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Cabot Prime Pro Week Ending March 2, 2018

Cabot Prime Pro Week Ending March 2, 2018

Cabot Weekly Review

In this week’s stock market video, Paul Goodwin surveys the damage caused by overly honest remarks from the new Fed chief and the rash remarks about tariffs from another relative Washington newcomer. The negative action over the past few days has pulled the markets back below their 25- and 50-day moving averages, erasing the medium-term green light that shone briefly. Still, many growth stocks are still doing well. Paul says that in this kind of market, it’s more important than ever to keep looking at the charts of the stocks you hold and are thinking about buying to be sure they are stronger than the market.

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Cabot’s 10 Best Marijuana Stocks

Update February 27: Cronos Group is expected to be elevated today from the Nasdaq International Designation program (where it has traded as PRMCF) to the Nasdaq Global Market, where it will trade under the ticker symbol CRON. In Canada, it will continue to trade under the symbol MJM.

Spring Issue February 15: Tim gives updates on the 10 stocks we’ve been following and two new stocks. The market’s recent correction has brought most of them down to what look like good buying areas.

Cabot Growth Investor

Other Stocks of Interest March 2: Follow ups to stocks featured September 27, 2017 (issue 1377) to February 28, 2018 (issue 1388). 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.

Special Bulletin March 2: The selloff ended our brief Cabot Tides buy signal from earlier this week, telling us the correction that began in late January isn’t over. Mike is paring back on Grubhub (GRUB), selling half our shares today and holding the rest, and ProShares Ultra S&P 500 Fund (SSO) is moving back to Hold given the reversal of the Tides signal.
Bi-weekly Issue February 28: Mike is honing his Watch List for more buying if the tenor of the market continues to improve. He writes about some of the clues to identifying abnormal action, which earlier this year led us to sell a couple of stocks that have since been hit hard, while holding onto some leaders that are beginning to re-emerge. The discussion will help you hold your highest-potential holdings through tough corrections.

Special Bulletin February 27: The recent rally has been enough to turn our Cabot Tides positive, as three of the five indexes we track are clearly above their 50-day lines, so Mike is putting some money back to work. He’s adding HubSpot (HUBS), buying an extra 3% position in Shopify (SHOP) and placing ProShares Ultra S&P 500 Fund (SSO) back on Buy.

Cabot Top Ten Trader

Movers & Shakers Weekly Update March 2: right now, the sellers are in control, and it will take more than a couple of good days to turn the trend back up. Thus, play some defense and keep your Watch List up to date with potential leaders of the next advance, which will come eventually. Buy ideas: Array Biopharma (ARRY), BeiGene (BGNE), Five Below (FIVE), Netflix (NFLX), Shopify (SHOP) and Twitter (TWTR).

Weekly Issue February 26: This week’s list is chock full of enticing stories and charts. If the rally continues, some of the leaders are likely to be in this issue (and last week’s). Our Top Pick is Red Hat (RHT)—it looks like a liquid leader in the super-strong software group.

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 March 2: Buy a Half Position: Buy Intel (INTC) January 52.5 Calls (exp. 1/18/2019) for $3.50 or less, or Buy Half a Position: Buy Intel (INTC) January 52.5/60 Bull Call Spreads (exp. 1/18/2019) for $2.15 or less.

Earning Update
March 2: Yesterday after the close, Nutanix (NTNX) reported earnings, revenues and guidance that beat expectations, and announced an acquisition.

Stocks on Watch
March 1: Options activity has been very quiet in the last several days except in two leading semiconductors, Micron (MU) and Intel (INTC). Jacob lists the trades that has him interested in these stocks.

Earnings Update March 1: Nutanix (NTNX) will report earnings after the close this afternoon. We’re holding a bullish April position that is currently sitting at a small loss. Jacob will take the earnings risk and hold the position through earnings.

Position Update February 28: Etsy (ETSY) is trading higher by $5 today following earnings, and our calls are now at a profit of over 265%. Jacob will continue to hold his position and go for the grand slam on the balance of his calls.

Earnings Update February 28: Etsy (ETSY) reported earnings, revenues and guidance that easily beat expectations. In early pre-market trade, ETSY is trading higher by 16%, putting our position at a potential profit of 169%.
Options Education February 28: As the market has rebounded just short of 2018 highs, an interesting and somewhat complex trade structure has become popular: 1x2 Bull Call Spreads.

Earnings Update February 27: Etsy (ETSY) will report earnings this afternoon after the close. We are holding a small position after selling the first three-quarters of our calls for profits of 21% and 13%.

Hedge Existing Position February 26: Against your CSCO March 37 Calls, buy March 44.5 Puts (exp. 3/16) for $0.60 or less.

Weekly Update February 26: The VIX closed the week at 16.5, lower by 15%. Jacob is a bit surprised with how hard the VIX has fallen just two weeks after the indexes dropped more than 10%, and given the continued frequency of 1% daily moves in the market.

Cabot Undervalued Stocks Advisor

Special Bulletin February 28: Delek US Holdings (DK) and Supernus Pharmaceuticals (SUPN) reported fourth-quarter results, and Crista rates both stocks Strong Buy. She also reports that financial stocks, including Bank of America (BAC), BB&T Corp. (BBT), CIT Group (CIT) and Morgan Stanley (MS) are breaking out of trading ranges.

Weekly Update February 27: Crista writes that stocks are not done bouncing around yet, and a few sectors are lagging the broader market, including energy and healthcare. Ratings changes: Alphabet (GOOGL) and Nucor (NUE) move to Hold, and KLX Inc. (KLXI) and XL Group (XL) move to Buy.

Monthly Issue February 6: Today’s portfolio changes: Blackstone Group (BX) moves from Buy to Strong Buy, Delek US Holdings (DK) joins the Buy Low Opportunities Portfolio as a Strong Buy, Martin Marietta Materials (MLM) moves from Hold to Buy and Schlumberger (SLB) moves from Hold to Buy.

Cabot Stock of the Week

Weekly Issue February 27: The market rebound over the past few weeks has been very impressive; it’s now turned our intermediate-term timing indicator back to positive. But buying after such a spike is risky, so today’s recommendation, Baker Hughes (BHGE), is a beaten-down stock that has nowhere to go but up. In the current portfolio, most of our stocks are doing fine, with three hitting new highs today. But Tim did find one to sell, Melco Resorts (MLCO), and he’s moving Alphabet (GOOGL) to Hold.

Cabot Emerging Markets Investor

Bi-weekly Update March 1: The iShares EM Fund (EEM) has dropped decisively below its 25- and 50-day moving averages, which returns the Emerging Markets Timer to a negative reading. Paul is moving Autohome (ATHM) and GDS Holdings (GDS) to Hold.
Bi-weekly Issue February 22: Emerging market stocks have followed the lead of the major U.S. indexes by executing a V-shaped bounce from their January/February slump and most of our stocks are in good shape. Paul adds high-flying Chinese biopharmaceutical company BeiGene (BGNE) to the portfolio, and is selling Melco Resorts (MLCO).

Cabot Benjamin Graham Value Investor

Weekly Update March 1: Warren Buffett’s highly anticipated annual letter to shareholders was released on Saturday. In it, Buffett reaffirmed our conservative outlook on the market. Updates on Berkshire Hathaway (BRK.B), Lowe’s (LOW) and STORE Capital (STOR).

Monthly Issue February 8: Azmath reviews recent market volatility, introduces a new Buy Nautilus (NLS) and moves Alphabet (GOOG) to Hold.

Cabot Small-Cap Confidential

Monthly Issue March 2: We’re adding Rapid7 (RPD), a pure-play security solutions provider to Cabot Small-Cap Confidential. The company is growing revenue well over 20% and expanding its portfolio of solutions to address large and rapidly growing markets. AppFolio (APPF), AxoGen (AXGN), BioTelemetry (BEAT) and Q2 Holdings (QTWO) move to Hold, and US Concrete (USCR) moves to Sell.

Cabot Dividend Investor

Monthly Issue February 28: Chloe clears one underperforming stock, ExxonMobil (XOM), from the portfolio today, puts dividend stalwart 3M (MMM) back on Buy, and adds very high-yielding AllianceBernstein (AB). She also recaps her sell strategy and gives updates on all our stocks.

Wall Street’s Best Investments

Daily Alert March 2: ProShares UltraShort Silver (ZSL) from Stock Trader’s Almanac
Daily Alert
March 1: Meritage Hospitality Group (MHGU) from Internet Wealth Builder
Daily Alert
February 28: Paycom Software (PAYC) from Validea Hot List Newsletter
Daily Alert
February 27: Vipshop Holdings (VIPS) from Cabot Stock of the Week
Daily Alert
February 26: Tetra Tech (TTEK) from Sound Advice
Monthly Issue February 21: While the market’s volatility increases the need for selective stock picking, it also presents some fantastic opportunities to buy stocks whose shares have been discounted through no fault of their own. Our contributors are pouncing on those ideas.

Wall Streets Best Dividend Stocks

Daily Alert March 2: Leggett & Platt (LEG) from Sure Dividend
Daily Alert
March 1: WestRock Company (WRK) from Cabot Undervalued Stocks Advisor
Daily Alert
February 28: Walmart (WMT) from Schaeffer’s Investment Research
Daily Alert February 27: Mercury General (MCY) from Forbes Dividend Investor
Daily Alert
February 26: Archer Daniels Midland (ADM) from Dividend Advisor

Monthly Issue February 14: Nancy’s featured stock today is Foot Locker (FL). Boosting the positive feelings for the stock is the outlook for retail, in general, due to tax cuts, a growing economy, and an improved job market—all of which contribute to optimism on the part of consumers.

This Week’s Q&As

Cabot Growth Investor and Cabot Top Ten Trader

Question: What are some reliable signs to look for that the market is finding a low -- and possibly successfully retesting its prior low in February?

Mike: First, the most reliable indicator is the trend of the market itself; oftentimes the market will throw off some encouraging signals before sinking anew. Thus, we prefer to simply wait for the trend to turn up.
That said, the perfect setup would be (a) some extreme sentiment measures like spikes in the VIX, very high equity put-call ratios, and big withdrawls of money from stock funds, (b) improvement among breadth measures as the market retests its lows (fewer stocks hitting new lows, more stocks above their 50-day moving averages, etc.) and (c) legitimate setups among growth stocks.
That’s the setup, of course; then you need to see the market show strong upside action with leading stocks breaking out. The more factors you get in place, the greater the chance the market is near a low. Today, though, we’re seeing a few signs of this but nothing across-the-board yet.

Cabot Stock of the Week

Question: I recently subscribed to Cabot Stock of the Week. Do you comment on stocks between issues, when warranted, like the other Cabot analysts do? I bought BioTelemetry (BEAT) but I’m getting nervous re the way it is acting, especially after the earnings report sounded pretty good. I realize the market is not acting well either, but still ... Any thoughts on your end?

Tim: With only a week between issues, it’s rare that I send a special bulletin. But it does happen. I have a 7% loss in BEAT now, so it is definitely something I am concerned about, but if I had a good profit cushion, I wouldn’t worry much. Given the market, the stock looks okay. Still, cutting losses short is one of the best practices, so if it gets painful, by all means cut it loose. My general limit for growth stocks is a 15% loss in bear markets and a 20% loss in bull markets … and I believe that we’re still in a long-term bull market.

Cabot Emerging Markets Investor

Question: Tencent Holdings (TCEHY): Trouble brewing?

Paul: All emerging market stocks are under pressure today, so TCEHY’s action isn’t isolated. I’ll keep watching, but this stock is always volatile, so I’m not hugely alarmed, especially as its still above its 50-day moving average.

Question: I have never seen anything like this. All the Chinese stocks in my portfolio are falling at the same time. TAL at almost 8%. Is there any news you are aware of that could account for this? The rest of my portfolio is green along with the Nasdaq.
Paul: It looks like Chinese stocks are scrubbing off Friday’s jump higher, not falling into an actual pullback. There are plenty of things going on as investors maneuver to accommodate possibly higher interest rates, growth rates and strengthening commodities. I don’t ever like to see any of my stocks pull back, but this looks pretty normal to me.

Wall Street’s Best Investments and Wall Street’s Best Dividend Stocks

Question: Nancy, thank you for presenting the National Presto Industries (NPK) special dividend information. Am wondering- does the share price drop by $5 on the ex- dividend date? If it does, then what is the benefit of the special dividend? The more I read about dividends, the more confused I become.

Nancy: The stock price does not always drop in the case of a special dividend, but it does sometimes. In many cases, the drop is a temporary reaction to the special dividend. And then, it’s business as usual, meaning that the stock price of a fundamentally strong company should once again find its footing, and continue to rise after investors realize the special dividend was a bonus.

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