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Weekly Summary February 15, 2019

Cabot Prime Pro Week Week Ending February 15, 2019

Cabot Weekly Review (Video)

In this week’s stock market video, Mike Cintolo discusses the continuing market uptrend, though isn’t complacent when it comes to a couple of worries (some resistance, many stocks extended from good entry points, etc.). The key now is to focus on some real leaders either on fresh breakouts or on shakeouts going forward—Mike highlights a handful of these potential buys, including a few recent IPOs that could provide new leadership.

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Bi-weekly Issue February 14: The market remains in good shape, generally shrugging off a stream of bad news by marching higher. Mike writes about a couple of additional positive longer-term signs for the market (one based on money flows, one based on the market itself), looks at some new ideas and reviews all of our Model Portfolio holdings. In tonight’s issue, he’s putting more money to work by adding two half-sized positions (one in a stock we already own), Okta (OKTA) Buy a Half and Workday (WDAY) Buy another Half. That will leave us with 25% in cash.

Bi-weekly Update February 7: The sellers finally showed up today, with some negative headlines causing the market to pull back. So far, though, retreats from the major indexes and leading stocks have been totally normal, and most of the evidence continues to point to higher prices ahead. In the Model Portfolio, Mike is standing pat tonight with 35% in cash, though he’s spying a few names for possible new buying.

Other Stocks of Interest February 1: Follow ups to stocks featured August 29, 2018 (issue 1401) to January 131 2019 (issue 1412). 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 February 15: Big picture, Mike remains very optimistic that the path of least resistance remains higher—the action of the market itself since the low, including the green light from the 2-to-1 Blastoff Indicator, looks like the initial thrust off a major low that should result in higher prices down the road. Mike’s Buy ideas this week are: Ciena (CIEN), Franco-Nevada (FNV), Planet Fitness (PLNT), and Tencent Music (TME). He doesn’t have any specific sales today, but now’s a good time to look through your portfolio and consider taking a couple of partial profits in some names.

Weekly Issue February 11: The overall evidence (which, by the way, includes a lack of meaningful pullbacks so far) continues to impress. Mike still thinks the next big move from here is up, but be sure to pick your spots (and your stocks) on the buy side, and practice patience with your strongest performers, giving them a chance to continue advancing. This week’s list sports a bunch of recent earnings winners from a variety of industries. Mike’s Top Pick is Array Biopharma (ARRY), which has shown fantastic accumulation pre- and post-earnings as it lifted to all-time highs.

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 Stock on Watch February 15: Procter & Gamble (PG) popped up on Jacob’s watch list in late January when the stock rose from 90.5 to 95 on an earnings beat. Since then the stock has continued to grind higher, trading at 99 today. PG is on the top of his watch list for a new position should the stock and market continue to strengthen.

Cabot Options Trader Alert February 15: Adjust Existing Position: Buy Back the Regions Financial (RF) February 16 Call and Sell the March 16 Call.

Cabot Options Trader Position Update February 14: The portfolio has two buy-writes (RF and PE) set to expire tomorrow. Jacob anticipates he will let the calls that we sold expire worthless, and then come Tuesday (the market is closed for Presidents Day Monday) he will decide if he wants to sell new March calls or if he will just move on to new trade ideas. He also updates several other positions that are performing well.

Cabot Options Trader Position Update February 13: While our portfolio is currently filled with strong stocks and nice returns the one stock that has not been performing is Twitter (TWTR) which fell on earnings last week. And because of its earnings fall, Jacob is prepared to sell our TWTR position any day. That said, TWTR did get two pieces of positive news today.

Cabot Options Trader Pro Alert February 12: Buy the Corning (GLW) August 34/38 Bull Call Spreads (exp. 8/16) for $1.60 or less.

Cabot Options Trader Alert February 12: Buy the Corning (GLW) August 34 Calls (exp. 8/16) for $2.60 or less.

Cabot Options Trader Earnings February 12: Twilio (TWLO) reports earnings today after the close. With the stock trading at 115, the options market is pricing in a move of $16, or 99 to the downside and 131 to the upside.

Cabot Options Trader Alert February 11: Sell Half of Existing Position: Sell HALF your Starbucks (SBUX) June 70 Calls for $3.90 or more.

Cabot Options Trader Weekly Market Update February 11: The Chicago Board of Options Exchange Volatility Index (VIX) closed the week at 15.75, or marginally lower on the week. Of note, both Thursday and Friday the VIX quickly rose above 17 as the market sold off. This would lead me to believe that traders are again under-hedged and because of that there is a rush to aggressively buy puts anytime the market looks like it is in danger.

Cabot Options Trader Pro Weekly Market Update February 11: Jacob has seven long positions: CIEN, ON, PE, RF, TWTR, SBUX and ZS, one position not impacting his decision making, PSTG and one short position, QQQ.

Cabot Undervalued Stocks Advisor

Special Bulletin February 13: Today, Martin Marietta (MLM) reports fourth-quarter results, Quanta Services (PWR) moves from Hold to Buy and Crista reiterates her Buy on Supernus Pharmaceuticals (SUPN).

Weekly Update February 12: Crista writes that U.S. stocks delivered great performance in January and are now taking a breather. As such, she expects the S&P 500 index to trade between 2625 and 2825 for a while. The trading range might end up being a little higher or a little lower, but for now, a repetition of the trading range that took place between late October through early December seems most likely to occur. There is one portfolio change today: Alexion Pharmaceuticals (ALXN) moves from Hold to Buy.

Monthly Issue February 5: Crista is not putting any new money to work as she is getting prepared to buy on pullbacks. Here are today’s portfolio changes: Apple (AAPL) moves from Buy to Hold, Apollo Global Management (APO) moves from Buy to Hold, Blackstone Group LP (BX) moves from Strong Buy to Buy, Comerica (CMA) moves from Hold to Buy, Commercial Metals (CMC) moves from Buy to Strong Buy, Delta Air Lines (DAL) moves from Buy to Strong Buy, D.R. Horton (DHI)0 moves from Buy to Hold, Knight-Swift Transportation (KNX) moves from Buy to Hold, Marathon Petroleum (MPC) moves from Buy to Strong Buy and Supernus Pharmaceuticals (SUPN) moves from Buy to Strong Buy.

Cabot Stock of the Week

Weekly Issue February 12: Market trends remain quite positive, and Tim continues to recommend that you work to get more invested. According to our market timing indicators, the odds are still very good that months from now, the market will be higher. Today’s recommendation, Planet Fitness (PLNT) was a recommended sell last May (we took a nine-month profit of 61%) after the stock sold off following a mixed earnings report, but today Tim is reinstating it, along with a new write-up by Mike Cintolo, who originally recommended the stock. There are two portfolio changes today, Arena Pharmaceuticals (ARNA) moves from Buy to Hold and MedMen (MMNFF) from Hold to Sell.

Cabot Emerging Markets Investor

Bi-weekly Update February 14: Our Emerging Markets Timer is still positive and constructive, though the EEM was essentially flat during the last week. Carl will keep moving forward while still playing some defense and mindful of the inevitable twists and turns as headline risks about China remain the key issue. There are no portfolio changes this week.

Bi-weekly Issue February 7: Emerging market stocks remain in an uptrend, though like most stocks around the globe, a little resting wouldn’t be uncalled for after the recent run-up. Carl has two new buys today, Nio Inc. (NIO) and Sea Limited (SE). Many of his recommendations are making solid progress, and he’s optimistic both of these can be leaders going forward.

Cabot Small-Cap Confidential

Weekly Update February 15: Small caps keep grinding higher. And many of the stocks in our portfolio are trading at, or near, all-time highs. Tyler has one rating change today: AppFolio (APPF) moves to BUY and yesterday he moved Q2 Holdings (QTWO) to HOLD.

Special Bulletin February 14: Tyler gives updates on three stocks that recently reported earnings, Avalara (AVLR), Q2 Holdings (QTWO) and Chefs’ Warehouse (CHEF).

Monthly Issue February 1: Today’s stock, Avalara (AVLR) is a cloud-based provider of sales and indirect tax compliance software. Its motto is “tax compliance done right.” To achieve its vision of being part of every transaction in the world the company has developed solutions that help customers become more efficient and accurate with respect to sales tax calculations, returns filing and remittance. Following this Issue is the full text of Tyler’s 2019 Small Cap Outlook.

Special Report: 2019 Small Cap Outlook

Cabot Dividend Investor

Weekly Update February 13: Tom believes there is still risk out there. But a catalyst may be emerging for strong upside. There is increasing optimism for a U.S./China trade deal. President Trump has indicated that he will let the upcoming deadline to raise tariffs on Chinese goods slide while the two sides continue to negotiate. Anything can happen, of course. But a trade deal would be huge. There is one rating change today: Community Health Trust (CHCT) moves from Buy to Hold.

Monthly Issue January 30: Right now Tom is favoring the more recession-resistant, safe stocks. His featured stock this month is, AbbVie Inc. (ABBV), a Chicago-based biopharmaceutical company formed in 2013 when it was spun off from Abbott Laboratories (ABT). The spinoff has already eclipsed its old parent in size and is now the eighth-largest pharmaceutical company in the world. There has been one rating change since last week’s update: STAG Industrial (STAG) was upgraded from a HOLD to a BUY. The reason for the change is momentum and performance. The stock is consistently outperforming the market on both the upside and the downside.

Cabot Marijuana Investor

Update February 14: Tim writes that one of the things you should occasionally think about as an investor is the topic of what makes stocks move, either up or down.The simplest reason is an imbalance of supply and demand; if supply is insufficient to meet demand, as it often is in a brand new industry, prices rise. That’s one reason marijuana stocks have been rising, overall, for the past few years. Today he updates all the stocks in the portfolio.

Monthly Issue January 31: The portfolio’s cash level is in the high teens, and Tim would like to reduce that, ideally on a substantial correction by the sector. For now, that cash will sit. What he will do is sell a third of Canopy Growth (CGC) and Cronos (CRON) tomorrow, using the average price of the day, and reinvest the proceeds equally in Cresco Labs (CRLBF) and KushCo (KSHB) and new addition Elixinol (ELLXF).

Wall Street’s Best Investments

Daily Alert February 15: Deckers Outdoor Corporation (DECK) from Canaccord Genuity Research
Daily Alert February 14: ADMA Biologics, Inc. (ADMA) from Schaeffer’s Investment Research

Monthly Issue February 13: Nancy just returned from the Orlando Money Show, where she had an opportunity to interview several of our contributors and also signed up a couple of new ones! As soon as the videos of her interviews become available, she’ll post them on our website. This issue’s Spotlight Stock, Cigna Corporation (CI), is a mega-insurance company that—despite all of the turmoil in the healthcare markets of the last few years—has latched on to a very profitable niche. Nancy explores the industry and the company a bit more in her Feature article.

Daily Alert February 13: Canadian Pacific Railway Limited (CP.TO) from The Successful Investor
Daily Alert February 12: Continental Materials Corporation (CUO) from S.A. Advisory
Daily Alert February 11: BioSpecifics Technologies Corp. (BSTC) from Upside

Wall Streets Best Dividend Stocks

Daily Alert February 15: Vail Resorts, Inc. (MTN) from Internet Wealth Builder
Daily Alert February 14: Fluor Corporation (FLR) from Sure Dividend
Daily Alert February 13: BlackRock Floating Rate Income Strategies Fund, Inc. (FRA) from Contrarian Outlook
Daily Alert February 12: Vanguard Mega Cap Value ETF (MGV) from Moneyletter
Daily Alert February 11: Juniper Networks, Inc. (JNPR) from The Prudent Speculator

February 2019 Issue February 6: In this issue, Nancy is a bit more optimistic as she feels investors are remaining bullish. Her Spotlight Stock is Janus Henderson Group plc (JHG) which is an independent asset manager, specializing in active investments. They have double-digit growth in an expanding industry, a healthy stock repurchase program, and the shares look very attractively valued.

Ask the Experts

Cabot Options Trader

Question: I am one your subscribers of “Cabot Options Trader” starting this year. So far I have done well with your trades and alerts. I love to ready your daily morning 5:30AM Trader Watch Lists and our timely alerts about trades. I have also been a fan of Mike Cintolo for many years and watch his “Weekly Cabot Review” without fail. Here is my question. I believe that CRM, SPLK, SBUX, XLNX and NOW are all positioning as potential money makers for 2019 ( I am sure there are many others to consider )What kind of options would I buy for LEAPS ( long term.. Jan 2020 ) or even 3-5 months out expirations, on these stocks ? What kind of calls would I buy, what strike prices, etc.. so that if the bull market were to continue for at least next 3-6 months, I would like to benefit from it using options. Just wanted to get your thoughts on this.

Jacob: It sounds like you are using my service, and Mike’s awesome chart reading perfectly! And I can tell you that MANY Cabot subscribers use similar strategies that you mentioned in your email. So if you were targeting these stocks, all of which I like as well, I would as you had said, look at options expiring 4-12 months out in time. That way you won’t get shook out if the market were to hit short term selling pressure on trade/government shutdown/etc. So once I chose an expiration, say September for XLNX, I would then buy calls just a touch out of the money. So in the case of XLNX which closed at 113.70 on Friday, it might be the September 115 or 120 calls. Those calls will move fairly aggressively higher should the stock rise. For NOW which closed at 228.5 on Friday, it might be the August 230 calls or the January 230 or 240 calls. I would stay away from calls really far out of the money, as they won’t move higher at a very rapid rate.

Cabot Undervalued Stocks Advisor

Question: Back in the December 18 report you mentioned NXPI. This was not added to the portfolio but you noted that this was an interesting undervalued stock. I am very happy to say that I am up 21% since buying the shares. The current share price at $93 is close to $95 where you had said that there would be price resistance. Do you have any further insights on NXPI today?

Crista: NXPI appears ready to storm past 95, with additional resistance at 105. I will note that 2019 earnings estimates were revised downward, and that the stock is no longer undervalued based on my normal investing criteria. The 2020 earnings estimates reflect stronger earnings growth, which is a good sign for longer-term investors. If you’re inclined to be cautious, then perhaps use a stop-loss order. (NXPI was featured in Cabot’s 10 Best Stocks to Buy and Hold for 2019. The portfolio is up 14.75% YTD, not including dividends.)

Premium Reports

Cabot’s 10 Best Stocks to Buy and Hold for 2019

Special Report

January 3: Crista has designed this portfolio of 10 stocks to compete with the S&P 500 during the coming year, with no trading, no buying and no selling whatsoever.

Cabot’s Best Safe Investments for Uncertain Times

Special Report

December 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 Report

December 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.

A Richer Retirement

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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.