Cabot Prime Pro Week Ending June 4, 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, Tyler Laundon talks about how the market for growth stocks is looking much better over the last three weeks. He suggests investors continue to spread new investments around in a variety of thematic arenas given the likelihood for choppy market action to persist into the spring. He goes over 11 names that look interesting now. Stocks mentioned include WHD, CRWD, EAR, FSR, ABNB, SPT, BSY, KRNT, DAVA, RVLV, LOVE.
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Advisory Services
Cabot Growth Investor
Bi-weekly Issue June 3: Three weeks ago, growth stocks were in ruins, and we don’t think that’s much of an exaggeration—while the Nasdaq was only 8.5% off its high, things like the Russell 2000 Growth Fund (IWO), which we write about later in this issue, sat more than 18% off its peak while the glamour ARK Innovation Fund (ARKK) was off nearly 40% from its high-water mark. Tonight do a little buying but go slow and take things step by step. In the Model Portfolio, we added half positions in Progyny (PGNY) and Roblox (RBLX) last week, and tonight, we’ll average up in Devon Energy (DVN), which is a bit extended but it (and the group) is very strong. That will leave us with a still-large 57% in cash.
Bi-weekly Update May 27: Stay cautious, but it’s OK to do a little buying. The evidence has improved of late, and given our huge cash position, that’s enough to tip-toe back into the market. That said, we consider the past few sessions as a good first step or two, but there’s a lot more work to be done before growth stocks are really in gear. Tonight we’ll add half-sized positions in both Progyny (PGNY) and Roblox (RBLX)—both are smaller and volatile (especially RBLX), but both also look like potential new leaders if the market kicks into gear. We’ll give them rope and we’ll still be holding around 60% in cash even after the buys.
Cabot Top Ten Trader
Movers & Shakers June 4: It’s been a relatively quiet holiday-shortened week, with the indexes and many individual stocks not making many moves. (A few groups, like energies, financials and even REITs made decent moves, but that was about it.) It’s possible this morning’s jobs report could change that, but all in all we’ll chalk it up as a neutral week—which, coming after three constructive weeks, is fine by us.
Weekly Issue June 1: If you had told us three weeks ago that growth stocks would bounce decently, a collection of names would show some big-volume upmoves and other names would start to tighten up, we’d have taken it in a heartbeat. As we’ve written in recent days, the action is encouraging, though not decisive yet, and the next week or two will be key—many prior winners have pushed into resistance, while in recent months most good-looking names have quickly found sellers, so if the buying pressures can continue it would be a sign that the market’s character has changed. Mike’s Top Pick is Nvidia (NVDA)—it’s had two failed breakouts this year, but we think the 3rd time could be the charm.
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 Pro & Basic Stocks on Watch June 3: Ahead of the “big” Jobs Report tomorrow the market is mixed. The Dow is up marginally, while the S&P 500 is mostly unchanged, and the Nasdaq is down 1%. Essentially, the market is still stuck in a choppy range.
Cabot Options Trader Pro & Basic Market Update June 2: Less than a week ago Jacob wrote to Cabot Options Trader/Cabot Options Trader Pro subscribers regarding a large call buy in AMC Entertainment (AMC): Here is the most ludicrous of the call buys: Buyer of 35,000 AMC June 40 Calls for $1.50 – Stock at 18. This trader would need AMC to rally 22 points in the next four weeks for these calls to finish in-the-money. While Jacob thinks this scenario is very unlikely, we have seen AMC, GME, RKT, FUBO etc. go crazy in the past, so anything is possible. Today, AMC is trading at 64!
Cabot Options Trader Pro & Basic Stocks on Watch June 1: Texas Roadhouse (TXRH) hit Jacob’s radar on Friday afternoon when a trader opened the following position: Friday - Buyer of 3,000 September 105 Calls for $5.56 – Stock at 100
Cabot Options Trader Pro Weekly Review June 1: Long positions: XLF, DKNG, F, GPS, CGC. Bearish positions: SPY
Cabot Options Trader Basic Weekly Review June 1: Stocks got back in gear to the upside last week with across-the-board gains. The Dow rose 0.9% while the S&P 500 advanced 1.2%, both breaking a two-week losing streaks. The Nasdaq gained 2.1% to post its best weekly return since April 9.
Cabot Undervalued Stocks Advisor
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.
Weekly Update May 26:We’ve written about inflation in the past two letters and promise that we’ll stop with this letter, unless some major news on this front emerges. Yet, what keeps us on the topic is commentary from brokerage firms and media outlets saying that the market is fully discounting the arrival of inflation. If inflation is here to stay, at perhaps a rate greater than, say, 3-4%, then the market is not discounting its arrival. Bruce has one new Buy: Otter Tail Corporation (OTTR).
Cabot Stock of the Week
Weekly Issue June 1: The bull market that began in March 2020 remains in effect, and our policy of investing in a balanced portfolio of stocks chosen using a variety of investing systems continues to work. Tim’s featured stock Palantir Technologies (PLTR) is a software company specializing in big data analytics. The stock is a bit on the controversial side due to its beginnings focused on government contracts and because of the unconventional politics of Peter Thiel, yet if you can get past that, you’ll find a great growth opportunity.
Cabot Explorer
Bi-weekly Update June 3: The market seems to have found its footing this week as the economy reopens amidst some supply shortages and inflationary pressures. Electric vehicle stocks are coming back as Ford announced a big push into EVs and its new F-150 Lightning received 70,000 deposits in just 10 days. After some weakness, Fisker (FSR) and Virgin Galactic (SPCE) have bounced back nicely over the last two weeks—50% and 100%, respectively. Marvell Technology Group (MRVL), our play on 5G, has developed a nice uptrend over the past two weeks as the company expects to announce first-quarter earnings next week. Carl is moving Anglo American (NGLOY) to a Sell.
Bi-weekly Issue May 27: The Dow Jones index began on May 26, 1896 with 12 companies, including the likes of American Cotton Oil and Distilling & Cattle Feeding. The storied index expanded to 20 stocks in 1916 and 30 stocks in 1928. It has increased an average of 7.7% each year, according to Dow Jones Market Data. It climbed above 100 in 1906, reached 1,000 in 1972 and passed 10,000 in 1999. Carl’s new recommendation Palantir Technologies (PLTR),is a software company specializing in big data analytics. Peter Thiel and a few others from the PayPal mafia founded Palantir in the early 2000s. Its software is used by government agencies in a wide range of applications and the company sees plenty of room to expand into the commercial sector.
Cabot Small-Cap Confidential
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.
Special Bulletin May 28: Yesterday I mentioned that I would follow up today with notes from the Thunderbird Entertainment (TBRD.CA, THBRF) earnings call. Here are a few tidbits from that call. There was a lot of talk about inclusivity and diversity on the call, both in terms of people and partners working for/with Thunderbird as well as the types of content the company seeks to produce and the messages it seeks to deliver.
Weekly Update May 27: Well, it’s about time some buyers showed up. While we can’t yet characterize the move in higher growth small- and mid-cap stocks as a rally per se, it’s not premature to say that sentiment has turned up when it comes to these types of stocks. Looking at the broad market indices, the S&P 500 has recovered from a 4% dip to trade near all-time highs, the Dow is just 2% off its high and the Nasdaq is two weeks into a recovery from a 9% drawdown and now sits 3% off its previous high. Tyler is moving Q2 Holdings (QTWO) to a Buy.
Cabot Dividend Investor
Weekly Update June 2: The market continues to stumble sideways. On the one hand, the S&P 500 is within a whisker of the all-time high. On the other hand, stocks have been going sideways for about a month. It looks like supply chain issues will hold back the pace of the economic recovery. The economy is still growing very strongly. And GDP may even still exceed expectations. But supply shortages, locally and mostly abroad, will limit U.S. economic growth below what it would otherwise have been.
Monthly Issue May 12: Despite the past couple of days, the market indexes are still close to all-time highs. Stocks have soared at an amazing pace over the last year and the past several months. A promising environment of a booming economy complemented by trillions in stimulus still lies ahead. But how much of that wonderful news is already priced in? Tom’s featured stock ONEOK Inc. (OKE), is a large U.S. midstream energy company specializing in natural gas. Tom has two portfolio changes.
Cabot Marijuana Investor
Weekly Update June 2: The big news this week is that Amazon will no longer screen most job applicants for marijuana use. Plus, the giant is supporting federal marijuana legalization. That’s one more step in the right direction. With last week’s sale of the last of our longtime holding Turning Point Brands (TPB), the portfolio has 31.5% of its assets in cash, and that’s too much for a sector that is looking increasingly healthy. So it’s time to do a little more buying. The two strongest charts in our portfolio now belong to Curaleaf (CURLF) and TerrAscend (TRSSF). And, as Tim noted above, Canopy Growth (CGC) seems to have bottomed, and he thinks it’s time to increase our small position in the Canadian leader.
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
Monthly Issue May 19: If you want to strike up conversation at your next social gathering just utter one of two sentences. “Hey, have you guys heard about lumber prices? Holy cow!” Or, “Man, I think inflation is here to stay. Prices on everything are going up and there’s no end in sight.” Tyler’s Top Pick Fox Factory Holdings (FOXF), makes suspension and other parts, including side-by-side vehicles, all-terrain vehicles, snowmobiles, motorcycles, and other specialty vehicles.
Special Bulletin May 14: This may just go down on record as one of the worst earnings seasons ever for growth stocks. Two weeks ago, things were “fine.” Since May began, not. Inflation is the bogeyman spooking investors and his shadow has crept out from below desks and up the walls of those with growth-heavy portfolios. The sell orders picked up steam early this week, and while the last two days have been far better, the divergent action between growth stocks (cloud, MedTech, Internet, etc.) and other areas of the market is crystal clear.
Cabot Profit Booster
Weekly Issue June 2: The market has strengthened again, which is great for our three open covered call positions, all of which are trading above the strike price of the call we sold. That being said, a sideways market is also fine for our volatility selling strategy, that is focused on buying the strongest stocks, while keeping the portfolio diversified. This eye on diversification is what brings Jacob to this week’s pick, which is a natural gas company that is breaking out to a new recent high. Jacob’s new stock recommendation is Range Resources (RRC).
Cabot Micro-Cap Insider
Weekly Update June 2: Rich’s favorite market strategist, Ryan Detrick, is always good for some interesting factoids. According to Ryan, when the S&P 500 is up >10% through the first 100 days of the year, it increases 8.6% on average during the remaining portion of the year. While the market is pricy, the advice “don’t fight the tape” usually pays off. That said, we aren’t recommending a single name in the S&P 500 due to our focus on micro-caps. When evaluating micro-caps, it’s important to focus on the fundamentals.
Monthly Issue May 13: Rich’s new recommendation Drive Shack (DS), is a modern take on driving ranges. Each Drive Shack Venue features expansive, climate-controlled, suite style bays with lounge seating; augmented-reality golf games and virtual course play; a restaurant and multiple bars; an outdoor patio with lawn games; and arcade games. See below for the view from a bay at a Drive Shack location. Drive Shack’s traditional and entertainment golf businesses are set to boom in 2021. Given substantial recent cost cuts, operating leverage should drive earnings growth in 2021 and beyond. Longer term, growth will be driven by new Puttery Venues, which have high potential.
Cabot Income Advisor
Weekly Update June 2: A market like this doesn’t tend to provide good call writing opportunities. Right now, the better opportunity is in accumulating stocks. Several other portfolio positions have not moved of late and are still in the buy range including Digital Realty Trust (DLR), NextEra Energy (NEE), and Enterprise Product Partners (EPD). As well, it’s a great time to accumulate newer portfolio additions Qualcomm (QCOM) and ONEOK Inc. (OKE).
Monthly Issue May 26: It looks like this relentless bull market is finally stalling out. The market isn’t correcting, or really selling off in any substantial way. It has just stopped moving higher, for now. Given the returns in the past year and recent months, the market had to take a break. That pace couldn’t last. Tom’s featured stock ONEOK Inc. (OKE), is a large U.S. midstream energy company specializing in natural gas. It owns one of the nation’s premier natural gas liquids (NGLs) systems and also has an extensive network of natural gas gathering, processing, storage and transportation assets.
Cabot Turnaround Letter
Weekly Update June 4: Duluth Holdings (DLTH) – This retailer of rugged workwear and outdoor gear struggled with a disjointed and overly aggressive retail store expansion strategy. Duluth’s turnaround started with the return of the founder to the interim CEO seat in September 2019. He slowed the expansion, instead focusing on upgrading infrastructure, operating efficiency and navigating the company through the pandemic. A new, permanent CEO started in May 2021 and is continuing Duluth’s turnaround. The company has immense opportunities – its challenge is to strike a successful balance between pursuit and execution. 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).
Special Bulletin May 25: Bruce is moving Jeld-Wen Holdings (JELD) from Hold to Sell. The company is executing on its turnaround, led by the relatively new CEO. However, after our more detailed review of the company’s future prospects, the shares appear to fully discount a robust profit recovery and are trading at our price target. Their Investor Day was uninspiring – while the company is operating much better and has at least a temporary cyclical tailwind, the management is talking about pursuing their growth ambitions, going so far as to outline as much as $4 billion in buying power over the next several years.
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.
| Stock | Cabot Small-Cap Confidential | Cabot Explorer | Cabot Growth Investor | Cabot Marijuana Investor | Cabot Stock of the Week | Cabot Undervalued Stocks Advisor | Cabot Dividend Investor |
|---|---|---|---|---|---|---|---|
| ABBV | Buy | ||||||
| ACCD | Buy | ||||||
| AGC | Buy | ||||||
| AGNC | Buy | ||||||
| ARCO | Buy | ||||||
| ARNA | Buy | ||||||
| AVGO | Hold | Buy | |||||
| AVLR | Buy | ||||||
| AVVIY | Buy | ||||||
| BIP | Buy | Buy 2/3 | |||||
| BMY | Strong Buy | ||||||
| BSCL | Hold | ||||||
| CBT | Buy | ||||||
| CCHWF | Buy | ||||||
| CGC | See Advisory | ||||||
| CRLBF | See Advisory | ||||||
| CRNC | Hold | ||||||
| CSCO | Buy | ||||||
| CURLF | See Advisory | ||||||
| CVX | Buy | ||||||
| DLR | Buy | ||||||
| DOW | Hold | ||||||
| DVN | Buy Another Half | ||||||
| EPD | Buy | ||||||
| EVBG | Buy | ||||||
| FIVE | Hold | Hold | |||||
| FND | Hold | ||||||
| FSR | Buy | ||||||
| FVRR | Hold | ||||||
| GM | Hold | Hold | |||||
| GOLD | Buy | Buy | |||||
| GRWG | See Advisory | ||||||
| GTBIF | See Advisory | ||||||
| HTHT | Hold | ||||||
| HUBS | Buy | ||||||
| IIPR | See Advisory | ||||||
| IBM | Buy | ||||||
| INSP | Hold | ||||||
| JUSHF | See Advisory | Hold 2/3 | |||||
| KO | Buy | Buy | |||||
| KRNT | Buy | ||||||
| LLY | Hold 2/3 | ||||||
| MRK | Buy | ||||||
| MRVL | Buy | ||||||
| NEE | Buy | Buy | |||||
| NET | Hold 1/2 | ||||||
| NGLOY | Sell | ||||||
| NVCR | Buy | ||||||
| NVDA | Buy | ||||||
| O | Buy | Buy | |||||
| OKE | Buy | ||||||
| OTTR | Buy | ||||||
| PGNY | Buy | ||||||
| PGX | Hold 1/2 | ||||||
| PLTR | Buy | Buy | |||||
| PRCH | Buy | ||||||
| QCOM | Hold | ||||||
| QTWO | Buy | ||||||
| RBLX | Buy | ||||||
| RGEN | Buy | ||||||
| RVLV | Buy | ||||||
| SE | Buy 1/2 | Buy | |||||
| SLB | Buy | ||||||
| SPCE | Hold 1/2 | ||||||
| SPT | Buy | ||||||
| SSO | Buy | ||||||
| ST | Buy | ||||||
| STAG | Hold | ||||||
| TAP | Hold | Buy | |||||
| TCNNF | See Advisory | Hold | |||||
| TPB | See Advisory | ||||||
| TRSSF | See Advisory | ||||||
| TSLA | Hold | ||||||
| TSM | Buy 1/2 | ||||||
| TSN | Hold | ||||||
| USB | Buy | ||||||
| VLO | Hold | ||||||
| VZ | Hold | ||||||
| XEL | Buy 2/3 |