Cabot Prime Week Ending May 5, 2017
Cabot Weekly Review
In this week’s video review, Mike Cintolo discusses his overall bullish view on the market, especially when it comes to leading growth stocks, which have been racing up the charts. That said, he is watching a couple of items closely, including the fact that most indexes haven’t hit new highs yet—an upside confirmation will probably be the sign to get fully invested. Mike also discusses a sector that could be ready to turn up and a batch of leading stocks that are set up nicely.
Cabot Growth Investor
Bi-weekly Update May 3: Most of the market’s evidence remains bullish, so we remain optimistic that higher prices are ahead; the Model Portfolio is more than 80% invested in nine strong stocks. That said, some key indexes are again testing their 50-day lines and we’re still in the thick of earnings season, so we’ll sit tight tonight and keep a close eye on the market and the earnings reactions of individual stocks.
Other Stocks of Interest April 28: Follow ups to stocks featured November 22, 2016 (issue 1356) to April 26, 2017 (issue 1366). 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.
Bi-weekly Issue April 26: The market’s rally in recent days has turned our Cabot Tides positive, joining our Cabot Trend Lines and Two-Second Indicator. Because of that, we did some buying in a Special Bulletin last evening, which leaves us with around 19% in cash. Elsewhere in tonight’s issue, Mike writes about some confirming signs of the recent strength and the potential for the retail sector to provide some new leadership in the weeks ahead.
Cabot Top Ten Trader
Movers & Shakers Weekly Update May 5: We remain mostly bullish on the market because the evidence remains mostly bullish. All major indexes are above their 50-day lines, the Nasdaq has shot ahead to new highs and many Top Ten stocks are acting well—strong stocks are generally reacting well to earnings and following through on the upside. That said, there are a couple of things we’d like to see before we get fully bullish.
Weekly Issue May 1: Mike is nudging the Market Monitor up to level 8. This week’s Top Ten is chock-full of strong stocks with great stories, including a few earnings winners. Our Top Pick is PayPaL (PYPL), a big-cap firm that we’ve flirted with a couple of times in the past; it’s now finally lifted out of a long post-IPO base.
Cabot Undervalued Stocks Advisor
Special Bulletin May 5: Tivo (TIVO) reported non-GAAP $0.40 EPS vs. the consensus estimate of $0.27. News agencies reported all of the following incorrect EPS numbers: (0.29), $0.22, $0.29, $0.30 and $0.45. Crista give the full story.
Special Bulletin May 4: Updates on four of our stocks. American International Group (AIG), Quanta Services (PWR) and TiVo (TIVO) reported first quarter results and Boise Cascade (BCC) offers a great buying opportunity. All are Strong Buys.
Special Bulletin May 3: Earnings Updates on Boise Cascade (BCC), Martin Marietta Materials (MLM), Archer Daniels Midland (ADM) and BP plc (BP), plus updates on Adobe Systems (ADBE) and Vulcan Materials (VMC), which have shown strong price action.
Monthly Issue May 2: Today’s featured stocks include ExxonMobil (XOM), Legg Mason (LM), and a new addition to the Growth Portfolio, Cavium (CAVM). Crista also compares the featured stocks and their peers in the integrated oil, asset management and semiconductor industries.
Cabot Stock of the Week
Weekly Issue May 2: Today’s selection is Aqua Metals (AQMS), a little-known small-cap stock with a revolutionary process that may change one of the world’s most noxious industrial processes. Tim thinks the stock is at a good entry point here.
Cabot Emerging Markets Investor
Bi-weekly Issue May 4: The Cabot Emerging Markets Timer continues to offer a green light, so we’re forging ahead as our stocks enter the heart of earnings season for emerging ADRs. We also welcome back Tencent Holdings (TCEHY), a mega-cap old friend into the portfolio.
Cabot Benjamin Graham Value Investor
Weekly Update May 5: This Weekly Update includes summaries for 11 Cabot Benjamin Graham Value Investor companies that reported quarterly financial results or other noteworthy news during the past week.
Monthly Value Issue May 4: This month’s Cabot Value Model contains a diversified list of buy recommendations, with a bias toward high quality companies in the Technology and Financial sectors. Roy adds Alliance Data Systems (ADS) to the model and moves Schlumberger (SLB) out of the model.
Monthly Enterprising Issue April 13: This month, Roy introduces Tech Data (TECD), which holds great promise. After reporting stagnant results during the past several years, the company recently acquired assets that will boost sales and earnings this year and next.
Cabot Dividend Investor
Special Bulletin May 4: Automatic Data Processing (ADP) reported strong first-quarter EPS but slightly weaker-than-expected revenue yesterday, and the stock has declined over 5%.
Weekly Update May 3: Chloe presents earnings updates and expectations on all our portfolio companies. She has no rating changes this week, and most of our holdings are acting quite well.
Monthly IssueApril 26: Chloe adds large-cap industrial stock Cummins (CMI) to the Dividend Growth Tier, reviews her sales from the past week, and explains how to write covered calls.
Wall Street’s Best Investments
Daily Alert May 5: Cimarex Energy (XEC) from Stock Pickers Digest
Daily Alert May 4: Forum Energy Technologies (FET) from Capitalist Times
Daily Alert May 3: Ryanair Holdings (RYAAY) from DRIP Investor
Daily Alert May 2: John Wiley & Sons (JWA) from Positive Patterns
Daily Alert May 1: Primerica (PRI) from Upside
Monthly Issue April 12: Our contributors found ideas with great potential in just about every sector this month, and our Spotlight Stock is Hologic (HOLX), a company that has taken the lead in women’s healthcare, particularly in the diagnostic, surgical and medical-imaging products sectors.
Wall Streets Best Dividend Stocks
Daily Alert May 5: NorthWest Healthcare Properties REIT (NWH-UN.TO) from Canadian Edge
Daily Alert May 4: iShares JPMorgan USD Emerging Markets Bond ETF (EMB) from Internet Wealth Builder
Daily Alert May 3: U.S. Bancorp, Fixed/Floating Depositary Shares Non-Cumulative Perpetual Preferred Stock, A (USB-A) from Jack Adamo’s Insiders Plus
Daily Alert May 2: Sanofi (SNY) from Argus Weekly Staff Report
Daily Alert May 1: Raytheon (RTN) from The Investment Letter
Daily Alert May 1: Sell Bar Harbor Bankshares (BHB) from The Investment Letter
Monthly Issue April 5: Contributors remain positive on a variety of industries, beginning with Spotlight Stock Verizon (VZ), a giant in the telecom sector that is poised to greatly benefit from cutting-edge tech developments like the mass-market adoption of the Internet of Things and the coming 5G rollout.
This Week’s Q&As
Cabot Growth Investor
Question: I’ve noticed the number of stocks hitting new lows on the NYSE has escalated in recent days, mainly due to the drop in energy stocks. Is this a sign to cut and run?
Mike: The number of new lows (we call it our Two-Second Indicator, because it takes two seconds to check every day) is one of our key indicators, but there are a couple of things to consider. First and foremost, we usually need to see many days in a row of greater than 40 readings with the indexes near their peaks to get worried. That could happen next week if it keeps up, but we’re not there yet.
Second, the Two-Second Indicator, while important, is secondary to the trend of the major indexes and the action of leading stocks. Really, then, it’s not as much about using one single indicator to drastically change your stance but looking at the evidence as a whole.
Right now, the major trend is up and leading stocks look good, but the intermediate-term trend is basically sideways and the broad market (Two-Second Indicator) is iffy. Probably a good reason not to floor the accelerator at this point, and if new lows don’t improve, to hold a bit more cash.
Cabot Undervalued Stocks Advisor
Question: What are the most relevant earnings to consider: GAAP, non-GAAP, adjusted earnings or net earnings?
Crista: The financial industry, within its analyst reports and consensus earnings estimates, commonly uses non-GAAP adjusted earnings numbers when making projections and citing results. Therefore, those are the numbers that I use as well.
Wall Street’s Best Investments
Question: I’ve owned the fund recommended in your April 20 Daily Alert, FPA Cresent Fund (FPACX), for years in my personal trust, but I recently tried buying it in my IRA but it’s closed to new investors. I wish it would accept new investors—I should have bought it in my IRA years ago, but didn’t.
Nancy: Our contributor, Chartist Mutual Fund/ETF Letter, didn’t mention that the fund was closed to new investment, so I did some research. I did see a notation on Morningstar’s site, but nowhere else. I reviewed FPA’s website and did not see anywhere on their site that the fund was closed to new investment.
Note: Our subscriber tried again to buy shares, and here is the message he received: “This fund is closed to new investors. Only accounts which currently have a position in this fund may place a buy order at this time. " He then asked if—since he owned the fund in another account outside his IRA—he could be considered an existing shareholder, and the answer was no. So, I guess when they say it is closed to new investments, they mean just that!