Cabot Prime Week Ending October 12, 2018
REMINDER: The next Cabot Prime quarterly analyst call is Wednesday, October 17 at 2:00 p.m. Eastern Time. It’s free as part of your Cabot Prime membership. Register here.
Cabot Weekly Review (Video)
In this week’s stock market video,Mike Cintolo discusses the market’s recent carnage and what he’s thinking for the short-, intermediate- and longer-term—in short, Mike’s still bullish longer-term, but is very defensive here as the odds favor time being needed to repair the damage. He does share some ideas if you want to play short-term bounces, and, as always, highlights some names that are on his watch list due to great resilience of late.
Advisory Services
Cabot Growth Investor
Bi-weekly Issue October 10: Mike says to turn defensive. In the Model Portfolio, he’s sold PayPal, Dexcom and Neurocrine since the last issue, while taking partial profits in Ligand, Okta and Teladoc. And tonight he’s cutting the loss in Autodesk (ADSK) leaving us with 61% of the portfolio on the sideline.
Special Bulletin October 8: At day’s end, the Dow actually gained 40 points but the Nasdaq sank another 53 points despite a decent late-day rally. In the Model Portfolio, the cash position rose from 16% to 40% just last week, and tonight Mike has two more moves—he’s going to dump the shares of Neurocrine Biosciences (NBIX) given the small loss and the stock’s break of support and he’s also going to sell one-third of our position in Okta (OKTA), which has been caught up in the growth stock selloff.
Bi-weekly Update October 3: Mike says to pare back. The iffy action he saw among growth stocks in September has turned into a severe selloff so far in October. While our Cabot Tides are still neutral, the action among leading stocks is enough for us to raise some cash. He has no further changes tonight.
Other Stocks of Interest October 12: Follow ups to stocks featured May 9, 2018 (issue 1393) to October 10, 2018 (issue 1404). 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
Movers & Shakers Weekly Update October 12: All together, the evidence has turned negative, and while Mike doesn’t view this as a repeat of 2008 and doesn’t believe you should be 100% in cash, he does believe a defensive stance is warranted. If you want to try to do some short-term trading in a small way, that’s fine, but overall it’s best to hold plenty of cash, cut back on new buying and let the dust settle. He’ll be moving our Market Monitor down to a level 4 on Monday. Today’s buy ideas are Canopy Growth (CGC), Dave & Buster’s (PLAY) and Ulta Beauty (ULTA). The market’s implosion through Thursday caused the majority of stocks to break down, leading to a bunch of sells.
Weekly Issue October 8: The Market Monitor falls one notch lower to 5, but the ten stocks in today’s issue are still—on their own—quite attractive, plus they come from a wide variety of industries. Mike’s Editor’s Choice is Clean Harbors (CLH), a stock that was last hot in 2011, after which it spent nearly seven years out of the limelight. But now it’s back and the chart risk looks low.
Cabot Undervalued Stocks Advisor
Special Bulletin October 11: Today’s news: Alexion Pharmaceuticals (ALXN) moves from Buy to Strong Buy; plus Crista has some additional buy recommendations during this week’s market correction.
Weekly Update October 9: In the coming months, Crista aims to reduce the number of portfolio stocks from about 30 to about 20. Today’s stock rating changes are unrelated to that goal, and more related to bearish price charts. Once price charts turn more bullish, she’ll send out a buy signal. Today’s Portfolio Changes: Knight-Swift Transportation (KNX) moves from Strong Buy to Hold, Quanta Services (PWR) moves from Strong Buy to Hold, Schlumberger (SLB) moves from Hold to Buy, Skechers (SKX) moves from Strong Buy to Buy and WestRock (WRK) moves from Strong Buy to Hold.
Monthly Issue October 2: Today’s featured stocks include Alexion Pharmaceuticals (ALXN), CIT Group (CIT), and a new addition to the Growth & Income Portfolio: Delta Air Lines (DAL). Today’s portfolio changes are: Blackstone Group LP (BX) moves from Buy to Hold, Delek U.S. Holdings (DK) moves from Strong Buy to Hold and Martin Marietta Materials (MLM) moves from Strong Buy to Hold. Crista also writes about General Electric (GE).
Cabot Stock of the Week
Weekly Issue October 9: Today’s recommendation is Centennial Resource Development (CDEV), a young stock in the energy industry that has both a great growth story and a strong chart. It was originally recommended by Mike Cintolo in Cabot Growth Investor. Tim has one change today: Teladoc Health (TDOC) moves from Buy to Hold.
Cabot Emerging Markets Investor
Bi-weekly Update October 11: The Cabot Emerging Markets Timer is solidly negative. Paul sold Beigene (BGNE) in a Special Hotline yesterday, and today, are selling half of our position in Alibaba (BABA).
Special Bulletin October 10: While Paul has been holding a large amount of cash in the portfolio and have only a short list of stocks rated buy, the market’s assault on Beigene (BGNE) has reached unacceptable levels. He will sell the portfolio’s half position in BGNE tomorrow
Bi-weekly Issue October 4: Paul writes that it may be that the Fed’s recent actions have increased the attractiveness of bonds versus stocks. But whatever the cause, emerging market stocks have taken it on the chin over the last two days, pulling both the iShares EM Fund and the China Golden Dragon Fund decisively into the bearish camp. Our cash position is plenty high enough to weather the storm, but you should be paying close attention to your personal loss limits. Tonight’s recommendation is Companhia Vale do Rio Doce (VALE) (literally the Doce River Valley Company, but just Vale to its friends), a big Brazilian iron miner. It’s rated Buy. Paul has no changes to the portfolio tonight.
Cabot Dividend Investor
Special Bulletin October 11: Chloe says that on an individual stock level, sharp one-day selloffs are often fixed quickly, and it doesn’t pay to act rashly. However, here are a few names she does want to comment on. AllianceBernstein (AB) moves to Hold, CSX Corp. (CSX) moves to Hold and Occidental Petroleum (OXY) is still on Hold. And in general, be very cautious about buying here, until we get more clarity on the market’s next move.
Weekly Update October 10: Interest rates surged last week after ADP released September payroll data showing a significant uptick in hiring and Fed Chair Jerome Powell said in an interview that the Fed’s benchmark rate is still “a long way from neutral.” Then on Friday, the U.S. unemployment report fell to 3.7%, the lowest level since 1969. The yield on the 10-year Treasury hit its highest level in seven years and remains elevated as this week progresses. If the market stays shaky, Chloe could lighten up on some of the weakest positions, probably starting with McGrath RentCorp (MGRC), which has been trending down since July. For now, though, she has no rating changes.
Monthly Issue September 26: Today Chloe is adding a little more diversity, increasing her consumer exposure by adding a well-known chain, Dunkin’ Brands Group (DNKN), to the Dividend Growth tier. Also, Community Health Trust (CHCT) moves to Hold.
Cabot Marijuana Investor
Update October 11: What Tim is still concerned about today is that the sector is likely to peak this month as investors enthuse about legalization, and then go through a cooling off period. And if the broad market itself is in a downtrend then, there could be serious damage done to some of these stocks. (We’re still only a couple of weeks off the broad market’s top, so despite the current nasty plunge, the long-term trend is still judged up.) So he continues to advise against buying extended stocks. He recommends taking profits when appropriate. And he continues to remind you to try to cultivate a long-term perspective.
Monthly Issue October 4: Marijuana stocks have been relatively calm since Tim’s last update exactly two weeks ago, and this is good, particularly if you can find a good setup. His choice for the portfolio today is MedMen Enterprises (MMNFF), which he profiled in his August 22 report. In the portfolio, he will now take half the cash and invest it in MMNFF. Additionally, he will now take partial profits in Aurora (ACBFF), selling a third of his position, because it’s grown to an oversize share of the portfolio and the stock is extended.
Wall Street’s Best Investments
Daily Alert October 12: Earthstone Energy (ESTE) from Global Investing
Daily Alert October 11: Frontdoor, Inc. (FTDR) from Research & Portfolio Evaluation, Inc.
Daily Alert October 10: Catasys, Inc. (CATS) from Nate’s Notes
Daily Alert October 9: Dunkin’ Brands Group, Inc. (DNKN) from Cabot Dividend Investor
Daily Alert October 8: Great Lakes Dredge and Dock Corporation (GLDD) from The National Investor
Monthly Issue September 19: Nancy’s Spotlight Stock is AK Steel (AKS), a leading producer of flat-rolled carbon, stainless and electrical steel products, primarily for the automotive, infrastructure and manufacturing, including electrical power, and distributors and converters markets. In her Feature article, she further discusses the health of the industry, as well as Wall Street’s view of the recommended stock.
Wall Streets Best Dividend Stocks
Daily Alert October 12: National Health Investors (NHI) from Contrarian Outlook
Daily Alert October 11: Summit Midstream Partners, LP (SMLP) from Forbes/Lehmann Income Securities Investor
Monthly Issue October 10: This month’s Spotlight Stock, Carnival Corporation (CCL), is in one of Nancy’s favorite industries—cruising! The company is the largest in the sector, offering cruises that target all socioeconomic ranges. In her Feature article, she explores the industry, which is seeing unprecedented demand right now.
Daily Alert October 10: Fidelity Total Bond (FTBFX) from Moneyletter
Daily Alert October 9: DowDuPont Inc. (DWDP) from Cabot Undervalued Stocks Advisor
Daily Alert October 8: Genuine Parts Company (GPC) from Directinvesting.com
Ask the Experts
Cabot Marijuana Investor
Question: I am a subscriber to the Cabot Marijuana Investor newsletter. Last week you recommended purchase of MedMen and I would like to ask if you could forward me the ISIN number of the company. This company is not listed with the online stockbroker company I use and it is not customary for them to offer OTC companies but they are willing to add it to their trading platform if I give them the ISIN number details. I managed to find the ISIN for MMEN as traded on the Canadian Stock Exchange (CA 58507M 10 7 7) but since I usually try to follow your recommendations I thought best to check with you first if this is correct or if you recommend I purchase the OTC version instead as on the newsletter. Thanks in advance for your reply and well done for your very interesting and profitable suggestions.
Tim: I looked hard, but I’m afraid I can’t find the ISIN for the MMNFF OTC listing. And this is the first time I’ve heard of this type of problem with a broker. Some of the more old-fashioned brokers refuse to trade cannabis stocks for ethical reasons (Raymond James, for example), but all the major online brokerages trade these stocks without a problem.
Cabot Growth Investor
Question: I would like to hear your view of Square. I bought little bit of SQ in early 2017, following the ideas of your special reports (also featured as ‘Other stocks of interest’ in growth stock letter). Now SQ has been in free fall, personally my unrealised profit has gone from over 400% to 350% of today. What would you advice in this point, sell or hold? Is SQ still Forever Stock? Thanks a lot for your views!
Mike: Thanks for writing. Well, honestly, I think SQ is definitely broken in the intermediate-term, and I’m skeptical of stocks that have had HUGE
prolonged runs and are now getting bludgeoned with high-volume selling. If you have a decent-sized position, you could sell some and hold some and see if and how well it bounces from here. If you have a small position (relative to your overall portfolio), maybe you just hold and see how it bounces, but like I said I think, while a sharp snap back is certainly possible, my guess is the stock is, at the very least, going to need a ton of time to repair the damage.
Cabot Dividend Investor
Question: Would you buy AXP here?
Chloe: I still have AXP rated Buy in the Dividend Investor portfolio but I’d be very cautious about doing any buying until the market stabilizes a bit.If AXP finds support around its 200-day, currently at 100 (and the market isn’t in free-fall) I think that would probably be a good buying opportunity. If it breaks through that level, watch out.
Question: I just joined your service. I have one question: How do you think writing covered call options would work using your stock selections?
Chloe: I’ve heard from many Dividend Investor subscribers who regularly write call options on stocks in our portfolio, and most do quite well. Monthly options expiring two to three months out and LEAPS are the most popular. They work particularly well on holdings trading in sideways ranges, and can often more than double your yield.
It’s a little hard to pick out individual names in today’s market, but OKE, AXP, OXY, ED and UNH could all be candidates. If you’d like more specific advice on any names, I’m always happy to ask my colleague Jacob Mintz, who writes Cabot Options Trader. Jacob and I also gave a presentation on just this topic at this year’s Wealth Summit, and he summarized most of it in thisarticle for our readers who weren’t there.
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 Buy and Hold Stocks for 2018
Update July 13, 2018: Today, Crista updates investors on portfolio news and performance of the stocks in Cabot’s 10 Best Buy and Hold Stocks for 2018. In terms of individual stock performance, Supernus Pharmaceuticals (SUPN) is up 34.6% YTD through July 12, while Universal Electronics (UEIC) is down 28.0% YTD. The performance of the remaining stocks ranges between +19.5% and -18.2%.
Update June 12, 2018: On June 11, 2018, USG Corporation (USG) announced that its Board of Directors agreed for the company to be acquired by Gebr. Knauf KG for $44 per share in cash. Crista suggestion is that investors sell USG now, rather than wait for the remaining $0.96 per share to accrue from the special dividend and the remaining potential capital appreciation.
Cabot’s 10 Best Takeover Stocks
Special ReportUpdated August 10: There are a variety of reasons that a corporation might want to purchase another company. They might want to acquire a company’s patents or products to enhance their product lines; access the company’s distribution network and sales relationships; or simply aim to increase their earnings growth rate by purchasing a very profitable company within a related industry. After all, stronger earnings growth leads to better share price appreciation—a topic that boards of directors care very much about. Crista’s investment strategy, which combines both growth and value criteria, inadvertently identifies potential takeover targets. That’s because big companies and she often seek the same thing: stock investments in undervalued, financially thriving companies that can deliver profits to investors. The ten companies are all undervalued growth stocks. What’s more, they’re small enough that big competitors and peers within their sectors could easily finance their acquisitions, often through current cash flow.
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.
Cabot’s 10 Best Small-Cap Cloud Computing Stocks to Buy Now
Special ReportUpdated August 10: If you’re a growth investor, you need to own cloud software stocks. It’s just that simple. Cloud computing is changing the world. It’s powering massive growth in companies across sectors, empowering digital transformations, enabling new generations of connected technologies and changing how people live their lives. Tyler Laundon lays out the landscape and names his 10 best small-cap cloud computing stocks.
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.