Cabot Prime Pro Week Ending December 22, 2017
Cabot Weekly Review
In this week’s stock market video, Mike Cintolo discusses his split market view—short-term, there are some risks, though long-term, the unusual strength recently portends gains as 2018 arrives. His advice: Stick with the new leadership that has lifted off within the past couple of months and continues to act excellently (including one sector that just got going this week). And he finishes up with his usual batch of stocks that look like they want to head higher.
Cabot’s 10 Favorite Low Priced Stocks for 2018
Annual Report December 14: The report was sent to you via email on December 14. The goal with these stocks is generally to capture a shorter-term rally during the next two to eight weeks. Historically, most of these types of stocks enjoy something of a pop higher, and there are usually one or two that continue to trend for a few months (assuming the market remains in good shape).
Cabot’s 10 Best Marijuana Stocks
Special Update December 18: (emailed to Prime Pro members) In the month since Tim’s November report was published, a lot has happened—most of it good. The big news today is that Innovative Industrial Properties (IIPR) has announced the acquisition of a commercial property in Arizona that will be leased by The Pharm, one of Arizona’s largest wholesalers of medical-grade cannabis.
Cabot Growth Investor
Other Stocks of Interest December 22: Follow ups to stocks featured July 19, 2017 (issue 1372) to December 20, 2017 (issue 1383). 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 December 20: Today, the system tells us to remain bullish, and on the buy side, look for fresher leading stocks. In the Model Portfolio, Mike is placing Universal Display (OLED) back on Buy.
Bi-weekly Update December 13: Mike is buying a 10% position in E*Trade (ETFC), a leading Bull Market stock that’s pulled back a bit after a decisive breakout. That will leave our cash position near 18%.
Cabot Top Ten Trader
Movers & Shakers Weekly Update December 22: Mike says that shorter-term, things look fine, but there’s no question that (a) the major indexes and many stocks are extended to the upside, and (b) investor sentiment is getting giddy. Buy ideas: Beacon Roofing (BECN), First Solar (FSLR), Match.com (MTCH), Nutanix (NTNX) and Old Dominion (ODFL). Sell ideas: Align Technology (ALGN ) and Pure Storage (PSTG).
Weekly Issue December 18: Intermediate- to longer-term, the majority of evidence is clearly positive, so you should remain bullish. Tonight’s Top Ten has a bunch of excellent charts, and from a variety of industries, too. It was tough to narrow down to one Top Pick, but our choice is Urban Outfitters (URBN), another turnaround retailer that’s under very strong accumulation.
Cabot Options Trader and Cabot Options Trader Pro
Note that the current week’s Weekly Update, earnings updates, position updates and stocks on watch are posted on the website in the Market Update section, which is deleted each week.
Position Updates December 22: Since the market will be closed on Monday, Jacob will not be sending his weekly market update. In this update he has written his thoughts on our current open positions.
Position Update December 21: Etsy (ETSY) is making a new high today, trading higher by 4% at 21.55. Our March 20 calls, originally purchased for $1.64, are now worth $2.75, or a profit of 67%. Jacob is going to continue to hold the position looking for more upside.
Trade Alert December 21: Buy-Write: Buy Canada Goose (GOOS) Stock and Sell the January 28 Calls (exp. 1/19/2018) for a net of $26.90 or less.
Trade Alert December 20: Sell Existing Position: Sell your Yelp (YELP) April 37.5 Calls for $0.30 or more.
Options Education December 19: Bitcoin and crypto-related securities have been the talk of the trading world for weeks as the value of these new digital currencies have skyrocketed. And with the value of the coins’ rise, there’s been massive moves in the share prices of companies that are involved.
Earnings Update December 19: Micron (MU) will report earnings today after the close. With the stock trading at 44, the options market is pricing in a move of $3.5, 40.5 to the downside and 47.5 to the upside.
Weekly Update December 18: As long as the tax bill continues to progress as most anticipate, Jacob expects trading will slow down as the calendar gets closer to the Christmas holiday. Traders are likely to begin traveling ahead of the holiday mid to late this week, and the slate of economic data to be released this week—companies releasing earnings and Federal Reserve speeches—is largely barren of market-moving catalysts.
Cabot Undervalued Stocks Advisor
Special Bulletin December 21: Today’s News: Nucor (NUE) moves from Buy to Hold (traders sell!); Delek US Holdings (DK) moves from Strong Buy to Buy (traders buy!); CIT Group (CIT) joins the Growth Portfolio as a Strong Buy; and other portfolio notes.
Weekly Update December 19: Today’s portfolio changes: Baker Hughes (BHGE) joins the Buy Low Opportunities Portfolio as a Strong Buy, Southwest Airlines (LUV) moves from Hold to Buy and Vertex Pharmaceuticals (VRTX) moves from Hold to Strong Buy.
Monthly Issue December 5: Today’s featured stocks include two new additions to the portfolios, Alphabet (GOOGL) and The Interpublic Group of Companies (IPG), and Alexion Pharmaceuticals (ALXN), which seems ready for a huge price rebound.
Cabot Stock of the Week
Weekly Issue December 19: Today’s recommendation is Insulet (PODD), a medical device company whose one product—an insulin delivery system for diabetics—is growing market share rapidly. No ratings changes today.
Cabot Emerging Markets Investor
Bi-weekly Update December 21: The iShares EM Fund (EEM) has popped back above its 50-day line, which is a plus, but the Emerging Markets Timer remains basically neutral, having made no net progress over the past two months. Thus, we continue to take things on a stock-by-stock basis. Paul is making one rating change: moving China Lodging (HTHT) back to Buy a Half.
Bi-weekly Issue December 14: After an outstanding year, the current slowdown in emerging market stocks is giving us a little cautionary message. The Cabot Emerging Markets Timer is sitting firmly on the fence and some of our stocks are taking breathers. It’s not anything like a time to over-react, but we’re pulling in our horns in an appropriate way. Paul’s new stock is 58.com (WUBA), which does a brilliant job of balancing a national presence with thorough local focus.
Cabot Benjamin Graham Value Investor
Weekly Update December 20: Azmath writes about the 13% gain in Discovery Communication (DISCA) and is recommending the sale of FedEx (FDX) as it hit its fair value of $248 per share.
Monthly Issue December 14: Since the last issue, five stocks have declined and 10 gained more than 10%. Many are now at or near fair value, and eight are rated Sell or Sell a Portion. Also in this issue, Azmath recommend two new stocks, Hanesbrands (HBI) and LCI Industries (LCI) and profiles a new small-cap stock, Malibu Boats (MBUU), that’s on his watch list.
Cabot Small-Cap Confidential
Weekly Update December 22: Tyler writes that most of the positions are doing just fine. The average gain over the past week was 3.3%, led by BioTelemetry (BEAT) and Evebridge (EVBG). There are no rating changes.
Monthly Issue December 1: Public since just last September, this month’s stock is Apptio (APTI), a $895 million market cap software company that is pioneering Technology Business Management (TBM) solutions. Ratings changes: BioTelemetry (BEAT) to Buy and Datawatch (DWCH) to Hold.
Cabot Dividend Investor
Monthly Issue December 20: Chloe adds American Express (AXP) to the Dividend Growth Tier. She also reviews the buys and sells of 2017, and provides updates on all our holdings.
Weekly Update December 13: Given the improvement in the overall market, Chloe is putting ONEOK (OKE) back on Buy today for high-yield investors. And if you’re looking to add a stock with great short-term momentum, CME Group (CME) is looking indestructible today; the stock just broke out to a new all-time high for the first time since before the financial crisis. Other good buys in the portfolio include Pembina Pipeline (PBA) for high income, General Motors (GM), BB&T Corp (BBT), Broadridge Financial (BR) and Wynn Resorts (WYNN) for growth, and 3M (MMM) and United Health (UNH) for long-term growth and safe income.
Wall Street’s Best Investments
Top Pick Daily Alert December 22: Cardinal Health (CAH) from Sure Dividend
Top Pick Daily Alert December 21: Autohome (ATHM) from Cabot Emerging Markets Investor
Top Pick Daily Alert December 21: GDS Holdings (GDS) from Cabot Emerging Markets Investor
Monthly Issue December 20: Bullish sentiment remains high, both for investors and advisors. This month’s Spotlight Stock, Texas Pacific Land Trust (TPL), is a two-pronged recommendation, as the company is benefiting from owning and selling off its land holdings, which also happen to be in one of the most profitable oil regions in the country. As Nancy explains in her Feature article, this oil basin is nowhere near depletion, so the profits should continue to roll in for many years.
Daily Alert December 20: LGI Homes, Inc. (LGIH) from Validea Hot List Newsletter
Daily Alert December 19: Five Below (FIVE) from Cabot Growth Investor
Daily Alert December 19: Partial Sale of Exact Sciences (EXAS) from Cabot Growth Investor
Daily Alert December 18: Cerner (CERN) from PAD System Report
Wall Streets Best Dividend Stocks
Daily Alert December 22: Oppenheimer Holdings (OPY) from Hughes Investment Management
Daily Alert December 21: Allstate Corp. Preferred (ALL-PB) from Forbes/Lehmann Income Securities Investor
Daily Alert December 20: The ClearBridge Energy MLP Total Return Fund Inc. (CTR) from Brinker Fixed Income Advisor
Daily Alert December 19: Energy Transfer Partners (ETP) from Sure Dividend
Daily Alert December 18: Innovative Industrial Properties (IIPR) from The Wealth Advisory
Monthly Issue December 13: Nancy’s Market Views contributors remain bullish, as do the Advisor and Investor Surveys she follows, and contributors continue to find investing ideas with which to stuff your stocking—in just about every sector.
This Week’s Q&As
Cabot Emerging Markets Investor
Question: Good morning what benchmark for Chinese stocks do you consider to be a better proxy for the Chinese market-PGJ or MCHI?
Paul: For purposes of Cabot Emerging Markets Investor, I prefer PGJ, which is a direct measure of the performance of Chinese ADRs. And since that’s the China universe I pick from, it makes sense. MCHI is a measure of China’s domestic stock market performance, which is useful to look at, but less volatile than PGJ. You can see a pale reflection of PGJ in MCHI, but MCHI has had a much smoother time of it since June, dipping just to its 25-day moving average until its big correction that started on November 22. And MCHI is already back on top of its 25- and 50-day moving averages. The performance of our portfolio’s holding is much better reflected in PGJ.
Question: Today in your posting you recommend autohome and state that it is from 12/24/17 by Paul Goodwin. I subscribe to his emerging markets letter and there was no mention of autohome in the 12/14 issue and in fact there has been no mention of it for a long time. Please explain. Thank you.
Paul: I understand your skepticism about my recommendation of ATHM as a top pick for 2018. I’ll explain. Every year, I’m asked for my top picks for the following year, and every year I complain and hem and haw. But it’s a thing that people enjoy (and as 2018 draws to a close, some people will be keeping score), so eventually I give in. I’m not in favor of this kind of stock picking because it has nothing to do with how I actually construct a portfolio or make recommendations for stocks to buy now. My actual choices are made on the basis of short- and medium-term trends, and from my point of view, a year is a long time. So I have to look for a stock that has good numbers and a good story, but is underperforming in its chart. Stocks like that are ones that usually go on my watch list, not into my portfolio. I hope Autohome does well in 2018, and if it does, I will be happy to add it to the Cabot Emerging Markets Investor’s portfolio (and take credit for my farsightedness when the yearly picking contest is graded). But don’t buy it now.
Cabot Options Trader
Question: With interest rates forecasted for continuing increases in 2018 I’ve liked the Big Banks but they all made their move and are now flat and down on volume. Are there any bank or ETF options I should be looking at?
Jacob: The common bank related ETFs are XLF for big banks, and KRE for regional banks. Give me a timeline and expected move, and I can come up with ideas.
Guide to Cabot Prime
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