Cabot Prime Pro Week Ending December 8, 2017
Cabot Weekly Review
In this week’s stock market video, Mike Cintolo discusses the market’s rebound from the vicious Nasdaq and growth stock selling in recent days. His overall advice, though, hasn’t changed much—he’s still leaning bullish, but stresses that it’s important to take things on a stock-by-stock basis. Mike reviews some popular leading stocks that look iffy in the short- and intermediate-term, and also presents his usual batch of strong, resilient performers, including a couple of new leaders in the retail and financial fields.
Cabot Marijuana Investor
November Issue (emailed to Prime Pro members on November 16) If you bought a basket of Tim’s 10 Best Marijuana Stocks when the report was originally published in August, you’re off to a great start. Since that report was written, the average of the 10 stocks is up 38%, with the best up 157% and the worst down just 3%. Even better, if you bought only the eight stocks that he actually recommended (he suggested waiting on two until their charts improved), your average gain was 45%—and you had no losses!
Cabot Growth Investor
Other Stocks of Interest December 8: Follow ups to stocks featured July 5, 2017 (issue 1371) to December 6, 2017 (issue 1382). 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 6: We’ve pared back during the past few days in the Model Portfolio (we now have 28% in cash), but we’re not sticking our heads in the sand and are giving our profitable stocks room to consolidate. In tonight’s issue, Mike dives into his game plan for our remaining stocks, and also does some sector analysis, including two areas that are launching new leaders.
Special Bulletin December 4: Tonight, we’re selling ServiceNow (NOW), which broke down today, and book partial profits in Exact Sciences (EXAS) by selling one-third of our shares. We’re also going to place Universal Display (OLED) on Hold, as that stock has been correcting sharply, though it’s still in an overall uptrend.
Cabot Top Ten Trader
Movers & Shakers Weekly Update December 8: We continue to lean bullish and think it’s best to give your resilient, profitable stocks a chance from here. On the buy side, we don’t advise going hog wild, as a selling spree like we saw recently often has another leg to it; in other words, it would be somewhat unusual for the market to just kite higher from here without any further reverberations. Even so, we’re fine sharpshooting a couple of buys, either on powerful rebounds following a sharp shakeout or, if we get a dip in the market, retreats in some of the new leaders that have decisively lifted off in recent days.
Weekly Issue December 4: This week’s Top Ten Trader is heavy on cyclical, retail and building stocks. Our Top Pick is Warrior Met Coal (HCC), a big turnaround opportunity in a beaten-down group.
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.
Trade Alert December 8: Buy Etsy (ETSY) March 20 Call (exp. 3/16/2018) for $1.60 or less.
Position Updates December 8: Next Friday is December expiration, and we have three positions that will be in play next week: Freeport McMoRan (FCX), Fiat Chrysler (FCAU) and Michaels (MIK).
Stock on Watch December 7: For most of the past several years, Twitter (TWTR) stock has struggled, as the company seemed to have bungled its somewhat revolutionary product, but option activity has been very bullish as traders play a potential turnaround or buyout.
Market Update December 6: Interestingly, traders this morning are starting to get a bit more interested in leading technology stocks via big put sales—big put selling is always something Jacob looks for when gauging how far a selloff could go.
Stocks on Watch December 4: This afternoon, call buying continues to be brisk in some of the stocks that have been hit hard, including Take-Two Interactive (TTWO) and Visa (V). Both these stocks are at the top of Jacob’s watch list should the Nasdaq stabilize.
Position Updates December 4: Today, Union Pacific (UNP) is exploding higher, up $6 on the day. Our spread, originally bought for $5.70, can be sold today for $12, or a profit of 110%. Our calls, originally bought for $7.65, can be sold today for $20, or a profit of 161%. Also, PayPal (PYPL) and Micron (MU) are getting crushed today. However, with PYPL down 8% on the day, and MU down 6%, call buyers are stepping in.
Weekly Update December 4: The same issues that moved the market last week, will almost certainly be the driver of price action this week: tax reform progress, rumors about Michael Flynn and President Trump’s administration and the extreme rotation in and out of hot and cold sectors.
Daily Watch List: Order Flow Reading is a strategy Jacob uses to follow the biggest hedge funds or traders into their trades. These are recent large order flows that Jacob has spotted, plus two covered call ideas.
Cabot Undervalued Stocks Advisor
Special Bulletin December 8: Crista describers share price action in Southwest Airlines (LUV) and Alexion Pharmaceuticals (ALXN).
Special Bulletin December 6: KLX (KLXI) reported third-quarter earnings beat, and the stock is up near 10% this morning. Also, steel stocks are up today, and Commercial Metals (CMC) and Nucor (NUE) are both rated 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.
Special Bulletin December 4: Today’s news: Legg Mason (LM), Morgan Stanley (MS) and Southwest Airlines (LUV) each move from Strong Buy to Hold; buy KLX (KLXI) and Quanta Services (PWR) today.
Cabot Stock of the Week
Weekly Issue December 5: A major divergence has crept into the market; the leading indexes look strong, while growth stocks—especially technology stocks—are being sold. As a result, there are only two stocks in our portfolio hitting a new high today, while there are many that are candidates for sale. Tim is recommending selling three, Hubspot (HUBS), Signet Jewelers (SIG) and VMWare (VMW), and downgrading two, Baidu (BIDU) and PayPal (PYPL) to Hold. Today’s recommended stock is WestRock (WRK), an old-world company in a prosaic business, and its prospects are bright as it reaps improved efficiencies from its recent big merger.
Cabot Emerging Markets Investor
Bi-weekly Update December 7: The iShares EM Fund (EEM) has dipped decisively below its 25- and 50-day moving averages, which pushes the Cabot Emerging Markets Timer into negative territory. We have one change tonight: We’re moving Weibo (WB) from Buy to Hold.
Bi-weekly Issue November 30: Paul digs into the reasons behind this painful correction, finding an aggravating Chinese government regulatory shift that can account for a large part. Despite the turmoil, the Cabot Emerging Market Timer is still positive, and Paul has a fresh, young Chinese tech stock, GDS Holding (GDS), that has enormous potential as the development of the Chinese cloud continues.
Special Bulletin November 29: A wave of selling took a bite out of growth stocks today, including every stock in the Cabot China and Emerging Market Investor’s portfolio. Paul is taking two actions in response to today’s weakness: moving our half positions in Sociedad Quimica y Minera (SQM) and Jupai (JP) to Sell.
Cabot Benjamin Graham Value Investor
Weekly Update December 7: Nike (NKE) has reached its fair value and is now rated Sell; three other stocks, Toll Brothers (TOL), Big Lots (BIG) and Rowe Price (TROW) are rated Sell a Portion.
Monthly Issue November 9: Azmath presents his outlook on the investment climate and the economy, adds two new stocks to the portfolio, Discovery Communications (DISCA) and Signet Jewelers (SIG), and gives updates on our existing stocks.
Cabot Small-Cap Confidential
Weekly Update December 8: We’ve taken a few hits over the past couple of weeks. But we’re still outperforming our benchmark with our open positions. No new ratings 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
Weekly Update December 6: It remains to be seen whether the rotation from tech into older economy names is a temporary tax-bill-related phenomenon or a longer-term cycle. But historically, a day like last Wednesday, when the Nasdaq closes more than 1% lower and the Dow closes at least 0.4% higher, is followed by at least a month of Dow outperformance. No ratings changes.
Monthly Issue November 29: Chloe adds UnitedHealth (UNH) to the Safe Income Tier. She also reviews why you might want to own preferred stock, and provides updates on all our holdings.
Wall Street’s Best Investments
Daily Alert December 8: Chesapeake Energy (CHK) from Sound Advice
Daily Alert December 7: Align Technology (ALGN) from The Chartist
Daily Alert December 6: U.S. Natural Gas ETF (UNG) and Velocity Shares 3X Long Nat Gas ETN (UGAZ) from The National Investor
Daily Alert December 5: Tower International (TOWR) from Upside
Daily Alert December 5: Sell Taylor Morrison Home (TMHC) from Upside
Daily Alert December 5: Sell Charter Financial (CHFN 19) from Upside
Daily Alert December 4: Fidelity National Information Services (FIS) from Pivotal Point Trader
Monthly Issue November 15: Most of Nancy’s contributors remain bullish for now, and are still finding pockets of opportunities for our subscribers. This month’s Spotlight Stock is Cognizant Technology Solutions (CTSH), a company that is steeped in a variety of technology channels, including some very disruptive technologies that Nancy discusses further in her feature.
Wall Streets Best Dividend Stocks
Daily Alert December 8: Black Stone Minerals LP (BSM) from Income Millionaire
Daily Alert December 7: Public Storage (PSA) from IQ Trends
Daily Alert December 6: Easterly Government Properties (DEA) from The Intelligent REIT Investor
Daily Alert December 5: Annaly Capital Management 7.50% Series-D Cumulative Redeemable Preferred Stock (NLY-D) from Jack Adamo’s Insiders Plus
Daily Alert December 5: Sell Deutsche Bank Contingent Capital Trust II, 6.55% Trust Preferred Securities (DXB) from Jack Adamo’s Insiders Plus
Daily Alert December 4: JPMorgan Alerian MLP ETN (AMJ) from Bob Carlson’s Retirement Watch
Monthly Issue November 8: Nancy’s contributors remain bullish, but cautious. The Spotlight Stock is Blackstone Group (BX), a Master Limited Partnership that’s primarily an asset manager, with holdings that are increasingly energy investments. The company is growing at double-digit rates and currently yields 5.35%.
This Week’s Q&As
Cabot Growth Investor and Cabot Top Ten Trader
Question: Do you ever buy a stock below its 50-day or 200-day moving average?
Mike: As a trend follower, the answer is rarely. There will be the occasional time when, after a major market decline, there could be a stock that looks buyable that’s below its 200-day line, though above its 50-day line. But, really, the classic setup is where the stock is above both of those lines—the best winners over time usually emerge from a big post-IPO or other long consolidation and show some relative strength before they get going, giving you proof big investors are active on the buy side.
Cabot Undervalued Stocks Advisor
Question: I never did sell Goldman Sachs (GS) back when you advised. It’s hovered for months now and lately blasted back up to ~250. Do you see it having any more upward momentum or should I take this as a selling opportunity? Also, I did sell half my American International Group (AIG) when you advised and it has been going nowhere ever since. Maybe it’s time to capitulate and move on to better prospects.
Crista: Even though the banking sector stands to tremendously benefit from tax reform, rising interest rates and deregulation, I personally sold my Goldman shares. That’s because current earnings estimates project the company’s earnings per share (EPS) to grow just 6.3% in 2018. I expect earnings estimates to rise, but I make decisions based on today’s numbers. That said, a rising tide tends to lift all ships. If you hold your GS, there’s a decent chance that it could keep rising now.
As for American International Group (AIG), earnings estimates for 2018 have been declining throughout 2017, although the company is still solidly profitable. I suggest switching into a stock with strong earnings growth, so as to increase the likelihood that the share price rises in conjunction with the profits.
Cabot Emerging Markets Investor
Question: Interesting times. Do you have any thoughts on GDS Holdings (GDS), and emerging markets in general? Can’t help but wondering if GDS is heading to low 16’s.
Paul: I’m holding for now. Our loss is still relatively low and Chinese stocks are doing better than EM stocks in general. Let’s see what the market has to say tomorrow as I’m writing the weekly update.
Guide to Cabot Prime
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