Cabot Prime Pro Week Ending November 17, 2017

Cabot Prime Pro Week Ending November 17, 2017

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.

Cabot Prime Pro Quarterly Market Report

In this Cabot Prime Pro Quarterly Market Report, Cabot President Timothy Lutts offers his read on the stock market, looking back at Q3 2018.

Cabot Prime Pro Quarterly Analyst Teleconference

Watch the October 18 Quarterly Prime Pro Teleconference, in which Cabot Analysts answer members’ questions live.

Cabot Weekly Review

In this week’s stock market video, Mike Cintolo talks about his overall bullish view, but also details what he sees as the broad market’s weakness, which is a fly in the market’s bullish ointment. That said, the broad market hasn’t affected the major indexes or leading stocks, both of which remain in good shape, which has kept Mike in a near-fully-invested position. He also discusses the three patterns he hunts for when looking for new buys and shares some of his top watch-list candidates.

Cabot’s 10 Best Marijuana Stocks

November Issue (emailed to Prime Pro members on November 16) If you bought a basket of Tim’s 10 Best Marijuana Stocks when the report was originally published in August, you’re off to a great start. Since that report was written, the average of the 10 stocks is up 38%, with the best up 157% and the worst down just 3%. Even better, if you bought only the eight stocks that he actually recommended (he suggested waiting on two until their charts improved), your average gain was 45%—and you had no losses!

Cabot Growth Investor

Bi-weekly Update November 15: There are some cracks in the market’s armor, with some major indexes softening and the broad market under more and more pressure. However, our two trend-following indicators are positive and most leading growth stocks are acting fine. While we’re keeping a close eye on our stocks and will take action if necessary, we’re not making any major moves tonight. Our one change is to place Alibaba back on Hold. Our cash position remains less than 5%.

Other Stocks of Interest November 10: Follow ups to stocks featured June 7, 2017 (issue 1369) to November 8, 2017 (issue 1380). 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 November 8: In tonight’s issue, we write about the fact that big moves take time to play out, so it’s important not to get too impatient. Plus, we review all our stocks, telling you which ones look like good buys, which ones don’t, and which ones could be ripe for some partial profit taking.

Cabot Top Ten Trader

Movers & Shakers Weekly Update November 17: Mike doesn’t see a ton of great setups out there at this time, which isn’t shocking given the run-up in leading stocks and the sluggishness of the broad market. Right now, he’s mainly looking for either (a) powerful breakouts on earnings or some other meaningful news, (b) tightness after a big rally, or (c) a quick, sharp shakout/knockout action, which could clear the decks for higher prices. Buy ideas: Caterpillar (CAT), MKS Instruments (MKSI), SVB Financial (SIVB 214), Vishay (VSH) and YY Inc. (YY).

Weekly Issue November 13: This week’s list has a broad mix of stock and sectors, including two names from a group that hasn’t been represented in a long time. Our Top Pick is Planet Fitness (PLNT), a great retail story that just gapped up on earnings after a nice shakeout last week.
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 November 17: Buy to Close your November 14 Calls and Sell to Open the December 14 Calls or Buy to Close your November 14 Puts and Sell to Open the December 14 Puts.

Stock on Watch November 16: Cisco (CSCO) gapped higher by 6% on earnings this morning and is now at a multi-year high at 36.25. Into the move higher, traders have been aggressively buying calls, looking for higher prices.

Position Update November 15: Our Freeport McMoRan (FCX) buy-write/put-write will expire this Friday afternoon. As of 1PM Eastern time, the stock is trading $0.30 below our short strike price, at 13.7. While we would prefer the stock to close at 14 or above, this is hardly a terrible situation as our position is still profitable at this point.

Stock on Watch November 14: Jacob breaks down his watch list into three groups: stocks on watch because of unusual option activity, because of stock strength and because the options are cheap.

Weekly Market Update November 13: Much like last week, trader’s optimism and pessimism regarding tax reform will likely continue to drive the market this week. Also, traders will be watching the retail stocks, as many leading companies from that sector report this week.

Daily Watch List: Order Flow Reading is a strategy Jacob uses to follow the biggest hedge funds or traders into their trades. These are recent large order flows that Jacob has spotted, plus two covered call ideas.

Cabot Undervalued Stocks Advisor

Weekly Update November 14: Crista starts off with an update on Bank of America (BAC) because good news affecting BAC will also affect virtually all bank stocks. Ratings changes: Bank of America (BAC) moves from Buy to Strong Buy, Blackstone Group LP (BX) moves from Hold to Strong Buy, Commercial Metals (CMC) moves from Hold to Strong Buy, GameStop (GME) moves from Hold to Buy, Legg Mason (LM) moves from Hold to Strong Buy, Martin Marietta Materials (MLM) moves from Buy to Strong Buy, Nucor (NUE) moves from Hold to Strong Buy and PulteGroup (PHM) moves from Buy to Hold.

Special Bulletin November 13: Rumors are racing about that Hasbro (HAS) might attempt to purchase Mattel (MAT). There are absolutely no details to discuss at this time. Considering that these are the two largest U.S. toy companies, I would anticipate a serious amount of antitrust drama surrounding a potential merger.

Monthly Issue November 7: Today’s featured stocks include two new additions to the portfolios—WestRock Company (WRK) and Delek US Holdings (DK)—and Cavium (CAVM), which has ostensibly become a takeover target.

Cabot Stock of the Week

Weekly Issue November 14: Tim’s recommendation this week is Signet Jewelers (SIG), an undervalued stock recommended by Azmath Rahiman of Cabot Benjamin Graham Value Investor. Grupo Supervielle (SUPV) moves to Sell and PulteGroup (PHM) moves to Hold.

Cabot Emerging Markets Investor

Bi-weekly Issue November 16: There has been plenty of action in emerging markets recently, but today’s strong rally pushed the Cabot Emerging Markets Timer to a clear buy signal. Part of this may be the continuing effect of a great Singles’ Day splurge in China, and I write about that. We’re making some adjustments to the portfolio to put the spotlight on the winners and switch out of one laggard, Sina.com (SINA), to make room for Weibo (WB).

Cabot Benjamin Graham Value Investor

Weekly Update November 16: The year-over-year (YoY) increase in inflation in October was 2%, slightly below the 2.2% YoY increase in September, as the cost of gasoline and fuel oil eased after the hurricane-related production glut. Berkshire Hathaway (BRK) reported earnings this week.
Monthly Issue November 9: Azmath presents his outlook on the investment climate and the economy, adds two new stocks to the portfolio, Discovery Communications (DISCA) and Signet Jewelers (SIG), and gives updates on our existing stocks.

Cabot Small-Cap Confidential

Weekly Update November 17: Given the intensity of the September rally, it’s not surprising that small caps are giving a little back. But it doesn’t feel great when your new purchases are down—our two most recent additions are in the red and, other than BioTelemetry (BEAT), those are the only stocks in our portfolio underperforming the small-cap index over the same holding period. On average, our current stocks are beating their benchmark by 23%. No ratings changes.

Special Bulletin November 14: Asure Software (ASUR) reported a solid quarter this week that prompted a fresh wave of buying and drove the stock up over 10% yesterday.

Monthly Issue November 3: Today’s addition to our portfolio, Materialise (MTLS), is different from our other stocks. It’s not a pure-play cloud software stock, though its software division generates 26% of revenue. It’s not a pure-play medical device stock, though its medical division generates 33% of revenue. It’s not even based in the U.S.

Cabot Dividend Investor

Weekly Update November 15: Short-term rates are rising in anticipation of the Fed’s December rate hike, but low inflation and high demand for safe investments are preventing longer-term rates from keeping up. No ratings changes today, but Chloe give updates on all our holdings, most of which are still rated Buy.

Monthly Issue October 25: Chloe adds ONEOK (OKE), a new 5.3% yielding stock to the High Yield Tier. Most of her other positions are rated Buy as well, and the market is strong, so if you’re underinvested, it’s time to put some money to work. She also review some of her best and worst trades of the past two years, to see what we can learn from them.

Wall Street’s Best Investments

Daily Alert November 17: CGI Group (GIB-A.TO) from The Successful Investor
Daily Alert November 16: Canada Goose Holdings (GOOS) from Canaccord Genuity Research

Monthly Issue November 15: Most of Nancy’s contributors remain bullish for now, and are still finding pockets of opportunities for our subscribers. This month’s Spotlight Stock is Cognizant Technology Solutions (CTSH), a company that is steeped in a variety of technology channels, including some very disruptive technologies that Nancy discusses further in her feature.

Daily Alert November 15: Fidelity Focused Stock Fund (FTQGX) from Moneyletter
Daily Alert November 14: Black Knight (BKI) from Positive Patterns
Daily Alert November 13: Royal Gold (RGLD) from Adrian Day’s Global Analyst

Wall Streets Best Dividend Stocks

Daily Alert November 17: Energy Transfer Equity LP (ETE) from The Income Millionaire
Daily Alert November 16: Delek US Holdings (DK) from Cabot Undervalued Stocks Advisor
Daily Alert November 15: Stifel Financial 5.20% Fixed Rate Senior Notes (SFB) from Forbes/Lehmann Income Securities Investor
Daily Alert November 14: AXA SA (AXAHY) from The Prudent Speculator
Daily Alert November 13: CoreSite Realty Corporation (COR) from The Periscope Report

Monthly Issue November 8: Nancy’s contributors remain bullish, but cautious. The Spotlight Stock is Blackstone Group (BX), a Master Limited Partnership that’s primarily an asset manager, with holdings that are increasingly energy investments. The company is growing at double-digit rates and currently yields 5.35%.

This Week’s Q&As

Cabot Emerging Markets Investor

Question: How do you like jd.com (JD)? Is now the time for me to buy my position of 1,000 shares?

Paul: I have been watching JD carefully, with special attention to the company’s performance during the Singles’ Day period. JD decided to run its Singles’ Day promotions during the week of Nov. 11 in an attempt to avoid a bottleneck in its delivery system. JD.com booked a little over $19 billion in sales during the event, compared to Alibaba’s $25.4 billion. But it’s worth noting that JD’s total is all retail sales of merchandise that JD owns and warehouses, while BABA’s number is just the total of all sales that took place on its platform.
JD was just dinged in a cautionary message from Morgan Stanley that lowered its rating to “equal weight” from “overweight.” Morgan Stanley believes that there is potential here, but that the stock “is likely to take a breather as apparel headwinds temper near-term GMV [gross merchandise value] growth.”
I’m more concerned with the stock’s performance yesterday, a correction from 41 to 38.9 on heavy volume. That follows the stock’s big jump higher on Monday after the Singles’ Day news was released.
If JD had followed through to the upside, I would have considered it as this week’s pick in the regular Thursday issue. But the big correction (probably at least partly due to the MS downgrade) may be a warning sign.
I’ll keep watching, but right now, JD is still in the trading range it has occupied since the middle of May, and that’s not a sign of strength. The 41 level looks like it might represent technical resistance.

Cabot Small-Cap Confidential

Question: Please advise if it is worthwhile to take advantage on AxoGen (AXGN)‘s public offering price pressure by accumulating a few extra shares.

Tyler: At this point, I don’t anticipate changing my Buy rating on AXGN. I’m crunching the numbers to come up with the new diluted share count post-secondary offering, and taking a look at the trading action/volume today (a ton of shares trading hands). I’ll present it all in tomorrow’s update. But provided I don’t turn up anything unexpected, as I say, I expect to maintain at buy, especially since, at this point, the “damage” appears priced in.

Question: I just saw this announcement from Everbridge (EVBG) and I wonder what your
take is on it. Was this expected?
Here’s part of the press release:
In connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates expect to enter into various derivative transactions with respect to the Shares concurrently with or shortly after the pricing of the Notes. This activity could increase (or reduce the size of any decrease in) the market price of the Shares or the Notes at that time.
The press release also says:
Concurrently with the offering of the Notes, a selling stockholder expects to offer 650,000 Shares for resale in a separate underwritten offering. The selling stockholder also expects to grant the underwriters a 30-day option to purchase up to an additional 97,500 Shares. Everbridge ( EVBG) will not receive any of the proceeds from the sale of the Shares.
This increase of capital may certainly give them some benefits in terms of growth, but some of it looks like pretty fancy footwork to me. What do you think?

Tyler: As I understand it (admittedly, I need to do more research to be sure), the reason EVBG would issue convertible debt is because it (1) means a lower interest rate on the debt versus “normal” non-convertible debt, and (2) it delays any potential shareholder dilution by up to 5 years (the notes are due 2022), and only if certain holders of the debt elect to convert, and possibly, if the stock price is much higher than it is today, the dilution would be even less. In contrast, say EVBG chose to raise funds through a secondary stock offering today, at a lower price than the stock trades at in the future, the current dilution would be greater. The company is electing to “cap” the amount of debt that can be converted, which is (as I understand it) designed to give them more control over how much dilution could occur (which I think is good).Tyler: Yes, it’s definitely a complicated transaction. I didn’t expect it, but it’s not too surprising that the company would like to raise cash. I would hope (and expect) that the money will go toward acquisitions, which would dull the pain quite a bit, I think.
As I said, complicated. But the bottom line appears to be to raise cash through debt, at a more reasonable interest rate by offering the convertible “sweetener” to the debt buyers, and minimize as much shareholder dilution as possible.
Also pressuring the stock today is the CEO selling 650,000 shares. Though, I have to say I can’t blame him! I’d probably take some cash off the table too if I sat in his seat.
We don’t yet know what the price of the convertible debt is, or at what price the CEO’s shares will be sold. Until we have that, we’re in wait-and-see mode. The company’s been pretty good at negotiating decent prices in the past, so I would expect them to do so again.

Question: Are you going to update analysis on the Asure (ASUR) earnings call this am?

Tyler: I’m working my way through some of the details and will put out an update in the morning (I’m hoping to get a look at the 10-Q SEC filing, which should come out this evening before I wrap up my analysis).
That said, I think the quarter was quite good, the stock had been beaten down (unfairly), and I expect to maintain my buy rating. Will provide more details soon!

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

Question: Just a question about your newsletter. These are your picks among all the experts that write the newsletters? Is that right? And what would you say are your top 3 picks of all growth stocks to buy right now? thanks

Nancy: Thank you for subscribing to my newsletter. Both my Wall Street’s Best Investing and Wall Street’s Best Dividend Stocks are comprised of recommendations excerpted from more than 200 contributors and 1,000 newsletters. But each monthly newsletter contains the top stocks—my personal picks—from the contributors that I review every month.
It would be almost impossible to name my top three stocks, as those companies would differ for almost every subscriber, along with their investing philosophies.
As for the top three that would be most suitable for you, it would depend on whether you are:
1. an investor or trader
2. how long your ideal holding period is
3. the amount of risk with which you are comfortable
Traders tend to be more interested in very-short term holdings; investors, more for the long-term, which can also differ widely among investors. And some investors can set stop-losses at 30% of the purchase price of a stock, and others are only comfortable with 10% movements.
If you would like to assess your personal investing risk, you might want to take this Investor Profile Survey on our website: https://cabotwealth.com///daily/how-to-invest/investor-profile-survey/