Cabot Prime Week Ending May 7, 2021
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, Mike Cintolo discusses the growth stock destruction this week, and while it hasn’t infected the rest of the market (and he does see some non-growth areas setting up well), he still favors staying relatively close to shore (in his words) and picking your spots on the buy side. Stocks mentioned include DVN, XEC, FDX, UPS, CLF, WING, HALO, PGNY, ASO and BILL.
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Advisory Services
Cabot Growth Investor
Bi-weekly Issue May 6: During the past month, the way we thought about what was going on was that growth stocks had finally put themselves into a position to get going after a two and a half month stretch of tough, choppy trading. Instead of narrow, volatile, brief ranges (as we saw during rally attempts in mid-March and early April), a bunch of names had set up nice-looking, three- to five-month launching pads ahead of their quarterly reports. Tonight, though, we’re going to put a smidge of our huge cash position to work in Devon Energy (DVN). That will leave us with a large 65% cash position, which we’ll hang onto tonight.
Special Bulletin May 6: It’s been a brutal week for growth stocks, and that’s continuing today. Today, we’re forced to sell both Twilio (TWLO) and Uber (UBER) as both, despite solid Q1 reports, are sinking on heavy volume through our stops. That will leave us with a giant 70% cash position; we want to put a bit of that back to work if things stabilize, but for the moment, we’ll hang onto it.
Special Bulletin May 4: There’s still a chance earnings season could save the day, but so far, most reports have led to selling and after seeing many growth stocks set up in recent weeks, the bears are beginning to come out of the woodwork again. Today, we’re selling Pinterest (PINS), which has etched a big double top and has been unable to find support since earnings. Our cash position will now be around 56%.
Bi-weekly Update April 29: It remains a very tricky environment for growth stocks, with most names near new highs finding sellers and earnings reactions (so far) being underwhelming (Pinterest is now on a tight leash). That said, we do see a lot of high-quality setups, so we’re ready to put some money to work, but we need to see buyers actually step up before stepping further into the meat-grinder environment. We have no changes tonight, though we’ll be on the horn if some bullish earnings moves have us putting money to work in the days ahead. Our cash position stands just south of 50%
Cabot Top Ten Trader
Movers & Shakers May 7: The past three or four weeks, growth stocks, which have been in a correction since mid-February, finally worked themselves into position to get going if the buyers really stepped in. But they never did—of the few breakouts that tried to lift off, most lacked vigor and were quickly smacked back. Mike has two buy recommendations: ASML (ASML) and Williams Sonoma (WSM).
Weekly Issue May 3: To us, the major (and most disappointing) theme of the past few weeks has been the selling in stocks as they approach their old highs—selling on strength has been seen in growth stocks for a couple of months but it’s even seeping into many cyclical-type names, too. Mike’s Top Pick Crocs (CROX), one of the few growth-oriented names that has shown great power of late.
Cabot Undervalued Stocks Advisor
Monthly Issue May 5: While the year-to-date 11.8% surge in the S&P 500 (helped by a 5.3% jump in April) has been impressively strong, the 40% annualized pace seemed unlikely to continue, at least without interruption. May hasn’t started out quite so exuberantly, with an early pull-back in the high-momentum tech stocks dragging down the broader indexes. The immediate catalyst appears to be Treasury Secretary Yellen’s comments on Tuesday that interest rates may need to increase to ward off inflation. Bruce has no portfolio changes.
Weekly Update April 28: When looking at an investment idea, investors may want to replicate this intake process, tweaked of course for a clearly different (and less urgent) task. By using a consistent process, regardless of whether the idea comes from a friend, that off-beat relative, an investment broker or a newsletter, you can better categorize and screen incoming ideas. Bruce has one new buy: Arcos Dorodos (ARCO).
Cabot Stock of the Week
Weekly Issue May 3: With the S&P 500 and Nasdaq Composite hitting new highs just last week, there’s no question that we remain in a bull market, and thus there’s no question that we should remain heavily invested. Tim’s featured stock Realty Income (O), is one of the highest-quality and best-run REITS on the market. Cash flow from a conservative portfolio of 6500 properties has enabled the company to amass a phenomenal track record of paying monthly dividends. Tim has one portfolio change: Broadcom (AVGO) to Hold.
Cabot Explorer
Bi-weekly Update May 6: Treasury Secretary Janet Yellen raised concerns about inflationary pressures earlier this week and then walked it back the next day. Markets said thank you, with the Dow reaching another all-time high yesterday. Capital gains taxes, the most sensitive of all taxes, are going up and some are saying not to worry, it will only impact 2% or 3% of all Americans. What they forget is that this elite group owns more than half of publicly traded stocks and a great proportion of property and private companies. Carl has one portfolio change: Paysafe (PSFE) Moves from Buy to Hold.
Bi-weekly Issue April 29: Major corporations are sitting on a pile of cash. Wouldn’t that be a nice problem for all of us? This has been a decade-long cash buildup but it has gotten quite a boost from the pandemic. And the trend is even starker outside America. Carl’s new recommendation Draganfly (DFLYF), manufactures and sells commercial drones, also known as unmanned aerial vehicles (UAVs), worldwide. Its products include quad-copters, fixed wing aircraft, ground based robots, and handheld controllers, as well as software used for tracking, live streaming, and data collection. Carl has no portfolio changes.
Cabot Dividend Investor
Weekly Update May 5: Things are still great. The market indexes are either making new all-time highs or within a whisker of them. The uptrend continues ahead of what is sure to be a booming economy in the months ahead. But the market is also being a little weird. Earnings have been spectacular. The first 25% of S&P 500 companies to report first-quarter results delivered and average of 33.8% earnings growth over last year’s quarter and have exceeded expectations by the most in history. That’s pretty good. But the market has been yawning it off. Tom has two portfolio changes: AbbVie (ABBV) andQualcomm Inc. (QCOM) move from Hold to Buy.
Monthly Issue April 14: This is an unusual environment to say the least. The market is looking ahead to the highest GDP growth in decades as vaccines end the lockdowns and restrictions. And forecasts continue to rise. At the same time, trillions in government stimulus will flood into the economy. Tom’s featured stock AGNC Investment Corp. (AGNC),is a mortgage real estate investment trust (mREIT) that invests predominantly in U.S. Government backed residential mortgages. It pays a high dividend yield, currently 8.4%, and makes dividend payments on a monthly basis.
Cabot Marijuana Investor
Weekly Update May 5: The big news in the marijuana industry this week is that the Tilray/Aphria merger is complete, turning these two Canadian firms into the biggest marijuana company in the world—for now. Someday, Tilray may be a good investment again. But right now, trading under the ticker TLRY in the U.S., the chart is still a reminder that this stock peaked at the insane price of 300 back in September 2018, just before selling marijuana in Canada became legal. Today, trading at 16.5, and well off its February high of 67, it has no momentum.
Monthly Issue April 28: One of the many adages about investing in stocks says, “Never sell a dull market short.” The theory, basically, is that if the market isn’t going up or down, it’s likely to go up, given that that’s the long-term trend of the market and that a “dull” market is eventually likely to be followed by an exciting market. Well, the marijuana sector has been “dull” for only a few weeks, but before that the sector had a broad decline that pulled the marijuana index down 50% in just 10 weeks, so it’s logical that the sector’s next major move will be up. Additionally, the broad market is still acting well, with major indexes hitting record highs frequently, so it makes sense that the marijuana sector should turn around and rejoin the party, eventually taking the industry leaders out to new highs.
Cabot Early Opportunities
Special Bulletin May 7: Yesterday was a bloodbath for growth stocks as concerns of rising rates and high valuations continue to put pressure on these types of stocks. Earnings season has also been a disaster for many growth stocks as “sell the news” has been the trend. Part of me thinks there is programmatic trading going on here as a negative reaction has just become too consistent. But still, overall, the positive momentum from April has been wiped out here in May for many players.
Special Bulletin May 4: The market has been a little iffy over the last five or so sessions. This action, coming on the back of great earnings from mega cap tech stocks last week, but not great reactions, suggests a more conservative stance is appropriate right now for some of our high-growth names.
Monthly Issue April 21: As investors we need to keep our eyes open and ears to the ground as we seek out opportunities to participate in what that new normal could be. Today’s Issue covers five candidates, all of which have been acting reasonably well. Tyler’s Top Pick AtriCure (ATRC), is a small-cap MedTech company that plays in the atrial fibrillation (AF, or Afib) and left atrial appendage (LAA) management markets, which top 30 million people worldwide and six million in the U.S.
Cabot Profit Booster
Weekly Issue May 4: While some sectors of the market look tired (growth), other sectors and stocks (retail, materials, financials, energy) continue to make new highs and/or come alive. Fortunately, the Cabot Profit Booster portfolio has avoided the hyper-growth stocks that are under pressure, and is positioned in stocks that are in the strongest sectors. Jacob’s new stock recommendation is Matador Resources (MTDR).
Cabot Income Advisor
Weekly Update May 5: It’s earnings season. And it’s a weird one. The first 25% of companies on the S&P 500 reported earnings with an average year-over-year growth rate of 33.8%, the highest in over a decade. In addition, companies are beating expectations by the widest margin on record. Earnings are stellar by every measure. But the market doesn’t seem to care. Many companies are killing it on earnings and blowing away expectations only to trend lower in the following days. Great earnings don’t seem to be impressing this market much. It’s beyond a case of high expectations. The market expects earnings to exceed high expectations, and by a lot.
Monthly Issue April 28: The market is still creeping higher and is near the all-time high. But skepticism is rising. The S&P 500 has risen 28% since the beginning of November and over 80% since the lows of last year. Sure, the likely economic boom ahead, complemented by trillions in stimulus, is a compelling catalyst. But when is that priced in? The market anticipates. It started flying after the vaccine announcement but before the economy took off. At some point it will anticipate beyond the full economic recovery.
Cabot Turnaround Letter
Weekly Update May 7: Today’s note includes earnings updates, ratings changes and the podcast. Bruce reviews earnings from the 11 companies reporting this past week, including Adient (ADNT), Berkshire Hathaway (BRK.B), Borg Warner (BWA), Conduent (CNDT), Elanco Animal Health (ELAN), Gannett (GCI), GCP Applied Technologies (GCP), General Motors (GM), Ironwood Pharmaceuticals (IRWD), Mosaic (MOS)and Oaktree Specialty Lending (OCSL). Click here to listen to the podcast.
Monthly Issue April 28: With the stock market continuing to reach record highs, and with most stocks either participating in the rally or facing structural, fundamental challenges that they won’t likely overcome, finding new ideas can be a challenge. As contrarians, we want to look for stocks in places that others find too unconventional or uncomfortable, as bargains may be found there. One such place is in stocks with low share prices, generally under $10. Bruce’s has one buy recommendation: Dril-Quip (DRQ).
Quarterly Cabot Analyst Meeting
The recording of the Cabot Prime Members Meeting with the Analysts from April 21, 2021 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 member benefits.
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 Explorer | Cabot Growth Investor | Cabot Marijuana Investor | Cabot Stock of the Week | Cabot Undervalued Stock Advisor | Cabot Dividend Investor |
|---|---|---|---|---|---|---|
| ABBV | Buy | |||||
| AGC | Buy | |||||
| AGNC | Buy | |||||
| ARCO | Buy | |||||
| AVGO | Hold | Buy | ||||
| AVVIY | Buy | |||||
| BIP | Buy | Buy 2/3 | ||||
| BMY | Strong Buy | |||||
| BSCL | Hold | |||||
| CCHWF | See Advisory | Buy | ||||
| CGC | See Advisory | |||||
| CRLBF | See Advisory | |||||
| CSCO | Buy | |||||
| CURLF | See Advisory | |||||
| CVX | Hold | |||||
| DFLYF | Buy | |||||
| DLR | Buy | |||||
| DOW | Hold | |||||
| DVN | Buy | |||||
| EPD | Buy | |||||
| FIVE | Buy | Buy | ||||
| FND | Buy a Half | |||||
| FSR | Hold | |||||
| GM | Hold | Hold | ||||
| GOLD | Buy | Buy | ||||
| GRWG | See Advisory | |||||
| GTBIF | See Advisory | |||||
| HTHT | Hold | |||||
| IBM | Buy | |||||
| IIPR | See Advisory | |||||
| JUSHF | See Advisory | Hold 2/3 | ||||
| KKR | Buy | |||||
| KO | Buy | Buy | ||||
| LLY | Hold 2/3 | |||||
| MO | Sold | |||||
| MRK | Buy | |||||
| MRVL | Buy | |||||
| NEE | Buy | Buy | ||||
| NET | Hold 1/2 | |||||
| NGLOY | Hold | |||||
| NVCR | Buy | |||||
| NVDA | Buy | |||||
| O | Buy | Buy | ||||
| PGX | Hold 1/2 | |||||
| PINS | Sell | Hold | ||||
| PSFE | Hold | |||||
| QCOM | Buy | |||||
| SE | Buy 1/2 | Buy | ||||
| SLQT | Buy a Half | Buy | ||||
| SONO | Buy | |||||
| SPCE | Hold A Half | Take Partial Profits | ||||
| SSO | Buy | |||||
| ST | Buy | |||||
| STAG | Hold | |||||
| TAP | Hold | Buy | ||||
| TCNNF | See Advisory | Buy | ||||
| TPB | See Advisory | |||||
| TRSSF | See Advisory | |||||
| TSLA | Hold | |||||
| TSM | Buy 1/2 | |||||
| TSN | Hold | |||||
| TWLO | Sell | |||||
| UBER | Sell | Buy | ||||
| USB | Buy | |||||
| VLO | Hold | |||||
| VZ | Hold | |||||
| XEL | Buy 2/3 |