Cabot Prime Pro Week Ending December 21, 2018
Cabot Weekly Review (Video)
In this week’s stock market video, Paul Goodwin doesn’t really talk about the markets at all. Rather, as he has for the past ten years, he reviews the year in verse, putting the highlights and lowlights into perspective with a touch of humor. Happy Holidays!
Advisory Services
Cabot Growth Investor
Special Bulletin December 20: The market was brutalized again today, with another avalanche of selling after yesterday’s disappointing Fed rate hike and press conference. At today’s close, the Dow was down 464 points and the Nasdaq tumbled 108 points. Tonight’s special message concerns Exact Sciences (EXAS), which dove below support during today’s market meltdown and is forcing Mike to sell.
Bi-weekly Issue December 19: Remain defensive, but as always, keep an open mind. The Model Portfolio is about three quarters in cash (74%), though Mike is still holding onto three stocks, all of which he believes can help lead the next bull move. He’s not having trouble finding resilient growth stocks with excellent stories for our watch list, but tonight, he has no new buys or sells.
Bi-weekly Update December 12: Remain defensive, but keep an open mind. Following last week’s big decline, the market has shown some resilience, and Mike continues to see a growing number of stocks showing great resilience. Even so, our Cabot Tides green light from two weeks ago has disappeared and the longer-term Cabot Trend Lines remain down, so we continue to advise a cash-heavy posture as we patiently wait for confirmation the buyers have taken control. He has no changes in the Model Portfolio tonight.
Other Stocks of Interest December 13: Follow ups to stocks featured July 4, 2018 (issue 1397) to December 5, 2018 (issue 1408). 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 December 21: Mike has been getting questions about whether this is a bear market, is a recession coming soon, etc. Honestly, he’s not really into labels—you can call the decline whatever you want, but labeling something doesn’t really help your portfolio. The point is to stay in gear with the market’s trends, which turned down in October and have mostly been down ever since. Here are this week’s Buy ideas: Bilibili (BILI), Mellanox (MLNX), Planet Fitness (PLNT) and Workday (WDAY).
And, this week, Mike has a long list of Sells.
Weekly Issue December 17: This week’s list is another that’s full of stocks Mike thinks can do very well if the market can get going. His Top Pick is Tableau Software (DATA), one of the strongest growth stocks in the market today as big investors buy into its transition to the cloud.
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 Market Update December 21: Up until Wednesday many of Jacob’s positions were in good shape. Xilinx (XLNX) was trading above 90, Twitter (TWTR) looked fantastic above 37, ON Semiconductor (ON) popped much higher any time the market showed signs of life, and Ciena (CIEN) was performing just fine (CIEN still looks good). Then Wednesday afternoon and yesterday the sellers came after the stocks with “meat on their bones.” XLNX and ON were hit following Micron’s (MU) earnings Wednesday, and yesterday TWTR fell on a short-seller’s note.
Cabot Options Trader Pro Alert December 20: Sell Existing Position: Sell your Nasdaq ETF (QQQ) March 165/155 Bear Put Spreads for $5.25 or more.
Cabot Options Trader Alert December 20: Sell Existing Position: Sell your Nasdaq ETF (QQQ) March 165 Puts for $14 or more.
Cabot Options Trader Alert December 20: Close Existing Position: Sell your Xilinx (XLNX) March 80 Calls for $7.50 or more.
Cabot Options Trader Market Update December 19: The Federal Reserve will release its statement on interest rates this afternoon at 2 p.m. Eastern time, and likely more important for traders is Fed Chair Jerome Powell’s speech at 2:30. The expectations are that the Fed will raise interest rates by a quarter point and that Powell will signal that they will hike rates less aggressively next year than previously forecast. That’s not to say that there hasn’t been plenty of positioning ahead of the event. First, Jacob takes a look at the expected S&P 500 move today, he says that with the S&P 500 ETF (SPY) trading at 256.5, the 256.5 calls and puts expiring TODAY are worth a combined $4.13. This implies a potential move in the SPY of 1.61% today.
Cabot Options Trader Position Update December 17: This morning Jacob added his first bullish position in many weeks. Largely he has been on the sidelines for much of the market malaise as he has held only a couple positions, own a hedge and had not yet bought the dip. However, as he noted in my trade alert, he has become intrigued by the risk/reward in adding a bullish trade having watched the leading indexes all fall more than 10% since October.
Cabot Options Trader Alert December 17: Buy the Ciena (CIEN) April 36 Calls (exp. 4/18/2019) for $2.75 or less.
Cabot Options Trader Weekly Market Update December 17: The big event for the week will be the Federal Reserve’s announcement on interest rates on Wednesday. Fed Funds Futures are pricing in a 72% chance of a rate hike, though the odds of a hike have been dropping in recent weeks as the stock market has tumbled and economic data has softened. And Jacob gives his personal rules for dealing with a bear market and losses.
Cabot Options Trader Pro Weekly Market Update December 17: Jacob has four long positions: ON, RF, TWTR and XLNX, one position not impacting his decision making: PSTG and one short position: QQQ Bear Put Spread.
Cabot Undervalued Stocks Advisor
Weekly Update December 18: Crista continues to expect the worst of the drama to play out by year end, simply because tax-loss selling is over after December 31. Stocks that fell steadily will need time to stabilize before they can recover. Stocks that had been trading sideways might be ready to move higher in January. And the rare stock that barely suffered in recent months could experience a bullish run-up to new or recent highs in the first quarter of 2019. Here are today’s portfolio changes: CIT Group (CIT) moves from Buy to Hold, Alexion Pharmaceuticals (ALXN) moves from Strong Buy to Hold and Universal Electronics (UEIC) moves from Strong Buy to Hold.
Monthly Issue December 4: Crista expects December to deliver a nice stock market rebound, which will be somewhat restrained by tax-loss selling, especially among some of the very popular FANG stocks. Then in January, as long as something big and unexpected does not occur, she expects the S&P 500 to retrace its September highs. That could actually happen in December, but January seems more realistic to me.Today’s featured stocks include DowDuPont (DWDP), which moves to Strong Buy. General Electric (GE), General Motors (GM) and United Technologies (UTX). Though Christ is not adding GE, GM or UTX to the portfolios.
Cabot Stock of the Week
Weekly Issue December 18: The market’s major trend remains down, and thus caution remains the watchword; if Tim had a new account to begin investing now, he would keep a hefty amount of it in cash until the main trend turned up. This week’s recommendation is Twilio (TWLO)—it has a fantastic combination of story, numbers and a resilient chart. It looks like an emerging blue chip to us—the kind of company that can grow rapidly for years and attract hundreds of institutional investors along the way. Tim has three sells today: Alexion Pharmaceuticals (ALXN) from Buy to Sell, Guess? (GES) from Hold to Sell and WNS Holdings (WNS) from Hold to Sell.
Cabot Emerging Markets Investor
Bi-weekly Update December 20: The usual suspects—trade war, Brexit and the Fed—continue to dog the market, and the situation for emerging market stocks has worsened. Paul is making substantial changes to the portfolio to protect capital and limit exposure. He’s selling our half position in Petrobras (PBR), moving Alibaba (BABA), Mix Telematics (MIXT) and Autohome (ATHM) to Hold ratings and dropping Baidu (BIDU) and WNS Holdings (WNS) from the watch list.
Bi-weekly Issue December 13: The nascent buy signal from the Emerging Markets Timer has fizzled out a bit, but we’re still mostly encouraged by the overall action—EM stocks hit their lows in late October, held solidly above those lows even during last week’s sharp dip and some stocks are perking up. But, net-net, the action of the past couple of months has been a solid bottoming effort. Among our stocks, there are plenty of good and a couple of iffy situations, but overall, Paul has no changes in tonight’s issue. In today’s issue we’re revisiting old Friend, AutoHome (ATHM), the premier online automobile shopping site in China. It’s rated Buy a Half.
Cabot Small-Cap Confidential
Weekly Update December 21: Tyler writes about one big picture thing worth mentioning: We’ve all seen various data points about just how bad this market is and how it’s “the worst” in this dimension or that. All of this stuff is just saying what we know—the market stinks and is breaking a bunch of undesirable records. He has one change today: Chefs’ Warehouse (CHEF) Moves to BUY.
Special Bulletin December 18: Tyler has held on to quarter-sized stakes in a few positions in the event that the market firms up and turns north. That hasn’t happened, so it’s time to step completely aside from both AxoGen (AXGN) and IntriCon (IIN). Sell the last quarter of both stocks.
Monthly Issue December 7: Today’s recommendation, Codexis (CDXS), is an industrial biotechnology stock. And the secret to its success lies in a proprietary technology platform that uses artificial intelligence and machine learning to create new proteins for use in various industries. Tyler is buying a half position. There is only one portfolio change this week, Chefs’ Warehouse (CHEF), moves to Hold.
Cabot Dividend Investor
Monthly Issue December 19: Chloe writes that it’s time for her to move on, but Cabot Dividend Investor isn’t going anywhere. She’s excited to pursue new opportunities in the New Year, and she’ll be leaving you in great hands. Tom Hutchinson, the new Chief Analyst of Cabot Dividend Investor, introduces himself in this month’s issue, with his take on the market and an exciting new stock pick. Here are today’s portfolio changes: BB&T Corp (BBT) Hold to Sell, Broadridge Financial Solutions (BR) Hold to Sell, CME Group (CME) Buy to Hold, Dunkin’ Brands (DNKN) Hold to Sell Half, Invesco Preferred ETF (PGX) Buy to Sell Half and UnitedHealth Group (UNH) Buy to Hold. Tom’s featured stock this month is: Altria Group (MO) is the largest U.S. domestic cigarette maker and one of the largest in the world.
Weekly Update December 12: Although Chloe was optimistic when the market strengthened two weeks ago, for now it’s time to stay defensive. In our portfolio, that means selling half of AllianceBernstein (AB), which has suddenly lost significant support, and the rest of ONEOK (OKE), which is hitting new lows. Broadridge Financial (BR) and BB&T Corp. (BBT) could be next to go if the market continues to struggle. However, some sectors are still working well, and she’s moving both our REITs—Community Health Trust (CHCT) and STAG Industrial (STAG)—back to Buy today.
Cabot Marijuana Investor
Update December 19: Tim is adding two new stocks to the portfolio. But first he’s going to sell a third of CV Sciences (CVSI), which has become a bit overweight. This will raise our cash position to about 26%. And then he’s going to take half the cash and split it between the two new stocks, Cresco Labs (CRLBF) and Curaleaf (CURLF). When all is done, then, the portfolio will be roughly 13% in cash.
Monthly Issue November 29: In today’s issue, Tim has no new buy and sell recommendations, but you’ll find updates on all the stocks. And as we head toward the last of 2018, he’s very optimistic that the sector will have another great run in 2019—just when most investors least expect it!
Wall Street’s Best Investments
Top Picks Daily Alert December 21: Ulta Beauty, Inc. (ULTA) from Hendershot Investments
Top Picks Daily Alert December 20: Azure Power Global Limited (AZRE) from Global Investing
Monthly Issue December 19: Nancy’s Spotlight Stock Matador Resources Company (MTDR), is an independent energy company that explores, acquires, develops, and produces crude oil and natural gas resources in both the Delaware portion of the Permian Basin in southeast New Mexico and the Eagle Ford shale in Texas. In her Feature article, Nancy writes that energy stocks have lagged other categories in 2018, but with oil prices estimated to recover somewhat, we should see companies like Matador—who has consistently beat earnings forecasts and is increasing production—show some price appreciation in the new year.
Daily Alert December 19: Lumentum Holdings Inc. (LITE) from Insider Alert
Daily Alert December 18: Sell: Hormel Foods Corporation (HRL) from 2 for 1 Stock Split Newsletter
Daily Alert December 18: Cass Information Systems, Inc. (CASS) from 2 for 1 Stock Split Newsletter
Daily Alert December 17: Sell: Advance Auto Parts, Inc. (AAP) from The Turnaround Letter
Daily Alert December 17: Twilio Inc. (TWLO) from Cabot Growth Investor
Wall Streets Best Dividend Stocks
Top Picks Daily Alert December 21: The DoubleLine Income Solutions Fund (DSL) from Brinker Fixed Income Advisor
Top Picks Daily Alert December 20: Quarterhill Inc. (QTRH.TO) from Contra the Heard Investment Letter
Daily Alert December 19: Verizon Communications Inc. (VZ) from DRIP Investor
Daily Alert December 18: Invesco Ltd (IVZ) from Sure Retirement Newsletter
Daily Alert December 17: SPDR S&P Emerging Asia Pacific ETF (GMF) from The Turnaround Letter
Monthly Issue December 12: This month’s Spotlight Stock, Bank of Hawaii Corporation (BOH) is a 120-year-old regional financial services company with $16.9 billion in assets. Through its subsidiaries, the company provides a broad range of financial products and services to businesses, consumers and governments in Hawaii, Guam and other Pacific Islands. In her Feature article, Nancy delves further into the Regional Banking industry, discussing its recovery since the worldwide recession, as well as the pros of investing in our Spotlight Stock.
Ask the Experts
Cabot Dividend Investor
Question: Is it correct that if BSJK is held to maturity, you cannot lose your original investment and, are guaranteed the 4.8% return? Otherwise, what are the risks of this investment including worst case scenario? Finally, what is the maturity date exactly?
Chloe: Not exactly. The maturity date on BSJK is December 31, 2020. At that time, Invesco will distribute the NAV (net asset value) of the account to shareholders. Most likely, the NAV at that time will be very close to $25 per share. For example, look at BSJI, the high-yield BulletShares fund maturing at the end of this year. The NAV has gradually become less volatile and stayed closer and closer to $25 as the maturity date has approached. Most likely, that’s what will happen with BSJK. So if you buy under $25, you’ll make a little money between now and then, and if you buy over $25 you’ll lose a little. But, that’s not a guarantee. Invesco does a little buying and selling in the funds because of client money flowing in and out. As a result, there is a possibility that BSJK’s NAV could be under $25 at maturity. How likely that is depends on how much interest rates rise and if there are inflows or outflows into the fund, so Invesco can’t make any promises. The one thing they can predict with a high degree of visibility is the Yield To Worst of the fund. That’s basically the total return into the midpoint of the final year, and is currently 5.94% (you can look it up here). So between now and June 2020, you can expect a total return (including distributions) of at least 5.94%. I hope that helps, the BulletShares funds aren’t quite as straightforward as they appear, but I still think they can be a very good store of value and source of income.
Cabot Options Trader
Question:Jacob, this market sure appeals to my sense of chaos, but I’m afraid a bounce might not come soon enough! Geesh.
Jacob: Great opportunities are coming. When that will happen, and if the S&P 500 is 10% lower from here is anyone’s guess. I’m guessing volatility and silliness isn’t going to end in 2018. Maybe slows down a touch in early 2019. Big picture, right now NO one is making money unless they are scalping on five minute time horizons ... and I don’t even believe that. So it’s capital and mental preservation time.
Premium Reports
Cabot’s Best Safe Investments for Uncertain Times
Special ReportDecember 21: This report gives you some suggestions of the safest, productive places to put your money when the market gets bumpy.
Cabot’s 10 Favorite Low-Priced Stocks for 2019
Special ReportDecember 13: Welcome to Cabot’s 10 Favorite Low-Priced Stocks for 2019, our annual pick of some little-known stocks that, for one reason or another, have a great shot of tacking on some great gains in the short-term (and, if things go well, longer-term, too). Of course, the market environment hasn’t been following the usual script—instead of a strong November-December, the market is scuffling. That will require some patience and picking your spots on the buy side, but ideally will work to our advantage (creating more advantageous entry points), too.
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 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.
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.
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.