Cabot Prime Week Ending May 4, 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 Cintolo says that not much has changed with the overall market’s stance during the past couple of weeks—with the trend down, he continues to advise a cautious stance. However, he also believes the market is in an interesting spot, as it’s holding above its correction lows despite a bunch of bad news. A couple of good up days could actually turn the trend up! No predictions, but Mike relays a bunch of stocks in pole position to lead the market’s next uptrend, whenever it begins.
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 Growth Investor
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.
Special Bulletin May 1: Tonight Mike is going to sell the remaining shares of Shopify (SHOP). While the stock hasn’t broken its recent lows, today’s adverse earnings reaction and its prior long run tell us there will be better stocks to own once the market gets going on the upside. He’s also going to sell another half of Grubhub (GRUB), which got hit on earnings today.
Bi-weekly Issue April 25: Mike says to remain cautious and focus on preserving capital until the next uptrend begins. In tonight’s issue, Mike writes about the bifurcation we’re seeing among obvious, later-stage stocks (like chip stocks) and some of the newer, fresher names—including one recent IPO we’re very high on once the market finds its footing.
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 4: Mike writes that he has no changes in our advice—he’s still advising a cautious stance as the market and most stocks are having trouble sustaining much upside. Buy ideas: Coupa Software (COUP), GoDaddy (GDDY), Lululemon (LULU), Melco Resorts (MLCO), Palo Alto Networks (PANW) and Michael Kors (KORS). There are a handful of sells this week.
Weekly Issue April 30: Today’s roster includes some strong breakouts and a handful of set-ups, and Mike’s Top Pick is AMN Healthcare (AMN), which has a steadily growing business in the field of healthcare staffing.
Cabot Undervalued Stocks Advisor
Special Bulletin May 3: CIT Group (CIT) announced its intention to purchase $500 million of its common stock via a modified Dutch auction within a range of $50 to $56 per share. The offer expires on May 23. Crista’s suggestion is to ignore the tender offer, and hold CIT for future capital appreciation.
Special Bulletin May 2: Apple (AAPL) has a good earnings report and Crista is moving KLX Inc. (KLXI) from Hold to Strong Buy.
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.
Special Bulletin May 1: Boeing (BA) and KLX Inc. (KLX) have agreed that Boeing will purchase the Aerospace Solutions Group from KLX for a price of $63 per share in cash, which will go directly to KLXI shareholders. Crista will make her recommendation within a few days.
Special Bulletin April 30: Molina Healthcare (MOH) announced first-quarter results far above Wall Street estimates this morning, and significantly raised guidance for full-year 2018. Crista is changing the rating on the stock from Strong Buy to Hold.
Cabot Stock of the Week
Weekly Issue May 1: Tim is selling two stocks today: Baker Hughes, a GE Company (BHGE) and Azul (AZUL). This week’s recommendation, iQIYI (IQ) is a real wild card, a recent Chinese IPO that has been spun off from one of the big Chinese leaders. Risk-averse investors might want to give it a pass, or at least wait until there’s an established uptrend, but if you can handle the risk, buying down here might work out really well!
Cabot Emerging Markets Investor
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.
Bi-weekly Update April 26: The iShares EM Fund (EEM) has been through a bad week, pulling it decisively below its 25- and 50-day moving averages. In the portfolio today, Paul is selling Azul (AZUL) and moving the half position in 51 Job (JOBS) to a Hold rating.
Cabot Benjamin Graham Value Investor
Weekly Update May 3: Crista is selling two healthcare stocks today: Gilead Sciences (GILD), with a dreary outlook and a poor price chart, and McKesson (MCK), with an extremely modest outlook and a recent rebound.
Cabot Dividend Investor
Weekly Update May 2: The past week also brought a slew of earnings reports, and some big reactions, so Chloe has three rating changes today. She’s moving CME Group (CME) to Hold, and selling Cummins (CMI) and the rest of 3M (MMM).
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 4: STMicroelectronics NV (STM) from Schaeffer’s Investment Research
Daily Alert May 3: GW Pharmaceuticals (GWPH) from Shortex Market Letter
Daily Alert May 3: Conn’s Inc. (CONN) from Shortex Market Letter
Daily Alert May 2: Visa Inc. (V) from The MoneyLetter
Daily Alert May 1: Tomra Systems ASA (TMRAY) from Global Investing
Daily Alert April 30: Nutanix, Inc. (NTNX) from Cabot Growth Investor
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 4: McGrath RentCorp (MGRC) from Cabot Dividend Investor
Daily Alert May 3: IBERIABANK Corporation (IBKC) from Hughes Investment Management
Daily Alert May 2: Pardee Resources Company (PDER) from Positive Patterns
Daily Alert May 1: Fifth Third Bancorp (FITBI) from Forbes/Lehmann Income Securities Investor
Daily Alert April 30: Realty Income Corporation (O) from Forbes Dividend Investor
Monthly Issue April 11: The Spotlight Stock is Southern Company (SO), now the highest-yielding stock in the Dow Jones Utility Average, after dropping 17% from its November 2017 high. Nancy’s Feature explores low beta stocks—companies whose shares are less volatile than the overall market. And this month’s Spotlight Stock, fits that criteria, boasting a beta of 0.3.
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 Emerging Markets Investor
Question: Please ignore my earlier email about updates. I joined the other day and just got around to reading the welcome information which is well written and very informative. It answered my update question. I do have another question however. As a new member do you recommend still buying the stocks that were initially recommended in December of January? For example, ATHM was recommended in January at $78 and is now $94. I assume from the newletter that you still recommend getting into it? PBR was recommended in January at $13 and is now $14. Is it okay to buy in at these new levels or would you recommend waiting for new recommendations?
Paul: Welcome aboard! You’ve joined at an interesting time for both the broad market in general and emerging market stocks in particular. The market’s swings are creating a lot of tension without making decisive moves up or down.
If I have a stock rated Buy, it means that I think it is more likely than not to continue its advance. In this kind of market, stocks can go sideways for a long time, and if we have a profit, we will often give them a loose leash.
But this is also a market without a strong upward trend behind it, and momentum is an important part of our investing strategy. So, while you can buy the stocks rated Buy, I would advise keeping initial investments smaller than usual. A full position in our portfolio should represent 10% of the capital you have allocated to emerging markets, and a half position should be 5%. It makes sense in a squishy market to come in on the smaller side.
Question: Can you give me the ‘17 actual and ‘18 estimated earnings for JP. Stock seems to be stabilizing and I still hold it. Thanks.
Paul: Jupai Holdings reported two dollars per share in earnings in 2017. The company doesn’t have any analyst coverage, so there isn’t a consensus number for this year. JP has been trading in a tightening wedge since it completed its one big run from 7.4 in August to 29 in November. The trading range has had support at 18 and resistance at 21 since the middle of March. I think it’s fine to hold the stock for now, as it seems to be completely ignoring the fluctuations of the broad market. But be sure you know when the next quarterly report is coming and watch the reaction closely. This period of tight trading will make a great base if the news is well received, but the converse is also true.
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.