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Cabot Prime Pro Week Ending February 19, 2021

Cabot Prime Pro Week Ending February 19, 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, Tyler Laundon discusses the move in the 10-year Treasury and possible impacts on the market. He runs through charts of a few cyclical stocks to illustrate areas of strength there then digs into three growth stocks that have reported recently and which could outperform the market in the months ahead. Stocks discussed: LUV, FCX, DE, AMAT, EVBG, LYFT, TXG.

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Advisory Services

Cabot Growth Investor

Bi-weekly Update February 18: The market took another hit this morning, but like yesterday, the major indexes have found support as the day has progressed—just after 3 pm EST, the Dow was down 70 points while the Nasdaq was off 66 points. Part of the reason for the recent selling is supposedly due to inflation fears and higher interest rates—indeed, the 10-year note reached north of 1.30%, which is low historically, but up 30 basis points (0.3%) since late January and 50 basis points (0.5%) from the start of December. Mike is restoring the Buy rating on Five Below (FIVE).

Bi-weekly Issue February 11: Two weeks ago, the major indexes and some individual stocks began to flash abnormal action, a couple of key leaders were threatening to break down and some late-in-the-advance type of action (heavily shorted stocks going nuts) was occurring. Importantly, though, the primary evidence—the big-picture price, volume and trend action from the market and leading stocks—never cracked. Thus, we trimmed a bit, but thankfully didn’t let go of much stock. And the action since then—really, it’s hard to have written a better script. Not only have the major indexes rebounded beautifully, but leading stocks have soared (many have exploded back to new highs), and even some of the aforementioned secondary evidence has wowed. Mike has two portfolio changes: Pinterest (PINS) and Twilio (TWLO) to Buy.

Cabot Top Ten Trader

Movers & Shakers February 19: After some solid up weeks, the major indexes are down a bit so far this week, with the bigger blows seen among the broad market, as small- and mid-cap stocks are down 2% or so coming into today, while the bigger-cap indexes are down a bit less. Interestingly, the market saw some distribution on Tuesday and then had two straight good-sized gap downs and intraday slides on Wednesday and Thursday—but each day saw volume fade and the indexes fight back nicely by day’s end. More importantly, leading stocks also held firm, though most took on some water. Mike has three buy recommendations: 10x Genomics (TXG), One Medical (or 1Life) (ONEM) and Shopify (SHOP).

Weekly Issue February 16: With the major indices in record territory and the leading growth stocks showing strength, it’s hard to be anything less than bullish right now. Even at these elevated levels, the market has provided us with a few attractive entry points recently. But with earnings season well underway and sentiment still elevated, the potential for near-term volatility has increased. Mike’s Top Pick is CarParts.com (PRTS), which recently had a high-volume breakout from a huge basing pattern.

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.

Cabot Options Trader Basic & Pro Trade Alert February 19: Sell Half of Existing Position: Sell Half of your Financials ETF (XLF) June 31 Call for $2.50 or more.

Cabot Options Trader Basic & Pro Trade Alert February 18: Buy the Uber (UBER) June 60 Calls (exp. 6/18) for $7.50 or less.

Cabot Options Trader Basic & Pro Position Update February 17: Likely aided by the inflation story Freeport-McMoRan (FCX) shares appear to be breaking out to the upside as natural resource stocks continue to track higher across the board. That’s great news for our FCX May calls, and are now at a potential gain of 146%. Similar to FCX, our XLF position is in great shape as the financial sector is likely to benefit from a rising interest rate environment. Moving on to our lone position that will expire this week, our ETFMG Alternative Harvest ETF (MJ) covered call. With the ETF trading at 25.5 we are likely to have our February covered call position assigned on Friday for a profit of $95 per contract, or a 5.57% gain.

Cabot Options Trader Basic & Pro Mental Stops February 16: We have a bunch of positions with HUGE profits. That is certainly not a bad thing. That being said, Jacob does want to tighten his mental stops on these positions in order to protect us from giving back significant gains if the market were to lose its recent momentum.

Cabot Options Trader Basic Weekly Update February 16: The Chicago Board of Options Exchange Volatility Index (VIX) see-sawed up and down last week before the “fear index” ended the week down 4% at 19.97. It’s worth noting this is the lowest VIX closing level since back before the pandemic-induced market selloff started in February 2020 … almost exactly one year ago.

Cabot Options Trader Pro Weekly Update February 16: Long positions: FCX, GM, MSFT, SNAP, SONO, XLF, MJ, TSM, PINS

Cabot Undervalued Stocks Advisor

Weekly Update February 17: With the stock market regularly surging to record highs, it may seem like an unusual time to focus on valuation. After all, many stocks are remarkably expensive on traditional measures, and even somewhat lofty on non-traditional measures. But valuation still matters, especially if the market loses its current luster (assuming that is even possible)! Bruce’s new buy Sensata (ST), is a $3 billion (revenues) producer of an exceptionally broad range (47,000 unique products) of sensors used by automotive, industrial, heavy vehicle and aerospace customers.

Monthly Issue February 3: Investors and commentators seemed a bit troubled by the emerging power of the Reddit crowd, the trade-at-home “renegades” who drive highly-shorted stocks like GameStop (GME), AMC Entertainment (AMC), Koss Corporation (KOSS) and others to prices well beyond the orbit of their troubled underlying fundamentals. Yet, other than a few bruised hedge fund manager egos (and balance sheets), the effect on the broader stock market appears to be fleeting. Even last week’s slippage in the S&P 500 could easily be attributed to temporary and technical knock-on effects. Historically, bubbles don’t pop early. They gradually inflate for years, then tend to go parabolic, prior to bursting. Our current bubble could easily continue for many more years. Investors sense that the easy money will continue to flow, earnings will remain robust and few impediments will crop up. Bruce has no portfolio changes today.

Cabot Stock of the Week

Weekly Issue February 16: The market’s main trend remains up, and thus Tim continues to recommend that you be heavily invested. This week’s recommendation is a small company with no earnings, minimal revenues and a lot of competition. Thus it’s rather speculative. But the story is interesting, and the company’s main product has the potential to be a ground-breaker—though it’s also possible it will be a flop. Tim’s featured stock ElectraMeccanica Vehicles (SOLO), a Canadian company, has been quietly laying the groundwork to bring to the U.S. west coast a single-seat, three-wheel electric car dubbed Solo. Tim has five portfolio changes: Arcosa (ACA) to Hold, Coca-Cola (KO) to Buy, Columbia Sportswear (COLM) to Sell, Molson Coors Beverage (TAP) to Hold and Xcel Energy (XEL) to Sell.

Cabot Global Stocks Explorer

Bi-weekly Issue February 18: Congress is intent on pumping significant cash and liquidity into the economy and an accommodative Federal Reserve is signaling to markets continued low interest rates in an attempt to boost a pandemic economy. Meanwhile, some investors are bracing for the possibility that all this will lead to a surge in the cruelest tax of all – inflation. Carl’s new recommendation Anglo American (NGLOY), is the largest producer of platinum with about 40% of the world’s output. It also engages in exploring, mining, and processing various other metals and minerals worldwide. Carl has one portfolio change: NeoGenomics (NEO) Moves from Hold to Sell.

Bi-weekly Update February 11: While the market continues to move forward, The “Buffett Indicator,” which takes the broadest Wilshire 5000 Index and divides it by the annual U.S. GDP, is now at a record high. In doing the math, the Buffett Indicator stands at about 194%. This figure is well above the 159% seen just before the dot-com bubble. So it’s not just the big tech stocks that look a bit ahead of themselves. Over the past year, the combined revenue of the five biggest U.S. tech companies grew by 20% to reach $1.1 trillion. Their aggregate profit rose by 24%, and their combined market cap soared by half to $8 trillion. Incredible.

Cabot Small-Cap Confidential

Special Bulletin February 19: Everbridge (EVBG)reported Q4 results yesterday that exceeded expectations on both the top and bottom lines and have sent shares soaring over 20% to a new all-time high this morning. Part of the reason is that the stock has been consolidating forever and is one of the few high-growth software stocks that has not traded at a crazy valuation. Today’s move may be the beginning of a reset to a sustained higher valuation (hopefully). Hold.

Weekly Update February 18: Fiverr (FVRR) reported early this morning and hosts a conference call at 8:30 am ET. The headline results from Q4 are that revenue grew 89.3% to $55.9 million (beating by $1.8 million) while adjusted EPS of $0.12 beat by $0.02. Fiscal 2021 guidance of $277 million to $284 million is well ahead of $260 million consensus). Q2 Holdings (QTWO) reported Q4 results yesterday and hosted a conference call at 8:30 am ET today. The quarter exceeded expectations. Revenue of $109.7 million was up 26% and beat by $2.8 million while adjusted EPS of $0.02 missed by $0.03.

Monthly Issue February 4: Tyler’s new recommendation, Profound Medical (PROF) is an Ontario, Canada-based company that has developed a platform of customizable, incision-free therapeutic systems for the ablation of diseased tissue. The company has a market cap of roughly $500 million. Management believes it is the only company offering therapies of its kind, which merge three powerful technologies: real-time Magnetic Resonance Imaging (MRI), thermal ultrasound and closed-loop temperature feedback control. The company began generating revenue in 2017. In 2019 sales rose by 112% to $4.2 million. Through the first three quarters of 2020 revenue is up 115% to $4.3 million. In Q3 2020 revenue was up 338% to $2.2 million. That follows Q2 revenue growth of 100% (to $1 million) and Q1 revenue growth of 5% (to $1.1 million).

Cabot Dividend Investor

Weekly Update February 17: The market continues to move higher, and for good reasons. It seems relentless. The S&P 500 is now up 20% since the beginning of November and 80% from the low of last March. And it doesn’t seem to want to stop moving still higher. Energy stocks in particular, including positions in Valero Energy (VLO), Enterprise Product Partners (EPD) and Chevron (CVX), still sell at cheap valuations and should be less vulnerable in a market pullback. These stocks have also been on the move again recently amidst better-than-expected economic and earnings news. Click here to listen to the podcast. Tom has no portfolio changes.

Monthly Issue February 10: The bull market keeps raging. All three major indexes just made still new all-time highs. The S&P 500 is up about 20% since the end of October and 78% since the low of last March. How long can this keep going? The short answer is that it will likely continue higher over the course of the year, albeit at a much slower rate. Of course, a pullback or correction would be entirely normal and healthy after such a steep run higher. And it wouldn’t be surprising in the coming weeks and months. But the year looks solid. In this issue, Tom highlights Chevron Corporation (CVX), which is one of the world’s largest fossil fuel pushers. The reason for the purchase is simple. Right now, it is a play on the vaccine and full recovery, which is a good bet. The stock has momentum and a long way to go to get to pre-pandemic prices. CVX has significant upside in just recovering from this pandemic.

Cabot Marijuana Investor

Weekly Update February 10: So, today the portfolio will sell one-half of its positions in these stocks: Cresco Labs (CRLBF), Curaleaf (CURLF), Green Thumb (GTBIF), GrowGeneration (GRWG), TerrAscend (TRSSF). And the portfolio will sell one-third of its positions in these stocks: Canopy Growth (CGC), Innovative Industrial Properties (IIPR), Trulieve (TCNNF), Turning Point Brands (TPB) and Village Farms (VFF). After these sales, the portfolio will be roughly 42% in cash.

Monthly Issue January 27: The long-term strategy is to develop core holdings of the companies that will lead this fast-growing industry five and 10 years from now—but as I explained in a recent update, there’s no certainty who those leaders will be. Thus, our short-term strategy is to listen to the stocks, owning those with the strongest charts and the best fundamentals, and then switching incrementally to stocks that grow stronger or to cash as various stocks roll over and underperform. Tim recommends staying heavily invested but keeping an eye on the exit. It’s tempting to look at this morning’s selloff and declare that the uptrend is over and it’s time to sell—but just as one swallow doesn’t make a summer, one down day doesn’t make a bear market. Read the issue for updates on each position. Tim has one portfolio change: Village Farms (VFF) to Buy.

Cabot Early Opportunities

Monthly Issue February 17: This has been a phenomenal run for those of us that focus on early-stage companies. The IPO market is as strong as it has been at any point in six years. Even if all the companies that have been coming public aren’t great buys right now, collectively they are recharging the pipeline of potential opportunities. Tyler’s Top Pick is JFrog (FROG), is the hands-down leader in providing artifact repositories. It has been doing so since 2009 and the company’s core product, Artifactory, leads in a specialized market. That said, while the DevOps movement is gaining ground, many organizations still don’t fully understand how artifact repositories can help them. Over time they will, and in the meantime, JFrog’s growth should expand with clients that have already seen the light.

Cabot Profit Booster

Update February 19: The expiration of our February covered calls is today, and we have two positions (KSS and SNAP) that are deep-in-the-money and will almost certainly be called away for maximum gains (great scenario) and another (AA) that is just in-the-money and likely to be called, but it will come down to the close (good scenario).

Weekly Issue February 17: The stock market added to its gains last week up for a second straight week with the S&P 500 up 1.2% while the Nasdaq jumped 1.7%. Of note, February expiration is upon us this week. And all three of our February positions (Alcoa, Kohl’s and Snap) are in great shape, and likely to expire for full profits. Jacob’s new stock recommendation is Johnson Controls International plc (JCI).

Cabot Micro-Cap Insider

Weekly Update February 17: The market continues to perform incredibly well with the S&P 500 at an all-time high. And there continues to be signs of froth. The latest data point that Rich has found is the average SPAC is trading at a 26.4% premium to its cash value. Nonetheless, it’s important to remember that markets climb a wall of worry. And there are always reasons to be bearish. Further, we are not investing in “the market.” We are investing in individual securities that are undervalued. This bottom-up approach should help us make money no matter the market direction.

Special Bulletin February 11: Zedge (ZDGE) has appreciated a lot faster than I had anticipated. It is up over 100% since we profiled the name last month and is trading above my fair value estimate of $9.80. The price strength was driven by a recent press release highlighting 158% subscriptions growth as well as a broker upgrade. The subscription growth is indeed excellent, but it’s not anything new (Zedge reported that growth last quarter). Rich is moving Zedge to a Sell and locking in 114% profit in a month.

Monthly Issue February 10: Depending on who you follow to get your financial news, you may be aware that the U.S. stock market is quite expensive and there are several warning signs that prospective returns could be weak. For example, the S&P 500 Index recently hit an all-time high Price to Sales multiple at 2.9x, as shown in the issue. Rich’s new recommendation IDT Corporation (IDT), is a mini-conglomerate run by Howard Jonas, one of the best value creators in the world. The stock is trading at a big discount to its sum-of-the-parts valuation, but the imminent spin-off of one or more of its high growth technology subsidiaries will unlock that value.

Cabot Income Advisor

Special Bulletin February 19: Sell CVX April 1 $95.50 call at $4.30 or better.

Weekly Update February 17: It’s another day and another new all-time high for the market. The big story on this latest leg higher is earnings. They’ve been terrific so far. Analysts had been expecting S&P 500 earnings to decline by -11% on average versus the same quarter last year, as pandemic restrictions persist. But so far, earnings have averaged a year-over-year increase of 2%. Corporate profits are rebounding much faster than expected. In last week’s issue, Tom wrote calls on recently high-flying Valero Energy (VLO). Be on the lookout for “Trade Alerts” in your email as there will likely be timely opportunities in the weeks ahead.

Monthly Issue January 27: The S&P 500 is making yet another new all-time high. The index has risen 72% since last March and over 17% just since the beginning of October. That’s amazing performance in a short amount of time. While Tom is positive on the market for the rest of this year, he is increasingly cautious in the near term. The income strategy has been keeping us honest in an expensive market. Several portfolio positions have been called away in recent weeks as the market values have exceeded the strike prices at expiration. Recently called stocks include AbbVie (ABBV), Altria (MO), Enterprise Product Partners (EPD), and U.S. Bancorp (USB). Tom has one new featured stock Digital Realty Trust (DLR) and multiple portfolio changes.

Cabot Turnaround Letter

Weekly Update February 19: All ratings and price targets remain unchanged, except we are moving Trinity Industries (TRN) from Buy to Sell. Earlier this week, we raised ViacomCBS (VIAC)’s price target to 65 and moved the shares from Buy to Hold, with the suggestion that investors may want to sell half of their position. Baker Hughes (BKR) is trading above our 23 price target and we will be reviewing it shortly. Click here to listen to the podcast.

Special Bulletin February 17: We are raising our price target on ViacomCBS (VIAC) from 54 to 65 and moving to Hold.

Monthly Issue January 27: While momentum-driven concept stocks make the headlines, stocks of companies that are firmly grounded in cash flows and tangible assets, like energy pipelines, remain out of favor. There may be an opportunity emerging in this group from their contrarian status and a favorable secular change. Bruce’s has one buy recommendation: Viatris, Inc. (VTRS) and one sell recommendation: DuPont (DD).

Ask the Experts

Cabot Profit Booster

Question: What do you think about some UVXY calls to protect for the downside?

Jacob: I never get involved with the VIX products as they tend to be too complicated and have weird quirks. If I’m looking to hedge or get short exposure, I always stick with SPY or QQQ puts. They give you downside exposure, plus the puts gain in value if the VIX rises. Essentially you win two ways.

Quarterly Cabot Analyst Meeting

The recording of the Cabot Prime Members Meeting with the Analysts from January 20, 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 Pro 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.

StockCabot Small-Cap ConfidentialCabot Global Stocks ExplorerCabot Growth InvestorCabot Marijuana InvestorCabot Stock of the WeekCabot Undervalued Stocks AdvisorCabot Dividend Investor
ABBVHold 2/3
ACAHold
ACCDHold
APT.AXHold 1/2
ARNABuy
AVGOBuy
AVLRHold
BFTBuy 1/2
BIPBuyBuy 2/3
BLFSBuy
BMYStrong Buy
BSCLBuy 1/2
CDLXHold
CGCSee Advisory
COLMSellSold
CRLBFSee Advisory
CRNCBuy
CRWDBuy Another HalfBuy
CSCOBuy
CURLFSee Advisory
CVXBuy
DLRBuy
DOWHold
EPDBuy
ESTCBuy
EVBGBuy
FIVEBuy
FSRBuy
FVRRHold 1/2
GMHoldHold
GRWGSee Advisory
GSHDHold
GTBIFSee Advisory
HALOBuy Another 1/2
HTHTHold
IIPRSee AdvisoryHold 2/3
IBMBuy
INSPHold
JBLUBuy
JUSHFSee AdvisoryHold 2/3
KOBuyBuy
LGIQBuy 1/2
LLYHold 2/3
MOBuy
MRKBuy
NEEHoldHold 1/2
NEOSell
NETHold 1/2
NGLOYBuy
NUANHold
NVCRBuyBuy Another 1/2Buy
OBuy
PGNYBuy
PGXHold 1/2
PINSBuyHold
PRCHHold
PROFBuy
PSNLBuy
QCOMSoldHold 2/3
QTWOHold
RGENBuy
ROKUHold 3/4
SEHold 1/2Hold
SOLOBuy 1/2Buy
SPCEHold A HalfTake Partial Profits
SPOTHold
SPTHold
SSOBuy
STBuy
STAGHold 1/2
TAPHoldBuy
TCNNFSee AdvisoryHold
TMXSold
TPBSee Advisory
TRSSFSee Advisory
TSLAHold
TSMBuy 1/2
TSNBuy
TWLOBuy
UBERBuyBuy
USBBuyBuy
VIACHold
VLOBuy
VZHold
XELSellBuy 2/3