Cabot Prime Pro Week Ending February 9, 2018
Cabot Quarterly Market Report
4Q 2017 Report January 18: (emailed to Prime Pro members) A very strong year for the stock market closed with a flourish, as the S&P 500 surged another 6% in the fourth quarter to reach new all-time highs entering 2018.
Cabot Weekly Review
In this week’s stock market video, Mike Cintolo takes a deep dive into the market’s recent plunge, relaying the facts of what’s happened and revealing what the odds favor for the short-, intermediate- and longer-term (as well as some tips on the best way to handle your stocks). Surprisingly, Mike isn’t having trouble filling his Watch List with resilient growth stocks and recent earnings winners, and he rifles through a bunch that have a shot at being leaders of the next upturn.
Cabot Wealth Summit Registration
Register here for the August 15-17, 2018 Summit at special pricing for Cabot Prime Pro members.
Cabot’s 10 Best Marijuana Stocks
Cabot’s 10 Best Marijuana Stocks: The latest issue and update is now located on the Library page at our website along with your other Cabot publications.
Cabot Growth Investor
Special Bulletin February 8: Mike is going to boost his cash position by selling one-third of his shares in both Facebook (FB) and ProShares Ultra S&P 500 Fund (SSO), and by selling the entire position in E*Trade (ETFC), which is now showing us a tiny loss.
Bi-Weekly Update February 7: There are no rating changes in tonight’s update. Mike has two stocks that are rated Buy, Shopify (SHOP) and Splunk (SPLK). Seven stocks are rated Hold.
Special Bulletin February 5: After today’s market selloff, Mike is going to Sell Diamondback Energy. Only two stocks are now rated Buy, Shopify and Splunk.
Special Bulletin February 5: After Friday’s selloff, Mike is going to sell one-third each of his positions in Five Below and PayPal, both of which have taken hits lately. He’s also placing Diamondback Energy on Hold as the stock has pulled back to his buy point.
Other Stocks of Interest February 2: Follow ups to stocks featured August 30, 2017 (issue 1375) to January 31, 2018 (issue 1386). 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 January 31: Mike adds Splunk (SPLK) to the Model Portfolio, leaving us with 10% on the sideline, and writes about biotech stocks, which appear to be getting going (including a couple of our favorites) and discusses some other ideas he’s keeping a close eye on.
Cabot Top Ten Trader
Movers & Shakers February 9: In today’s update. Mike has a long list of stocks that have tripped their stops this week. There’s no question the intermediate-term trend is pointed down and the broad market is unhealthy. In the very short-term (days) the market is probably getting close to a nice bounce; who knows, it may be starting today. And given the severity of the decline so far, the bounce could be pretty powerful.
Weekly Issue February 5: The good news is that (believe it or not) there are many stocks holding up well, including a bunch of recent earnings winners. This week’s Top Ten contains many of those winners, with some providing good-looking entry points during this dip. Mike’s Top Pick is Pure Storage (PSTG).
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.
Stock on Watch February 8: A stock that is on Jacob’s watch list is Freeport McMoRan (FCX). While a recent trade isn’t outright bullish, it does give Jacob some confidence that there will be buyers should the market slide.
Earnings February 8: Nvidia (NVDA) is reporting earnings after the close today.
Position Update February 7: Jacob answers a few questions about his trade on Knight-Swift (KNX).
Earnings February 7: Tesla (TSLA) is reporting earnings after the close today.
Trade Alert February 7: Cabot Options Trader Pro—Buy the Knight-Swift Transportation (KNX) August 50/60 Bull Call Spreads (exp. 8/17) for $3.30 or less.
Trade Alert February 7: Cabot Options Trader—Buy the Knight-Swift Transportation (KNX) August 50 Calls (exp. 8/17) for $4.20 or less.
Trade Alert February 6: Cabot Options Trader Pro—Sell Existing Position: Sell your Union Pacific (UNP) January 120/145 Bull Call Spreads for $9.50 or more.
Trade Alert February 6: Cabot Options Trader—Sell Existing Position: Sell your Union Pacific (UNP) January 120 Calls for $16 or more.
Trade Alert February 6: Cabot Options Trader Pro—Iron Condor: Sell the S&P 500 ETF (SPY) September 220/215 Bull Put Spreads and sell 295/300 Bear Call Spreads for $0.90 or more.
Market Update February 6: Jacob writes that S&P futures last night, and this morning, have been extremely volatile. At the lows last night, he saw futures indicating a fall of more than 3%. As of 9 a.m. Eastern time, the S&P is indicated lower by 1.35%. His advice today is: Get your buy list ready and keep the size of any new buys small. He anticipates adding a position or two today. Though again, that will be only if the conditions are right.
Stock on Watch February 5: A stock that is on the top of Jacob’s watch list is Intel (INTC). If the market can stabilize, he is likely to add INTC to the portfolio.
Weekly Market Update February 5: Traders this week will likely continue to be laser focused on the bond market’s every move. However, there isn’t much economic data this week which could potentially spark a move.
Cabot Undervalued Stocks Advisor
Special Bulletin February 9: No rating changes today, but Crista has commentary on the U.S. stock market, and management changes at GameStop (GME).
Special Bulletin February 8: Crista has one rating change: KLX Inc. (KLXI) moves from Hold to Strong Buy. Alexion Pharmaceuticals (ALXN) and Chipotle (CMG) reported quarterly results; and XL Group (XL) is rising due to takeover rumors.
Monthly Issue February 6: Today’s portfolio changes: Blackstone Group (BX) moves from Buy to Strong Buy, Delek US Holdings (DK) joins the Buy Low Opportunities Portfolio as a Strong Buy, Martin Marietta Materials (MLM) moves from Hold to Buy and Schlumberger (SLB) moves from Hold to Buy.
Cabot Stock of the Week
Weekly Issue February 6: Tim’s recommendation is Knight Swift Transportation (KNX), it’s a special situation—a transport stock that, because of a recent merger (and a strong economy) should see earnings boom. Rating changes: Alphabet (GOOGL) Buy to Hold, Broadridge Financial (BR) Buy to Hold, Discovery Comm. (DISCA) Buy to Hold, LCI Industries (LCII) Buy to Sell,
Pembina Pipeline (PBA) Buy to Sell, Planet Fitness (PLNT) Buy to Hold, Quanta Services (PWR) Buy to Sell and WestRock Company (WRK) Buy to Hold.
Cabot Emerging Markets Investor
Bi-weekly Issue February 8: Paul has many rating changes in today’s issue: 58.com (WUBA) Buy a Half to Sold, Baidu (BIDU) Hold a Half to Sold, Grupo Supervielle (SUPV) Hold a Half to Sell, Melco Resorts (MLCO) Buy to Hold, Tencent Holdings (TCEHY) Buy to Sell Half, Weibo (WB) Buy to Hold and YY Inc. (YY) Buy to Sell Half.
Special Bulletin February 5: Because of today’s wave of selling, Paul is selling two of our half positions—Baidu (BIDU) and 58.com (WUBA).
Bi-weekly Update February 1: The iShares EM Fund (EEM) is still well on top of its moving averages, which keeps the Emerging Markets Timer firmly positive. Paul has no changes to the portfolio.
Cabot Benjamin Graham Value Investor
Monthly Issue February 8: Azmath reviews recent market volatility, introduces a new Buy Nautilus (NLS) and moves Alphabet (GOOG) to Hold.
Weekly Update February 1: Updates on Thor Industries (THO), LCI Industries (LCII), Target (TGT) Starbucks (SBUX), Alliance Resource (ARLP) and Gentex (GNTX) Two ratings changes: LCI Industries (LCII) and Starbucks SBUX to Sell.
Cabot Small-Cap Confidential
Weekly Update February 9: Tyler is making one rating change, moving U.S. Concrete (USCR) to Hold. He also has an earnings update for Apptio (APTI), and an acquisition for LogMeIn (LOGM) to discuss.
Monthly Issue February 2: This month’s stock is Arena Pharmaceuticals (ARNA), a promising small-cap biotech with two high-potential drug candidates, each of which could develop into a billion-dollar asset.
Cabot Dividend Investor
Special Bulletin February 9: Chloe is selling half of ExxonMobil (XOM), and is taking some profits in Pembina Pipeline (PBA) while we still have them.
Weekly Update February 7: Chloe is turning more defensive without overreacting, moving many of the stocks to Hold, and selling the weakest holding, Welltower (HCN).
Special Bulletin February 5: Chloe is moving ExxonMobil (XOM) to Hold as it pulled back sharply after reporting earnings this past Friday morning.
Monthly Issue January 31: The title of today’s issue is “Don’t Overreact”—the major trend of the market is still up, and there are many signs pointing to higher prices in the months ahead. Chloe adds ExxonMobil (XOM) to the Safe Income Tier and presents her view on the forces affecting interest rates and income investments today. No ratings changes.
Wall Street’s Best Investments
Daily Alert February 9: PIMCO Short-Term D (PSHDX) from No-Load Mutual Fund Selections & Timing
Daily Alert February 8: Intrepid Potash (IPI) from Crisis and Opportunity
Daily Alert February 7: John Bean Technologies Corp. (JBT) from Weiss Stock Ratings Heat Maps
Daily Alert February 6: Bright Horizons Family Solutions (BFAM) from Ian Wyatt’s Million Dollar Portfolio
Daily Alert February 5: Varian Medical Systems (VAR) from Schaeffer’s Investment Research
Annual Top Picks Issue January 17: While the broad market returns were fantastic in 2017, there was no stopping our contributors, whose Top 5 Picks—Arista Networks ANET), YY Inc. (YY), Vertex Pharmaceuticals (VRTX), Crocs (CROX) and NMI Holdings (NMIH)—gained an average of 72.83%! And in today’s 2018 Top Picks issue, you’ll find a great selection of investments, distributed among almost every sector and investing style.
Wall Streets Best Dividend Stocks
Daily Alert February 9: Eli Lilly & Co. (LLY) from Argus Weekly Staff Report
Daily Alert February 8: Cummins, Inc. (CMI) from Cabot Dividend Investor
Daily Alert February 7: BlackRock Enhanced Capital and Income (CII) from Dividend Detective
Daily Alert February 6: J.Daimler AG (DMLRY) from The Income Millionaire
Daily Alert February 5: J.P Morgan Chase (JPM) from The Drip Investor
Annual Top Picks Issue January 10: Our first place 2017 Top Pick, Lam Research (LCRX) gained a very healthy 71.39% for the year, second-place pick Caterpillar (CAT) delivered a return of 71.23%, and capturing third place was AbbVie (ABBV) for a 54.92% gain. This Top Picks 2018 issue is packed full of exciting opportunities among very diversified sectors and investing styles.
This Week’s Q&As
Cabot Emerging Markets Investor
Question: What is your recommendation for AAPL, based on their participation in emerging market countries, as well others?
I currently have 700 shares, with a cost basis of about $14.5/share.
Paul: Apple has a unique market niche with a dedicated and loyal fan base. It’s enormously profitable and has been able to maintain its financial performance despite a lack of major new product releases.
iPhone X is very popular in China, where the Chinese hunger for status and displaying wealth leads many consumers to buy. There are also plenty of buyers who go for the cheapest knock-off they can find, but China is a big country. Analysts can foresee a hypothetical saturation point, but no such forecasts have yet proven accurate.
Your very low basis price allows you a great deal of flexibility in dealing with AAPL. You can use your profit cushion to hold through a much bigger pullback than we have yet seen.
But if you want to manage AAPL with an eye to short-term portfolio protection, I would advise you to sell at least some of your holding if AAPL dips below its 200-day moving average, which is now at 158.9. Your decision may need to include advice from your tax advisor about how capital gains will affect your tax liabilities.
You can also simply designate AAPL a long-term investment and ignore short-term moves like yesterday’s free-fall.
At this point, I think Apple’s exposure to emerging markets is probably priced into the stock, and with a platoon of analysts following AAPL, I don’t think there will be many surprises that are not directly precipitated by earnings beats or misses.
I wish I could be more definitive, but without sounding you out on your plans for the stock, this is the best I can do.
Cabot Dividend Investor
Question: How would you rate SHLX and T, they are around 5% + dividend at this point.
Chloe: AT&T (T) comes up in my screens a lot, but the competitive dynamics in the telecom industry have made those stocks toxic over the past year. The failure of Sprint and T-Mobile’s merger talks toward the end of 2017 was good news for AT&T and Verizon though, and T found a bottom in early November and has been trending up since. AT&T will be the first U.S. carrier to introduce 5G service later this year, which could provide another boost to the stock, and possible subscriber numbers. But that’s still speculative. What’s real is that revenue growth has stagnated, and EPS growth is low. So while the 5% yield is attractive, and probably still safe (T’s payout ratio is 94% but is often higher) I don’t have enough conviction in the stock’s or earning’s recoveries to recommend T at this time.
Shell Midstream Partners (SHLX) is an MLP. If you haven’t owned MLPs before, there’s a report all about them available on your subscriber website. As MLPs go, it’s in good shape, distributable cash flow is rising and covers the dividend by 1.23 times. MLPs often underperform when interest rates are rising though, and SHLX’s long-term trend is down. Intermediate-term it’s trading sideways though, and has decent support at 25. So if you’re more risk tolerant, it could be a decent speculation with a stop-loss just below there. Just be aware that most of your returns are likely to come from the distribution, not capital appreciation, and make sure you understand the taxes associated with owning MLPs.
Cabot Stock of the Week
Question: In times of great declines, or great inclines, do you feel market newsletters and market TV shows try to calm the populace so that they do not over react? It’s not just Cabot’s newsletters that I find efforts to calm the public. I feel those who are a part of the market machine have a vested interest in maintaining a certain positive or very neutral stance in order to control the herds of people that invest. What are your thoughts on this?
Tim: Thanks for asking. Given that the long-term trend of the market is up, and will remain so as long as the world economy continues to grow, the best investment policy is to remain calm during market corrections, and that indeed is what Cabot and other institutions who serve investors counsel.
Institutions who derive their living from selling news, on the other hand, benefit from exciting their readers and viewers, and thus deliver a very different message. To them, the present is all, and the existence of a long-term trend but a dim notion.
Guide to Cabot Prime
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