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Cabot Prime Pro Week Ending July 9, 2021

Cabot Prime Pro Week Ending July 9, 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, Mike Cintolo talks about the market’s continued bi-furcated environment—cyclical areas likely need more time to rest, but while growth remains choppy, he’s seeing more and more to like. He’s still going slow, but it’s definitely time to make sure you have your watch list ready. Speaking of watch lists, I hope you can join us for our Cabot Wealth Summit on August 17-19, where I’ll be leading things off giving my in-depth views of the market, both longer-term and where I see opportunities in the weeks and months to come.

UPCOMING CABOT EVENTS:

Cabot Prime Members Meeting with the Analysts: 3rd Quarter 2021

FREE WEBINAR FOR PRIME MEMBERS ONLY: July 14, 2021 Sign up now.

Cabot Micro-Cap Insider Member Call

FREE WEBINAR FOR PRIME MEMBERS ONLY: July 15, 2021 Sign up now.

How Government Spending Can Turn Into Investment Gains

FREE WEBINAR FOR PRIME MEMBERS: July 22, 2021 Sign up now.

Advisory Services

Cabot Growth Investor

Bi-weekly Update July 8: The market wobbled today, which put our Cabot Tides back on the fence. As for growth stocks, there’s still wobbly action, but there’s also many names that continue to improve and set up. We’re more optimistic than not, but tonight we’ll stand pat and see how the next few sessions go—ideally, we get a controlled pullback or rest that presents some solid entry points, but if the selling accelerates, we may be forced to prune a name or two. Tonight, we have no changes (~47% in cash), but we’ll be on the horn if that changes in the days ahead.

Bi-weekly Issue July 1: Slowly extend your line. Last week, we added half-sized positions in Cloudflare (NET) and DocuSign (DOCU), which leaves us with 47% cash. We’re aiming to put more to work soon, especially if growth stocks rest for a few days, but tonight our only change is restoring the Buy rating on Floor & Décor (FND).

Cabot Top Ten Trader

Movers & Shakers July 9: The first three sessions of this holiday-shortened week have been down across the board for the major indexes, but as has been the case, the damage has been tame in some places and harsh in others. Big-cap indexes are down less than 1% (and should be flat-ish after this morning’s open), while broad market indexes (NYSE Composite, small- and mid-caps) are down 2% to 3%, mostly due to weakness in financials, energy and transports.

Weekly Issue July 6: It was a relatively quiet, but bullish, pre-holiday week, with the major indexes acting well and many stocks resting nicely. That said, there was still rotation evident, with growth stocks finally easing a bit while money sloshed into some other areas, before that situation reversed today. Mike’s Top Pick is Carvana (CVNA), which is near the top of a six-month launching pad.

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 Market Update July 7: You may have noticed this morning that Jacob’s Options Barometer from option activity for Tuesday recorded its most bearish reading in many months, a 3. This was intriguing given the recent strong performance of the indexes, especially the Nasdaq.

Cabot Options Trader Pro Weekly Review July 6: Long positions: CLF, KWEB, CSCO, GPS, CGC, BSX. Bearish Positions: SPY

Cabot Options Trader Basic Weekly Review July 6: Having just gotten back from the beach late last night, here is a shortened version of the Weekly Review focused on our existing positions. The rest of this week we are back to our normal schedule.

Cabot Undervalued Stocks Advisor

Monthly Issue July 7: At the mid-point in the year, the investing environment seems to be exceptionally favorable. The U.S. economy is recovering robustly with promises of ongoing strength as the jobs market recovery accelerates and as international economies more fully reopen. Earnings growth for the S&P 500 this year is estimated to be 35%, followed by 21% growth in 2022. Not only are these growth rates exceptionally healthy, but analysts seem to be underestimating the strength. S&P 500 earnings estimates typically decline as a year progresses, but over the past three months, the consensus estimate for 2021 earnings of $191 has been increasing – and by a record amount (+9%).

Weekly Update June 30: In our continuing series on deciding how many positions to hold in a stock portfolio, let’s borrow a page from Major League Baseball (MLB). The methods that these teams use managing their players can be applied to investment portfolios. MLB teams are limited to 26 players (up from 25 previously) on their active roster. These players are the only ones allowed to participate in a game. Translating to an investment portfolio, these would be analogous to your current roster of stock holdings. If you have a portfolio with more than 26 stocks, these active roster names might represent your highest-conviction holdings.

Cabot Stock of the Week

Weekly Issue July 6: The bull market is alive and well, and Tim continues to recommend that you be heavily invested in stocks that help meet your goals—while remaining prudently diversified. Tim’s featured stock Pinduoduo (PDD), is the third-largest e-commerce player in China in terms of annual revenue, but in terms of total shoppers, it’s actually now larger than JD, with 628 million annual active buyers. Like Alibaba, Pinduoduo generates most of its revenue through listing fees and ads for third-party merchants.

Cabot Explorer

Bi-weekly Issue July 8: The Uber of China, DiDi (DIDI) has been in the headlines and is caught up in a power play over data security and defying authorities in Beijing. All this highlights the fact that Chinese stocks listed in the U.S. should be considered speculative as they are caught between American and Chinese regulators. Carl’s new recommendation Porsche Automobile Holding (POAHY), has a controlling interest in Volkswagen. And with typical Teutonic complexity, Porsche, in turn, is one of the many divisions of this auto giant, along with VW and Audi, and owns prestigious names including Bentley, Lamborghini and Bugatti. Porsche owns 31.4% of Volkswagen equity, but has 53.3% voting control of the company.

Bi-weekly Update July 1: The S&P 500 closed out the second quarter of 2021 at a record high, advancing for a fifth consecutive quarter. Meanwhile the Dow and Nasdaq closed just below records and each of these indexes recorded more than 18 record closes during the first half of the year. Accelerating economic growth is the key to keeping things moving forward. Younger Chinese people’s views of the American and the West’s brands are evolving. According to the Global Times, the share of young Chinese people that looked up to the West is down from 37% five years ago to only 8% today.

Cabot Small-Cap Confidential

Weekly Update July 8:

Clear

The market, and especially the small-cap index, has been a little soft after the Fourth of July holiday weekend, but all things considered it’s hard to say anything is wrong. The move down in U.S. Treasury yields is a bit of a head-scratcher and the noise in the oil market is potentially of interest as consumers ponder charges at the pump. These are noteworthy items but not changing any big-picture thinking at this point.

Monthly Issue July 1: Tyler’s new recommendation On24 (ONTF), is a $1.6 billion market cap company that offers a cloud-based digital experience platform to facilitate business-to-business (B2B) sales. Despite its small size, On24 is the leading provider of purpose-built solutions for this market, which is worth roughly $40 billion. Organizations use the platform to deliver interactive webinar experiences, virtual event experiences and multimedia content experiences in either live or on-demand formats.

Cabot Dividend Investor

Weekly Update July 7: There is a Fed meeting today. The ultimate oracle of wisdom will bestow their current thinking upon anxious traders. The ground-breaking event may determine the market trend for the next couple of days. Last time the central bankers met, they blind-sided traders with the shocking revelation that they might start raising rates in two years. Wall Street people are on the edge of their seats, waiting to see if there is another tectonic-plate-moving declaration this month. We’ll see.

Monthly Issue June 9: It’s hard to get away from the current headlines. It’s all about the pandemic and recovery. Lately, they’re throwing in some inflation talk to spice things up. But, as hard as it may be to believe, these headlines will fade away. The current smoke will clear. Then what? Tom’s featured stocks are Qualcomm (QCOM) and Broadcom (AVGO). Tom also has four portfolio changes.

Cabot Marijuana Investor

Weekly Update July 7: Green Thumb (GTBIF) announced the closing of its acquisition of Dharma Pharmaceuticals, which gets it one of the five licenses in Virginia as well as an operating production facility. The first medical marijuana dispensary opened in Virginia last August, and home growing and possession of marijuana for adult use became legal in Virginia on July 1, but over-the-counter adult-use sales won’t begin until January 2024!

Monthly Issue June 30: In the early years of marijuana legalization in the U.S., when the main action was in Colorado and the three West Coast states, there were no major multistate operators (MSOs). Instead, hundreds of small-time businesses sprang up, and in the competitive environment that followed, many found it difficult to compete with the established illegal market, which didn’t pay taxes. But many survived, and because of that, those early states still have a very fragmented industry. Today, as the country is perhaps halfway (a very rough guess) toward national legalization, the state of Michigan, where legal adult-use sales began in December 2019, provides some interesting data.

Cabot Early Opportunities

Special Bulletin July 6: Today we’re going to part ways with two positions that we added in May and which we’ll make a little more than 10% on. Both positions were trading higher a couple weeks ago but have lost some momentum recently. Sell WHD and APP.

Monthly Issue June 16: The Nasdaq, which fell 9% in the first half of May, has recovered and hit an all-time closing high early this week. Even the ARK Innovation ETF (ARKK), which felt immense pain from February through March, has begun to look better and is up 18% over the last four weeks, though it is still 26% below the all-time high from February. Tyler’s Top Pick Telus International (TIXT) is a customer care company that serves enterprise clients and their digital customer experiences by designing, building and managing engagement and HR tools that reach end consumers. Examples of services it provides on behalf of clients are sales, after sales support, transaction processing and complaint management.

Cabot Profit Booster

Weekly Issue July 7: There’s no doubt it has been an incredible year for the market. The S&P 500 has witnessed five straight months of gains while simultaneously carving out new all-time highs in the process. And last week was no different. The market continued to forge higher, with all three major market benchmarks closing the week near or at all-time highs. The S&P 500 added 1.67%, the Dow gained 1.02%, and the Nasdaq advanced by 1.94%. Jacob’s new stock recommendation is Ford (F).

Cabot Micro-Cap Insider

Weekly Update July 7: Just last week, one of Rich’s favorite follows on twitter, Connor Haley, disclosed a new, high conviction idea: IDT Corporation (IDT). That’s the reason IDT jumped into the mid-40s last week. Here’s a link to IDT presentation. His base case price target is $88, double our $44 price target. After reviewing his detailed work, especially his analysis of IDT’s point of sale segment, NRS, Rich believes our price target is far too conservative. NRS has the ability to increase penetration considerably while also increasing average revenue per user. This should result in continued explosive revenue growth over time. As such, he is increasing our buy limit for IDT to 45.

Special Bulletin June 29: Aptevo filed an 8-K disclosing that Proposal 4 (Company Sale) passed. However, as you can see in the screenshot below, the company made a special point in the footnote that the majority of non-Tang shareholders voted against the immediate sale.

Monthly Issue June 9: Rich’s new recommendation Stabilis Solutions (SLNG) specializes in delivering liquid natural gas (LNG) and hydrogen to its customers who are away from pipelines and off the energy grid. Customers use Stabilis Solutions as it provides them with cheap, reliable energy that is cleaner than other fossil fuels. The company has grown revenue at a 27% CAGR and has a bright outlook. Insiders own over 50% of the company but have been relentlessly buying more stock in the open market. The stock has performed well since the pandemic but looks like a double over the next 12 months.

Cabot Income Advisor

Weekly Update July 7: Cyclical stocks are getting creamed today. Energy is down the most. But industrials, materials, and financials are getting hit too. Energy stocks are taking a beating after an OPEC meeting apparently went awry, fueling the perception that production will be higher than previously anticipated. Financials and industrials are reeling most likely from nervousness about the Fed meeting later this week, which should shed some light on the strength of the economy. As a result, the Dow is down over 300 points.

Monthly Issue June 23: The sideways market finally got some action. It went the wrong way. But it showed signs of life nonetheless. Last week, the Dow Jones Industrial Average posted its worst week since last August, down more than 3.4%. The main culprit was the Fed. At last Wednesday’s meeting, the central bank announced its intention to start hiking the federal funds rate – in two years. That is sooner than the market had anticipated. And investors freaked.

Cabot Turnaround Letter

Weekly Update July 9: Covering recent news and analysis for our portfolio companies and other topics relevant to value investors.

Monthly Issue June 30: Major pharmaceutical stocks are clearly not “the place to be” in today’s market. Investors much prefer fast-growing yet expensive technology (including biotech) and cyclical re-opening stocks. After years of stagnant share prices while the S&P 500 surged, the group now sells at about a 40% price/earnings discount to the market, its largest in decades and well below the historical premium valuation. Bruce’s has one buy recommendation: Organon & Co. (OGN).

Ask the Experts

Cabot Profit Booster

Question: In setting up a Covered Call, I have the following questions: (1) Do you use “Market Order” or “Limit Order”. If you recommend the latter, what is the criteria to select one. (2) Do you use “GTC” or “Day”. (3) Do you use “Delayed” or subscribed to “Market Data Manager”.

Jacob: (1) I typically use a limit order when selling calls, especially if a wide bid-ask spread exists in the call strike I’m interested in selling. Not really the case with F, but for future situations. (2) It depends on your time horizon for getting into the trade. I prefer to use a day order and reestablish my entry the following day if I’m not filled. (3) I always use live quotes...always. Delayed quotes don’t really help me since they are often delayed by 15 minutes...and when trading options that can make a huge difference in the price of my call options. And to pay an extra $15 a month for live quotes (approximately) this may save you some money in the long run.

Quarterly Cabot Analyst Meeting

The recording of the Cabot Prime Members Meeting with the Analysts from April 21, 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 ExplorerCabot Growth InvestorCabot Marijuana InvestorCabot Stock of the WeekCabot Undervalued Stocks AdvisorCabot Dividend Investor
ABBVBuy
ACCDBuy
AGCBuy
AGNCBuy
ARCOBuy
ARNABuy
ASMLBuy
AVGOBuyBuy
AVLRBuy
AVVIYBuy
BIPBuyBuy
BMYStrong Buy
BSCLHold
CBTBuy
CCHWFSell
CGCSee Advisory
CRLBFSee Advisory
CRNCBuy
CSCOBuy
CURLFSee Advisory
CVXHold
DLRBuy
DOCUBuy
DOWHold
DVNBuy Another Half
EPDBuy
EVBGBuy
FIVEHoldHold
FNDBuy
FNKOHold
FSRBuy
FVRRHold
GMHoldHold
GOLDBuy
GRWGSee Advisory
GTBIFSee Advisory
HTHTHold
HUBSBuy
IIPRSee Advisory
IBMBuy
INSPHold
JUSHFSee AdvisoryHold 2/3
KOBuy
KRNTBuy
LLYHold 2/3
MRKBuy
MRVIBuy
MRVLBuy
NEEBuyBuy
NETHold 1/2Buy
NVCRBuy
NVDABuy
OSoldBuy
OGNBuy
OKEBuy
ONTFBuy
OTTRBuy
PDDHold 1/2Buy
PGNYBuyBuy
PGXHold 1/2
PLTRBuyBuy
POAHYBuy
PRCHBuy
QCOMBuy
QTWOBuy
RBLXHoldHold
RGENBuy
RVLVHold
SEBuy 1/2Buy
SLBBuy
SPCEHold 1/2
SPTHold
SSOBuy
STBuyBuy
STAGHold
TAPHoldBuy
TCNNFSee AdvisoryBuy
THBRFBuy
TPBSee Advisory
TRSSFSee Advisory
TSLABuy
TSMBuy 1/2
USBBuy
VLOHold
VZHold
XELBuy
XPSell