Cabot Prime Week Ending May 21, 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 market’s show of support this week, which he considers a nice first step after a dreadful past two weeks. He’s not changing his stance yet, but reviews just what he’s looking for (some upside power through resistance levels in indexes and leading stocks) as a sign to become more constructive. Stocks mentioned include RBLX, ALGN, MXIM, UPS, W, SNAP, CRWD, NVDA, UPST and CURLF.
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Advisory Services
Cabot Growth Investor
Bi-weekly Issue May 20: It’s been a downer of a three months for growth stocks, so we want to start with a positive note, partially in response to some worried questions we’ve started to get as the sellers really dug in their heels last week: Longer term, we remain as optimistic as ever that this bull market (yes, even in growth stocks) has a long way to run. Part of that is our still-bullish Cabot Trend Lines (bullish for more than a year now), but a lot of it comes from a study we write about later in this issue.
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%.
Cabot Top Ten Trader
Movers & Shakers May 21: After a brutal couple of weeks for growth (especially) and the broad market (a bit near the end), this week finally saw a bit of encouraging action. No, the major indexes haven’t lit up the sky (the S&P 500 is flat and the Nasdaq is up around 1% on the week), but we have seen some support appear—the market fell Monday and Tuesday and gapped down sharply on Wednesday, but most stuff has bounced nicely since then. Mike has two buy recommendations: Snap On (SNA) and United Therapeutics (UTHR).
Weekly Issue May 17: Last week, the selling that had been concentrated in growth names spread to the rest of the market through Wednesday, though a late-week bounce helped a bit. Still, not much has changed with the overall environment—growth stocks remain in the dumps, and while bounces are possible (many fell 20% to 30% in just the past three weeks), there’s a lot of damage to repair. Mike’s Top Pick is International Game Technology (IGT), which is benefiting from both the reopening of casinos and also the growth wave in sports betting.
Cabot Undervalued Stocks Advisor
Weekly Update May 19: Investors have started to see a cloud or two in an otherwise sunny stock market sky. We don’t focus much on short-term market moves, but we have noticed that the weather is shifting, at least slightly. Since mid-February, the equal-weighted S&P 500, as measured by the Invesco S&P500 Equal Weight ETF (RSP), has surged about 11%, leaving the regular S&P 500’s 6% return in the rearview mirror. A spread this wide is unusual. Sloppy performance by heavily-weighted mega-cap tech stocks is holding back the broad index, but is having little effect on the equal-weighted index. 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 17: Tim’s featured stock is HubSpot (HUBS), which was born in Cambridge, Massachusetts in 2005. The company is a cloud-based provider of inbound marketing tools for website content management, blogging, email campaigns, SEO, social media monitoring, CRM and more. It currently has a market cap of $23 billion. Tim has four portfolio changes.
Cabot Explorer
Bi-weekly Update May 20: Markets are a bit jittery despite strong earnings and expected strength as America opens up its post-pandemic economy. China is already at a 5% growth path while India, Japan, and other important economies struggle to get the pandemic under control. It has been extraordinary to see Larry Summers pushing back on President Biden’s stimulus and infrastructure plan as well as the Fed’s expansionary policy. Since his opinions carry weight, this will be a real fight. Although Fed officials have said the economy is still in recovery mode and requires stimulus from the central bank, that prospect has led tech stocks and other riskier assets to wobble in recent weeks.
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.
Cabot Dividend Investor
Weekly Update May 19: The market’s relentless march ever higher is being interrupted. What’s going on? The market sold off the first three days of last week and then recovered in the last two sessions. But it’s back to its old tricks again this week, as the indexes sold down the first two days and are lower so far today. It certainly isn’t a big deal yet. The S&P 500 is down just a little over 3% from the all-time high. But there is concern. Tom has two portfolio changes: Broadcom Inc. (AVGO) and U.S. Bancorp (USB) move from Hold to Buy.
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.
Cabot Marijuana Investor
Weekly Update May 19: The five “real” plant-touching stocks that look healthy here are Columbia Care (CCHWF), Cresco Labs (CRLBF), Green Thumb (GTBIF), Jushi (JUSHF) and TerrAscend (TRSSF). TerrAscend looks strongest of all, as it is above both its 25- and 50-day moving averages. Going forward, if more stocks fall below that low, Tim may recommend more selling. But right now, he is standing pat, with the portfolio 29% in cash, and optimistic that the stage is being set for the next advance.
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
Monthly Issue May 19: If you want to strike up conversation at your next social gathering just utter one of two sentences. “Hey, have you guys heard about lumber prices? Holy cow!” Or, “Man, I think inflation is here to stay. Prices on everything are going up and there’s no end in sight.” Tyler’s Top Pick Fox Factory Holdings (FOXF), makes suspension and other parts, including side-by-side vehicles, all-terrain vehicles, snowmobiles, motorcycles, and other specialty vehicles.
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.
Cabot Profit Booster
May Expiration May 20: The expiration of our May covered calls is this Friday, and several of our positions are trading below the strike price of our covered call options (CLF, LEVI, HOG), though it’s a close call, and a totally fine situation. If these stocks close tomorrow below the strike, the calls will expire worthless, and we will keep 100% of the premium sold. In that case you won’t need to act, and early next week we will most likely sell those stock positions and move on.
Weekly Issue May 18: Despite the market coming under pressure in the last several weeks, the Cabot Profit Booster portfolio continues to perform spectacularly! And heading into expiration this Friday, our five May covered calls are all in terrific shape, and potentially on track to their full profits. As is always the case, Jacob will update you where we stand with these positions on Friday morning. The “secret” to our success continues to be buying the best stocks, and keeping the portfolio as diversified as possible. Jacob’s new stock recommendation is International Game Technology (IGT).
Cabot Income Advisor
Weekly Update May 19: The market is still in an uptrend and not far from the highs. But things are changing. The market had a fairly steep selloff over the first three days of last week but then recovered over the last two days. This week it’s been wobbly. The issues are supply problems and inflation. While the economy is delivering on the booming growth, supplies can’t keep up. Businesses can’t find workers to hire. Housing supply is at a four-decade low. Industry-wide chip shortages are hurting technology and automobile sales.
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 21: We review earnings from the two companies reporting this past week, including Macy’s (M) and Vodafone (VOD) and provide some numbers from last week’s Toshiba (TOSYY) report. The next earnings report is Duluth Holdings (DLTH), which reports on June 3. 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 | Buy | ||||
| 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 | Sold | |||||
| DLR | Buy | |||||
| DOW | Hold | |||||
| DVN | Buy | |||||
| EPD | Buy | |||||
| FIVE | Hold | Hold | ||||
| FND | Hold | |||||
| FSR | Hold | |||||
| GM | Hold | Hold | ||||
| GOLD | Buy | Buy | ||||
| GRWG | See Advisory | |||||
| GTBIF | See Advisory | |||||
| HTHT | Hold | |||||
| HUBS | Buy | |||||
| 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 | |||||
| PSFE | Sold | |||||
| QCOM | Hold | |||||
| SE | Buy 1/2 | Buy | ||||
| SLB | Buy | |||||
| SLQT | Sold | Sell | ||||
| SONO | Sell | |||||
| SPCE | Hold A Half | Sell | ||||
| 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 | |||||
| UBER | Sold | |||||
| USB | Buy | |||||
| VLO | Hold | |||||
| VZ | Hold | |||||
| XEL | Buy 2/3 |