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Cabot Prime Pro Week Ending June 25, 2021

Cabot Prime Pro Week Ending June 25, 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 discusses the market’s very good week, though the environment remains tricky and challenging. He’s seeing more names to sink his teeth into (especially on pullbacks), but he still thinks going slow and taking it step by step is the best way to go.

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Cabot Growth Investor

Bi-weekly Update June 24: There remain a few yellow flags in this environment, especially as many indexes are chopping around and trends in individual stocks and sectors remain fleeting. But there’s no question that the action in growth stocks has improved, so we’re going to put a bit more of our large cash hoard to work—we’re going to add half-sized positions in both DocuSign (DOCU) and Cloudflare (NET), which are two of the best-looking growth names in terms of story, numbers and charts. That will leave us with around 47% in cash.

Bi-weekly Issue June 17: Remain patient and relatively cautious while we see if the buying pressures persist. In the Model Portfolio, we’ve been riding the bucking bronco with most of our stocks, but we’re still standing pat with all of them. Our only change since last week is that we’ve placed Roblox (RBLX) on Hold after its sharp pullback this week. Our cash position remains north of 50%. Details inside.

Cabot Top Ten Trader

Movers & Shakers June 25: It’s been a very solid week for the market—at the close last Friday, the market’s overall intermediate-term trend was close to cracking, but the upmove in recent days has pushed most indexes nicely higher. In fact, both the S&P 500 and Nasdaq have nosed to new highs, which, as trend followers, is all to the good.

Weekly Issue June 21: There are definitely some positives among the action out there—growth stocks, for instance, have continued their rally, with many “old” winners finally showing some power in both volume and price (including some names that have poked out to new highs). Mike’s Top Pick is HubSpot (HUBS), which showed top-notch relative strength during the growth stock correction and has now started to power ahead.

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 Market Update June 17: Following the Federal Reserve chairman’s press conference yesterday, the market is fairly nuts today. Materials, Financials, and Oils are getting killed (down 3-6% depending on the sector), while at the same time earlier this morning, the Nasdaq was trading higher by 1.5% before giving up some of those gains.

Cabot Options Trader Position Update June 16: This Friday is the expiration of two of our Covered Call positions. Ford (F) should be a non-event, while Cleveland Cliffs (CLF) will likely be more interesting.

Cabot Options Trader Pro & Basic Trade Alert June 25: Roll Position: Against your CLF Stock, Buy Back the July 22.5 call (exp. 6/25) and Sell the July 22.5 Call (exp. 7/2)

Cabot Options Trader Pro & Basic Trade Alert June 24: Buy the China Internet ETF (KWEB) November 70 Calls (exp. 11/19) for $5.50 or less.

Cabot Options Trader Stocks on Watch June 22: As I’ve written in the past, Bull Risk Reversals are a favorite options strategy of hedge funds as this trade structure allows the trader to get bullish exposure to a stock, at a discount. More on that below in an “old” options education piece.

Cabot Options Trader Pro Weekly Review June 21: Long positions: CLF, CSCO, GPS, CGC, BSX. Bearish Positions: SPY

Cabot Options Trader Basic Weekly Review June 21: The inflation/interest rate hike debate continued to rage on last week, sending cyclical stocks spiraling lower, while hyper growth stocks regained some of the ground they lost the last several months. For the week the S&P 500 fell 2.43%, the Dow lost 3.45%, and the Nasdaq declined by 0.28%.

Cabot Undervalued Stocks Advisor

Weekly Update June 23: Last week, we started our multi-part discussion on position sizes, and looked at the benefits and weaknesses of an equal-weighted approach. Let’s look at perhaps the most common weighting used by fund managers: relative weighting. A relative weighting strategy sizes a position based on the weight of that stock in an index. If a manager likes Coca-Cola (KO), for example, they would base their position size relative to KO’s weight of 0.59% in the S&P500. The manager may find the shares to be particularly attractive, so they would overweight the position by 2 percentage points, resulting in a 2.59% position size. In industry-speak, this would be phrased as “200 over” (or, 200 basis points over the index weight).

Monthly Issue June 3: Several companies are presenting at investor conferences in coming weeks, including Bristol-Myers, Cisco, and Dow. The annual Bernstein Strategic Decisions Conference is notable, as it provides a high-level discussion of each company’s strategy. The conference is being held this week. Cisco is presenting on June 9th at Cowen’s Technology, Media and Telecom conference. Investors can access replays at each company’s (not the brokerage firm’s) investor relations website. Bruce has no portfolio changes.

Cabot Stock of the Week

Weekly Issue June 21: One of the consequences of capping this portfolio at 20 stocks is that Tim has to sell stocks just as fast as he recommends them—on average once a week. This process means he is regularly forced to identify the weakest prospects and kick them out, and this is usually good; one of the most common mistakes of beginning investors is holding on to stocks that should have been sold long ago. Tim’s featured stock Progyny (PGNY), is all about babies, specifically the increasing number of hiccups couples are having in conceiving. The main reason for this is obvious to anyone who’s had kids: For a variety of reasons, people are choosing to have kids later in life, and fertility decreases with age.

Cabot Explorer

Bi-weekly Issue June 24: The S&P 500 has now gained 90% since its closing low last March. Quite amazing. We now need to look forward and remain optimistic while a bit cautious. Carl’s new recommendation 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.com (JD), with 628 million annual active buyers. Like Alibaba, Pinduoduo generates most of its revenue through listing fees and ads for third-party merchants.

Bi-weekly Update June 17: The Federal Open Market Committee (FOMC) convened on Wednesday and Chairman Jerome Powell and colleagues seem to be inclined to raise benchmark rates sometime next year. At least for now, the Fed kept rates on hold and signaled it would continue its quantitative easing. However, what spooked markets a bit was that according to the Fed’s new economic projections, seven of 18 officials now see an interest rate hike taking place by the end of 2022. Carl actually thinks this sort of signal was way overdue and can be good for markets, which can now focus on what’s far more important – growth, profits and valuations.

Cabot Small-Cap Confidential

Weekly Update June 24:

Clear

Despite some wobbles last Friday it has been a constructive week for the market, and especially for growth stocks. Since last Thursday’s close and through yesterday’s close the S&P 500 has inched up 0.5% (back near record closing highs), the Nasdaq has hit a record high and the S&P 600 Small Cap Index is up 0.3%. Tyler has three portfolio changes: Cerence (CRNC) Moves to Buy, Revolve (RVLV) Moves to Hold, Sprout Social (SPT) Moves to Hold.

Monthly Issue June 3: Tyler’s new recommendation Funko (FNKO), is a pop culture consumer products company that makes figures and other products that give people a chance to showcase their fandom for their favorite TV shows, movies, video games, musicians, and sports teams. The majority of sales – 80% in the most recent quarter – come from sales of figures, while bags, wallets, apparel, accessories, board games, plush, homewares and other products make up the remaining 20%. The company has a market cap of $1.3 billion.

Cabot Dividend Investor

Weekly Update June 23: The market is hovering at a high level within bad breath distance of the all-time high. But that factoid is deceiving. The market really has not gone anywhere but sideways for about two months. There are two primary reasons for the sideways direction of late. One, stocks couldn’t continue to climb forever after a nearly 90% move higher from the pandemic lows of last year. A consolidation is necessary and healthy. And two, the market tends to anticipate six months or so into the future. Investors can’t decide what will drive stocks higher by the end the year when the economy slows, and comparisons get tougher.

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 June 23: The trend toward legalization in the U.S. continues, as Connecticut’s governor, Ned Lamont, yesterday signed legislation that will make adult-use legal beginning July 1 and will enable retail sales to begin in late 2022. These retail sales will include a 3% municipal sales tax, directed to the city or town where the sale occurs, plus the usual 6.35% state sales tax plus an additional tax based on the THC content of the product—which will be 2.75 cents per milligram of THC for cannabis edibles; 0.625 cents per milligram of THC for cannabis flower; and 0.9 cents per milligram of THC for all other product types. This means that Connecticut generally will have about a 4% lower tax rate than New York and about the same as Massachusetts.

Monthly IssueMay 26: The good news is that quarterly reports from our marijuana companies continue to reveal an industry that’s booming. The figures below, reflecting the latest report from each company, show an average revenue growth rate, year-over-year, of 158%! And if you take out the three non-plant-touching companies, which are there to provide a bit of stability and diversification, as well as the lone remaining Canadian company, you get an average of 204%. That’s fast!

Cabot Early Opportunities

Special Bulletin June 23: We’re going to step aside from e.l.f Beauty (ELF) today for a very slight loss (roughly 4%). We’ve held the stock for just over a month and it has posted uninspiring performance, especially since reporting on May 26. My original intent was to try to make a relatively quick and modest gain on the stock, but with so many other positions working well there’s little incentive to hold this one. Let’s walk away.

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 June 22: Monday, shortly after the market open, we exited the stock components of three of our June covered call positions (FNKO, IGT, RRC). Jacob’s new stock recommendation is Scientific Games (SGMS).

Position Update June 21: The market got hit hard on Friday, which sent three of our stocks (FNKO, IGT, RRC) below their strike prices on expiration Friday. And while none of these stocks are dramatically below our entry levels, and the calls that were sold expired worthless, let’s sell these stocks today, entirely closing out our June covered call positions, and prepare to move this capital into fresher ideas Tuesday morning and in the weeks to come.

Cabot Micro-Cap Insider

Weekly Update June 23: Do you consider yourself a growth stock investor or a value stock investor? Rich thinks growth or value framework is a false dichotomy. Warren Buffett summed it up well when he said: “Most analysts feel they must choose between two approaches customarily thought to be in opposition: ‘value’ and ‘growth.’… In our opinion, the two approaches are joined at the hip: Growth is always a component in the calculation of value.” Recognizing that growth and value are joined at the hip.

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

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.

Weekly Update June 16: Not much has changed in the market over the last week. The S&P 500 did manage to climb to a new all-time high yesterday. But that high was only a fraction of a percent above the high of early May. The market really hasn’t gone anywhere in six weeks.

Cabot Turnaround Letter

Weekly Update June 25: Covering recent news and analysis for our portfolio companies and other topics relevant to value investors. Click here to listen to the podcast.

Monthly Issue May 26: Good investment ideas can come from anywhere. One useful source is to borrow ideas from like-minded investors. While major institutional investors want to keep their best ideas secret, they are required by the Securities and Exchange Commission to file regular reports that disclose their holdings. Once disclosed, anyone can view them. Several online aggregators provide convenient access to these reports. Bruce’s has one buy recommendation: Vistra Corporation (VST).

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 2/3
BMYStrong Buy
BSCLHold
CBTBuy
CCHWFBuy
CGCSee Advisory
CRLBFSee Advisory
CRNCBuy
CSCOBuy
CURLFSee Advisory
CVXBuy
DLRHold
DOCUBuy
DOWHold
DVNBuy Another Half
EPDBuy
EVBGBuy
FIVEHoldHold
FNDHold
FSRBuy
FVRRHold
GMHoldHold
GOLDSoldBuy
GRWGSee Advisory
GTBIFSee Advisory
HTHTHold
HUBSBuy
IIPRSee Advisory
IBMBuy
INSPHold
JUSHFSee AdvisoryHold 2/3
KOSellBuy
KRNTBuy
LLYHold 2/3
MRKBuy
MRVLBuy
NEEBuyBuy
NETHold 1/2Buy
NVCRBuy
NVDABuy
OBuyBuy
OGNBuy
OKEBuy
OTTRBuy
PDDBuy
PGNYBuyBuy
PGXHold 1/2
PLTRBuyBuy
PRCHBuy
QCOMBuy
QTWOBuy
RBLXHoldHold
RGENBuy
RVLVHold
SEBuy 1/2Buy
SLBBuy
SPCEHold 1/2
SPTHold
SSOBuy
STBuyBuy
STAGHold
TAPHoldBuy
TCNNFSee AdvisoryBuy
TPBSee Advisory
TRSSFSee Advisory
TSLABuy
TSMBuy 1/2
USBBuy
VLOHold
VZHold
XELBuy 2/3
XPBuy