Cabot Prime Pro Week Week Ending February 22, 2019
Cabot Weekly Review (Video)
In this week’s stock market video, Mike Cintolo discusses a bit of rotation he’s seeing out there—over time, it’s a good thing, though near-term he’s starting to see some leaders (not all) take a rest. Still, the good news is that two more rare “blastoff” signals flashed this week, and there’s no shortage of good-looking stocks out there as the buyers remain active.
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Cabot Growth Investor
Bi-weekly Update February 21: Remain optimistic. The market remains in good shape, though near-term, pullbacks and potholes are possible given the big run and the fact that we’re finally seeing a few leaders hit resistance. But the intermediate-term trend is up, the longer-term trend is on the verge of turning positive and more blastoff-type signals are being flashed. Long story short, Mike thinks the market will go higher over time, though we’re wading through a bunch of earnings reports on our stocks in the next couple of weeks. He’ll stand pat tonight with a cash position of 24%.
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.
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 22: Mike remains bullish and will likely leave our Market Monitor at a level 8 next week. In the near-term, be sure to take things on a stock-by-stock basis and look for reasonable pullbacks in leaders to take new positions. His buy ideas this week are: Alarm.com (ALRM), Alteryx (AYX), Coupa Software (COUP), and Entegris (ENTG). There are two sells today, Azul (AZUL) and Spirit Airlines (SAVE).
Weekly Issue February 19: The overall action from the major indexes and leading stocks remains about as good as you could hope for considering we’re two months off a major bottom—we’re nudging up our Market Monitor another notch (to 8) in this issue to respect the continued improvement in the overall evidence. This week’s list is still heavy on growth, though with a couple of new areas popping up, too. Mike’s Top Pick is Chart Industries (GTLS), a little-known name that looks like a great way to play the booming LNG infrastructure area.
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 Alert February 22: Sell Half of Existing Position: Sell HALF your Corning (GLW) August 34 Calls for $2.95 or more.
Cabot Options Trader Pro Alert February 21: Sell Existing Position: Sell your Twitter (TWTR) March 33/39 Bull Call Spreads for $0.35 or more.
Cabot Options Trader Alert February 21: Sell Existing Position: Sell your Twitter (TWTR) March 33 Calls for $0.35 or more.
Cabot Options Trader Stocks on Watch February 21: Option order flow has been fairly mixed the past week. However, yesterday, Jacob started to pick up on put buying in growth leaders and today he has picked up on similar trades. Because this is just one/two days of this activity he is not going to start selling our winning bullish positions. However, these trades are enough to raise a yellow flag on new buying.
Cabot Options Trader Stock on Watch February 19: JPMorgan (JPM) traded mostly unchanged following reporting earnings in mid-January, and has continued to chop around since. However, one leading financial stock is seeing an intriguing bullish position open today.
Cabot Options Trader Pro Position Update February 19: Ciena (CIEN) is breaking to a new high today, trading higher by $2 at 42.20. This has pushed our adjusted April Bull Call Spreads originally purchased for $0.95 to $5.30. Jacob is going to continue to hold his position for more upside.
Cabot Options Trader Position Update February 19: Ciena (CIEN) is breaking to a new high today, trading higher by $2 at 42.20. This has pushed our April calls originally purchased for $2.08 to $7, or a potential profit of 236%. Jacob is going to continue to hold his position for more upside.
Cabot Options Trader Alert February 19: Exit Existing Position: Sell the Parsley Energy (PE) Stock Position.
Cabot Options Trader Weekly Market Update February 19: The Chicago Board of Options Exchange Volatility Index (VIX) closed the week at 14.87, or lower by 5.4%. Friday’s close below 15 is the lowest close for the “fear index” since early December 2018, which was just two weeks before the market fell apart and the VIX spiked to 37.
Cabot Options Trader Pro Weekly Market Update February 19: Jacob has seven long positions: CIEN, GLW, ON, PE, RF, TWTR, SBUX and ZS and one short position, QQQ.
Cabot Undervalued Stocks Advisor
Special Bulletin February 22: Apollo Global Management, LLC (APO) moves from Hold to Buy; Quanta Services (PWR) reports great fourth quarter; moves from Buy to Strong Buy. Universal Electronics (UEIC) reports fourth quarter earnings miss and greatly increases first quarter guidance. And Crista has additional price action on portfolio stocks and a brief comment on Kraft-Heinz (KHC).
Special Bulletin February 21: Delek U.S. Holdings (DK) reports strong fourth quarter and moves from Strong Buy to Hold and Southwest Airlines (LUV) falls on temporary problems.
Weekly Update February 19: Crista writes that U.S. stocks continue to defy gravity, with their audacious 2019 year-to-date gains mirroring their equally extreme fourth quarter 2018 descent. Experienced investors know that this is one for the record books. The problem is that newer investors could easily be fooled into thinking (a) that these types of extreme run-ups are normal and (b) that pullbacks won’t happen because “it’s different this time.” There are three portfolio changes today: Comerica (CMA) moves from Buy to Hold, Martin Marietta Materials (MLM) moves from Hold to Buy and Synchrony Financial (SYF) moves from Strong Buy to Hold.
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 19: The market remains in a strong uptrend, driven by the gradual return of investors who sold out in December and are now being drawn back in by the market’s inexorable ascent. And the strength is not limited to the U.S.; Cabot’s Emerging Markets Timer has also flashed a buy signal, and once again one of the strongest markets is China. Today’s recommendation, Nio Inc. (NIO), is a stock was recently recommended by Carl Delfeld in Cabot Emerging Markets Investor. Tim recommends that you start small. There are two portfolio changes today, Huazhu Group Limited (HTHT) moves from Buy to Hold and Canada Goose (GOOS) from Hold to Sell.
Cabot Emerging Markets Investor
Bi-weekly Issue February 21: Despite today’s weak performance, emerging markets (EEM) gained a point during the week despite the ongoing uncertainty surrounding the U.S.-China trade talks. Carl’s new recommendation today is, Baozun, Inc. (BZUN) which offers end-to-end e-commerce solutions, including IT infrastructure setup and integration, online store design and setup, store operations, visual merchandizing and marketing campaigns, customer services, warehousing and order fulfillment. He has one change today, Brasil Foods (BRFS) moves from Buy a Half to Hold a Half.
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.
Cabot Small-Cap Confidential
Weekly Update February 22: Small caps continue to move higher so keep leaning bullish, but be mindful that we’re near a resistance area and that it’s equally likely we will see some softness as it is that we will see more strength. Tyler has no changes to the portfolio today.
Special Bulletin February 21: Everbridge (EVBG) reported Q4 2018 results the other night that were better than expected. Revenue was up 43% to $41.8 million while EPS of -$0.09 beat by a penny. For the full-year 2018, revenue was up 41% (versus 35.8% in 2017), while EPS came in at -$0.54. Tyler is keeping the stock at Buy. But to balance the near-term risks he recommends that you just buy small blocks of shares.
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 20: Tom reminds us to not forget about the dividends. Investor attitudes about the market change with the wind. A couple months ago we were spiraling into a recession and bear market. Now, things look good. But the truth is that no one really knows if we are in a raging bull market poised for an epic 2019 or we are still in a bear market that began last September. But he does know one thing. Dividends will continue to ring the register no matter what. There is one rating change today: STAG Industrial (STAG) 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 21: Trends remain good for investors in the marijuana industry. Revenues are rising rapidly at producers in both the U.S. and Canada. The supply shortages that characterized the opening of legal marijuana commerce in Canada are being resolved. Development of delivery systems, from vaping to tinctures to edibles to drinks, continues. Also, the Cabot Marijuana Investor portfolio is up 39.6%, and still 15% in cash, looking for a buying opportunity. Today Tim 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 22: American Express Company (AXP) from Internet Wealth Builder
Daily Alert February 21: Sea Limited (SE) from Cabot Emerging Markets Investor
Daily Alert February 20: Mastercard Incorporated (MA) from Argus Weekly Staff Report
Daily Alert February 19: Hill-Rom Holdings, Inc. (HRC) from Dow Theory Forecasts
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.
Wall Streets Best Dividend Stocks
Daily Alert February 22: iShares US Preferred Stock ETF (PFF) from Jack Adamo’s Insiders Plus
Daily Alert February 21: Dine Brands Global, Inc. (DIN) from Schaeffer’s Investment Research
Daily Alert February 20: Franklin Resources, Inc. (BEN) from The Turnaround Letter
Daily Alert February 19: Federal Realty Investment Trust (FRT) from Forbes Real Estate Investor
Monthly 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: First thank you to coach me since it is my first experience as a trader option.I stick to your plan and money is very good. I am asking you something: why your daily order flow list contain so little slightly in the money option activity and so much out of the money option activity? Finally what are your criterias do you apply to select an cheap option trading?
Jacob: Your questions are very good, and I like the way you are thinking. I would imagine why there is so much out-of-the-money vs. in-the-money is that the hedge funds/institutions like slightly “out” options as they are dollar cheaper than “in”, but also gives great upside potential. This is similar to how I like to trade. Determining if an option is cheap is somewhat an experience thing. And I know that isn’t a great answer, but over time I guess I have developed a good feel if an option is inexpensive or not especially in comparison to the stocks daily volatility. That said, looking at our CIEN and ZS call buys you can see that the CIEN call that we bought for $2.08 that was slightly “out” vs. the ZS call that we bought for $5.60 that was slightly “out” there was a $3.52 difference in the price of the options.
Question: I happened to see an article on CIEN on IBD : Ciena (CIEN), the IBD Stock Of The Day, is a top-performing provider of optical communications systems that’s carving a rare ascending base and is near a buy point. CIEN has a relative strength of 97. How do we benefit from CIEN going up now ? in the coming months. Markets seem to be healthy and inching up each week. Should we buy more calls expiring in Aug/Sep now ? What option strategies would make sense here ?
Jacob: Because our calls are so deep in the money I am going to stick to my position and not add to it (and at a profit of over 150%). That being said ... If I wanted more bullish exposure to CIEN I might buy the: July 42 Calls for $3 or January 45 Calls for $3.50 Unfortunately there are not August or September options yet. Those are probably the two best.
Cabot Small-Cap Confidential
Question: Hi, I’m really interested in your advisory, it sounds terrific. Would you be able to provide me with the performance on recent returns?
Tyler: Yes! The simple average return of currently open positions is around 65%. In 2018, the simple average of all positions closed (including partial positions, winners and losers) was 39%. Please email me (tyler@cabotwealth.com) with any further questions!
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