Cabot Prime Week Ending May 11, 2018
Cabot Wealth Summit Registration
What do Cabot’s most successful investors have in common? They come to the Cabot Wealth Summit!
If you haven’t yet registered for the Cabot Wealth Summit, now’s the time because the Extra Early Bird rate expires soon! The Summit is a literal breakfast, lunch and dinner with every one of Cabot’s analysts, a rich and intense program of stock picks, market analysis, investing tips and techniques and a chance for face-to-face Q&A with some of the savviest investors around. We will also have great social activities!
Register here for the August 15-17, 2018 Summit at special pricing for Cabot Prime members.
Cabot Weekly Review
In this week’s stock market video, Mike delivers some good news: He’s gotten a buy signal! Mike’s intermediate-term indicator has flashed a green light, basically saying that the market’s primary evidence (action of the major indexes and leading stocks) is kicking into gear. This isn’t a sign to go nuts on the buy side, but to start wading into a couple of top performers and then, if you develop profits, do some more buying in the days ahead. To get you started, Mike relays a ton of recent breakouts and setups to chew on.
Cabot Growth Investor
Bi-weekly Issue May 9: Our Cabot Tides has turned positive, telling us the intermediate-term trend is now pointed up. So tonight, Mike is adding two new stocks to the Model Portfolio. The first is Okta (OKTA), a leading provider of identity solutions to big businesses, boosting both productivity and security. The stock has had a good run but looks like a new leader. The second addition is Shake Shack (SHAK), a burger-focused restaurant that’s in the midst of a rapid store expansion plan.
Bi-weekly Update May 2: Mike says to remain cautious. The market is doing more chopping than declining in recent weeks, and because of that, a couple of good days on the upside could actually turn the intermediate-term trend up. But we never anticipate, and right now, our Cabot Tides and Two-Second Indicator remain negative and many resilient growth stocks have come under pressure. There are no rating changes tonight.
Other Stocks of Interest April 27: Follow ups to stocks featured November 22, 2017 (issue 1381) to April 125 2018 (issue 1392). 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 May 11: Mike writes the odds are now very good that the correction is over and that the market is ready to work its way back up toward—and hopefully beyond—its old highs. Buy ideas: Abercrombie & Fitch (ANF), Dexcom (DXCM), Energen (EGN), Lululemon (LULU), Nutanix (NTNX) and Shutterfly (SFLY). There are five sells this week.
Weekly Issue May 7: This week’s list is chock-full of stocks that look like they want to move higher if this rally is the real McCoy. Mike’s Top Pick is Shake Shack (SHAK), which catapulted higher on earnings last week on its heaviest volume ever. Keep positions small and use a loose leash.
Cabot Undervalued Stocks Advisor
Special Bulletin May 11: Crista writes about “takeover stocks” specifically TiVo (TIVO).
Special Bulletin May 10: Supernus Pharmaceuticals (SUPN) reports strong earnings and revenue beat and Crista moves it from the Buy Low Opportunities Portfolio to Growth Portfolio.
Weekly Update May 8: Crista writes about Who Benefits From Apple Share Repurchases? There is one rating change today: Supernus Pharmaceuticals (SUPN) moves from Buy to Strong Buy.
Special Bulletin May 7: Crista has one rating change: PBF Energy (PBF) moves from Strong Buy to Hold. Also, there earnings announcements from Delek US Holdings (DK) and Martin Marietta Materials (MLM) coming. She gives us valuation metrics for the KLX Inc. (KLXI) Energy Services Group spinoff and clarity from the Universal Electronics (UEIC) conference call.
Monthly Issue May 1: Today, D.R. Horton (DHI) joins the Growth Portfolio as a Strong Buy, and PBF Energy (PBF) moves from the Buy Low Opportunities Portfolio to the Growth & Income Portfolio. Also, Crista discusses stock market trends pertaining to energy stocks, financial stocks and takeover stocks.
Cabot Stock of the Week
Weekly Issue May 8: Tim is selling one stock today: Insulet (PODD). This week’s recommendation is Supernus Pharmaceuticals (SUPN) which focuses on the development and commercialization of products for the treatment of central nervous system diseases and psychiatric disorders. It comes from Crista Huff’s Buy-Low Opportunities portfolio.
Cabot Emerging Markets Investor
Bi-weekly Update May 10: With stocks having chopped lower for three-plus months, there’s a firm foundation for the market to build on, and Paul is very encouraged with the action of our stocks.
Overall, then, he’s taking a slightly more constructive view of the market. Tonight, he’s moving 51job (JOBS) back to Buy a Half, moving Alibaba (BABA) and GDS Holdings (GDS) back to buy, buying another half position of Petrobras (PBR) and adding an initial half position in 58.com (WUBA).
Bi-weekly Issue May 3: Today’s featured stock is 58.com (WUBA). With our Emerging Markets Timer still negative, it’s best to keep positions very small or, as we’re doing, simply add it to your Watch List.There are no rating changes.
Cabot Benjamin Graham Value Investor
Weekly Update May 10: Crista reviews several stocks originally recommended by Roy Ward. And she’s selling two stocks today: STORE Capital (STOR) and Target (TGT) and is moving Stifel (SF) from Buy to Hold.
Cabot Dividend Investor
Weekly Update May 9: Chloe has three rating changes today. She’s putting high-yield holding ONEOK (OKE) and dividend growth stock Broadridge Financial (BR) back on Buy after both stocks broke out this week. She’s also selling one third of CME Group (CME), which has weakened, especially relative to the market.
Monthly Issue April 25: Chloe is selling one third of our 3M (MMM) shares. This month’s featured buy is McGrath RentCorp (MGRC), which joins the Safe Income Tier.
Cabot’s 10 Best Marijuana Stocks
Update April 18: Tim remains long-term bullish on the marijuana sector, aiming to build a diversified portfolio of the best U.S. and Canadian stocks, and he’s looking forward to delivering your next quarterly issue of Cabot’s 10 Best Marijuana Stocks in the middle of May.
Spring Issue February 15: Tim gives updates on the 10 stocks we’ve been following and two new stocks. The market’s recent correction has brought most of them down to what look like good buying areas.
Wall Street’s Best Investments
Daily Alert May 11: iShares Core S&P Small-Cap (IJR) from Dow Theory Forecast
Daily Alert May 11: Sell: Royal Caribbean Cruises (RCL) from Dow Theory Forecast
Daily Alert May 10: Sell: Rosetta Stone (RST) from Ian Wyatt’s Million Dollar Portfolio
Daily Alert May 10: Barrick Gold Corp. (ABX) from Jack Adamo’s Insiders Plus
Daily Alert May 9: Harbor Capital Appreciation Inv (HCAIX) from The MoneyLetter
Daily Alert May 8: Loews Corporation (L) from Internet Wealth Builder
Daily Alert May 7: Texas Roadhouse, Inc. (TXRH) from Stock Picker’s Digest
Monthly Issue April 18: Our Spotlight Stock is, Cintas Corporation (CTAS), the leading uniform company in that space, with 25% of the very fragmented market. Nancy’s Feature article discusses her thoughts on this company from a personal perspective, after having visited it several years ago.
Wall Streets Best Dividend Stocks
Daily Alert May 11: Six Flags Entertainment (SIX) from Forbes Dividend Investor
Daily Alert May 11: Sell: Andeavor Logistics, L.P. (ANDX) from Forbes Dividend Investor
Daily Alert May 10: US Bancorp (USB) from Argus Weekly Staff Report
Monthly Issue May 9: The Spotlight Stock is Discover Financial Services (DFS). While best known for its credit card business, Discover offers a variety of services, from home-equity and student loans to deposit products. Nancy’s Feature explores its benefits.
Daily Alert May 9: Qualcomm Incorporated (QCOM) from High Yield Wealth
Daily Alert May 8: Saul Centers, Inc. Series D Cumulative Preferred (BFS-PD) from Jack Adamo’s Insiders Plus
Daily Alert May 7: Tapestry, Inc. (TPR) from Canaccord Genuity Research
Cabot’s 10 Best Takeover Stocks.
Special Report May 3: 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 Report Updated April 15: 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.
This Week’s Q&As
Cabot Undervalued Stocks Advisor
Question: Regarding the Marathon Petroleum (MPC) purchase of Andeavor (ANDV), I’m wondering if I should take my 73% gain or hang on for the merger with MPC. MPC is offering 1.87 shares of MPC for each share of ANDV.
Crista: Marathon Petroleum (MPC) has strong earnings growth, comparatively low price/earnings ratios, a nice dividend, and a bullish price chart. On the down side, the debt ratio is a little higher than I would prefer, and it’s going to get worse as they finance their acquisition of Andeavor (ANDV). The other consideration is that during big M&A transactions, the two stocks tend to stagnate until the acquisition takes place, and then the new, larger company’s stock tends to continue stagnating until they report one or two quarters of combined financial results. That’s when Wall Street gets a strong grasp of whether the new company is going to be as profitable as originally projected. If I owned MPC or ANDV right now, I would use a stop-loss order to protect my down side, and I would raise the stop-loss order as the stock price goes up, with the full expectation that I WILL be stopped out of the stock in the near future. At that point, I wouldn’t look at MPC again until after the deal is consummated and the new quarterly numbers are reported. I hope that helps you decide how you will proceed...and Congratulations on the big capital gain on ANDV!
Cabot Stock of the Week
Question: I just joined stock of the month and have a question. When you recommend a stock and the price jumps 10 percent the next day like SUPN do you recommend waiting for a pullback to jump in? Your report suggested jumping in if there was a favorable reaction today to the earnings report but with the stock now up 10%, I’m wondering if you’d advise waiting on a pullback.
Tim: Thanks for asking. In general, when investing in true growth stocks like SUPN, strength is good; momentum is your friend. So I would treat the current mid-day retreat from the high of 50.30 as a buying opportunity. But don’t overcommit. Start with a pilot position, and average up if the stock does what we want.
Cabot’s 10 Best Marijuana Stocks
Question: Wondering if you have seen this video on Canopy Growth and if you have other information that counters this particularly troubling report on Canopy Growth management. I am thinking you must since you have identified the TWMJF as one of the stronger marijuana stocks. Also when will your May report become available? Have a great weekend!
Tim: Thanks for asking. The May report of Cabot’s 10 Best Marijuana Stocks will be published May 24. As to TWMJF, we have long held that the best clue about a stock’s future comes from the action of the stock itself—because this reflects the wisdom of the crowd—rather than the opinion of any one analyst (or amateur analyst). Today, judging the chart of TWMJF relative to the charts of its peers and other companies in the young industry, I conclude that all is well. TWMJF is in a stable basing pattern, and given the rapid growth being enjoyed by all the growers, odds are very good that the next major move will be up.
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.