Cabot Prime Week Ending May 14, 2021

Cabot Prime Week Ending May 14, 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 talks about the still-soggy environment, with growth stocks remaining in corrections while more of the broad market has come under some pressure. Big picture, Mike very much expects another sustained run (or two) down the road, but for now he’s cautious and suggests going slow and raising stops even in the resilient cyclical areas. Stock mentioned include KBR, YETI, HUBS, BOOT, MTDR, VALE, SUM and MLM.

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Cabot Growth Investor

Bi-weekly Update May 13: Overall, the levee has broken when it comes to growth stocks—while many had set up nicely ahead of earnings, this has been one of the worst earnings seasons (in terms of stock reactions) that we can remember, with even solid beat-and-raise reports bringing major gaps lower. We’ve been north of 45% in cash for months, and we’ve continued to ditch stocks in the portfolio and are up to around 70% on the sideline.

Special Bulletin May 12: The market remains in the dumps, and while some beaten-down growth names have found support, many are still getting hit on earnings and we’re even seeing selling spread to the broad market. Today’s bulletin is in regards to SelectQuote (SLQT), whose good-not-great quarterly report is causing a big break today—we’re forced to bail here and make sure a bad situation doesn’t get worse. We’re also placing Floor & Décor (FND) and Five Below (FIVE) on Hold as the selling spreads. Our cash position is now a large 70%.

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.

Cabot Top Ten Trader

Movers & Shakers May 14: This week’s main theme was follow-on selling from last week’s mess, with most growth stocks remaining under pressure and (at least during the first three days of the week) the selling spreading to other nooks and crannies of the market. To be fair, we have seen a decent bounce in the broad market during the past couple of days, which has been enough to keep the intermediate-term trend of the major indexes and many cyclical names from cracking. Mike has four buy recommendations: KBR (KBR), Scientific Games (SGMS), Summit Materials (SUM) and Vale (VALE).

Weekly Issue May 10: While there are still a handful of growth stocks in decent shape, the spate of setups we saw during the past few weeks has been replaced by a ton of breakdowns, including many big winners from last year slicing below longer-term support. Mike’s Top Pick is Wesco (WCC), a dominant electronic products distributor, which just gapped out of a base on earnings last week.

Cabot Undervalued Stocks Advisor

Weekly Update May 12: We’ve seen signs of it everywhere. Retail prices for homes, apartments, food, gasoline, cars and everyday services are higher than they were a year or two ago and are going higher. Upstream from these consumer-facing prices, input prices for raw materials, semiconductors, crops, wages, energy and transportation are going up. Inflation is no longer around the corner – it is here. Bruce has no portfolio changes.

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.

Cabot Stock of the Week

Weekly Issue May 10: With the Dow hitting another new high but the growth-focused Nasdaq Composite still unable to get above its February peak, we remain in a bull market that is challenging for growth investors; in fact, many recent great earnings reports have been met with selling instead of buying. Tim’s featured stock Schlumberger (SLB), is one of the granddaddies of the oil service sector, with operations in dozens of countries around the globe (the vast majority of its business is outside the U.S. at this point) that are just starting to pick up steam. Tim has five portfolio changes.

Cabot Explorer

Bi-weekly Issue May 13: Consumer prices surged in April by the most in any 12-month period since 2008. The surge came against the backdrop of a loose monetary policy and constrained production, and rising demand as the Covid-19 pandemic eases. Carl’s new recommendation Cabot Corporation (CBT), operates 45 manufacturing facilities in 21 countries around the world with strong growth in emerging markets. Carl has two portfolio changes.

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.

Cabot Dividend Investor

Monthly Issue May 12: Despite the past couple of days, the market indexes are still close to all-time highs. Stocks have soared at an amazing pace over the last year and the past several months. A promising environment of a booming economy complemented by trillions in stimulus still lies ahead. But how much of that wonderful news is already priced in? Tom’s featured stock ONEOK Inc. (OKE), is a large U.S. midstream energy company specializing in natural gas. Tom has two portfolio changes.

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.

Cabot Marijuana Investor

Weekly Update May 12: Recent days have seen substantial selling pressures in the broad market, with growth stocks being particularly hard hit. But the good news is that stocks in the marijuana sector, which had previously corrected 50% from their February peak to their bottom in late March or early April, are not seeing the same selling pressures. In fact, the average stock in the sector is trading close to both its 25- and 50-day moving averages, which is decent post-correction action. And the best stocks are developing patterns of higher lows dating back to the late-March bottom.

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 14: This may just go down on record as one of the worst earnings seasons ever for growth stocks. Two weeks ago, things were “fine.” Since May began, not. Inflation is the bogeyman spooking investors and his shadow has crept out from below desks and up the walls of those with growth-heavy portfolios. The sell orders picked up steam early this week, and while the last two days have been far better, the divergent action between growth stocks (cloud, MedTech, Internet, etc.) and other areas of the market is crystal clear.

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 11: The Cabot Profit Booster portfolio continues to be in the right stocks, even as sector rotation intensifies and countless stocks have come under intense selling pressure. This is a great situation, and sparked a great question from a CPB subscriber. Jacob’s new stock recommendation is Funko (FNKO).

Cabot Income Advisor

Weekly Update May 12: It looks like the relentless bull market is finally running into trouble. The market indexes are down a lot for the third straight day. But it’s not because the economy and corporate earnings aren’t delivering on the anticipated boom. They are. In fact, the economy is again exceeding expectations, even the lofty ones. S&P 500 earnings delivered whopping 50% growth in the first quarter, doubling expectations. GDP growth was 6.4% in the first quarter, and it’s just getting warmed up.

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 14: Today’s note includes earnings updates, ratings changes and the podcast. We review earnings from the two companies reporting this past week, including Viatris (VTRS) and Toshiba (TOSYY). This past Wednesday, we moved Mohawk Industries (MHK) from a Buy to a Sell. We are making no other changes to our ratings or price targets in today’s note. Click here to listen to the podcast.

Special Bulletin May 12: We are moving Mohawk Industries (MHK) from Buy to Sell. The company’s turnaround from its modest difficulties yet overly-depressed stock appears complete, and the shares have reached our 220 price target, although they have modestly retreated today. From here, this cyclical company would likely need several things to go right: enduring recovery in the residential market, stronger rebound in the commercial market, no more input cost inflation, no/minimal capacity increases within the flooring/ceramic industries, and no operational, legal or other problems over the next few quarters, at least. Some of these will no doubt go right, but needing all of them to go right is a bit too much to ask. Based on mid-day prices, the investment produced a 54% profit.

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		Hold
AVVIY					Buy
BIP				Buy		Buy 2/3
BMY					Strong Buy
BSCL						Hold
CBT	Buy
CCHWF			See Advisory	Buy
CGC			See Advisory
CRLBF			See Advisory
CSCO					Buy
CURLF			See Advisory
CVX						Hold
DFLYF	Sell
DLR						Buy
DOW					Hold
DVN		Buy
EPD						Buy
FIVE		Hold		Buy
FND		Hold
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
MRK					Buy
MRVL	Buy
NEE				Buy		Buy
NET	Hold 1/2
NGLOY	Hold
NVCR				Buy
NVDA				Buy
O				Buy		Buy
OKE						Buy
PGX						Hold 1/2
PINS		Sold		Sell
PSFE	Sell
QCOM						Hold
SE	Buy 1/2			Buy
SLB				Buy
SLQT		Sell		Hold
SONO				Hold
SPCE	Hold A Half			Take Partial Profits
SSO		Buy
ST					Buy
STAG						Hold
TAP				Hold	Buy
TCNNF			See Advisory	Hold
TPB			See Advisory
TRSSF			See Advisory
TSLA				Hold
TSM	Buy 1/2
TSN					Hold
TWLO		Sold
UBER		Sold		Sell
USB						Buy
VLO						Hold
VZ						Hold
XEL						Buy 2/3