCH) from Buy to Hold and MedMen (MMNFF) from Hold to Buy.
Cabot Emerging Markets Investor
Bi-weekly Update November 21: Emerging market stocks, as tracked by the MSCI Emerging Market ETF (EEM) aren’t making much progress. But, and this is important, they aren’t losing much ground either, even as U.S. growth stocks are taking it on the chin. The only change in the portfolio today is that Paul is moving the half position in Petrobras (PBR) to a Hold rating.
Bi-weekly Issue November 15: Our Emerging Markets Timer remains negative, though the next few sessions will be key to watch. The decent-looking bounce in the iShares EM Fund (EEM) ran into strong resistance near its 50-day line earlier this month. But despite the recent slide, the fund is holding above its October lows and hanging around its lower (25-day) line—a good two or three days from here could produce a green light. Tonight’s recommendation is Tencent Holdings (TCEHY). Among the Chinese ADRs enjoying bounces in the past couple of days, Tencent Holdings is probably the best known. Paul has it rated Watch. There is one portfolio change tonight: Paul is selling Ecopetrol (EC) which held up very well when oil prices initially started to skid, but the mini-crash in that commodity (and meltdown in all energy stocks) has been too much for the stock to resist—shares have been under strong distribution and dipped below their 200-day line this week.
Cabot Small-Cap Confidential
Weekly Update November 21: Relative performance doesn’t necessarily make you feel good about buying a stock like Altair Engineering right before a market retreat. But if you’re in this for the long-haul, as most of us are, it’s important to keep tabs on how you’re doing relative to the market. Remember, the really long-term trend is up! With a short trading week and Cabot’s offices closed Thursday and Friday this will be an abbreviated Weekly Update. Tyler has only one rating change today: Altair Engineering (ALTR) moves back to Hold after falling back near 30 on Monday.
Special Bulletin November 12: Apptio (APTI) is surging over 50% today on news that Vista Equity Partners will buy the firm for $1.84 billion, equal to $38 a share. Tyler is going to Sell and book a gain on the Apptio position. If you feel like holding a small stake just in case there’s a better offer, go for it!
Monthly Issue November 2: After taking partial gains on many positions in October we’ve largely sat back and watched the action with reduced exposure. While we took some money off the table, the money we’ve left in has produced positive returns over the past week – our portfolio moved 4% higher. Tyler’s new recommendation is Repligen (RGEN), a pure-play supplier of bioprocessing technologies that make it more efficient to manufacture biologic drugs, while ensuring high quality and safety standards. He will start with half a position.
Cabot Dividend Investor
Weekly Update November 21: The stock market slump that started last week has intensified in recent days, bringing the major indexes back to their October lows. But growth stocks have been the worst hit, and many conservative investments—like those in our Safe Income Tier—are actually holding up well. Chloe has one rating change today, she is selling another third of Broadridge Financial (BR), our lone tech stock, as it continues to slide along with the market.
Monthly Issue October 31: Today Chloe is adding another conservative consumer staples stock to the Safe Income tier, Hormel Foods (HRL), which she expects to provide us with a secure income stream for a long time. She also looks into why REITs have been doing so well recently.
Cabot Marijuana Investor
Update November 16: Tim is in Las Vegas at MJBiz.com, the biggest gathering of cannabis industry professionals. But he’s got so much on his mind—partly from what he’s learned in the past two days at the conference and partly from what our stocks have been doing. So here he is, with an update on the industry, and a reminder of some of the best practices of investing in these exciting stocks, as well as a quick look at the charts.
Monthly Issue October 25: Short-term, Tim’s advice is to hold off new buying on most of these stocks and let this correction run its course a little longer. If things perk up, both in the marijuana sector and in the broad market, he’ll be happy to jump right back in, but for now, he’ll stand pat.
Wall Street’s Best Investments
Daily Alert November 21: SYNNEX Corporation (SNX) from AlphaProfit Sector Investors’ Newsletter
Daily Alert November 20: OTC Markets Group Inc. (OTCM) from Positive Patterns
Daily Alert November 19: JELD-WEN Holding, Inc. (JELD) from The Turnaround Letter
Monthly Issue November 14: Nancy’s Spotlight Stock Comcast Corporation (CMCSA), is pushing growth via mergers and acquisitions, including its recent $40 billion acquisition of the 39% percent of the company owned by Twenty-First Century Fox. In her Feature article, Nancy says that Comcast looks undervalued at a P/E of just 7.47. Yet, the company is forecast to grow its earnings some 23% this year and another 10.3% in 2019. Add in the dividend yield, and the future looks bright for Comcast investors.
Wall Streets Best Dividend Stocks
Daily Alert November 21: Invesco Preferred ETF (PGX) from Cabot Dividend Investor
Daily Alert November 20: Cohen & Steers Limited Duration Preferred & Income Fund, Inc. (LDP) from Bob Carlson’s Retirement Watch
Daily Alert November 19: Repsol S.A. (REPYY) from Validea Hot List Newsletter
Monthly Issue November 7: This month’s Spotlight Stock, Brookfield Property Partners (BPY-UN.TO, BPY), is a diversified global real estate company. It owns, operates, and develops a large portfolio of office, retail, multifamily, industrial, hospitality, triple net lease, self-storage, student housing, and manufactured housing assets. In her Feature article, Nancy writes that it’s not only residential real estate that has seen phenomenal growth since the recession. Commercial real estate (CRE) is also booming, and is expected to grow 5% annually and reach revenue of $4 trillion over the next four years.
Ask the Experts
Cabot Options Trader
Question: First of all, Thank you very much for all your great analysis. I really like it and it helps me growing in my way. I have couple questions to open long positions.
1. $XLNX, I see you have March 80 calls and those are at good profit. What do you think if I open/buy those calls now at a price of 12.51 so looks pricey to buy here right? Can you please advise?
2. If #1 is not the good R/R to buy at that price, Is there anything long I can buy?
3. I am thinking to buy $AMZN Feb-2019 $1900 strike calls @20 price? I really interested in seeing your thoughts on this.
Jacob: Thanks for the kind words and the questions. I LOVE the way XLNX looks. That said, tech. is a total disaster right now, and if it gets worse, XLNX will almost certainly fall with its peers. I guess if were to put on a XLNX position today I would probably look at the March 90 calls. Those cost less at this point, but would also work should the market stabilize. As for AMZN, its the same story as XLNX ... should the market fall, AMZN is going down with it. But if I wanted to play a bounce, I would probably target a call closer to the stock price. I say this because calls that are so far out-of-the-money like the 1900 strike won’t move up much unless the stock really rips higher. So I might target a call like the 1,600 strike call (though those cost way more unfortunately)
Cabot Options Trader
Question: I received a Cabot email today. It’s an offer to purchase Cabot’s 10 favorite low priced stocks for 2019. The idea presented is to buy the stocks in December as they slide down in price due to tax selling and then “sell a few weeks later, after their January bounce.” The concept seems simple enough and the logic makes some sense (take advantage of tax selling that drives prices down and grab the bounce in January when buyers return). Makes some sense I guess except for this crazy market environment today. My question is this: if the theory is that someone buy the stock in December and sell in January or February would it be more cost effective to just buy options on the recommendations and then wait for the bounce? Obviously it’s cheaper to buy options than the stock but if the Cabot premise is correct (stock prices go down in December due to tax selling and then rebound in January) why not buy the options rather than the stock?
Jacob: That report is one of my favorite that Cabot produces. Mike has a real knack for finding 10 stocks that can really rip higher in the new year. And given the recent market declines, Mike will have plenty to choose from. Yes using call options is a great way to play these stocks. And Cabot Options Trader has put on bullish plays on these stocks in years past. Though I will note some of Mike’s picks for this report either don’t trade options, or are too illiquid for Cabot Options Trader to get into.
Cabot Emerging Markets Investor
Question: This is my observation; I’ve noticed that the Chinese market showing signs of a bottom. Earlier this year I remember the Chinese market being the first to slide, leaving investors with the impression that the US stock market was more resilient by comparison. But now our market is faltering. When sailing, adverse weather negatively affects the lead boat and then, of course, the boats behind it. Now that the adverse weather is hopefully passing, I would like to know if you think the emerging markets will be the first to rally. Will Jerome Powell doom us all? Are there market Gods manipulating the market to prevent worldwide chaos? And should I consider a prescription for Prozac to combat this volatility and exposure to my in-laws during this holiday season?
Paul: I like your observations, and I hope you’re right about the Chinese market bottoming. I have never believed in the market gods, either benign or malignant. Human nature is quite sufficient to explain every kind of market weirdness and irrationality, including our recent chaos. (And I don’t think Jerome Powell’s actions are the prime mover in the whole drams.) One main tenet of Cabot’s growth disciplines is that we don’t try to predict what the market will do, not tomorrow and not in the medium or long run. What we try to do is be ready for whatever happens. That’s what has led me to have the Cabot Emerging Markets Investors’ portfolio heavily in cash for months now. And I’ll keep it in cash until I see the EM index and the China index get back on top of their 25- and 50-day moving averages and new leadership emerging.
Cabot Dividend Investor
Question: I was wondering what you thought of Enable Midstream Partner’s stock?
Chloe: I did a little digging into ENBL for you, but I can’t say the evidence points strongly one way or another. Technically, the stock doesn’t look great. It’s found support around 13.70 but is in a short-term downtrend, longer-term sideways trend. The yield is great, obviously, but they haven’t increased their distribution in four years. And they’re still in the lowest tier of their IDR schedule, so that may make it harder to grow the distribution going forward. It looks like you might know more about the business than I do, from an operations point of view, but their financials look pretty good. Distributable cash flow is rising and the distribution coverage ratio is good. Although only 9% of revenues depend directly on commodity prices, it’s worth noting that their 2019 outlook is based on crude oil prices being between $63 and $73, which is obviously higher than they are now. So no big red flags, but it doesn’t stand out to me as a best-in-class MLP either.
Premium Reports
Cabot’s 10 Best Canadian Small-Cap Stocks
Special ReportAugust 31: One of the generally accepted wisdoms over the past couple of years has been that the U.S. stock market is where the action is. But there are market-beating returns available to investors willing to step abroad too. And one of the easiest places to find them is just over the border with our neighbor to the north, Canada.
10 Monthly Dividend Stocks to Buy for Year-Round Income
Special ReportAugust 9: Dividend-paying stocks are favorites of retirees and other investors who live off income from their investing portfolios. Like bonds, dividend-paying stocks provide a steady income stream that you can spend without eroding your principal. Unlike bonds, many stocks increase their dividends over time, so your income stream can actually rise each year. This report includes profiles of Chloe’s 10 favorite monthly dividend payers, each of which offers a unique mix of yield, capital appreciation and safety. If you’re looking for monthly income, you’re sure to find at least one that’s right for you.
Cabot’s 10 Best REITs to Buy Now
Special ReportJuly 18: Nancy has always loved real estate; in fact, she owns a small real estate franchise. But she loves the idea of a diversified real estate portfolio and REITs fit the bill. They have been excellent investments for her subscribers over the years as they offer the perfect opportunity to buy real estate with very little capital. And she believes the boom cycle in real estate is far from over. With that in mind, she set out to find the 10 Best REITs for today’s economy and market. She looked at growth, valuation, dividend yield, and fundamental and technical strength.
Cabot’s 10 Best Covered Calls on Dividend Stocks
Special Report April 12: With interest rates just coming off of historically low levels, income investors have been desperately searching for alternative sources of yield. Dividend stocks are the obvious answer. But there’s an even better way to create yield: by executing a covered call strategy on stocks that pay dividends.
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.