Cabot Prime Pro Week Ending June 2, 2017
Cabot Wealth Summit
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Cabot Weekly Review
Paul Goodwin, chief analyst of Cabot Emerging Markets Investor, gives his take on the state of the stock market in this week’s stock market video. Paul looks at the Dow and other indexes compared to the Nasdaq and sees a big difference. Bottom line: While the overall market looks pretty good, growth stocks are looking terrific. In this growth investor’s market, Paul offers advice on how to handle five growth stocks: Vertex Pharmaceuticals (VRTX), Five Below (FIVE), Tesla (TSLA) Yum China Holdings (YUMC) and XPO Logistics (XPO).
Cabot Growth Investor
Bi-weekly Update May 31: Our market timing indicators are still mixed, though the long-term trend and growth stocks remain in good shape. In the Model Portfolio, we’re going to buy another half-sized position of Tesla (TSLA) because the stock has resumed its uptrend, but we’ll sit tight with our remaining cash position (16%) for now.
Other Stocks of Interest May 26: Follow ups to stocks featured December 21, 2016 (issue 1357) to May 24, 2017 (issue 1368). 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 May 24: Mike dives into all our stocks and highlights his current batch of ideas (including an intriguing recent IPO, Floor & Decor (FND), with a great cookie-cutter story) and discusses the good and bad of mental versus in-the-market stops. Mike has no changes in the portfolio tonight, but will continue to take his cue from the market.
Cabot Top Ten Trader
Movers & Shakers Weekly Update June 2: The market experienced a couple of wobbles to start the holiday-shortened week, but then boomed yesterday and is adding a bit to those gains today, despite a weaker-than-expected jobs report. Buy ideas: Coherent (COHR), Jabil Circuit (JBL), Netflix (NFLX), Universal Display (OLED) and Vertex Pharmaceuticals (VRTX).
Weekly Issue May 30: We’re continuing to put most of our emphasis on the bullish longer-term trend and positive action of leading stocks, so you should remain heavily invested. This week’s Top Ten Trader has a bit wider variety than recent weeks, and for our Top Pick, Mike is going with Best Buy (BBY). a big-cap turnaround play that’s just gapped up on earnings.
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 June 2: Buy Cypress Semiconductor (CY) September 15 Calls (exp. 9/15) for $0.85 or less.
Trade Alert June 1: Sell HALF your MGM Resorts (MGM) September 32/37 Bull Call Spread Calls for $1.71 or more.
Trade Alert June 1: Sell HALF your MGM Resorts (MGM) September 33 Calls for $1.71 or more.
Stocks on Watch May 31: Jacob highlights trades in two stocks that are on the top of his watch list for new positions: Cypress Semiconductor (CY) and ILG (ILG).
Stocks on Watch May 30: Retail and malls are two sectors that have been very challenging for investors this year, likely due at least in part to the Amazon effect. However, Jacob highlights bullish trades in Macy’s (M) and Macerich (MAC) in these beaten down sectors.
Weekly Update May 30: Following the long holiday weekend, it’s possible that the start of the trading week will be slow as traders return from vacation. The May Jobs Report is on Friday, and often traders don’t initiate big positions ahead of the Jobs Report. And with earnings season quickly wrapping up and very little economic data before Friday, there are few known catalysts for market movement.
Cabot Undervalued Stocks Advisor
Special Bulletin June 2: Crista moves Blackstone Group LP (BX) from Strong Buy to Buy, Vertex Pharmaceuticals (VRTX) from Strong Buy to Hold, and Whirlpool (WHR) from Buy to Hold. She also give an update on H&R Block (HRB) and names 10 Stocks that are at good buy points.
Special Bulletin May 30: Good news for TiVo (TIVO); H&R Block (HRB) and Mattel (MAT) shares are rising.
Weekly Update May 30: There’s something unusual and significant afoot in the bond market, so Crista plucks her Goldman Sachs (GS) update out of the Growth Portfolio updates, and puts it in the intro so that nobody misses what’s going to be happening soon. No ratings changes.
Monthly Issue May 2: Today’s featured stocks include ExxonMobil (XOM), Legg Mason (LM), and a new addition to the Growth Portfolio, Cavium (CAVM). Crista also compares the featured stocks and their peers in the integrated oil, asset management and semiconductor industries.
Cabot Stock of the Week
Weekly Issue May 30: Today’s recommended stock is Vertex Pharmaceuticals (VRTX), a niche medical provider whose risk is substantially outweighed by reward, both fundamentally and technically. In the current portfolio, most stocks are acting well and there are no ratings changes.
Cabot Small-Cap Confidential
Monthly Issue June 2: This month’s stock, AppFolio (APPF), has a cloud-based software solution tailor-made for property managers. It’s growing revenue by more than 30%, has no debt, is on track to become profitable this year, and the chart is solid. Tyler believes the company will ultimately be sold, hopefully at a nice premium to where shares trade today.
Cabot Emerging Markets Investor
Bi-weekly Issue June 1: The trend is up and most of our stocks are acting well, so you should remain bullish. Paul’s new buy today is Autohome (ATHM), a powerful Chinese online automotive site that’s hitting on all cylinders, and he’s restoring the Buy rating to Melco Crown (MLCO).
Cabot Benjamin Graham Value Investor
Weekly Update June 2: Roy includes summaries for 11 Cabot Benjamin Graham Value Investor companies that reported quarterly financial results or other noteworthy news during the past two weeks. One sell: Bristow Group (BRS).
Monthly Enterprising Model Issue May 11: This month, Roy introduces a new stock that has out-shined most stocks in the retail sector. Five Below (FIVE) will add 100 new stores in 2017, which will surely add significant growth, but there’s much more to the story. Today’s issue describes how this specialty retailer has thrived in a difficult sector.
Monthly Value Model Issue May 4: This month’s Cabot Value Model contains a diversified list of buy recommendations, with a bias toward high quality companies in the Technology and Financial sectors. Roy adds Alliance Data Systems (ADS) to the model and moves Schlumberger (SLB) out of the model.
Cabot Dividend Investor
Monthly Issue May 31: Chloe adds mid-cap tech stock Broadridge Financial Solutions (BR) to the Dividend Growth tier, provides updates on all our holdings, and shares some of her favorite investment resources. Guggenheim 2017 Corp Bond (BSCH) and Home Depot (HD) move to Hold.
Wall Street’s Best Investments
Daily Alert June 2: Sterling Construction Company (STRL) from Crisis and Opportunity
Daily Alert June 1: Baozun (BZUN) from Cabot Emerging Markets Investor
Daily Alert June 1: Sell Half of Momo (MOMO) from Cabot Emerging Markets Investor
Daily Alert May 31: CBS (CBS) from DRIP Investor
Daily Alert May 30: Air Transport Services Group (ATSG) from The Buyback Letter
Daily Alert May 30: Sell Investors Bancorp (ISBC) from The Buyback Letter
Monthly Issue May 17: We’re still bullish, and as you can see from our Advisor Sentiment Barometer and Market Views section, so are most investment pros. And that’s great news, as it means our contributors continue to find an array of stocks with excellent potential. Our Spotlight Stock this month is Cavium (CAVN).
Wall Streets Best Dividend Stocks
Daily Alert June 2: IGM Financial (IGM.TO) from The Successful Investor
Daily Alert June 1: The GEO Group (GEO) from Canaccord Genuity Research
Daily Alert May 31: Deutsche Bank Contingent Capital Trust II, 6.55% Trust Preferred Securities (DXB) from Jack Adamo’s Insiders Plus
Daily Alert May 30: Compass Minerals International (CMP) from Forbes Dividend Investor
Daily Alert May 30: Sell Navient (NAVI) from The Buyback Letter
Monthly Issue May 10: Our Spotlight Stock, Qualcomm (QCOM) became a common household name to many investors during the tech revolution. The Internet/mobile chip provider not only managed to survive the boom and bust, but has come out on top of the growing semiconductor sector for low-cost chips for the exploding biometrics identification industry.
This Week’s Q&As
Cabot Top Ten Trader
Question: I see in your charts in Top Ten Trader you use the 25-day and 50-day moving averages, and the 10-week and 40-week lines on the weekly chart. Is there any reason for these rather than some other moving averages?
Mike: Not really. I like to keep things simple, and the 50-day line (or 10-week) is probably the most important when it comes to growth stocks—it often serves as a demarcation between intermediate-term uptrends and downtrends. It works well for the market, too (it’s included in our Cabot Tides market timing indicator in Cabot Growth Investor).
The 200-day line, obviously, is longer-term, and we use it as a big-picture barometer for a stock’s trend. But other than that, I honestly chose the 25-day line because it was half of 50—nothing special, just something to measure a stock’s (or the market’s) shorter-term movements.
Feel free to experiment with different moving averages, including exponential ones. But be careful not to go down the rabbit hole in terms of researching the arcane—usually keeping it simple is best..
Cabot Options Trader and Cabot Option Trader Pro
Question: Curious if the June call trader exited his Bristol-Myers Squibb (BMY) position. I have few left that I am planning to exit.
Jacob: Still 30,000 June 55 Calls and 30,000 June 57.5 Calls in open interest. Also 40,000 June 60 Calls, that are virtually worthless. BMY is like sooooo many stocks right now—chopping around and going nowhere.
Cabot Undervalued Stocks Advisor
Question: Would it be best to buy Goldman Sachs (GS) now or wait to see further drop because of the Venezuela issue?
Crista: From what I glean among Wall Street analysts—who definitely focus on things that are different from what financial news media focuses on and sensationalizes—the purchase of deeply-discounted Venezuelan bonds by Goldman Sachs is a complete non-event.
Right now, analysts and stock market writers are focused on the big banks’ low trading revenues in the first half of 2017, which is attributed to an unusual lack of market volatility. That situation, being an anomaly, should rebound to normal trading volume relatively quickly.
In addition, I mentioned in my weekly update that we’re extremely likely to see a sustainable increase in bond market volatility, related to changes in the Federal Reserve’s plan to reinvest about $20 billion less of the proceeds of bond redemptions each month.
Buying low seems like a good idea, yes.
Cabot Small-Cap Confidential
Question: Old article on Airgain (AIRG) but wanted to get your thoughts regarding the content. http://thestreetsweeper.org/article.html?c=3&i=26289
Tyler: I think the author (who was short the stock at the time) did raise some good concerns that were relevant at the time. But are less so now.
One thing worth mentioning; I did speak with the Wunderlich analyst about his “downgrade” at that time. If the author is referring to the same one, he actually upped his target price but downgraded to hold due to concerns about the trading halt of a Chinese customer, Lee TV (stock trades in China). The analyst moved past those concerns in the quarters since. I don’t believe Wunderlich distributes those notes outside of its client base, so his reasons aren’t in the public domain (for non-Wunderlich clients).
That all said, the stock’s performance isn’t confidence inspiring at the moment. Hopefully that will change reasonably soon.
Cabot Emerging Market Investor
Question: Paul Is the drop to 73 a normal pull back for Weibo (WB) or should we sell? I have a half a position.
Paul: I think it’s normal, at least so far. WB hasn’t made a move to fill the May 16 gap and its action over the last couple of days has been pretty much parallel to what’s happening with PGJ and EEM. I’ll take a closer look at it today and you’ll get my latest advice in the new issue this afternoon.
Cabot Benjamin Graham Value Investor
Question: What is your view on CBI? Should we sell or hold tight? (from subscriber B.K.)
Roy: Chicago Bridge & Iron (CBI 19.57) reported poor first-quarter results, and then old news about lawsuits involving CBI, Toshiba and Westinghouse surfaced, which kept the stock price plummeting. The lawsuits should not become a major problem, but resolution will take years.
However, yesterday, CBI announced the retirement of Philip K. Asherman, 66, from his role as President and Chief Executive Officer of CBI and as a member of the company’s Board of Directors effective July 1, 2017. Patrick K. Mullen will become President and Chief Executive Officer. In my opinion, this is good news. The company’s leadership has been in question, and a change was long overdue. The change won’t solve all of CBI’s problems, but it will be a good start, which will help send the stock higher from here. Hold tight.?
Question: I notice my GHL stock has now lost 25%. I have been trying to sell before a 20% loss but somehow this one got past me and I do not know what to do. Please advise. (from subscriber B.C.)
Roy: Greenhill (GHL 21.05) reported weak sales and earnings for the quarter ended 3/31/17. Management indicated normal earnings will return this quarter. GHL has the potential to produce exceptional results during the remainder of 2017. I advise holding GHL.