Cabot Prime Week Ending January 24, 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, Mike Cintolo says the environment hasn’t changed — the price, volume and trend evidence for the indexes and leading stocks look great, but there remain many yellow flags that indicate the risk of a sharp pullback or prolonged consolidation is elevated. Mike’s still bullish overall and is holding most of his winners, but he’s also keeping his feet on the ground and seeing how earnings season treats the market’s leaders.
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Advisory Services
Cabot Growth Investor
Bi-weekly Update January 23: Remain bullish, but keep your feet on the ground. The market has been extremely resilient despite many worries this year (including the recent China virus), and while the risk of a retreat is still elevated, Mike is content to ride our winners and follow the plan. His only change tonight is that he’s adding another half-sized position to Sea (SE), which has decisively gotten going this week. That will leave us with around 12% in cash.
Bi-weekly Issue January 16: Overall, you should remain mostly bullish, though Mike still favors stepping a bit lightly on the buy side. The good news is that any shakeout or tight trading area should offer up some solid opportunities. Tonight, though, he’ll again sit tight, riding our winners and holding onto a 17% cash position.
Other Stocks of Interest January 21: Follow ups to stocks featured August 29, 2019 (issue 1427) to January 16, 2020 (issue 1437). 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. Feel free to email me directly (mike@cabotwealth.com) with any questions/comments you have.
Cabot Top Ten Trader
Movers & Shakers January 24: Overall, the environment has remained the same for the past few weeks: The momentum in the market is very strong, and the price/volume action of leading stocks remains excellent, so you should remain bullish. That said, the risk of a sharp pullback or prolonged consolidation is elevated, so it’s good to keep your feet on the ground. Mike’s buy ideas today are: Alnylam Pharm (ALNY), Planet Fitness (PLNT) and PTC Therapeutics (PTCT) and he has four sells today: Disney (DIS), Oshkosh (OSK), Reliance Steel (RS) and TAL Education (TAL).
Weekly Issue January 20: The market remains extremely strong, as the combination of a new year and reduced anxiety about China trade has encouraged the bulls and calmed the bears. At the same time, a broad correction is increasingly overdue, as numerous stocks have grown increasingly stretched far above their moving averages. Thus, when you do buy, you need to do so with an eye not just to the potential upside but the potential downside as well. Mike’s Top Pick this week is iQiYi (IQ), a fast-growing Chinese media/technology company that has its tentacles in numerous fields and is succeeding at many of them.
Cabot Undervalued Stocks Advisor
Special Bulletin January 24: Crista’s news today: Broadcom (AVGO) gets big Apple (AAPL) contracts, she has trading notes on LGI Homes (LGIH), Valero Energy (VLO) announces a dividend increase and she has updates on her special report, Cabot’s 10 Best Stocks to Buy and Hold for 2020.
Special Bulletin January 23: Baker Hughes Company (BKR) reported fourth quarter results and Netflix (NFLX) joins the Special Situation & Movie Star Portfolio as a Strong Buy.
Weekly Update January 22: The S&P 500 (SPX) index is up 10% since rising above its previous trading range in late November. While 10% is not necessarily a big move for a stock, it is definitely a big move for a major index. Crista expects the index to pull back and rest for a while before advancing further. Here are today’s portfolio changes: Citigroup (C) moves from Buy to Hold, LGI Homes (LGIH) moves from Strong Buy to Hold, Marathon Petroleum (MPC) moves from Strong Buy to Buy, Mosaic (MOS) moves from Buy to Hold, Schlumberger (SLB) moves from Buy to Retired, VanEck Vectors Oil Refiners ETF (CRAK) moves from Strong Buy to Hold and Voya Financial (VOYA) moves from Strong Buy to Buy.
Monthly Issue January 8: We are almost past a very quiet time period on Wall Street that featured a lack of major company news, M&A activity and earnings reports. As such, this will likely be the last recent issue where Crista has had to scour the internet for new information on our portfolio companies. Today’s featured stocks are those that she senses are most likely to rise this month: AXA Equitable (EQH), Broadcom (AVGO), LGI Homes (LGIH) and Tyson Foods (TSN). Today’s portfolio changes are: Alexion Pharmaceuticals (ALXN) moves from Strong Buy to Buy, Designer Brands (DBI) from Hold to Buy and Mosaic Company (MOS) from Hold to Buy.
Cabot Stock of the Week
Weekly Issue January 20: The broad market remains strong, and all of Cabot’s market timing indicators are currently positive, so Tim remains optimistic that we’ll see higher prices in the month ahead and he continues to recommend that you remain heavily invested. This week’s recommendation, Sea Ltd. (SE), is a dynamic young Asian company. There are three portfolio changes today: Endava (DAVA) moves to Hold, Luckin Coffee (LK) moves to Hold and Marathon Petroleum (MPC) moves to Sell.
Cabot Global Stocks Explorer
Bi-weekly Issue January 23: This week’s leading issue is the China virus, which is impacting markets. Carl writes that we will need to keep an eye on this breaking issue. Our emerging market timer is clearly positive and today’s recommendation, Direxion Mexico 3X Bull ETF (MEXX), is in an emerging country that is the overlooked big winner from the two recent trade deals. It is in a nice uptrend and has fuel to burn going forward, backed by several positive trends. There is one portfolio change today: Freeport-McMoRan (FCX) from Buy a Half to Sell.
Bi-weekly Update January 16: Carl writes that the big news pertaining to global investing is the signing in Washington yesterday of the phase-one “truce” trade deal between America and China. In effect, it kicks the hard stuff down the road—and there will surely be some hard feelings if China is unable or unwilling to meet its broad, ambitious and vague promises for more purchases of U.S. agricultural and manufacturing products. There are two portfolio changes today: DBS Bank (DBSDY) moves from Hold to Sell and Rakuten (RKUNY) moves from Buy to Hold.
Cabot Dividend Investor
Weekly Update January 22: Tom writes that right now the market looks good, especially for dividend stocks. In the weeks ahead, earnings news will likely dominate the exquisitely crafted stock write-ups in the updates. And it is likely that moves will become more individualized, and less about the overall market. He has no rating changes today.
Monthly Issue January 8: In this issue Tom highlights a shipping stock that has remained profitable and paid dividends every single quarter through an industry depression. SFL Corp. Ltd. (SFL) is yielding a massive 9.6%. And industry conditions are improving. It may be 2020 in the overall market, but Tom found a place where it’s 2009 again. He has no portfolio changes today.
Cabot Marijuana Investor
Update January 22: Tim’s game plan remains unchanged. Hold your strong stocks and sell the weak ones, with an eye to developing a portfolio of the leading stocks in the sector over the long run. As he writes this, the portfolio is 22% in cash, and he will use a bit of that (3% of the portfolio) to take a pilot position in Akerna (KERN).
Monthly Issue December 26: Generally, pruning losers and weak stocks and replacing them with strong stocks is the recipe for success. Tim added two new stocks to the portfolio last week, and if you feel underinvested in cannabis stocks, you can add any of the stocks that look attractive. But the portfolio still has 25% in cash, waiting until the sector strengthens, and he expects that to be soon!
Cabot Early Opportunities
Monthly Issue January 15: Today’s issue features five stocks across the market cap spectrum and from a wide variety of industries. Tyler has a young but rather large online retailer that’s crushing it in the pet supplies market, a supplier of industrial supplies that you’ve probably never heard of, a solar stock and an innovative software company that’s growing through viral use of its products. Then there’s this month’s Top Pick, Axonics Modulation (AXNX), a MedTech stock that’s just launched an innovative device that’s grabbing market share from the incumbent.
Special Bulletin January 14: Most of our stocks have been heading north but over the last week (or more) both Ehealth (EHTH)andEndava (DAVA) have diverged from the pack and headed south. Neither stock looks particularly broken and there’s been no big news release from either management team about any fundamentally negative developments. Tyler is moving Ehealth to Sell and Endava to Hold. We’ll end up with a small gain on Ehealth, which will remain on his watch list for potential inclusion at a later date.
Bonus Report:
3 Cloud Software Stocks to Buy NowBonus Report:
3 Canadian Small-Cap Stocks to Buy NowBonus Report: Secrets To Early-Stage Stock Profits
Bonus Report:
Cabot Profit Booster
Weekly Issue January 21: The Stock – Morgan Stanley (MS) Global investment bank Morgan Stanley thrilled investors last week by delivering record profit and revenue numbers, beating Wall Street’s fourth quarter 2019 revenue and earnings estimates, and meeting or exceeding all of CEO Jim Gorman’s performance targets. Six Wall Street firms promptly raised their price targets to a range of 58-70. Buy Morgan Stanley (MS) Stock at 56.25, Sell to Open March 57.5 Calls (exp. 3/20/2020) for $1, or a Net Price of 55.25 or less
Frequently Asked Questions Report:
Frequently Asked QuestionsBonus Report:
Best-Kept Hedge Fund Secrets to Explode Your WealthBonus Report:
5 Easy Stock-Picking Secrets That Make it Ridiculously Easy to Profit.Bonus Report:
The Simple Technique that Brings in 5%-15% Each Month.Wall Street’s Best Investments
Daily Alert January 24: Sell: A. O. Smith Corporation (AOS) 2 for 1 Stock Split Newsletter
Daily Alert January 24: Global X NASDAQ 100 Covered Call ETF (QYLD) 2 for 1 Stock Split Newsletter
Daily Alert January 23: Short Sell: Grubhub Inc. (GRUB) Shortex Market Letter
Daily Alert January 23: InMode Ltd. (INMD) Shortex Market Letter
Daily Alert January 22: Spirit Airlines, Inc. (SAVE) Investor Advisory Service
Daily Alert January 21: Radian Group Inc. (RDN) Upside
Daily Alert January 20: Ecolab Inc. (ECL) Directinvesting.com
Top Picks Issue January 16: It was a great year for the markets with the DJIA gaining 22.3%, the S&P 500 up 28.9% and the Nasdaq rose 35.2%. But it was even a better year for us! Our Top 5 Picks for 2019 averaged returns of 131%! William Velmer of S.A. Advisory was our big winner. His stock idea gained an astonishing 332%! In this year’s Top Picks issue, Nancy’s contributors are primarily focused on growth, technology and healthcare. But, she also offers several other categories for your review.
Ask the Experts
Cabot Stock of the Week
Question: Hi Tim, I had a quick question on MOMO. On January 13th after stalking MOMO for quite some time and looking for a break out, it seemed to finally get going with it closing near the high (40.80) of the day. SInce then, it has sold off and now almost seems to have fallen “off the face of the earth” in terms of any significant volume. Today’s drop in price seemed unwarranted and probably a result of the coronavirus headlines, and I feel compelled here at this level to start a position but after the failed breakout I’m questioning what I’m missing. Growth, value, earnings etc. all seem to be showing strong numbers, so is this just out of favor? Why all of sudden the push to 40.80 only to fail and breakdown?
Tim: MOMO’s long-term chart is generally constructive. Since the big correction that ended in December 2018, we’ve seen a series of higher lows. However, last week when the stock had the potential to break out above its April 2019 high, it failed by two cents. And then came the gap down—happily on lower volume than on the surge up. So the breakout failed, and now that the buying power that was exhausted in that effort is gone, it appears that there’s nothing to support the stock. I don’t think it’s broken, but it looks like a case of lack of buying power. Instead, money is going into bigger stocks that are hitting new highs. And this assumes that there’s nothing fundamentally wrong.
Cabot Undervalued Stocks Advisor
Question: I have a large position in Apple (AAPL), but I am in at 106. I liked your discussion of stop-loss orders, but I don’t know if I want to be stopped out.
Crista: If you are a long-term investor who is comfortable living through stock market corrections, then in my opinion you have very little to worry about with Apple (AAPL). The stock will likely fall and recover alongside any market correction, but as you have witnessed, both AAPL and the S&P 500 tend to march higher as the years go by. Since I am personally more of an active portfolio manager, I am tuned in to trading opportunities as a way to enhance my total capital gains. I am using a stop-loss order on 25% of my AAPL shares. My only caution on AAPL for you is that if a big problem arises with the company -- similar to the Boeing (BA) 737 MAX jet problem or when a CEO gets accused of chronic sexual harassment or when profits decline year-after-year, as with Macy’s (M) -- then you should seriously consider whether you’re willing to see your share price fall and remain low for an extended period of time.
Question: How do you calculate where to put a stop-loss on a particular stock, including Blackstone Group (BX), so that maximum profit is locked in, while also not selling too soon? Do you go by a percentage below the current price? Do you sell the entire position or just a small portion during a market correction?
Crista: I never use percentages when I’m determining stop prices. Instead, I use the price chart, looking for the bottom of a recent trading range, and placing my stop just below that bottom. (To be more precise, I use the “candlesticks” chart rather than the “solid line” chart, so that I can put the stop below the range of daily fluctuations.) Then as the stock rises, I raise the stop-loss a bit. On BX, I would go with 57 or 59.5, with the full expectation that my shares will sell as soon as the market turns downward. I don’t use stops on most of my portfolio stocks. I will use them in situations where bad news is developing (like if I had owned Boeing), or if the earnings or P/E numbers are deteriorating (like recently on Schlumberger), or if the stock has an extended run-up without pausing (as with Blackstone Group), or if I perceive the market to be way overdue for a correction. Normally, though, if bad news or bad numbers are occurring, I simply sell the stock outright. I usually put a stop on the entire position, but if it’s a big position on something I’m fond of, or a stock that would give me a big taxable gain, or a stock that pays me large dividends, I would just put a stop on a portion of the shares. Importantly, people have a hard time with stop-loss orders because (a) they don’t place the stops at a good price point, so they’re more likely to see the stock sell and quickly rebound and (b) they don’t have a plan with what to do with the capital, so they sit at the computer staring at the price of the stock that just got stopped out. You MUST have a plan, and that includes a list of stocks that you’d love to own right now, or a specific plan to wait for the market correction to arrive, at which time you will buy low. You might buy low on the same stock that got stopped out, or you might buy something else that’s rarely “on sale”, like Apple (AAPL). Stick to your plan. Lastly, if you NEVER use stop-loss orders, just start with one or two stocks. Test the waters. You need to get used to the full process, including the subsequent redeployment of capital, and then decide, “Yes, this stop-loss thing seems to work well for me,” or “Nope. I didn’t like this at all. I’m not doing this anymore.”
Premium Reports
Quarterly Cabot Analyst Meeting
The recording of the quarterly Cabot Analyst Meeting from January 15, 2020 is now available for you to listen to at your convenience—click here for access. This quarterly private call with our analysts is one of your exclusive Cabot Prime member benefits.
Cabot’s 10 Best Stocks to Buy and Hold for 2020.
Special ReportOnce again, Crista has created a diversified portfolio of growth stocks with strong fundamentals to help you achieve your 2020 investment goals through capital gains and dividends. The Top 10 list from 2019 performed well, with a total return over 20% through mid-December.
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
This Guide to Cabot Prime 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.
| Stock | Cabot Global Stocks Explorer | Cabot Growth Investor | Cabot Marijuana Investor | Cabot Stock of the Week | Cabot Undervalued Stocks Advisor | Cabot Dividend Investor |
|---|---|---|---|---|---|---|
| ABBV | Buy | |||||
| ACB | See Advisory | |||||
| ADBE | Hold | |||||
| ALXN | Buy | |||||
| AMZN | Strong Buy | |||||
| ANF | Strong Buy | |||||
| APHA | See Advisory | |||||
| ARE | Hold | Hold | ||||
| AVGO | Strong Buy | |||||
| BABA | Buy | |||||
| BIP | Hold | Hold | ||||
| BKR | Buy | |||||
| BLD | Sold | |||||
| BSCL | Buy 1/2 | |||||
| BX | Hold | |||||
| C | Buy | Hold | ||||
| CCI | Buy | |||||
| CGC | See Advisory | |||||
| CHCT | Hold 1/3 | |||||
| CRAK | Hold | |||||
| CRLBF | See Advisory | |||||
| CRON | See Advisory | |||||
| CTVA | Hold | |||||
| CURLF | See Advisory | |||||
| CZZ | Buy 1/2 | |||||
| DAVA | Hold | |||||
| DBI | Buy | Buy | ||||
| DBSDY | Sold | |||||
| DIS | Buy | |||||
| DOCU | Buy | |||||
| DOW | Buy | Buy | ||||
| DXCM | Buy | |||||
| EPD | Buy | Buy | ||||
| EQH | Strong Buy | |||||
| FCX | Sell | |||||
| GES | Strong Buy | |||||
| GM | Buy | |||||
| GRWG | See Advisory | |||||
| GTBIF | See Advisory | |||||
| HTHT | Hold | |||||
| IIPR | See Advisory | Buy | ||||
| IPHI | Buy | Buy | ||||
| KERN | See Advisory | |||||
| LGIH | Hold | |||||
| LK | Buy 1/2 | Hold | ||||
| MCY | Buy | |||||
| MEDIF | See Advisory | |||||
| MEXX | Buy 1/2 | |||||
| MO | Buy | |||||
| MOS | Hold | |||||
| MPC | Sell | Buy | ||||
| MRVL | Buy 1/2 | |||||
| NEE | Hold | Hold 1/2 | ||||
| NFLX | Strong Buy | |||||
| NVCR | Buy 1/2 | |||||
| OGI | See Advisory | |||||
| PDD | Hold | |||||
| PGX | Buy 1/2 | |||||
| PLNHF | See Advisory | |||||
| PNGAY | Buy | |||||
| PWR | Strong Buy | |||||
| QCOM | Buy | |||||
| QRVO | Buy | Buy | ||||
| RIO | Buy | |||||
| RKUNY | Hold 1/2 | |||||
| RNG | Hold | |||||
| SE | Buy 1/2 | Buy another 1/2 | Buy | |||
| SFL | Buy | |||||
| SLB | Retired | |||||
| SPCE | Buy a Half | Buy | ||||
| SSO | Buy | |||||
| STAG | Hold | |||||
| TCNNF | See Advisory | Hold | ||||
| TDOC | Buy | |||||
| TOT | Strong Buy | |||||
| TPB | See Advisory | |||||
| TSLA | Hold | |||||
| TSN | Strong Buy | |||||
| UEIC | Buy | |||||
| VLO | Buy | |||||
| VOYA | Buy | |||||
| VRTX | Buy | Buy | ||||
| XEL | Hold 2/3 |