Cabot Prime Pro Week Ending January 15, 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, talks about his bullish stance, but he’s also seeing few stocks at good entry points and also a bit of churning among some leading stocks. He’s not changing his overall stance, but he’s focusing more on managing what he has rather than doing much new buying at the moment, though he does review many stocks that could emerge as high-odds buys on dips should things cool off a bit in the next week or two. Stocks mentioned include SNAP, NET, SPOT, FTCH, ZS, GS, X, GM, PYPL, and GH.
UPCOMING CABOT EVENTS:
Cabot Prime Members Meeting with the Analysts: 1st Quarter 2021
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The Best Stocks to Buy in 2021 - January 2021
FREE WEBINAR FOR PRIME MEMBERS ONLY: January 21, 2020 Sign up now.
Advisory Services
Cabot Growth Investor
Bi-weekly Issue January 14: And we’re happy to report that the intermediate- and longer-term trends of the major indexes are still strongly up; as our founder Carlton Lutts used to say, the most bullish thing a market can do is go up, and that’s certainly the case right now. However, we’re paying close attention to the bottom-up portion of the analysis these days, as different stocks look to be at different stages of their overall runs. Mike has two portfolio changes this week: Haloyzme (HALO) Buy Another Half and Roku (ROKU) Sell 1/3.
Bi-weekly Update January 7: The indexes are having another good day today, led by growth stocks this time—as of 3:30pm, the Dow is up 253 points and the Nasdaq is up a big 322 points. As Mike wrote during the latter part of December, early January is often like watching Jell-O-on-a-plate, and that’s proven to be true so far this week, with some major crosscurrents during the first couple of days, followed by a wild reaction to the Georgia elections/Presidential certification yesterday and today. Things are a bit hot and heavy right now, and the day-to-day rotation is extreme—neither are bearish, but we prefer to sit tight for the moment and see if the market and leaders settle down a touch. Mike has no changes tonight, and we’re holding 19% in cash.
Special Report December 17: Cabot’s 10 Favorite Low-Priced Stocks for 2021 (look for it in the Special Report Section)
Cabot Top Ten Trader
Movers & Shakers January 15: From a top-down perspective, the week has been fine—the S&P 500 and Nasdaq are down less than 1% on the week as of this morning, while broader indexes (small and mid-caps) are up decently. All in all, that keeps the intermediate-term trend pointed nicely higher, with most indexes at least a few percent above their 50-day lines. Mike has five Buy recommendations: Alcoa (AA), General Motors (GM), CrowdStrike (CRWD), Zscaler (ZS) and Palo Alto Networks (PANW).
Weekly Issue January 11: The first week of the year was extremely volatile, but all in all the action ended up positive, with major indexes kissing fresh all-time highs and many leading stocks ending up nicely on the week. Because of this, most of Mike’s buy ranges are a bit below current prices (looking for pullbacks), though he still see some solid setups. One is Snap (SNAP), which is a clear leader in the internet space and has just returned to its highs after its first test of the 10-week line since its October blastoff.
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 Position Update January 14: Very quickly I wanted to update you on where we stand with several call option positions that are breaking out today. Those positions include GM, FCX and SONO Call Options.
Cabot Options Trader Pro Trade Alert January 13: Adjust Existing Position: Buy Back your GM January 48 Calls, and Sell the March 55 Calls.
Cabot Options Trader Basic & Pro Position Update January 13: Friday is the expiration of January options, and we have several covered call positions in the Cabot Options Trader/Trader Pro portfolios that are likely to be called away for nice profits—or at the very least, will come right down to the wire. Read the update for a full breakdown of each.
Cabot Options Trader Basic & Pro Position Update January 12: General Motors (GM) is trading higher by another 8% today, and at a new high above 48.5. The spark for this move is several announcements made today. The company launched a new business unit, BrightDrop, which will provide an integrated set of electric vehicles, services, and software to be used by last-mile delivery and logistics companies.
Cabot Options Trader Pro Trade Alert January 11: Close Existing Position: Sell your Taiwan Semiconductor (TSM) January 85/115 Bull Call Spread for $29.30 or more.
Cabot Options Trader Basic Weekly Update January 11: The Chicago Board of Options Exchange Volatility Index (VIX) traded as we assumed it would last week as the “fear index” spiked higher by 18.6% on Monday as stocks declined, then spent the rest of the week falling while the market rebounded. By week’s end the VIX was lower by 5%, at 21.5.
Cabot Options Trader Pro Weekly Update January 11: Long positions: AAPL, CGC, GM, MSFT, NET, UBER, QCOM, SNAP, SONO, TSM, XLF, ZNGA
Cabot Undervalued Stocks Advisor
Weekly Update January 13: Most stocks on the Cabot Undervalued Stocks Advisor recommended list had strong performance this past week. Notable standouts included Equitable Holdings (+11%), General Motors (+18%), Molson Coors (+14%) and ViacomCBS (+15%). Part of the strength was perhaps due to money managers’ general optimism that seems to brighten with turn of the calendar. This translates into a higher tolerance for risk-taking, as there are nearly 12 months ahead to make up for any mistakes. Cyclical and value stocks tend to be major beneficiaries of this optimism. Bruce has multiple portfolio changes this week.
Monthly Issue January 6: While our investment recommendations focus on specific stocks, we like to keep these macro trends in mind. Investors generally prefer stocks that ride these trends. But, sometimes the most appealing stocks are those that superficially seem to go against these trends (leading to investors avoiding them) yet have either fundamental traits that sidestep these trends or have overly discounted valuations. Some of these secular trends are favorable and clear positives (tech and health, as examples) yet others are concerning (China, market cycles, government spending). Bruce has no portfolio changes today.
Cabot Stock of the Week
Weekly Issue January 11: The first week of the year saw buyers dominate, pushing the major indexes to higher heights on most days. Thus the major uptrend is intact, but extended, which means this is probably not the best time to buy an aggressive growth stock. Tim’s featured stock Brookfield Infrastructure Partners (BIP), owns and operates infrastructure assets all over the world. The master limited partnership (MLP) focuses on high-quality, long-life properties that generate stable cash flows, have low maintenance expenses and are virtual monopolies with high barriers to entry. Tim has three portfolio changes: Nuance Communications (NUAN) to Hold, Qualcomm (QCOM) to Hold and Taiwan Semiconductor (TSM) to Sell.
Cabot Global Stocks Explorer
Bi-weekly Update January 14: The Explorer portfolio came alive this week as ElectraMeccanica (SOLO) shares are up 33% in 2021 after surging 179% in the fourth quarter of 2020. LogiQ (LGIQ) shares jumped 22% this week, NovoCure (NVCR) shares made a nice move going from 162 to 177, and Sea Limited (SE) shares continued their upward surge in 2021, moving from 199 to 227 as the company announced it is acquiring an Indonesian bank. Under these conditions, it makes sense to stay about 75% invested in a diversified portfolio, keeping some cash as a buffer and to take advantage of any pullbacks. Take partial profits from time to time. Carl has one portfolio change: Afterpay (APT.AX) moves from Buy a Half to Hold a Half.
Bi-weekly Issue January 7: The shift in power, wealth and influence over the past century has been unmistakable. From agriculture and land to industrial production and now to information, data, technology and finance, intellectual intangible assets are now more important than physical assets and even cold hard cash. The most important catalyst for America’s political upheaval as well as the prime generator of wealth over the last three decades has been the inexorable rise of finance and technology and the relative decline in terms of jobs, growth and profits from manufacturing and industry. Carl’s new recommendation International Business Machines (IBM), is at the heart of our transformation to an information technology economy. Carl also has one portfolio change: Afterpay (APT.AX) from Buy a Half to Hold
Cabot Small-Cap Confidential
Special Bulletin January 12: Late yesterday Accolade (ACCD) announced it was diving deeper into the telehealth market by acquiring 2nd.MD, a small start-up based in Houston, TX. The acquisition target provides expert medical consultation services to patients, typically at a critical point in the patients’ lives when a second opinion and/or consultation and provider care options are of utmost importance. Porch Group (PRCH) just announced that it went on a spending spree, buying two larger companies and two smaller ones.
Weekly Update January 14: The lure of better times ahead (the market’s trend suggests it is embracing the recent Democratic party wins) and a government that is expected to be focused on stimulus and spending on clean energy and industrial revival is just too great a magnet to throw it off course (so far). Many of our stocks are doing very well, though we have a group that aren’t doing much at all. Generally speaking, Tyler thinks some of those stocks have fallen out of focus while investors chase hotter names. If this market remains strong, they’ll come back. And we’ll still be in them when they do. Tyler has no portfolio changes.
Special Bulletin January 12: Karyopharm (KPTI) pre-announced Q4 2020 results yesterday morning. Karyopharm missed expectations because XPOVIO sales were only around $20 million to $20.5 million, well below the roughly $26 million expected. Management cited three reasons for the underperformance: lack of patient visits to healthcare providers due to Covid-19, lack of sales team access to physicians due to Covid-19 and higher competition in the penta-refractory multiple myeloma setting. Tyler has changed Karyopharm (KPTI) to a Sell. Speaking of more attractive opportunities, Personalis (PSNL) reported preliminary Q4 results after the close on Monday that were largely in line with expectations.
Monthly Issue January 7: Tyler’s new recommendation, Porch Group (PRCH) is a business-to-business-to-consumer (B2B2C) software company that offers a proprietary ERP/CRM platform to home services companies in the U.S. It also offers home services comparison and booking tools for consumers. Porch has a market cap of $1 billion. Porch Group grew revenue by 43% to $77.6 million in 2019, which ended with 10,585 customers (up 20%) and $444 in revenue per account (monthly, up 29%). Things got off to strong start in 2020 but, not surprisingly, the pandemic put a dent in Q2.
Cabot Dividend Investor
Monthly Issue January 13: It’s hard to look beyond the current headlines. But, in the grand scheme of things, it’s mostly just short term surface noise. Meanwhile, massive longer-term changes are occurring below our feet. Below all this noise, tectonic plates are shifting and changing the world forever. The market is high. All three indexes have made new all-time highs recently. It’s not the best time to be too aggressive. Yet, the prognosis for 2021 is positive. In this issue, Tom highlights Broadcom Inc. (AVGO), a technology industry Goliath with $24 billion in annual net revenues. It’s an icon of the technology revolution with roots that trace back over 50 years to the old AT&T/Bell Labs. The company has many category-leading products in crucial areas of semiconductors and infrastructure software solutions.
Weekly Update January 6: The New Year is a wild one so far in the market with big up and down swings. The Dow was down big Monday and it’s up big today as bank stocks have caught fire. Bank stocks are flying and driving the market higher. The Financial Select Sector SPDR Fund (XLF) is about 5% higher on the day. Recent portfolio addition U.S. Bancorp (USB) is up over 6%. Banks love the specter of more stimulus spending, looser monetary policy and higher interest rates. Click here to listen to the podcast. Tom has no changes this week.
Cabot Marijuana Investor
Weekly Update January 13: Part of the marijuana sector’s strength, of course, is because the broad market is also trending higher. But a substantial part comes from the growing realization, especially in wake of last week’s election that promised us a uniformly Democratic federal government, that this industry will continue to boom as legal barriers are removed. Fundamentally, this is terrific. It makes me highly confident that this sector will continue to reward—at a higher-than-average rate—over the long term. Tim has no portfolio changes this week.
Monthly Issue December 30: First, the long-term trend of the market, over the centuries, is up, reflecting the growing value added by our civilization. That’s why it pays to invest. Second, the fundamentals of the leading companies in the marijuana sector remain extremely favorable. Revenue growth at the companies in our portfolio averaged 170% in the latest quarter. And that was not the result of any huge outlier; the median growth rate was 131%. Third, the legal situation continues to improve, with the state-by-state march toward legalization continuing and the incoming federal administration almost certain to be more friendly to the industry than the outgoing. Fourth, the leading stocks in the sector are still strong today—and as experienced momentum investors know, the final phase of a bull run can be very profitable. Tim has three rating changes: Jushi Holdings (JUSHF), Turning Point Brands (TPB) and Village Farms (VFF) to Hold.
Cabot Early Opportunities
Special Bulletin January 15: What a market! Despite all the noise out there our portfolio’s performance continues to exceed expectations. Our average gain across 30 positions is hovering between 80% and 85%. Next week our January issue of Cabot Early Opportunities is coming out. With Monday being a holiday, we’ve decided to push back the publishing date by one day, from Wednesday, 1/20 to Thursday, 1/21.
Monthly Issue December 16: The rumblings about stocks, and growth stocks in particular, getting overheated have gotten louder in December, thanks in no small part to the huge performance of IPOs like DoorDash (DASH), Snowflake (SNOW) and AirBnb (ABNB), and the lofty valuations that many growth stocks have been able to sustain so far. Rumblings don’t always translate to a correction. And in fact, questioning outstanding performance is generally a good thing. But still, the point is that investors should not get complacent. There is always a correction coming at some point and it’s best to realize that so when it comes, you’re not surprised. It’s just part of investing. Overall, Tyler recommends keeping two hands on the wheel, two eyes on the road, and proceed cautiously. Today’s Top Pick is Array Technologies (ARRY), which went public in October and has a market cap of $4.9 billion, is one of the world’s largest manufacturers of ground-mounting systems used in utility-scale solar energy projects.
Cabot Profit Booster
January Expiration Update January 15: The expiration of our January covered calls is today, and we have one position (UBER) likely to be called away for maximum gains (great scenario) and another (ADNT) that is too close to call and will likely come down to the close (good scenario).
Weekly Issue January 12: As a reminder, January option expiration is this Friday (January 15). Because of this, Friday morning Jacob will update you on where we stand with our two January positions (UBER and ADNT), both of which are in good shape, but may need some attention. Jacob’s new stock recommendation is Snap Inc. (SNAP).
Cabot Micro-Cap Insider
Monthly Issue January 13: Today, Rich explains his process for picking micro-cap stocks. It can be extremely profitable to invest in growth companies, as any Tesla or Amazon shareholder will tell you. But it is also easy to get burned when growth slows, especially if the stock is trading at a nosebleed valuation. In the micro-cap world, you can invest in growth companies at value prices. And the data suggests that it can be very profitable. Rich’s new recommendation Zedge (ZDGE), is a leading app developer focusing on the mobile phone personalization and entertainment verticals. Specifically, the app allows users to customize their phones’ wallpaper and ringtones. Please read the issue for more recommendation updates.
Weekly Update January 6: Despite signs of speculative excess, odds are the market should have a good year in 2021. As Rich has mentioned before, one of his favorite follows on twitter is Ryan Detrick, Chief Market Strategist at LPL Financial. He recently shared some interesting info about market returns after a strong year. “The S&P 500 is up nearly 14% in November and December. Only 7 other years was it ever up >10% or more these two months. What happened in January? Higher every single time, up 4.7% on average. Didn’t expect that.” So if history is a guide, January should be strong.
Cabot Income Advisor
Weekly Update January 13: A Democrat sweep, some believed, could give Democrats control of the Senate and all three branches of government, threatening the divided government outlook, and the market gains from that anticipation. What happened? The Democrats swept and the market rallied anyway. Go figure. It seems that investor sentiment concluded that although Democrats will control the government, the majorities will be so razor thin that we will have divided government anyway. But Democrat control makes more stimulus likely. It’s the same essential result as previously expected, but now with more stimulus. The market loves it. In this issue Tom highlights two timely stocks for purchase now: AGNC Investment Corp. (AGNC) and Brookfield Infrastructure Partners (BIP).
Monthly Issue December 23: Although the pandemic disrupted our lives and crashed the economy, the market loved it. All three major market indices are higher for the year and within a whisker of the all time highs. The S&P 500 is up over 14% YTD and the technology-laden Nasdaq is over 40% higher on the year. Tom has one new featured stock Chevron Corporation (NYSE: CVX) and multiple portfolio changes.
Cabot Turnaround Letter
Special Bulletin January 15: Bruce is raising our price target on Mohawk Industries (MHK). Mohawk shares are now trading above our 147 price target. We had previously reduced the price target to 147 from 220 when it looked like the pandemic would significantly weaken the company’s turnaround efforts. However, it appears that the construction and remodel industries will remain reasonably healthy, so we are raising our price target to 180.
Weekly Update January 15: This week we had two companies reporting earnings – Albertsons (ACI) and Wells Fargo (WFC). Baker Hughes (BKR) reports next week, and the earnings deluge starts the following week with at least seven companies reporting. Albertsons Companies (ACI) – After years of acquisitions, divestitures and other deals, this grocery company looks like a jumble of siloed and poorly-managed entities with minimal integration. Following its recent IPO, Albertsons has a lot of work ahead to boost its margins, reduce its debt and clarify its pension obligations. The new CEO looks capable and the pandemic tailwind will help as they make the necessary improvements. Click here to listen to the podcast.
Special Bulletin January 13: With the pending sale of its Nutrition & Biosciences (N&B) unit, DuPont shares have surged past our 75 price target (currently trading mid-day at about 82.50). The actual transaction has complicated mechanics, including an exchange into N&B shares at a discounted and yet-to-be-determined exchange ratio, followed by their conversion into International Flavors & Fragrances (IFF) shares. Bruce is moving DuPont (DD) to a Sell.
Monthly Issue December 23: Following the S&P 500’s incredibly strong 33% total return last year, adding to a remarkable decade-long bull market, it would have seemed a stretch to think that 2020 would bring more gains. Had we known that the world would be rattled by a devastating pandemic that brought a 10% drop in global economic output and a 31.4% plunge in U.S. output in the second quarter, we would have been shocked if the market was even flat for the year. Bruce’s has one buy recommendation: Ironwood Pharmaceuticals (IRWD) and two sell recommendations: GameStop (GME) and Freeport-McMoran (FCX).
Ask the Experts
Cabot Top Ten Trader
Question:What is your opinion on investing (GBTC) Grayscale Bitcoin Trust Please? Its growth is spectacular. What is your opinion on Bitcoin in general Please?
Mike: Thanks for writing. Well, in general, we think bitcoin should head higher as the trend is up, but realize the instrument has already had a giant run and, like gold, a lot of it has to do with fear and what-not, as opposed to fundamentals, so the worm can turn quickly. GBTC is certainly hot, and if it cooled off/tightened up for a few weeks (in gear with a pullback in bitcoin), it would be tempting. But I’m not in the mood to chase it up here – worth watching but on dips/consolidation.
Cabot Options Trader
Question:I have a question about the LEAPS strategy that I came across recently and wanted to run it by you to understand the downside. What is the downside in selling LEAPS put (instead of owning stock and writing covered call). If we find a stable stock that you would like to hold say for a year, from your observations, what are the downsides?
Jacob:I have zero issue with that strategy. Selling puts, and selling puts on LEAPS, is a way traders get exposure to stocks on a longer term horizon, at a lower price than the stock is currently trading.
Quarterly Cabot Analyst Meeting
The recording of the Cabot Prime Members Meeting with the Analysts from October 21, 2020 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.
| Stock | Cabot Small-Cap Confidential | Cabot Global Stocks Explorer | Cabot Growth Investor | Cabot Marijuana Investor | Cabot Stock of the Week | Cabot Undervalued Stocks Advisor | Cabot Dividend Investor |
|---|---|---|---|---|---|---|---|
| ABBV | Hold | ||||||
| ACCD | Hold | ||||||
| APT.AX | Hold 1/2 | ||||||
| ARNA | Buy | ||||||
| AVGO | Buy | ||||||
| AVLR | Hold | ||||||
| BGS | Sold | Hold | |||||
| BIP | Buy | Buy 2/3 | |||||
| BLFS | Buy | ||||||
| BMY | Strong Buy | ||||||
| BSCL | Buy 1/2 | ||||||
| CDLX | Hold | ||||||
| CGC | See Advisory | ||||||
| COLM | Buy | Hold | |||||
| CRLBF | See Advisory | ||||||
| CRNC | Buy | ||||||
| CRWD | Buy 1/2 | Buy | |||||
| CSCO | Buy | ||||||
| CURLF | See Advisory | ||||||
| DLR | Hold | ||||||
| DOW | Hold | ||||||
| EPD | Buy | ||||||
| EQH | Sell | ||||||
| ESTC | Buy | ||||||
| EVBG | Buy | ||||||
| FIVE | Buy | ||||||
| FVRR | Hold 3/4 | ||||||
| GM | Hold | Hold | |||||
| GRWG | See Advisory | ||||||
| GSHD | Hold 3/4 | ||||||
| GTBIF | See Advisory | ||||||
| HALO | Buy Another 1/2 | ||||||
| HTHT | Hold | ||||||
| IIPR | See Advisory | Hold 2/3 | |||||
| IBM | Buy | ||||||
| INSP | Hold 3/4 | ||||||
| JBLU | Buy | ||||||
| JUSHF | See Advisory | Hold 2/3 | |||||
| KO | Buy | Buy | |||||
| KPTI | Sell | ||||||
| LGIQ | Buy 1/2 | ||||||
| LLY | Buy | ||||||
| MO | Buy | ||||||
| MP | Hold | ||||||
| MRK | Buy | ||||||
| NEE | Hold | Hold 1/2 | |||||
| NEO | Buy 1/2 | ||||||
| NET | Hold 1/2 | ||||||
| NUAN | Hold | ||||||
| NVCR | Buy | Buy Another 1/2 | Buy | ||||
| O | Buy | ||||||
| PGX | Hold 1/2 | ||||||
| PINS | Buy | Buy | |||||
| PRCH | Buy | ||||||
| PSNL | Buy | ||||||
| QCOM | Hold | Hold 2/3 | |||||
| QTWO | Buy | ||||||
| RGEN | Buy | ||||||
| ROKU | Sell 1/3 | ||||||
| SBS | Buy | ||||||
| SE | Hold 1/2 | Hold | |||||
| SOLO | Buy 1/2 | ||||||
| SPCE | Hold | Hold | |||||
| SPT | Buy | ||||||
| SSO | Buy | ||||||
| STAG | Hold 1/2 | ||||||
| TAP | Buy | Buy | |||||
| TCNNF | See Advisory | Hold | |||||
| TMX | Hold | ||||||
| TPB | See Advisory | ||||||
| TRSSF | See Advisory | ||||||
| TSLA | Hold | ||||||
| TSM | Buy 1/2 | Sell | |||||
| TSN | Buy | ||||||
| TWLO | Buy | ||||||
| UBER | Buy | Buy | |||||
| USB | Buy | Buy | |||||
| VIAC | Buy | ||||||
| VLO | Buy | ||||||
| VZ | Hold | ||||||
| XEL | Buy 2/3 | ||||||
| ZM | Sold |