Cabot Prime Pro Week Ending January 22, 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, Tyler Laundon talks about the big picture of economic recoveries and how they tend to run much longer than investors think. While the pandemic is still an issue, there are ways to play both the vaccine rollout as well as the (hopefully) subsequent recovery. Tyler zeroes in on one vaccine distribution stock as well as two growth names that are doing very well since a spin out in 2019. Stocks mentioned include: EVBG, CYRX, CRNC and NUAN.
UPCOMING CABOT EVENTS:
Cabot Retirement Club Member Call
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Cabot Micro-Cap Insider Member Call – February 2021
FREE WEBINAR FOR PRIME MEMBERS ONLY: February 11, 2021 Sign up now.
Investing in Marijuana Stocks
FREE WEBINAR FOR PRIME MEMBERS ONLY: February 18, 2021 Sign up now.
Advisory Services
Cabot Growth Investor
Bi-weekly Update January 21: Remain bullish but pick your spots. The Model Portfolio is off to a good start this year, which is always a good thing, but we’re not seeing many solid entry points and there’s no question the environment is hot and heavy. Mike has no changes tonight, and we’re holding 18% in cash.
Bi-weekly Issue January 14: And we’re happy to report that the intermediate- and longer-term trends of the major indexes are still strongly up; as our founder Carlton Lutts used to say, the most bullish thing a market can do is go up, and that’s certainly the case right now. However, we’re paying close attention to the bottom-up portion of the analysis these days, as different stocks look to be at different stages of their overall runs. Mike has two portfolio changes this week: Haloyzme (HALO) Buy Another Half and Roku (ROKU) Sell 1/3.
Special Report December 17: Cabot’s 10 Favorite Low-Priced Stocks for 2021 (look for it in the Special Report Section)
Cabot Top Ten Trader
Movers & Shakers January 22: It’s been another good week for the market, though we’re seeing an increasing amount of crosscurrents and rotation—even with this morning’s dump, the big-cap indexes are solidly positive on the week, but the leading small- and mid-cap indexes are flat-to-down. Mike has two Buy recommendations: HubSpot (HUBS) and Pinduoduo (PDD).
Weekly Issue January 19: Sellers finally landed a few punches last week, with many tech-related growth stocks finding resistance and the big-cap indexes losing a little ground. Given the big run of late, lots of speculation and signs of greed, we have our antennae up for abnormal weakness—but so far, there hasn’t been much (if any), with the pullbacks in the indexes and individual stocks appearing normal and other timing indicators (number of new lows, etc.) looking fine. Mike’s Top Pick is Guardant Health (GH), from the strong medical area, as it’s come under major accumulation this year.
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 Basic & Pro Market Update January 22: Buying new earnings stars, which attract bullish option activity post-earnings has been a successful strategy for Cabot Options Trader. But some large institutional investors place bets ahead of earnings reports. They do so for one of two main reasons.
Cabot Options Trader Basic & Pro Trade Alert January 21: Covered Call: Buy Alternative Harvest ETF (MJ) Stock, and Sell the February 18 Call (exp. 2/19/2021) for 17.10 or less.
Cabot Options Trader Basic & Pro Position Update January 21: Yesterday afternoon as the Nasdaq raced higher, Jacob spent some time evaluating the portfolio. Read the post for his thoughts.
Cabot Options Trader Basic & Pro Stocks on Watch January 19: Tech stocks are bouncing back nicely today after last week’s pull back. One innovative tech stock with recent bullish option order flow stands out to me: Activision Blizzard (ATVI), the giant multimedia and electronic gaming company.
Cabot Options Trader Basic Weekly Update January 19: The Chicago Board of Options Exchange Volatility Index (VIX) continued to rise last week, with the “fear index” spiking higher on Friday as stocks slipped. For the full week the VIX rose 12.89% to end the week at 24.34.
Cabot Options Trader Pro Weekly Update January 19: Long positions: AAPL, GM, FCX, MSFT, NET, UBER, QCOM, SNAP, SONO
Cabot Undervalued Stocks Advisor
Weekly Update January 20: As value investors in a remarkably robust (exuberant) stock market, full valuation impels us to want to sell a stock. Such is the case with General Motors. On most conventional metrics, the stock is fairly priced. Through the courtesy of several friends, we’ve seen some of the math that Wall Street analysts use to justify prices well over $100/share and find them laughable, at best. As GM shares burst again through our price target, we were on the razor’s edge of selling. Bruce is raising General Motors (GM) price target from 49 to 62.
Monthly Issue January 6: While our investment recommendations focus on specific stocks, we like to keep these macro trends in mind. Investors generally prefer stocks that ride these trends. But, sometimes the most appealing stocks are those that superficially seem to go against these trends (leading to investors avoiding them) yet have either fundamental traits that sidestep these trends or have overly discounted valuations. Some of these secular trends are favorable and clear positives (tech and health, as examples) yet others are concerning (China, market cycles, government spending). Bruce has no portfolio changes today.
Cabot Stock of the Week
Weekly Issue January 19: On the growth side of the market, we’re always on the lookout for what we like to call emerging blue chips—decent-sized firms with a leading product in a big, growing market, with the potential to grow rapidly (and reliably for years). Tim’s featured stock Spotify (SPOT), is the global leader in streaming music and, increasingly, podcasts. The idea here, though, is less about any one category (music, etc.) and much broader than that, with Spotify’s offerings being the voice in your ear many times each day, whether you’re making breakfast for the kids, jogging or working out or simply looking for something to listen to in the car. Tim has three portfolio changes: Berkeley Lights (BLI) to Sell, Columbia Sportswear (COLM) to Hold and Elastic (ESTC) to Hold.
Cabot Global Stocks Explorer
Special Bulletin January 22: Based on the below press release highlighting the agreement for Australia’s Lynas to build a rare earths refinery in Texas, Carl recommends you sell your MP Materials (MP) position. He will have more on this in the next update.
Bi-weekly Issue January 21: In 2020, the pandemic accelerated a clear trend that caught the imagination of investors: the emerging digital economy and the digital-based stocks that thrive in it. These companies benefit from several advantages: low capital requirements, the ability to scale up revenue quickly, and the high margins that can come with a low headcount. Carl’s new recommendation Foley Trasimene Acquisition II (BFT) (Merging with Paysafe), is a Special Purpose Acquisition Company (SPAC) formed in October 2020 by Bill Foley. A SPAC is a company with no commercial operations that is formed strictly to raise capital through an initial public offering (IPO) for the purpose of acquiring an existing private company.
Bi-weekly Update January 14: The Explorer portfolio came alive this week as ElectraMeccanica (SOLO) shares are up 33% in 2021 after surging 179% in the fourth quarter of 2020. LogiQ (LGIQ) shares jumped 22% this week, NovoCure (NVCR) shares made a nice move going from 162 to 177, and Sea Limited (SE) shares continued their upward surge in 2021, moving from 199 to 227 as the company announced it is acquiring an Indonesian bank. Under these conditions, it makes sense to stay about 75% invested in a diversified portfolio, keeping some cash as a buffer and to take advantage of any pullbacks. Take partial profits from time to time. Carl has one portfolio change: Afterpay (APT.AX) moves from Buy a Half to Hold a Half.
Cabot Small-Cap Confidential
Weekly Update January 21: The big news this week was, of course, the swearing in of President Biden and all the associated stories about the transition. Fun fact – portfolio holding Everbridge (EVBG) supplied its Mass Notification system to help keep Washington, D.C. area residents and visitors safe and tuned in during, and leading up to, the Presidential Inauguration. The biggest thing coming up is earnings season. There are so many issues and potential opportunities out there that it will be refreshing to hear what management teams have to say regarding their perspectives in 2021. Tyler has one portfolio change: Sprout Social (SPT) moves to HOLD.
Monthly Issue January 7: Tyler’s new recommendation, Porch Group (PRCH) is a business-to-business-to-consumer (B2B2C) software company that offers a proprietary ERP/CRM platform to home services companies in the U.S. It also offers home services comparison and booking tools for consumers. Porch has a market cap of $1 billion. Porch Group grew revenue by 43% to $77.6 million in 2019, which ended with 10,585 customers (up 20%) and $444 in revenue per account (monthly, up 29%). Things got off to strong start in 2020 but, not surprisingly, the pandemic put a dent in Q2.
Cabot Dividend Investor
Weekly Update January 20: It’s another day and another all-time high for the S&P 500. The index is up over 70% since March and over 17% since the beginning of November. The market is off to a good start this year and anticipating wonderful things for 2021. Why shouldn’t the market be going up? A full recovery is likely to come during the year with the highest anticipated economic growth in decades. Interest rates are near historic lows (with no place else for money to go but stocks). And the country will soon be awash in new stimulus. Click here to listen to the podcast. Tom has two rating changes for Eli Lilly and Company (LLY) and Innovative Industrial Properties (IIPR).
Monthly Issue January 13: It’s hard to look beyond the current headlines. But, in the grand scheme of things, it’s mostly just short term surface noise. Meanwhile, massive longer-term changes are occurring below our feet. Below all this noise, tectonic plates are shifting and changing the world forever. The market is high. All three indexes have made new all-time highs recently. It’s not the best time to be too aggressive. Yet, the prognosis for 2021 is positive. In this issue, Tom highlights Broadcom Inc. (AVGO), a technology industry Goliath with $24 billion in annual net revenues. It’s an icon of the technology revolution with roots that trace back over 50 years to the old AT&T/Bell Labs. The company has many category-leading products in crucial areas of semiconductors and infrastructure software solutions.
Cabot Marijuana Investor
Weekly Update January 20: Canopy (CGC) last Thursday filed an early warning report relating to a new option it has acquired, which if exercised would give it a greater than 10% stake in TerrAscend (TRSSF). The option will be triggered if there is a change in the legal status of cannabis in the U.S.—which of course we are all expecting eventually. Canopy said it has no immediate plans or intentions with regard to TerrAscend, but this would give it a nice foothold in the country. Tim has no portfolio changes this week.
Monthly Issue December 30: First, the long-term trend of the market, over the centuries, is up, reflecting the growing value added by our civilization. That’s why it pays to invest. Second, the fundamentals of the leading companies in the marijuana sector remain extremely favorable. Revenue growth at the companies in our portfolio averaged 170% in the latest quarter. And that was not the result of any huge outlier; the median growth rate was 131%. Third, the legal situation continues to improve, with the state-by-state march toward legalization continuing and the incoming federal administration almost certain to be more friendly to the industry than the outgoing. Fourth, the leading stocks in the sector are still strong today—and as experienced momentum investors know, the final phase of a bull run can be very profitable. Tim has three rating changes: Jushi Holdings (JUSHF), Turning Point Brands (TPB) and Village Farms (VFF) to Hold.
Cabot Early Opportunities
Monthly Issue January 21: Overall, Tyler recommends staying invested but proceeding cautiously with respect to new buying. A pullback or deeper correction could be right around the corner, or months away. To balance out the risks be sure to average into new positions and accumulate a full position over time. Today’s Top Pick is Castle Biosciences (CSTL), develops diagnostic and prognostic tests for skin cancers that inform personalized treatment plans based on tumor-specific genomic information. While the company has a market cap of less than $2 billion, it has come a long way since it was formed in 2008. Progress has accelerated over the last year too. Entering 2020 Castle had an addressable market in the U.S. of $540 million. With two new tests launched over the last twelve months (DecisionDx-SCC and DecisionDx DiffDx-Melanoma), Castle’s addressable market has grown to over $2 billion.
Cabot Profit Booster
Weekly Issue January 20: January was another good month for the Cabot Profit Booster portfolio as we closed our two positions for profits: UBER January 55 covered call – Profit of $450 per covered call, or a yield of 8.9%. ADNT January 36 covered call – Profit of $210 per covered call, or a yield of 6.33%. Jacob’s new stock recommendation is Sonos (SONO).
Update January 19: Last Friday the ADNT January 36 Call that we sold for $2.15 expired worthless (good situation), leaving us with our stock position, and an approximate profit of 6.5%. Today we are not going to sell a new call. Instead, we are going to sell our stock position, and prepare to move this capital into a fresher idea tomorrow morning.
Cabot Micro-Cap Insider
Weekly Update January 20: This week, the big news is that Greystone Logistics (GLGI) reported earnings. The stock has been a little volatile, but Rich still has long-term conviction in it. Revenue declined by 20% in the quarter. The biggest challenge that Greystone currently faces is meeting demand from its customer base. As a result, one of the company’s customers (a major beer company) gave notice that it will be diversifying purchases of case pallets between Greystone and another vendor. Greystone will continue to be the sole provider for the keg pallets. Greystone believes this change will not have a material impact on its financials.
Monthly Issue January 13: Today, Rich explains his process for picking micro-cap stocks. It can be extremely profitable to invest in growth companies, as any Tesla or Amazon shareholder will tell you. But it is also easy to get burned when growth slows, especially if the stock is trading at a nosebleed valuation. In the micro-cap world, you can invest in growth companies at value prices. And the data suggests that it can be very profitable. Rich’s new recommendation Zedge (ZDGE), is a leading app developer focusing on the mobile phone personalization and entertainment verticals. Specifically, the app allows users to customize their phones’ wallpaper and ringtones. Please read the issue for more recommendation updates.
Cabot Income Advisor
Weekly Update January 20: In last week’s update, AGNC Investment Corp. (AGNC) and Brookfield Infrastructure Partners (BIP) were purchased. Outstanding calls in Altria (MO), Enterprise Product Partners (EPD) and U.S. Bancorp (USB) expired on Friday as well. All three stocks closed above the strike price and were called. That is to be expected when the market rises sharply, especially when the rally is led by previously downtrodden stocks like those that were called. Strong returns were generated on all positions in a short amount of time. And the newsletter is well-ahead of schedule to earn a double-digit annualized income return, close to 20%.
Monthly Issue December 23: Although the pandemic disrupted our lives and crashed the economy, the market loved it. All three major market indices are higher for the year and within a whisker of the all time highs. The S&P 500 is up over 14% YTD and the technology-laden Nasdaq is over 40% higher on the year. Tom has one new featured stock Chevron Corporation (NYSE: CVX) and multiple portfolio changes.
Cabot Turnaround Letter
Weekly Update January 22: This week we had two companies reporting earnings – Gannett (GCI) and Baker Hughes (BKR). Next week, four companies are scheduled to report earnings: Xerox (XRX), Valero (VLO), Western Digital (WDC), and General Electric (GE). Baker Hughes (BKR) – Baker is one of the world’s largest diversified energy service companies. It is currently beleaguered by the depression in global oil and gas drilling activity. Also, the shares are being weighed down by General Electric’s sale (over 3 years) of its huge 377 million share stake. The company’s investment grade balance sheet and positive free cash flow should provide it with the ability to endure until the industry’s eventual recovery. Click here to listen to the podcast.
Special Bulletin January 20: We are raising our price target on General Motors (GM), following our review as the shares have surged through our 49 price target, to the mid-50s. Our lengthy analysis, summarized in the quote below, describes our thinking. “Lord, Please Make Me Chaste – But Not Yet.”
Monthly Issue December 23: Following the S&P 500’s incredibly strong 33% total return last year, adding to a remarkable decade-long bull market, it would have seemed a stretch to think that 2020 would bring more gains. Had we known that the world would be rattled by a devastating pandemic that brought a 10% drop in global economic output and a 31.4% plunge in U.S. output in the second quarter, we would have been shocked if the market was even flat for the year. Bruce’s has one buy recommendation: Ironwood Pharmaceuticals (IRWD) and two sell recommendations: GameStop (GME) and Freeport-McMoran (FCX).
Ask the Experts
Cabot Profit Booster
Question: I just subscribed to your Cabot Profit Booster and would like to know how to buy this stock. Do I need to buy 100 shares of snap and then Sell to Open February 55 Strike Calls (exp. 2/19/2021) for $5.00 or can I buy 20 shares of snap and then do Sell to Open February 55 Strike Calls (exp. 2/19/2021). My fidelity account is not allowing me to directly sell 55 Strike Calls. Do I need to buy in 100 or 200 shares and sell the covered calls?
Jacob: When executing a covered call trade you need to buy at least 100 shares. That 100 shares “covers you”, so that you can then sell 1 call. Or you can buy 200 shares, and sell 2 calls.In terms of order of execution of the trade, first you would buy the stock, and then sell the call. Once you become more familiar with this strategy, and your options trading platform, you could execute the buy of the stock, and sale of the call as one trade.
Quarterly Cabot Analyst Meeting
The recording of the Cabot Prime Members Meeting with the Analysts from January 20, 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 Pro 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 Small-Cap Confidential | Cabot Global Stocks Explorer | Cabot Growth Investor | Cabot Marijuana Investor | Cabot Stock of the Week | Cabot Undervalued Stocks Advisor | Cabot Dividend Investor |
|---|---|---|---|---|---|---|---|
| ABBV | Hold | ||||||
| ACCD | Hold | ||||||
| APT.AX | Hold 1/2 | ||||||
| ARNA | Buy | ||||||
| AVGO | Buy | ||||||
| AVLR | Hold | ||||||
| BFT | Buy 1/2 | ||||||
| BGS | Hold | ||||||
| BIP | Buy | Buy 2/3 | |||||
| BLFS | Buy | ||||||
| BMY | Strong Buy | ||||||
| BSCL | Buy 1/2 | ||||||
| CDLX | Hold | ||||||
| CGC | See Advisory | ||||||
| COLM | Buy | Hold | |||||
| CRLBF | See Advisory | ||||||
| CRNC | Buy | ||||||
| CRWD | Buy 1/2 | Buy | |||||
| CSCO | Buy | ||||||
| CURLF | See Advisory | ||||||
| DLR | Hold | ||||||
| DOW | Hold | ||||||
| EPD | Buy | ||||||
| EQH | Sold | ||||||
| ESTC | Buy | ||||||
| EVBG | Buy | ||||||
| FIVE | Buy | ||||||
| FVRR | Hold 3/4 | ||||||
| GM | Hold | Hold | |||||
| GRWG | See Advisory | ||||||
| GSHD | Hold 3/4 | ||||||
| GTBIF | See Advisory | ||||||
| HALO | Buy Another 1/2 | ||||||
| HTHT | Hold | ||||||
| IIPR | See Advisory | Sell 1/3 | |||||
| IBM | Buy | ||||||
| INSP | Hold 3/4 | ||||||
| JBLU | Buy | ||||||
| JUSHF | See Advisory | Hold 2/3 | |||||
| KO | Buy | Buy | |||||
| KPTI | Sold | ||||||
| LGIQ | Buy 1/2 | ||||||
| LLY | Sell 1/3 | ||||||
| MO | Buy | ||||||
| MP | Sell | ||||||
| MRK | Buy | ||||||
| NEE | Hold | Hold 1/2 | |||||
| NEO | Buy 1/2 | ||||||
| NET | Hold 1/2 | ||||||
| NUAN | Hold | ||||||
| NVCR | Buy | Buy Another 1/2 | Buy | ||||
| O | Buy | ||||||
| PGX | Hold 1/2 | ||||||
| PINS | Buy | Buy | |||||
| PRCH | Buy | ||||||
| PSNL | Buy | ||||||
| QCOM | Hold | Hold 2/3 | |||||
| QTWO | Buy | ||||||
| RGEN | Buy | ||||||
| ROKU | Hold 2/3 | ||||||
| SBS | Buy | ||||||
| SE | Hold 1/2 | Hold | |||||
| SOLO | Buy 1/2 | ||||||
| SPCE | Hold | Hold | |||||
| SPOT | Buy | ||||||
| SPT | Hold | ||||||
| SSO | Buy | ||||||
| STAG | Hold 1/2 | ||||||
| TAP | Buy | Buy | |||||
| TCNNF | See Advisory | Hold | |||||
| TMX | Hold | ||||||
| TPB | See Advisory | ||||||
| TRSSF | See Advisory | ||||||
| TSLA | Hold | ||||||
| TSM | Buy 1/2 | Sold | |||||
| TSN | Buy | ||||||
| TWLO | Buy | ||||||
| UBER | Buy | Buy | |||||
| USB | Buy | Buy | |||||
| VIAC | Buy | ||||||
| VLO | Buy | ||||||
| VZ | Hold | ||||||
| XEL | Buy 2/3 |