Please ensure Javascript is enabled for purposes of website accessibility
Cabot Prime Pro Logo
Cabot Prime Pro

Cabot Prime Pro Week Ending October 1, 2021

Cabot Prime Pro Week Ending October 1, 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 the market’s reaction to the Fed’s Wednesday meeting and how Treasury yields have reacted throughout the week. He then shifts into growth mode and reviews three strong IPOs that should be of interest to aggressive investor.

UPCOMING CABOT EVENTS:

Cabot Prime Members Meeting with the Analysts: 4th Quarter 2021

FREE MEMBERS MEETING: October 13, 2021 Sign up now.

Cabot Micro-Cap Insider Member Call

FREE MEMBER CALL: October 14, 2021 Sign up now.

3 Stocks to Play the Coming American Solar Boom

FREE WEBINAR: October 21, 2021 Sign up now.

Cabot Retirement Club Member Call

FREE MEMBER CALL: October 28, 2021 Sign up now.

Advisory Services

Cabot Growth Investor

Bi-weekly Update September 30: Remain cautious. Our Cabot Tides remain under pressure, with the indexes (including growth indexes and funds) showing no ability to bounce in recent days. On the plus side, sentiment is getting pretty dour (a good thing down the line) and many growth stocks are still hanging in there, but we’re playing mostly defense and seeing how this correction plays out. Earlier this week, we cut bait on DocuSign (DOCU) and placed Cloudflare (NET) on Hold, leaving us with 45% in cash. We’ll sit tight tonight, but will be on the horn with any other actions in the days to come.

Special Bulletin September 28: Growth stocks (and, today, the market as a whole) are seeing follow-on selling after last week’s crack. Many stocks are pulling in normally, but some aren’t, including a couple of our names. In the Model Portfolio, we’re forced to cut bait with DocuSign (DOCU) and we’re placing Cloudflare (NET) on Hold. We came into this week with around 36% in cash, and today’s sell will lift that to a beefy 45%.

Bi-weekly Issue September 24: But, while we’re far from complacent, the resilient action of growth stocks (including many we own) and the snapback in some indexes has us standing pat with the rest of our names. In the Model Portfolio, we’re holding around 36% in cash after selling half of SSO, but we’re holding on tightly to our best performers (indeed, many still have Buy ratings) and we’re not opposed to adding exposure if the early-week decline turns into one big shakeout

Cabot Top Ten Trader

Movers & Shakers September 24: It’s been a very interesting week in the market. It started, of course, with Monday’s news-driven plunge, as fears of an implosion in the Chinese real estate market caused a big selloff that brought most indexes below near-term support. But growth stocks never really gave up the ghost, and the rally on Wednesday and Thursday was very encouraging, with most indexes coming into today up slightly on the week.

Weekly Issue September 27: After last Monday’s plunge, the initial rebound was very encouraging, and the fact that the major indexes are still doing their best to hang in there is a plus. But, while many individual stocks are in decent shape, the wild rotation that has been a hallmark of 2021 has returned, with money racing into cyclical areas and out of growth stocks the past couple of days. Mike’s Top Pick is Devon Energy (DVN), which looks like a leader of a fresh breakout in energy stocks (and cyclical stocks more broadly). We suggest aiming for dips as these names usually pull in after powerful rallies.

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 Basic & Pro Stocks on Watch September 29: The market is “quiet” today after a nasty trading day yesterday. Option activity is similarly slow today, which we oftentimes see after dramatic market moves. However, there have been a couple interesting call buys in stocks that have been in the news recently. This weekend the Wall Street Journal reported that Starboard Value had accumulated a stake of over 8.4% in Huntsman (HUN) and plans to agitate the board for change.

Cabot Options Trader Pro Trade Alert September 28: Sell Existing Position: Sell your NKE January 165/185 Bull Call Spread for $1.45 or more.

Cabot Options Trader Basic Trade Alert September 28: Sell Existing Position: Sell your NKE January 165 Calls for $2.20 or more.

Cabot Options Trader Pro Weekly Review September 27: Long positions: KWEB, CSCO, CGC, DVN, JETS, BSX, NKE, MS, UBER. Bearish Positions: None

Cabot Options Trader Basic Weekly Review September 27: Despite wild day-to-day volatility, by week’s end the returns for the indexes were mostly a non-event. The S&P 500 advanced 0.51%, the Dow rose 0.62%, and the Nasdaq gained a paltry 0.02%.

Cabot Undervalued Stocks Advisor

Weekly Update September 29: Across almost the entire length of the yield curve, interest rates are ticking up. The benchmark 10-year Treasury yield reached 1.53% and may be headed back toward its December 2019 rate of about 1.90%. In an economy that is showing rapid growth, with inflation well above the Fed’s 2% target and likely at 6% or more if housing prices were properly factored in, a sub-2% 10-year Treasury yield doesn’t seem to make sense.

Special Bulletin September 24: We are initiating coverage of ConocoPhillips (COP) with a BUY rating. Our interest in oil and natural gas exploration and production (E&P) companies has been warming up lately. Many of these stocks are beaten down, yet oil prices have remained resilient, leaving producers like ConocoPhillips meaningfully undervalued.

Monthly Issue September 1: On August 18, Cisco reported encouraging fiscal fourth-quarter results, particularly with a strong new order flow, and provided favorable and longer-term guidance. The company’s fundamentals are improving, and management is helping boost investor confidence by providing more visibility.

Cabot Stock of the Week

Weekly Issue September 27: Last Monday brought the market’s biggest selloff since the spring, but the rebound since then has been impressive, telling us this long bull market is not over yet. Tim’s featured stock ConocoPhillips (COP), is the world’s largest independent E&P company, with most of its production in the United States, Canada and Australia. With the news that it is acquiring Royal Dutch Shell’s Texas assets for $9.5 billion in cash, Tim believes the time to buy has arrived.

Cabot Explorer

Bi-weekly Issue September 30: Xu Jiayin was China’s richest man, a symbol of the country’s economic growth who helped move poor villages into cities for the rising middle class. His company, China Evergrande Group, became one of the country’s largest property developers, and he enjoyed hobnobbing with the elite, trips to Paris to taste rare French wines, a million-dollar yacht, and private jets. Now the company has nearly $300 billion in debt, has missed interest payments on loans, and has 800 unfinished projects in more than 200 cities across China. Carl’s new recommendation Else Nutrition Holdings (BABYF), a young, Israeli-headquartered, plant-based food and nutritional company aimed at babies and toddlers.

Bi-weekly Update September 23: A recent survey by the American Association of Individual Investors (AAII) showed that the percentage of investors who think stocks will rise over the next six months plunged to its lowest level in more than a year. Bullish sentiment sank 16.4 points to 22.4%, one of the fastest drops in history. Meanwhile, bearish sentiment rose 12.1 points to 39.3%. That marks the seventh week of the last nine that pessimism has exceeded the historical average. Yet we had only a mere 4% pullback in the S&P 500 from its recent highs, and now stocks appear to climbing again.

Cabot Small-Cap Confidential

Weekly Update September 30: The market rallied last week despite the happenings with Evergrande and the Fed’s indication that tapering should begin in a few months, then a rate hike cycle could begin later next year or early 2023. But things have been very different this week. Also, Cerence (CRNC) has languished for a while and shares are off 7% this week on no news. Today’s break below 100 (a rough zone of support) isn’t great to see and if we’re speculating could easily be tied to renewed supply chain concerns that could adversely impact auto deliveries for longer than previously expected. We will respect this dip and move to hold.

Special Bulletin September 13: Shares of CS Disco (LAW) are selling off today on what’s been a generally weak day for growth stocks (though getting better as we move into the early afternoon).

Monthly Issue September 2: Tyler’s new recommendation CS DISCO (LAW), has developed a next-gen AI-powered cloud software platform that helps corporate law departments, law firms and legal service providers operate more efficiently by automating and simplifying workflows. Users say the platform can slash time per case by roughly 30%. The company’s AI and ML powered applications are built around its eDiscovery solution, which is most commonly used by corporate legal departments and outside council for litigation and other legal matters.

Cabot Dividend Investor

Weekly Update September 29: Things are getting ugly out there. And I expect it to get worse before it gets better. Also, energy stocks are finally rallying as oil prices are heading higher and approaching the 52-week high amidst limited supply and soaring demand. The Energy Select Sector SPDR Fund (XLE) is up over 13% in just the past week. The energy rally is finally sparking a move higher in Enterprise Product Partners (EPD), Chevron (CVX), Valero Energy (VLO) and ONEOK (OKE). This may be the start of the move we’ve been waiting for.

Monthly Issue September 8: It’s still an amazing market. The S&P is up 96% from the bear market low in March of 2020. The index is also up over 20% so far this year. It may seem too good to be true. It feels like the market is overdue for trouble. And we are heading into what is historically the worst time of year for stocks, September and October. Meanwhile, the Delta variant is still wreaking havoc and inflation is persistent. Tom’s featured stocks are AGNC Investment Corp. (AGNC) and U.S. Bancorp (USB).

Cabot Marijuana Investor

Monthly Issue September 29: Since the marijuana sector peaked in February, the Global Cannabis Stock Index has lost 50% of its value. That’s the cost of investing in hot young growth industries. But the fundamentals of the industry remain exceedingly attractive, so there’s no question that eventually, this long slow bottoming process will give way to a new uptrend. In the meantime, our dual focus on the leading companies in the industry (measured by revenues and earnings) and the strongest stocks in the sector (measured by chart strength) will keep us in the stocks that are most likely to lead the next advance.

Update September 22: The simple fact is that the major market indexes are still high, even after Monday’s plunge, and thus a correction is to be expected, at some point. And whether that correction is blamed on a Chinese real estate company or inflation numbers or what the Fed does next really doesn’t matter. What matters (for this advisory service) is that marijuana stocks have already had their big correction—though of course it can get bigger. The index is already 51% off its February high—and some of our stocks have corrected even more.

Cabot Early Opportunities

Special Bulletin September 22: This morning we found out that Endava (DAVA) has postponed its Q4 earnings report from tomorrow (September 23) until next Tuesday (September 28). The stock is down around 6% on the news. Now, it very well could be that this delay is due to non-material events. Maybe some numbers just needed to be double checked, some accounting methods are changing that aren’t a big deal, or there was some logistical challenge in pulling everything together. Or, there could be some figures that need much more scrutiny or there is some issue with how things are being reported.

Monthly Issue September 15: From Tyler’s perspective growth has been where it’s at lately. We all tend to focus on what’s right in front of us, but even when flipping through dozens of charts of other types of stocks lately it seems like those that are working the best are the ones growing the fastest. In particular, software and rapid growth IPO stocks have been on fire. Case in point is Upstart (UPST), which is up 126% for us in just two months.

Cabot Profit Booster

Weekly Issue September 28: Last week, despite a large market decline on Monday, the major indices took a baby step forward. The S&P 500 gained 0.51%, the Dow rose 0.62%, and the Nasdaq eked out 0.02%. Jacob’s new stock recommendation is Snap Inc. (SNAP).

Cabot Micro-Cap Insider

Weekly Update September 29: There’s a case to be made that we are in the early innings of a commodity bull market. Rich is starting to see lots of articles about a looming energy shortage which will hit this winter. Commodity prices are soaring, but there is a limited supply response given a lack of capital and ESG concerns. Take crude oil as an example. Oil prices are higher than they were pre-pandemic, but the U.S. drilling rig count remains well below pre-pandemic levels. Unless more supply comes online, higher oil prices are here to stay.

Monthly Issue September 9: Rich’s new recommendation Cipher Pharma (CPHRF) is a cheap, Canadian specialty pharma company that has a promising pipeline. Despite strong potential, the stock trades at a draconian valuation. Insider ownership is high and insiders have been buying the stock in the open market. Further, the company is buying back its own shares in the open market. Downside protection is high given net cash on its balance sheet and strong free cash flow generation. My price target of 2.50 implies good upside over the next 12 months.

Cabot Income Advisor

Weekly Update September 29: The market is selling off on Tuesday after briefly recovering last week. The latest worry is the debt limit. While this issue is likely to be resolved without any disaster one way or another, it puts a negative weight on an already teetering market. The market is already grappling with the Delta variant, the Fed’s inevitable tightening, and possible contagion from the Chinese real estate firm Evergrande’s default. It’s also due for a correction in the historically worst months of the year for the market, September and October.

Special Bulletin September 24: Trade Alert: Sell USB November 19th $60 calls at $2.30 or better.

Monthly Issue September 22: The dicey market prognosis creates two issues for the portfolio. One is that it isn’t a great time to buy anything. Stocks aren’t down much yet and the near future looks bleak. The other issue is that the recent downward bias has shrunken call premiums, as less investors are willing to bet on higher prices. Tom’s featured stock AGNC Investment Corp. (AGNC), is a mortgage real estate investment trust that invests predominantly in U.S. Government-backed residential mortgages. It pays a very high dividend yield and makes payments on a monthly basis.

Cabot Turnaround Letter

Monthly Issue September 29: Most investors, and the general public, seem to regard the transportation industry as somewhat dull. No doubt, there is little inspiration that comes from waiting at airports, driving in city traffic, or watching delivery trucks start-n-stop their way through neighborhoods. Bruce’s has one buy recommendation: TreeHouse Foods, Inc. (THS). TreeHouse Foods is one of the nation’s largest independent private label food manufacturers.

Weekly Update September 24: The Cabot Turnaround Letter is back from our travels to Texas. On the trip, the airports and jets were looking more crowded, but were by no means full. The city centers in Dallas and Ft. Worth were remarkably devoid of pedestrians – maybe it is always this way, but even the parking lots seemed nearly empty. Streets and highways had what seemed like a lot of traffic, so maybe it’s just the high-rise office people who are working from home.

Ask the Experts

Cabot Growth Investor

Cabot Undervalued Stocks Advisor

Question: I wanted to get your views on Barrick over Newmont. On the surface, it would seem Newmont might be the better value (similar decline in price; strong, disciplined management; better dividend) plus, more of their assets in developed countries which have a longer history of property protection. But I’m sure I’m missing something?

Bruce: Short answer: Barrick is higher-risk but higher potential return, Newmont is safer, but in the end their shares likely will perform fairly similarly. Barrick initially attracted my attention in early 2019, and I put it in the Cabot Turnaround Letter (at the time, just “The Turnaround Letter”) at about $13. Liked the new leadership via the deal with Randgold, huge debt paydown to almost zero net debt over the prior 5 or so years, and commodity gold prices looked too low at around $1300/oz. Sold Barrick at $26 in late 2020.

Still like the ‘change’ story at Barrick, as there is more optionality for fundamental improvements, gold production growth, portfolio changes vs Newmont that seems more plug-n-chug. Also, GOLD trades at a perhaps 10% discount to NEM on EV/EBITDA (NAV is very subject but I’d estimate roughly similar discount) - while not a huge difference it is on the right side of the valence.
You’re right that Barrick has more geo risk - much of their production is in African countries (and PNG) with govts that may get (or already have) sticky fingers. Newmont has some decent mines in Ghana but that country seems a bit more stable than Barrick’s average African country. The land-grab trend is getting worse globally and things like the recent coup in Guinea only add to the legitimate worries. Newmont clearly has the safety edge although Guinea is only two doors down from Ghana on Africa’s west coast so Newmont may not be immune. South America would seem a more remote expropriation risk but both countries have sizeable assets there and governments are slipping populist/leftward there, too.

Both have near-zero net debt and generate decent FCF. Barrick’s lower recurring dividend gives them more financial flexibility than Newmont - which can be good or bad depending on what they do with it.

Barrick’s recurring dividend yield is lower at 1.8% (to NEM’s 3.8%) but their specials lift this year’s yield to 3.8%, matching NEM and there is upside for more next year. Barrick’s specials offer higher risk-higher return as they have made no commitments for specials beyond 2021 and may decide to do something else with the cash - like make an acquisition. It’s no secret that Barrick yearns to buy Newmont but this seems unlikely to happen, so they may buy mines or companies here and there. Canada has some up-n-coming mining companies that are likely attracting Barrick’s attention.

Quarterly Cabot Analyst Meeting

The recording of the Cabot Prime Members Meeting with the Analysts from July 14, 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
AGNCBuy
AMBABuy
ARCOBuy
ARNABuy
ASANBuy 1/2
ASMLBuy
AVGOBuyBuy
AVLRBuy
AVVIYBuy
BABYFBuy
BIPHoldHold
BMYBuy
CCHWFSee Advisory
CGCSee Advisory
CHPTBuy a 1/2Buy
CIIHold
COPBuyBuy
CRLBFSee Advisory
CRNCHold
CSCOBuyBuy
CURLFSee Advisory
CVXHold
DLRSell
DOCUSoldSell
DOWBuy
DTBuy
DVNBuy
DXCMBuy
EPDBuy
EVBGBuy
FNDBuyBuy
FSRBuy a 1/2
FVRRBuy
GKOSBuy
GLBEBuy
GMHoldBuy
GOLDBuy
GRWGSee Advisory
GTBIFSee Advisory
HUBSHold
IIPRSee Advisory
IBMBuy a 1/2
INSPHold
JOANBuy
JUSHFSee Advisory
KKRHold
KOBuy
KRNTBuy
LAWBuy
LLYHold
MRKBuy
MRVLBuy a 1/2Buy
NEEBuyBuy
NETHold a 1/2Hold
NVDAHold
NVNXFBuy a 1/2
OHold
OGNBuy
OKEBuy
ONTFHold
OTTRBuy
PGXHold
PLTRBuy a 1/2
QCOMBuy
QTWOHold
RGENHold
RVLVHold
SEBuy a 1/2Buy
SPBBuy
SPCEHold a 1/2
SPTBuy
SSOSold 1/2
STBuyBuy
STAGHold
TAPBuy
TCNNFSee Advisory
THBRFBuy
TPBSee Advisory
TRSSFSee Advisory
TSLAHold
TSMBuy a 1/2
USBBuyBuy
VECOBuy a 1/2
VLOHold
VZHold
XELBuy