Cabot Prime Pro Week Ending May 4, 2018

Cabot Prime Pro Week Ending May 4, 2018

Cabot Wealth Summit Registration

What do Cabot’s most successful investors have in common? They come to the Cabot Wealth Summit!

If you haven’t yet registered for the Cabot Wealth Summit, now’s the time because the Extra Early Bird rate expires soon! The Summit is a literal breakfast, lunch and dinner with every one of Cabot’s analysts, a rich and intense program of stock picks, market analysis, investing tips and techniques and a chance for face-to-face Q&A with some of the savviest investors around. We will also have great social activities!

Register here for the August 15-17, 2018 Summit at special pricing for Cabot Prime Pro members.

Cabot Weekly Review

In this week’s stock market video, Mike Cintolo says that not much has changed with the overall market’s stance during the past couple of weeks—with the trend down, he continues to advise a cautious stance. However, he also believes the market is in an interesting spot, as it’s holding above its correction lows despite a bunch of bad news. A couple of good up days could actually turn the trend up! No predictions, but Mike relays a bunch of stocks in pole position to lead the market’s next uptrend, whenever it begins.

Cabot’s 10 Best Takeover Stocks.

Special Report May 3: There are a variety of reasons that a corporation might want to purchase another company. They might want to acquire a company’s patents or products to enhance their product lines; access the company’s distribution network and sales relationships; or simply aim to increase their earnings growth rate by purchasing a very profitable company within a related industry. After all, stronger earnings growth leads to better share price appreciation—a topic that boards of directors care very much about. Crista’s investment strategy, which combines both growth and value criteria, inadvertently identifies potential takeover targets. That’s because big companies and she often seek the same thing: stock investments in undervalued, financially thriving companies that can deliver profits to investors. The ten companies are all undervalued growth stocks. What’s more, they’re small enough that big competitors and peers within their sectors could easily finance their acquisitions, often through current cash flow.

Cabot Growth Investor

Bi-weekly Update May 2: Mike says to remain cautious. The market is doing more chopping than declining in recent weeks, and because of that, a couple of good days on the upside could actually turn the intermediate-term trend up. But we never anticipate, and right now, our Cabot Tides and Two-Second Indicator remain negative and many resilient growth stocks have come under pressure. There are no rating changes tonight.

Special Bulletin May 1: Tonight Mike is going to sell the remaining shares of Shopify (SHOP). While the stock hasn’t broken its recent lows, today’s adverse earnings reaction and its prior long run tell us there will be better stocks to own once the market gets going on the upside. He’s also going to sell another half of Grubhub (GRUB), which got hit on earnings today.

Bi-weekly Issue April 25: Mike says to remain cautious and focus on preserving capital until the next uptrend begins. In tonight’s issue, Mike writes about the bifurcation we’re seeing among obvious, later-stage stocks (like chip stocks) and some of the newer, fresher names—including one recent IPO we’re very high on once the market finds its footing.

Other Stocks of Interest April 27: Follow ups to stocks featured November 22, 2017 (issue 1381) to April 125 2018 (issue 1392). 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.

Cabot Top Ten Trader

Movers & Shakers Weekly Update May 4: Mike writes that he has no changes in our advice—he’s still advising a cautious stance as the market and most stocks are having trouble sustaining much upside. Buy ideas: Coupa Software (COUP), GoDaddy (GDDY), Lululemon (LULU), Melco Resorts (MLCO), Palo Alto Networks (PANW) and Michael Kors (KORS). There are a handful of sells this week.

Weekly Issue April 30: Today’s roster includes some strong breakouts and a handful of set-ups, and Mike’s Top Pick is AMN Healthcare (AMN), which has a steadily growing business in the field of healthcare staffing.

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.
Position Update May 4: Jacob has not yet been filled on his sell order of Axon Enterprises (AAXN) at $4.80. If his order is not filled by the close of trade, it will cancel, and he will re-evaluate Monday morning.

Trade Alert May 4: Sell HALF of Existing Position: Sell HALF your Axon Enterprises (AAXN) September 45 Calls for $4.80 or more.

Stock on Watch May 3: One stock that saw big call buying yesterday, and again today, is Paypal (PYPL) which fell 4% yesterday on Amazon competition news.

Earnings Update May 3: Alibaba (BABA) will report earnings tomorrow before the open. With the stock trading at 182.5, the options market is pricing in a move of $9, or 173.5 to the downside and 191.5 to the upside.

Stock on Watch May 2: Finally, a stock is piquing Jacob’s interest because of bullish options positioning, Wynn Resorts (WYNN). This is the type of setup he likes. A trader is risking over $12.5 million in upside calls, and is paying higher prices today than he did yesterday. If the market can strengthen, WYNN is at the top of Jacob’s list for a new position.

Earnings Update May 2: Tesla (TSLA) will report earnings this evening after the closing bell. The stock is trading unchanged today at 300, as the market is down marginally. For the year, TSLA is down 3.67%.

Stock on Watch May 1: One stock that is of interest today is Starbucks (SBUX). The company reported earnings late last week and like many stocks recently, is trading lower following the report. However, this morning there are rumors of activist interest. And with those rumors is a flurry of options activity.

Earnings Update May 1: Apple (AAPL) will report earnings this evening after the closing bell. The stock is trading slightly higher today at 166, while the market is down marginally. For the year, AAPL is down 1.68%.

Weekly Market Update April 30: Jacob writes that it is expected that the Federal Reserve will not hike interest rates on Wednesday. However, at their last meeting, Fed members were evenly split whether to raise rates three or four times this year. The April Jobs Report, which will be released Friday morning, could potentially push the Fed closer to the three or four rate hike camp.

Cabot Undervalued Stocks Advisor

Special Bulletin May 3: CIT Group (CIT) announced its intention to purchase $500 million of its common stock via a modified Dutch auction within a range of $50 to $56 per share. The offer expires on May 23. Crista’s suggestion is to ignore the tender offer, and hold CIT for future capital appreciation.

Special Bulletin May 2: Apple (AAPL) has a good earnings report and Crista is moving KLX Inc. (KLXI) from Hold to Strong Buy.

Monthly Issue May 1: Today, D.R. Horton (DHI) joins the Growth Portfolio as a Strong Buy, and PBF Energy (PBF) moves from the Buy Low Opportunities Portfolio to the Growth & Income Portfolio. Also, Crista discusses stock market trends pertaining to energy stocks, financial stocks and takeover stocks.

Special Bulletin May 1: Boeing (BA) and KLX Inc. (KLX) have agreed that Boeing will purchase the Aerospace Solutions Group from KLX for a price of $63 per share in cash, which will go directly to KLXI shareholders. Crista will make her recommendation within a few days.

Special Bulletin April 30: Molina Healthcare (MOH) announced first-quarter results far above Wall Street estimates this morning, and significantly raised guidance for full-year 2018. Crista is changing the rating on the stock from Strong Buy to Hold.

Cabot Stock of the Week

Weekly Issue May 1: Tim is selling two stocks today: Baker Hughes, a GE Company (BHGE) and Azul (AZUL). This week’s recommendation, iQIYI (IQ) is a real wild card, a recent Chinese IPO that has been spun off from one of the big Chinese leaders. Risk-averse investors might want to give it a pass, or at least wait until there’s an established uptrend, but if you can handle the risk, buying down here might work out really well!

Cabot Emerging Markets Investor

Bi-weekly Issue May 3: Today’s featured stock is 58.com (WUBA). With our Emerging Markets Timer still negative, it’s best to keep positions very small or, as we’re doing, simply add it to your Watch List.There are no rating changes.

Bi-weekly Update April 26: The iShares EM Fund (EEM) has been through a bad week, pulling it decisively below its 25- and 50-day moving averages. In the portfolio today, Paul is selling Azul (AZUL) and moving the half position in 51 Job (JOBS) to a Hold rating.

Cabot Benjamin Graham Value Investor

Weekly Update May 3: Crista is selling two healthcare stocks today: Gilead Sciences (GILD), with a dreary outlook and a poor price chart, and McKesson (MCK), with an extremely modest outlook and a recent rebound.

Cabot Small-Cap Confidential

Monthly Issue May 4: Tyler’s new recommendation is MGP Ingredients (MGPI), also known as Midwest Grain Products, a $1.4 billion market cap company that makes premium distilled spirits, industrial alcohol, specialty wheat starches and specialty wheat proteins. There are no changes to the portfolio, but because it’s earnings season, Tyler suggests keeping new purchases small, particularly for those stocks that have yet to report.

Special Bulletin May 2: AppFolio (APPF), Apptio (APTI), AxoGen (AXGN) and Instructure (INST) all report Q1 results. There are no rating changes.

Weekly Update April 27: Tyler has no rating changes today, but because it’s earnings season, he suggests keeping new purchases small, particularly for those stocks that have yet to report. This week, we have earnings from just one company, LogMeIn (LOGM), which reported yesterday.

Cabot Dividend Investor

Weekly Update May 2: The past week also brought a slew of earnings reports, and some big reactions, so Chloe has three rating changes today. She’s moving CME Group (CME) to Hold, and selling Cummins (CMI) and the rest of 3M (MMM).

Monthly Issue April 25: Chloe is selling one third of our 3M (MMM) shares. This month’s featured buy is McGrath RentCorp (MGRC), which joins the Safe Income Tier.

Cabot’s 10 Best Marijuana Stocks

Update April 18: Tim remains long-term bullish on the marijuana sector, aiming to build a diversified portfolio of the best U.S. and Canadian stocks, and he’s looking forward to delivering your next quarterly issue of Cabot’s 10 Best Marijuana Stocks in the middle of May.

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.

Wall Street’s Best Investments

Daily Alert May 4: STMicroelectronics NV (STM) from Schaeffer’s Investment Research
Daily Alert May 3: GW Pharmaceuticals (GWPH) from Shortex Market Letter
Daily Alert May 3: Conn’s Inc. (CONN) from Shortex Market Letter
Daily Alert May 2: Visa Inc. (V) from The MoneyLetter
Daily Alert May 1: Tomra Systems ASA (TMRAY) from Global Investing
Daily Alert April 30: Nutanix, Inc. (NTNX) from Cabot Growth Investor

Monthly Issue April 18: Our Spotlight Stock is, Cintas Corporation (CTAS), the leading uniform company in that space, with 25% of the very fragmented market. Nancy’s Feature article discusses her thoughts on this company from a personal perspective, after having visited it several years ago.

Wall Streets Best Dividend Stocks

Daily Alert May 4: McGrath RentCorp (MGRC) from Cabot Dividend Investor
Daily Alert May 3: IBERIABANK Corporation (IBKC) from Hughes Investment Management
Daily Alert May 2: Pardee Resources Company (PDER) from Positive Patterns
Daily Alert May 1: Fifth Third Bancorp (FITBI) from Forbes/Lehmann Income Securities Investor
Daily Alert April 30: Realty Income Corporation (O) from Forbes Dividend Investor

Monthly Issue April 11: The Spotlight Stock is Southern Company (SO), now the highest-yielding stock in the Dow Jones Utility Average, after dropping 17% from its November 2017 high. Nancy’s Feature explores low beta stocks—companies whose shares are less volatile than the overall market. And this month’s Spotlight Stock, fits that criteria, boasting a beta of 0.3.

Cabot’s 10 Best Covered Calls on Dividend Stocks.

Special Report April 12: With interest rates just coming off of historically low levels, income investors have been desperately searching for alternative sources of yield. Dividend stocks are the obvious answer. But there’s an even better way to create yield: by executing a covered call strategy on stocks that pay dividends.

Cabot’s 10 Best Small-Cap Cloud Computing Stocks to Buy Now

Special Report Updated April 15: If you’re a growth investor, you need to own cloud software stocks. It’s just that simple. Cloud computing is changing the world. It’s powering massive growth in companies across sectors, empowering digital transformations, enabling new generations of connected technologies and changing how people live their lives. Tyler Laundon lays out the landscape and names his 10 best small-cap cloud computing stocks.

This Week’s Q&As

Cabot Emerging Markets Investor

Question: Please ignore my earlier email about updates. I joined the other day and just got around to reading the welcome information which is well written and very informative. It answered my update question. I do have another question however. As a new member do you recommend still buying the stocks that were initially recommended in December of January? For example, ATHM was recommended in January at $78 and is now $94. I assume from the newletter that you still recommend getting into it? PBR was recommended in January at $13 and is now $14. Is it okay to buy in at these new levels or would you recommend waiting for new recommendations?

Paul: Welcome aboard! You’ve joined at an interesting time for both the broad market in general and emerging market stocks in particular. The market’s swings are creating a lot of tension without making decisive moves up or down.
If I have a stock rated Buy, it means that I think it is more likely than not to continue its advance. In this kind of market, stocks can go sideways for a long time, and if we have a profit, we will often give them a loose leash.
But this is also a market without a strong upward trend behind it, and momentum is an important part of our investing strategy. So, while you can buy the stocks rated Buy, I would advise keeping initial investments smaller than usual. A full position in our portfolio should represent 10% of the capital you have allocated to emerging markets, and a half position should be 5%. It makes sense in a squishy market to come in on the smaller side.

Question: Can you give me the ‘17 actual and ‘18 estimated earnings for JP. Stock seems to be stabilizing and I still hold it. Thanks.

Paul: Jupai Holdings reported two dollars per share in earnings in 2017. The company doesn’t have any analyst coverage, so there isn’t a consensus number for this year. JP has been trading in a tightening wedge since it completed its one big run from 7.4 in August to 29 in November. The trading range has had support at 18 and resistance at 21 since the middle of March. I think it’s fine to hold the stock for now, as it seems to be completely ignoring the fluctuations of the broad market. But be sure you know when the next quarterly report is coming and watch the reaction closely. This period of tight trading will make a great base if the news is well received, but the converse is also true.

Cabot Options Trader

Question: Are you considering any bearish trades for hedging?

Jacob: I am and I’m not. The VIX is hardly screaming concern at 16, and option order flow is mixed, not bearish. This would lead me to believe, for now at least, that the recent weakness isn’t going to turn into a big market decline. Though if the VIX and option order flow turn bearish, I will be adding bearish positions.

Question: I am learning more and more about options (so I’m beginner with some knowledge to use). I would start carefully, little by little to invest in options. Knowing this, do you think it’s worthwhile for me at this point to subscribe to your Options Trader advisory?

Jacob: Cabot Options Trader is a great place for a beginner. I give step by stop instructions on how to enter into and out of trades. I also break down the risks, and potential rewards. And have built, and continue to build a library of options education materials. Plus you have access to me via email, and I typically respond within an hour. You have a good plan in starting small. If you have never traded options, I strongly recommend starting buying 1 call or put. That way, if you make a mistake, it won’t be too painful. It is my belief that options trading should be a part of every investors trading arsenal.

Guide to Cabot Prime Pro

This Guide to Cabot Prime Pro will help you make the best use of your Prime membership to create a strong personal portfolio.