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Cabot Prime Pro Week Ending February 25, 2022

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 whipsaws in the market over the past week and tries to put the market’s moves into context with what’s happened during (and after) previous invasions. He then moves on to a number of stocks in different sectors, including some growth and some growth + value, that could do well if the market gets back in gear.


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Cabot Growth Investor

Bi-weekly Issue February 24: Most people (active investors or otherwise) woke up today with news breaking about Russia’s “official” invasion of Ukraine and the accompanying losses in stock markets around the world caused by a rash of uncertainties, including spiking energy prices, questions about Russia’s ultimate intentions (and responses by other countries) and how it all plays out with a Fed likely to raise rates … before stocks turned tail and actually closed higher.

Bi-weekly Update February 16: The market is down on the day, though individual stocks aren’t doing too badly. As of 2 pm EST, the Dow is off 280 points while the Nasdaq is off 165 points.

Cabot Top Ten Trader

Movers & Shakers February 25: It’s certainly been an interesting holiday-shortened week, with the market continuing its recent plunge into Thursday, when Russia’s invasion of Ukraine caused a maelstrom at the open, with the major indexes diving to new correction lows—before they staged a rare, dramatic rally to close higher.

Weekly Issue February 22: Despite the general weakness, there have been a decent number of stocks across several industries that have shown some worthwhile relative strength. We’re also still seeing some setups in areas of the market that are inflation-sensitive, as well as in industries that should benefit from economic reopening. One such play is Expedia (EXPE), which just posted a big bottom-line beat and is this week’s Top Pick.

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 Market Update February 24: The waiting has ended, and Russia has invaded Ukraine. Today, and tomorrow ahead of the weekend, will be full of news reports, and endless rumors, that will swing the market wildly. My advice in terms of trading: don’t overreact, and if you are going to buy, make it small. Essentially let’s see how this situation plays out.

Cabot Options Trader Basic and ProAlert February 23: Sell Two Positions: Sell your Jets ETF (JETS) March 22.86 Calls for $0.25 or more, and your CGC Stock.

Cabot Options Trader Stocks on WatchFebruary 23: CRM/ADBE. While hyper-growth stocks have received most of the headlines throughout this market pullback, there are a handful of much larger tech stocks that have been hit very hard as well.

Cabot Options Trader Basic Weekly Review February 22: The same culprits continue to plague the market: historically heightened levels of inflation, upcoming Fed rate hikes, and escalating geopolitical tensions between Russia and Ukraine, with growth sectors taking the brunt of the pain. The Dow lost 1.9%, the S&P 500 fell 1.6% and the tech-heavy Nasdaq dropped 1.8% last week. Year-to-date the Dow, S&P 500 and Nasdaq are lower by 6.2%, 8.8% and 13.4%, respectively.

Cabot Options Trader Pro Weekly Review February 22: Long positions: CF, CGC, DT, FCX, F, JETS, UBER

Cabot Undervalued Stocks Advisor

Alert February 25: Today we are raising our price target on Arcos Dorados (ARCO) from 7.50 to 8.50. The company is recovering from the pandemic and looks well-positioned to expand its franchise and profits while continuing to improve its balance sheet. The shares remain undervalued.

Weekly Update February 23: Inflation is surging and the Fed is giving plenty of notice to investors that interest rates are going up. Taking the cue, financial analysts and mainstream news commentators are providing a steady stream of predictions about the size and timing of the upcoming rate hikes. Everyone has time to plan and no one should be surprised when interest rates are officially raised.

Monthly Issue February 2: We comment on a novel motivation that may be behind Putin’s military build-up, and move shares of oil-producer ConocoPhillips (COP) from Buy to Hold. Also, we comment on earnings from Dow (DOW) and Sensata Technologies (ST) and from Barrick’s (GOLD) production update.

Cabot Stock of the Week

Weekly Issue February 22: Tim’s featured stock is Harley-Davidson (HOG). Their revenue jumped 40% year over year to $1 billion, driven by a 39% rise in motorcycle shipments. The company also enjoyed solid growth in its general merchandise and parts & accessories divisions, which saw revenue increase 46% and 13%, respectively. Looking forward, management projects that full-year revenue for Harley-Davidson’s motorcycles and related products will rise by 5% to 10% in 2022.

Cabot Explorer

Bi-weekly Update February 24: Growth Stocks Reset and Russia Invades Ukraine. The Russian invasion of Ukraine will surely roil markets today and raise uncertainty over the next week. U.S. markets are off about 10% since early January as tech and growth stocks in particular reset their valuations amidst higher expected interest rates and geopolitical risk in Ukraine and Asia.

Bi-weekly Issue February 17: Carl’s new recommendation is Harley-Davidson (HOG), a stock that roared to life this week after the motorcycle maker reported a stunning fourth-quarter profit that saw motorcycle revenue surge 54% as U.S. demand for big bikes returned. Demand for Harley-Davidson bikes is in an uptrend.

Cabot Small-Cap Confidential

Alert February 25: CS Disco (LAW) reported Q4 results after the close yesterday that surpassed expectations and show the business continuing to gain momentum in the legal software space. Revenue was up 76% to $73.8 million (easily beating consensus of $28.5 million) while adjusted EPS of -$0.10 beat by $0.07.

Weekly Update February 24: It’s been another wild week as we’ve had four companies report quarterly results (two more are on deck tonight) and have seen the situation in Ukraine deteriorate as Russia has invaded the country. We’ve also had the S&P 500 Index officially slip into correction territory (-10% or more).

Alert February 23: Sell One Quarter Sprout Social (SPT). Sell SiTime (SITM). Sprout Social (SPT) reported a terrific Q4 yesterday and offered above-consensus guidance for 2022. Despite the good results and outlook, we’re going to sell another one-quarter position to take our stake down to one half today.

Monthly Issue February 3: Tyler’s new recommendation Nova LTD (NVMI) is a leading provider of dimensional and materials metrology solutions for process control used in semiconductor manufacturing. The company offers a portfolio of high-precision metrology tools (hardware) and related services and software that help integrated circuit (IC) manufacturers manage yield through the semi fabrication process.

Cabot Dividend Investor

Weekly Update February 23: It’s official. We are in a correction. The S&P 500 fell 10% from the high on a closing basis earlier this week. In and of itself, a correction is normal in bull markets, especially considering the current circumstances. After a massive 100% move higher in less than two years, a correction might be considered healthy.

Monthly Issue February 9: Tom’s featured stock Discover Financial Services (DFS) is the fourth-largest credit card company in the country and one of the largest in the world. The company issues credit and debit cards, offers consumer banking products and provides loans.

Cabot Early Opportunities

Alert February 23: Sell One Quarter Sprout Social (SPT). Sell SentinelOne (S). Sprout Social (SPT) reported a terrific Q4 yesterday and offered above-consensus guidance for 2022. Despite the good results and outlook, we’re going to sell another one-quarter position to take our stake down to one half today.

Alert February 17: Today is another challenging day in the market, and Allbirds (BIRD) has slipped below the 10.8 level that I’ve been watching as a breaking point for the stock. As a result, I’m moving the stock to sell today. SELL

Monthly Issue February 16: Recent data from Bank of America shows all of the bank’s clients, except for hedge funds, have been buying stocks in recent weeks.Retail buyers have been stepping up to the plate for six straight weeks while institutional buyers have been buying over the last three weeks. Tyler’s top pick is GitLab (GTLB).

Cabot Profit Booster

Weekly Issue February 23: I’m not going to sugar coat it: We are in a dodging rain drops type of market as every day a handful of stocks break down, and then continue to fall apart in the days that follow. This week we are going to sell a covered call on Marathon Oil (MRO) which we recently traded successfully, though because of market conditions we are going to play this conservatively by selling an in-the-money call.

Alert February 18: Today is the expiration of our three February covered calls. The big picture takeaway is that all three will expire for full profits, you don’t need to act on any of these trades, and come Monday we will no longer own a stock or option position in MRO, TECK and ABBV.

Cabot Micro-Cap Insider

Weekly Update February 23: As I scan the headlines, the big news is the potential invasion of Ukraine by Russia. Typically, the S&P 500 is volatile around geopolitical events but downside is usually brief and limited.

Monthly Issue February 9: Rich’s new recommendation Crossroad Systems (CRSS) is a “jockey bet.” In other words, we are betting on the management team and board of directors to create significant value going forward. The investors that control Crossroad Systems are the same investors that control P10 Holdings (PX), a Cabot Micro-Cap Insider recommendation that is up 323% since I originally recommended it. I think a similar situation could play out with Crossroad Systems as the stock is cheap, trading slightly above book value, yet has significant option value that is being heavily discounted by the market.

Cabot Income Advisor

Monthly Issue February 23: Things always change, especially in the market. It’s not 2020 anymore or 2021. This is 2022. It’s a different animal. Certain superstars of the pandemic recovery are dogs this year while little-known laggards of the past are soaring. When market circumstances change so do the casualties and beneficiaries. As investors, we need to forget what worked in the past and focus on what will win going forward.

Weekly Update February 16: Earnings have been terrific again. Rising corporate profits have so far kept stocks out of correction territory. But earnings season is ending. And problems are growing. The market rallied strongly on Tuesday as fears of a Russian invasion of Ukraine subsided. But it is just a secondary market concern, avoided temporarily.

Cabot Turnaround Letter

Weekly Update February 25: We summarize our recent monthly edition of the Cabot Turnaround Letter as well as the Catalyst Report, provide comments on our companies that reported earnings or had other meaningful news. Also, some thoughts on the war in Europe.

Monthly Issue February 23: We discuss five boring companies which have traits that could help their stocks shine in a low-return market over the coming decade. We highlight six appealing stocks we found by trolling through the 13F/D filings of like-minded institutional investors. Our featured recommendation this month is an opportunistic purchase of an average company whose shares have fallen sharply out-of-favor for what look like short-term reasons.

Cabot Money Club

Monthly Magazine February 2: You have, no doubt, seen the real-estate commercials, “Sell Your Home as Is,” “We’ll Buy Your Property Fast,” and “Sell Your Home for Cash Now,” all touting easy-peasy methods to sell your home without a Realtor. These ads are the work of iBuyers (instant buyers)—companies that use technology and algorithms, such as an Automated Valuation Model (AVM), instead of a local and experienced salesperson, to price, buy, and sell your home.

Cabot ETF Strategist

Alert February 24: We are maintaining the 10% position in the ProShares Short MSCI Emerging Markets ETF (EUM), which boasts a 7.8% return since February 8.

Alert February 24: Sell all of your holdings in: ProShares K-1 Free Crude Oil Strategy (OILK), Invesco S&P SmallCap Quality (XSHQ), and SPDR Global Dow (DGT). As I noted in the previous issue, the Undiscovered Portfolio is tactical in nature, meaning that we’ll be buying and selling funds on a fairly regular basis, as market conditions change.

Weekly Update February 22: In this week’s ETF Strategist update, I’ll continue answering questions I received after we launched this advisory. In particular, a reader asked why the specific funds were included in the allocation.

Monthly Issue February 8: With the markets in a cyclical rally, rebounding from January lows, it’s an excellent time to review your ETF holdings to make sure you’re invested properly for the current market conditions. In this issue of the Cabot ETF Strategist, you’ll find fully diversified portfolios tailored for aggressive, moderate and conservative risk tolerances.

Ask the Experts

Cabot Profit Booster

Cabot Turnaround Letter

Question: Bruce, Thank you for all the weekly information that you give out. There’s a tremendous amount of information, however, I have one quick question on the sale of COP. Can you explain a bit further the risk/reward? I’m just curious to know your reasoning, if you don’t mind, on the sale of COP.


With my approach to investing, commodity-based companies are difficult, because the share prices are tied to commodity prices which are mighty hard to predict accurately. While global oil demand is a big number (~100 million barrels/day), the price can be sharply influenced by small (~500k barrels/day) imbalances. Assessing the supply/demand balance to this level of precision is impossible. The lack of outlook visibility for the key fundamental behind a commodity company’s value makes these stocks inherently higher risk compared to a normal company.

Commodity stocks are usually “marked to market” in that they implicitly price in whatever the current commodity price is. So, I look for commodities that are out of favor but have an improving supply/demand outlook that should lift its price. Also, I pair this with commodity companies whose shares aren’t properly pricing in the current commodity price. This way, I can get more than full participation in any commodity price recovery while having relatively limited downside.

COP fit this description. I was a little late in recommending it, but it seemed like such an “obvious” winner at the time that not recommending it would have been almost a dereliction of duty, as it were.

I take the mirror approach to selling. I tend to sell when the commodity price has recovered and the stocks fully price-in that recovery plus some. This is where COP is today, and why I moved it to sell. That said, I find selling well to be harder than buying well, so I am usually “too early” in my selling, particularly with commodity stocks. While historically, $90+ oil brings on more supply, this cycle may be a ‘super cycle’ in that demand could be robust for longer while supply remains constrained unlike any prior cycle. If so, I will have been terribly early, and wrong.

In the sister publication, Cabot Turnaround Letter, we have several oil stocks that still look attractive and I am raising my price targets for these: Marathon Oil (MRO) and Shell plc (SHEL). This advisory accepts higher risks in pursuit of higher profits, relative to the Cabot Undervalued Stocks Advisor. Also, in general, I am keeping some exposure on the chance that the supply/demand picture is so imbalanced that oil prices rise to well over $100/barrel. It’s just that COP doesn’t quite fit the bill anymore.

Quarterly Cabot Analyst Meeting

The recording of the Cabot Prime Members Meeting with the Analysts from January 12, 2022 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.