Cabot Prime Pro Week Ending August 31, 2018
Cabot Weekly Review (Video)
In this week’s stock market video, Paul Goodwin looks at the market and sees the major U.S. indexes in positive territory, with the S&P 500 and the Nasdaq at new all-time highs. It’s a good situation, but not ideal … kind of a “yes, but” market. It’s good to be moving toward heavier investment, but not going all-in. The situation with emerging market stocks in general, and Chinese stocks in particular, is more worrisome, as the trade war drums are still talking. Paul also looks at a few powerful charts with an eye to distinguishing stocks that are too extended and ones that are set up well for buying.
Advisory Services
Cabot Growth Investor
Bi-weekly Issue August 29: The market overall and growth stocks in particular have shown great improvement during the past two to three weeks. Mike is continuing to add new positions given the bullish activity we’re seeing and it’s time to put even more money to work. He’s adding AutoDesk (ADSK) tonight, leaving the portfolio with 17% in cash.
Bi-weekly Update August 22: Continue to lean bullish. Mike has seen an improvement in the evidence during the past week, with growth stocks acting well and more names hitting new highs. Tonight, he is putting Five Below (FIVE) back on buy. The cash position is near 27%.
Other Stocks of Interest August 31: Follow ups to stocks featured March 28, 2018 (issue 1390) to August 29, 2018 (issue 1401). 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 August 31: Mike remains mostly bullish and thinks the odds favor generally higher prices going forward for many of the reasons he’s cited during the past couple of weeks—uptrends in the major indexes and leading stocks, an increase in the number of stocks hitting new highs and, impressively, a nice dry-up in the number of stocks hitting new lows, which is usually a good sign for the broad market. Here are this week’s Buys: Chart Industries (GTLS), Ingevity (NGVT), Roku (ROKU) and Wayfair (W). There are three sells this week: Hi-Crush Partners (HCLP), Turtle Beach (HEAR) and Keurig Dr. Pepper (KDP).
Weekly Issue August 27: This week’s list has a bunch of good setups and great breakouts from growth-oriented stocks. Mike’s Top Pick is Pure Storage (PSTG), which looks like it has recovered from the choppy action of the past few quarters. The Market Monitor moves to a level 8 (out of 10).
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 Position Update August 31: PagSeguro (PAGS) reported earnings and revenues last night that easily beat expectations. In early trade Friday the stock is higher by 14%, trading above 29.5. Jacob is going to continue to hold the position as option activity remains very bullish.
Cabot Options Trader Alert August 30: Sell Existing Position: Sell your Housing ETF (ITB) December 41 Calls for $0.55 or more.
Cabot Options Trader Sector Trades August 30: In the past Jacob has written about sector trades. This is when a trader executes a nearly identical trade in several stocks that make up a particular sector. This week he’s seen two examples of this.
Cabot Options Trader Alert August 30: Sell Existing Position: Sell your Housing ETF (ITB) December 41 Calls for $0.55 or more.
Cabot Options Trader Earnings Update August 30: PagSeguro (PAGS) will report earnings after the close today. While the stock doesn’t look great, Jacob is going to take the earnings risk and hold the position into the event as option order flow remains wildly bullish.
Cabot Options Trader Position Update August 29: The market is trading higher again today and our S&P 500 ETF (SPY) calls purchased for $4.05 are now trading at $6.35, or a potential profit of 57% in five trading days. Jacob is going to let the position continue to run, but will set a mental stop at the original purchase price of $4.05.
Cabot Options Trader Stock on Watch August 28: One stock that caught Jacob’s eye the last two days is Corning (GLW). The stock rose from 29.6 to 33.2 on earnings in late July, and a trader/traders have aggressively bought calls the last two days looking for more upside.
Cabot Options Trader Video Market Update August 28: While Jacob’s Daily Order Flow list from Monday looks aggressively bullish in terms of number of trades, when he break down the list further, there are several trades that lowered his Barometer to a level 5.
Cabot Options Trader Alert August 27: Sell Half of Existing Position: Sell HALF your S&P 500 ETF (SPY) March 300 Calls for $5 or more.
Cabot Options Trader Pro Weekly Update August 27: Jacob has 7 long positions: EA, FCAU, ITB, PAGS, PFE, SPY and WPX, two positions not impacting his decision making,BABA and EEM and one short position, QQQ.
Cabot Options Trader Weekly Update August 27: The Chicago Board of Options Exchange Volatility Index (VIX) closed the week at 12, or lower by 5%. Jacob continues to recommend watching the VIX when the “next big event” hits the market. If the VIX, also known as the fear gauge, doesn’t trade well above 15, the event is likely not too big of a deal.
Cabot Undervalued Stocks Advisor
Special Bulletin August 30: Guess? (GES) reported a great second quarter and Crista is moving it from a Strong Buy to Buy and is also moving it from Buy Low Opportunities Portfolio to Growth & Income Portfolio.
Special Bulletin August 29: Today, Crista is moving Universal Electronics (UEIC) from Hold to Strong Buy and Interpublic Group of Companies (IPG) from Strong Buy to Hold. KLX Energy Services Holdings (KLXE) begins trading today on a when-issued basis and she reports on recent price action on GameStop (GME) and TiVo (TIVO).
Weekly Update August 28: With a goal of bringing more clarity to her stock recommendations, Crista is adding a new designation: “Retired”. A Retired stock will be a stock in a healthy company that’s removed from the portfolio either because it reached her investment objective, or because its numbers began to fall short of her investment criteria – yet the company continues to be a healthy, market-leading company. Always be aware that if she believes the stock continues to offer attractive near-term capital gain potential, she certainly would not be removing it from the portfolio. The Sell designation will be reserved for stocks that she believes all investors should sell, due to deteriorating fundamentals and other problems that diminish the stock’s potential to deliver capital gains. There are no rating changes today.
Special Bulletin August 27: Apple (AAPL) announces product upgrades—it’s still a Buy. Also Crista gives us new details on the KLX Inc. (KLXI) spin-off and merger. It remains a Hold.
Monthly Issue August 7: Crista writes that if you’re not in the habit of listening to quarterly earnings conference calls, she suggests that you pick one of your stocks, and visit the company’s investor relations page. You’ll likely find their earnings press release, a webcast of the management conference call (complete with a Q&A between analysts and management), and sometimes there’s also a graphic presentation of interesting data. These conference calls are highly informative, especially when you own small-cap stocks that don’t have very much news or research coverage. Today, Royal Caribbean Cruises (RCL) joins the Buy Low Opportunities Portfolio.
Cabot Stock of the Week
Weekly Issue August 28: This week’s recommendation is Voya (VOYA), an undervalued financial stock with good growth prospects that’s designed to balance the portfolio as our many high-fliers soar to new highs. Tim has one portfolio change today: Stag Industrial (STAG) moves from Buy to Hold.
Cabot Emerging Markets Investor
Bi-weekly Update August 30: We are continuing to fly a caution flag from the Cabot Emerging Markets Timer. We remain in a defensive stance as we wait for some good news to turn investors’ sentiment around. In today’s update, Paul is moving our half position in Beigene (BGNE) back to a Buy rating and selling the half position in JD.com (JD).
Bi-weekly Issue August 23: Even thought the EEM is up around 5% from its August 15 lows and PGJ is up closer to 8%—we don’t have a Buy signal. And it’s important to keep that in mind, no matter how tempting it is to say that the bottom is in on the correction in emerging market stocks. In today’s issue, Paul has some thoughts about whether or not this is a bottom in emerging markets, and how we will know one when it appears. Today’s featured stock is, Bilibili (BILI), an intriguing new IPO for you to consider.
Cabot Small-Cap Confidential
Weekly Update August 31: Despite a modest dip yesterday the market generally looks healthy, with the S&P 500 finally breaking out to a new high this week, the NASDAQ trading above 8,000, and the S&P 600 Small Cap Index continuing to trade right up at all-time highs. This index is up 17% year-to-date and more than 30% over the last 12 months! Tyler has one portfolio change today: Instructure (INST) Moves to Buy.
Monthly Issue August 3: Tyler’s new recommendation is Bottomline Technologies (EPAY). The company plays in the massive digital payments market. And with customers that are expected to stick with it for a decade or more, the quality of its revenue base is top-notch. After yesterday’s Special Bulletin there are no additional changes to the portfolio.
Cabot Dividend Investor
Monthly Issue August 29: This month’s featured buy, to be added to the Dividend Growth tier is CSX Corp. (CSX), the third-largest U.S. railroad. The company recently underwent a major transformation that boosted margins, cash flow and profits. Now, the stock is riding a strong uptrend in the transport sector, and earnings are surging. Today Chloe is selling 1/3 of ONEOK (OKE),
Weekly Update August 22: Chloe says the broad market looks healthy. The S&P 500 is close to breaking out to new highs, and the Dow is at its highest level since February, propelled by strong performances from industrial and consumer staples stocks. Today she is moving four stocks back on Buy: General Motors (GM), BB&T Corp. (BBT), Broadridge Financial (BR) and Xcel Energy (XEL).
Cabot’s 10 Best Marijuana Stocks
Fall Issue August 30: Tim reminds us that marijuana remains a young and unpredictable industry, with frequent developments on both the legal side and the corporate side, as the players angle for advantage in what is the fastest-growing industry in America (27% per year). What is certain is that the legal market for adult-use marijuana in Canada opens October 17—and all the big players are ready. How big demand will be, both on the first day and in the weeks and months thereafter, we will see. Also to be seen is how marijuana prices change as production of what is essentially a commodity adjusts to meet market demand. Tim has updates on the 10 stocks currently in the portfolio, and gives you three new names to consider.
Update August 27: Tim says, if you’re in the mood for buying, you can buy. But you should consider using these two risk control measures: 1. Keep initial investments small and only commit more after profits grow. 2. Use stops, to minimize losses. And if you already own marijuana stocks and are enjoying this surge, you might want to consider taking some partial profits, particularly if you’ve become overweighted in any one stock or if a stock you own isn’t keeping up with its peers.
Wall Street’s Best Investments
Daily Alert August 31: Goldcorp Inc. (GG) from Adrian Day’s Global Analyst
Daily Alert August 30: MSCI KLD 400 Social ETF (DSI) from Drip Investor
Daily Alert August 29: Cadence Design Systems (CDNS) from Pivotal Point
Daily Alert August 28: Credit Acceptance Corporation (CACC) from Validea Hot List Newsletter
Daily Alert August 27: Fidelity Select Natural Gas Fund (FSNGX) from Sound Advice
Monthly Issue August 14: Nancy’s Spotlight Stock is Carvana (CVNA), a company that is taking the market of used cars to places that no one expected. The growth of the company is tremendous! In her Feature article, she report on the company’s stunning second quarter, as well as the catalysts keeping this market growing at significant rates.
Wall Streets Best Dividend Stocks
Daily Alert August 31: Sell: PotlatchDeltic’s (PCH) from Dividend Detective
Daily Alert August 31: National Storage Affiliates Trust (NSA) from Dividend Detective
Daily Alert August 30: Amerigas Partners, L.P. (APU) from Conrad’s Utility Investor
Daily Alert August 29: W.P. Carey Inc. (WPC) from The Intelligent REIT Investor
Daily Alert August 28: Norbord Inc. (OSB) from Income Investor
Daily Alert August 27: Republic Services, Inc. (RSG) from Argus Weekly Staff Report
Monthly Issue August 8: This month’s Spotlight Stock is Sanofi (SNY), a global pharmaceutical leader that is in turnaround mode. Nancy delves more into the drug sector in her Feature article, which focuses on the tremendous growth in the industry, particularly in emerging markets.
Premium Reports
Cabot’s 10 Best Canadian Small-Cap Stocks
Special ReportAugust 31: One of the generally accepted wisdoms over the past couple of years has been that the U.S. stock market is where the action is. But there are market-beating returns available to investors willing to step abroad too. And one of the easiest places to find them is just over the border with our neighbor to the north, Canada.
10 Monthly Dividend Stocks to Buy for Year-Round Income
Special ReportAugust 9: Dividend-paying stocks are favorites of retirees and other investors who live off income from their investing portfolios. Like bonds, dividend-paying stocks provide a steady income stream that you can spend without eroding your principal. Unlike bonds, many stocks increase their dividends over time, so your income stream can actually rise each year. This report includes profiles of Chloe’s 10 favorite monthly dividend payers, each of which offers a unique mix of yield, capital appreciation and safety. If you’re looking for monthly income, you’re sure to find at least one that’s right for you.
Cabot’s 10 Best REITs to Buy Now
Special ReportJuly 18: Nancy has always loved real estate; in fact, she owns a small real estate franchise. But she loves the idea of a diversified real estate portfolio and REITs fit the bill. They have been excellent investments for her subscribers over the years as they offer the perfect opportunity to buy real estate with very little capital. And she believes the boom cycle in real estate is far from over. With that in mind, she set out to find the 10 Best REITs for today’s economy and market. She looked at growth, valuation, dividend yield, and fundamental and technical strength.
Cabot’s 10 Best Buy and Hold Stocks for 2018
Update July 13, 2018: Today, Crista updates investors on portfolio news and performance of the stocks in Cabot’s 10 Best Buy and Hold Stocks for 2018. In terms of individual stock performance, Supernus Pharmaceuticals (SUPN) is up 34.6% YTD through July 12, while Universal Electronics (UEIC) is down 28.0% YTD. The performance of the remaining stocks ranges between +19.5% and -18.2%.
Update June 12, 2018: On June 11, 2018, USG Corporation (USG) announced that its Board of Directors agreed for the company to be acquired by Gebr. Knauf KG for $44 per share in cash. Crista suggestion is that investors sell USG now, rather than wait for the remaining $0.96 per share to accrue from the special dividend and the remaining potential capital appreciation.
Cabot’s 10 Best Takeover Stocks
Special ReportUpdated August 10: 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’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 ReportUpdated August 10: 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.
A Richer Retirement
Special Report This handbook is designed to help you secure a better, longer, richer retirement for yourself by making the most of your savings both before and during retirement.
Ask the Experts
Cabot Growth Investor
Question: What are your thought about Roku on this potential competition from Amazon?
Mike: Well, I’m OK taking partial profits, but honestly, the stock looks fine. If you have a profit, we’d try to hold on, though yes, the stock could pull back after running from 54 to 64 during the past couple of weeks. That said, probably wouldn’t let a decent profit turn into a loss if you had one.
Cabot Undervalued Stocks Advisor
Question: I’m interested in your current thoughts re: Toll Brothers (TOL), a former portfolio recommendation of the Benjamin Graham Value Investor.
Crista: The fundamentals for Toll Brothers (TOL) remain relatively attractive -- very strong EPS growth projected in 2018 (October year-end) followed by 11.7% EPS growth in 2019. I remain concerned about the price chart. If I owned TOL today, I would put in a sell limit order at 39.50, then move into a stock with a more bullish price chart. If I held TOL, I would expect the share price to languish below 40 through year end, due to inevitable tax loss selling.
Cabot Marijuana Investor
Question: Could you please comment on today’s short attack from Citron on Cronos (CRON) today?
Tim: CRON was too high; it needed to come down. And Citron is simply the instrument that pulled the trigger. Giving up half the recent two-week gain from 5.7 to 12.8 would get it back to about 9.25, which is about where it is now, so I would expect the stock to stabilize (if you can call the behavior of any of these hot stocks stable) in his area. In the long run, Citron doesn’t matter, but in the short run it’s one of the factors in play in this hot sector. Note: Citron hit CVSI at its top last week (CVSI was also unusually extended), and the pattern these two trace out may be similar. Bottom line: these developments remind us that finding proper entry points in the sector is critical—as is taking partial profits along the way when stocks are hyper-extended.
Guide to Cabot Prime Pro
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