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Weekly Summary July 17, 2020

Cabot Prime Pro Week Ending July 17, 2020

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, In this week’s video, Mike Cintolo discusses this week’s growth stock wobbles—while he’s still bullish overall, he’s up for some pruning given the recent runs and what history shows, though he also emphasizes the rubber-meets-the-road evidence remains solid. As always, he runs through some favored names, including many that are in the process of testing their 10-week lines.

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Three Stocks for Three “Blue Ocean” Global Trends

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Advisory Services

Cabot Growth Investor

Bi-weekly Issue July 16: Overall, Mike thinks it’s reasonable to pare back, reduce risk and, as always, stay flexible for what the market throws at us. But he’s also willing to give some of our winners (especially those we’ve taken a couple rounds of partial profits in) some room to consolidate. In the Model Portfolio, we booked our profit in Vertex (VRTX) earlier this week and sold one-third of our position in Okta (OKTA), leaving us with 20% in cash. There are no additional changes tonight.

Special Bulletin July 14: Our market timing indicators are still positive, though our Cabot Tides are effectively on the fence. More important, after huge, huge moves, many growth stocks are showing some near- and intermediate-term topping signs. Of course, one bad day doesn’t make a trend, so we don’t advise turning defensive, but we are paring back today by making two moves—first, we’re going to take our profit in Vertex (VRTX), and second, we’re going to take partial profits in Okta (OKTA), selling one-third of our position. That will bring our cash position up to around 20%.

Bi-weekly Update July 9: Growth stocks remain very strong, and our market timing indicators remain positive, so you should remain mostly bullish. Of course, you should also keep your feet on the ground, as there’s little doubt things are fairly frothy here so some potholes could occur at any time. That said, Mike will continue to mostly ride things higher and look for opportunities to put money to work. Tonight, he’ll fill out our position in Chegg (CHGG) by adding another 5% stake. He’s also restoring a buy rating on Dexcom (DXCM). That will leave us with around 9% in cash.

Other Stocks of Interest June 18: Follow ups to stocks featured February 13, 2020 (issue 1439) to June 18, 2020 (issue 1448). Since many of the stocks written about in Other Stocks of Interest don’t make their way into the Model Portfolio, you won’t see them followed on a regular basis in the issues. However, we are monitoring these stocks, and this listing gives you a quick view of our latest thoughts.

Cabot Top Ten Trader

Movers & Shakers July 17: Mike says a little paring back makes sense given the evidence of the past few weeks, but he’d also stay flexible, being willing to give your strong, profitable stocks room to maneuver, while updating stops and the like should the sellers dig in. Our Market Monitor will probably be a 6 or 7 come Monday. Today’s suggested buys are: Horizon Therapeutics (HZNP), Lululemon (LULU), PayPal (PYPL) and Twilio (TWLO). There are two recommended sells today: PagSeguro (PAGS) and Vertex (VRTX).

Weekly Issue July 13: The Nasdaq and leading stocks had a huge reversal today, with many names that had gone vertical suffering some heavy-volume selling, representing another shot across the bow. Still, as we’ve written before, one day does not a trend make; the trend of the Nasdaq and growth stocks remain up, while the broader indexes and cyclical sectors are positive but mostly range-bound. As has been the case earlier in the rally, what happens from here will be key—continued distribution would be a sign that the current run could be ending, likely followed by a well-deserved digestion phase, but strong support in the near future would likely tell us this was just another brief stumble on the way to higher prices. Stepping back, most of the evidence remains positive, so we’re still bullish, but the next few days will be key. As opposed to the last two weeks, this week’s list is back to having a leadership, growth-ier feel to it. Mike’s Top Pick is Alibaba (BABA), which has always had the makings of a liquid leader, and is helping to lead the group rally in Chinese stocks as it lifts out of a two-year rest.

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 July 17: Today is the expiration of our Sonos (SONO) and Gluu (GLUU) covered calls. Jacob gives us the details of these trades and instructions on how to manage them.

Cabot Options Trader Position Update July 15: We have two covered calls that will expire this Friday and will likely need attention ... though this is a great scenario. For example, we are short the Sonos (SONO) July 15 calls and the stock is trading at 14.90 today. This is the perfect spot. Similarly, we are the short the Gluu Mobile (GLUU) July 10 calls and the stock is trading at 9.80 today. Again this is near the ideal spot. Expect to hear from Jacob on both positions Friday with instructions on how to manage these positions.

Cabot Options Trader Pro Trade Alert July 14: Close Existing Position: Buy Back the Nasdaq ETF (QQQ) July 245/250 Bear Call Spread for $4.40 or less.

Cabot Options Trader Basic and Pro Trade Alert July 13: Covered Call: Buy Zynga (ZNGA) Stock and Sell the August 10 Call (exp. 8/21) for a net price of $9.45 or less.

Cabot Options Trader Pro Weekly Update July 13: Jacob has seven Long positions: GLUU, GILD, JD, PTON, SNAP, SONO XLF and two Short positions: QQQ Bear Call Spread, QQQ December Puts

Cabot Options Trader Weekly Update July 13: The Chicago Board of Options Exchange Volatility Index (VIX) closed the week at 27.3, or essentially unchanged on the week. This lack of a drop below 27 in the “fear index” highlights traders continued disbelief/lack of trust in the markets’ big rebound. And, this week’s “Stocks on Watch” are two “open-the-economy” stocks looking for a rebound later this year and in 2021, and a put buy in a stock that reported disappointing numbers early last week.

Cabot Undervalued Stocks Advisor

Weekly Update July 15: The earnings deluge is starting this week. Bruce expects considerable volatility as investors digest company results which cover the last few months of the Covid stay-at-home orders and the recent economic re-opening. Also on focus will be managements’ outlook for the next few months and perhaps longer, as well as macro news about a possible Covid vaccine or treatment, global trade issues, the upcoming election in only four months and possible new stimulus programs. Here are today’s portfolio changes: Bruce is Adding Chart Industries (GTLS) as a new Buy, Adobe (ADBE) is being Retired on valuation and VanEck Vectors Oil Refiners ETF (CRAK) moves from Hold to Retired.

Monthly Issue July 1: As the new Chief Analyst for the Undervalued Stock Advisor, Bruce Kaser, would like to thank you for reading this month’s letter. He knows you have many sources of investment ideas and advice, and he appreciates your interest in our service. Today’s featured companies include an undervalued but high-quality and well-capitalized consumer apparel company, Columbia Sportswear (COLM), as well as Quanta Services (PWR), Dow Inc (DOW) and Equitable Holdings (EQH). Here are today’s portfolio changes: Columbia Sportswear (COLM) is a new Buy, Quanta Services (PWR) moves to Buy from Hold and Marathon Petroleum (MPC) moves to Hold from Buy.

Cabot Stock of the Week

Weekly Issue July 13: The market’s main trend remains up, and thus Tim continues to recommend that you be heavily invested in stocks that help you achieve your investment goals. Yes, stocks are increasingly high and risky, but history has proven that trying to identify market tops and get out before stocks fall is a fool’s game. Instead, it’s best to simply continue to own the best stocks—and react when the top has passed. For today’s recommendation, he’s turning to a national homebuilder, LGI Homes (LGIH), an industry we have no exposure to at the moment, but which is booming as COVID spurs a flight to the suburbs. The stock was originally recommended by Mike Cintolo in Cabot Top Ten Trader. Tim has one change today: Beyond Meat (BYND) moves to Hold.

Cabot Global Stocks Explorer

Bi-weekly Update July 16: Today Carl writes that we’ll stay the course with selective trimming and adding new positions in sectors that are demonstrating relative strength. When you step back and look at markets since the March lows, one takeaway is unmistakable. The market is particularly rewarding investors who invest in certain high-growth sectors. The Explorer portfolio will seek to take advantage of that momentum as it focuses in on a number of promising global trends. Carl has one portfolio change today: Direxion Daily FTSE China Bull 3X Shares (YINN) Moves from Buy to Sell.

Bi-weekly Issue July 9: Today’s new recommendation, Swire Pacific (SWRAY), is a blue-chip Hong Kong conglomerate with roots going back to the early 19th century. It is a value play in a Hong Kong that is moving from being the Asian and perhaps even the global capital of financial markets to just another important Chinese city. The ramifications of the new Chinese national security law and administration will take time to play out but no doubt will be significant. China is definitely a momentum market that can be both volatile and unpredictable. Carl doesn’t know how long this current rally will last but for aggressive traders, he suggests adding a small allocation to Direxion Daily FTSE China Bull 3X Shares (YINN) leveraged ETF that moves three times the market in either direction. Please put in place a 20% trailing stop loss for some protection in case the market goes the other way.

Cabot Small-Cap Confidential

Weekly Update July 16: As far as the past week goes, it’s been a mixed bag, but not awful. Our stocks declined by an average of 3%, and we had our fair share of positions that were down 8% to 11%. But we also had a few stocks that were up. And with a mix of technology stocks from across different markets and some MedTech mixed in we’re set up to handle bouts of volatility relatively well. Looking forward, the game plan is to maintain our current positioning (roughly) through earnings and make any ratings changes based on what happens with individual companies. Tyler has has no portfolio changes today.

Monthly Issue July 2: Digital payments were already a big trend prior to Covid-19. But the pandemic has pulled forward demand for solutions that help businesses pay and get paid whenever, wherever, and however. Today Tyler is profiling a small company, Repay Holdings (RPAY), that specializes in payment processing solutions. It’s relatively new to the public markets and has a market cap well under $2 billion. While areas of its business have been harmed by the pandemic, the big-picture story remains great. And management reported record sales activity in both March and April. And the stock’s looking great.

Cabot Dividend Investor

Weekly Update July 15: This market is making a believer out of Tom. He had been skeptical that stocks could hold their incredible, rapid gains from the March bottom. The market was pricing in a booming economic recovery in the quarters ahead as well as low interest rates and an accommodative Fed. While he agreed that the recovery would be very strong, there were risks to the market’s rosy scenario. There are no rating changes today.

Monthly Issue July 8: While everyone is focused on the near-term risks and inconveniences of this pandemic, lasting changes are being forged. Major events have a way of reshaping the American psyche and changing behavior. This pandemic ordeal is forever altering aspects of our culture, creating an a unique opportunity for investors. In this month’s issue Tom highlights a stock that directly benefits from the fact that people will continue to do more things from home than they did before the pandemic. B&G Foods Inc. (BGS), sells popular packaged food brands. Business is booming and should stay good for a long time. He has no other portfolio changes.

Cabot Marijuana Investor

Update July 14: Tim has frequently written that owning the leading U.S. vertically integrated multi-state operators is the best long-term strategy, because five years from now, they will almost certainly be bigger and more profitable. And that strategy has been very rewarding over the past week, too. But he also likes the diversity provided the Canadians and peripheral U.S. companies, so for the foreseeable future, they will continue to be part of the portfolio. Today he has no recommended changes, just updates on the action of each of our stocks.

Monthly Issue June 24: Our long-term goal is to own the leading stocks in the marijuana industry, so that five and ten years from now, our profits will be spectacular. The stocks in our portfolio today are absolutely your best bet to achieve that goal. But this is a volatile sector, so buying at the right time is key—and Tim thinks today presents a good buying opportunity, but he might be wrong. Luckily, the solution to that is diversification, not only by geography and company but also by time. So buy some now, but don’t put it all in today. Time is your ally and we are still early in this race. The portfolio holds a cash position of 14% and he’s now going to use one-third of that cash to average up in Aphria (APHA).

Special Report: April 29, 2020

U.S. Vertically Integrated Multistate Operators (MSOs)

Cabot Early Opportunities

Monthly Issue July 15: This month’s Issue of Cabot Early Opportunities features a fresh group of stocks that offer varying risk profiles and exposure to rapid-growth markets. Tyler has a company with a disruptive security platform that acts as a guardian of the internet, a MedTech innovator, Schrodinger (SDGR), (his top pick) with two exciting growth businesses, a clean-energy stock looking to put a troubled past behind it, a little-known gaming company and another software player that’s offering crucial communication services during the pandemic.

Special Bulletin June 29: With a portfolio flush with positions and the market having gotten a little choppy lately we’re going to move incrementally more conservative today. Tyler is taking the following actions: Axonics Modulation (AXNX), Sunnova Energy (NOVA) and Tela Bio (TELA) all move to SELL. Solaredge Technologies (SEDG) and Viela Bio (VIE) Move to Hold.

Cabot Profit Booster

Update July 17: It was another fantastic month for the Cabot Profit Booster portfolio, and with today being the expiration of July options we are likely going to close seven positions for full profits ranging from 5.4% to 12.3%. Jacob updates us with the details and instructions.

Weekly Issue July 14: The Stock – Sunrun (RUN) RUN hit 21 last July, inched out above that level in February (near 24) and then knifed as low as 8 in March. The recovery since then has been strong and persistent, but the acquisition changed everything—RUN has exploded to new highs on record volume and has continued higher without taking a breath. Stop - 23.5. The Covered Call Trade Buy Sunrun (RUN) Stock at 30.25, Sell to Open August 30 Strike Calls (exp.8/21/2020) for $2.50, or a Net Price of 27.75 or less.

Cabot Micro-Cap Insider

Weekly Update July 15: This week, Rich has a couple updates that he wants to highlight. First, we are increasing our buy limit for Medexus Pharma (PDDPF) from Buy under 2.50 to Buy under 3.00. The company reported an excellent quarter and continues to act well. Second, we are upgrading hopTo Inc (HPTO) to Buy below 0.45 from Hold. We will be closely watching the second-quarter 10-Q for an update on the closing of the backstop agreement (see details below), but below 0.45, the stock looks attractive.

Monthly Issue July 8: This issue, Rich profiles Greystone Logistics (GLGI), a classic micro-cap company that is growing earnings 140% this year but only trades at 6.6x earnings. The current recommendations have performed very well and, importantly, the long-term performance of micro caps as a group speaks for itself (18% annual CAGR). Rich continues to find many attractive, growing micro caps trading at cheap valuations, and look forward to sharing them in future issues.

Special Report

A Defensive Healthcare Stock with 100% Upside

Special Report

The Best Way to Play the Oil Market Dislocation

Cabot Income Advisor

Weekly Update July 15: Tom writes that at this point, it looks as though, in the absence of some horrible development, the market should have an upward bias going forward. We’ll see if it lasts as the election comes more into focus. But the market looks solid, at least for now. Today’s change: Sell ABBV September 18 $100 call at $4.60 or higher.

Monthly Issue June 24: In this issue, Tom highlights three stocks to buy and at the same time offer covered call ideas on those same stocks. The simultaneous purchase of a stock and the writing of a call is called a buy/write. The current environment is ripe for such a strategy. As usual, he recommends selling a call that represents the position. If you buy 500 shares, write 5 calls. If you have 1,000 shares, write 10 calls.

Special Report:

Off the Radar Cash Generators

Special Report:

The Covered Call Income Machine

Wall Street’s Best Investments

Daily Alert July 17: IDEX Corporation (IEX) Argus Weekly Staff Report

Monthly Issue July 16: Nancy writes that the markets are certainly keeping us on our toes! She really didn’t know what to expect when she began calculating the returns for this Mid-Year Top Picks issue. We’ve had so much volatility; a big disruption in March, as coronavirus took hold; and many sectors that just haven’t bounced back. Despite the ongoing devastation of COVID-19, our contributors have broken all of our records, averaging a gain of 16.41%, while the Dow fell 8.6%, the S&P 500 is down 1.2% and only the Nasdaq is in positive territory, with gains of 18.3%. Even better, our Top 5 picks averaged 221.48%! In this month’s issue, she brings you an update on many of our 2020 Top Picks, along with several new non-Top Picks ideas.

Daily Alert July 16: Federal Realty Investment Trust (FRT) Sure Dividend
Top Pick Update Daily Alert July 15: Walgreens Boots Alliance, Inc. (WBA) Sure Dividend
Top Pick Update Daily Alert July 14: Enterprise Products Partners L.P. (EPD) Cabot Dividend Investor
Top Pick Update Daily Alert July 13: LeMaitre Vascular, Inc. (LMAT) Cabot Small-Cap Confidential

Ask the Experts

Cabot Profit Booster

Question: Regarding Cabot Profit Booster, if Mike highlights 10 stocks he doesn’t buy all ten but just ones that meet certain criteria. Is your pick narrowed down by his picks? Do you select the one with the best theta or time value? A gut feeling of potential? Heaven forbid, balancing or diversification?

Jacob: It actually is a combination of everything you listed. Yes I try to diversify. For example right now we have FND (flooring/retailer), IPHI (semiconductor), PAAS (mining), MRVL (another semiconductor), HZNP (pharma), PTON (stay at home growth), BIG (retailer), NVTA (bio-tech) and UPWK (covid tech play of sorts). Other considerations ... Potential yields/theta would be number 1 or 2 on my criteria list. Option activity (want bullish options and why I chose UPWK this week) And lastly a bit of gut feeling on the market .. if I think market is overheated I would lean towards a defensive play.Our results have been spectacular so far. Though admittedly a “bull market” helps.

Question: I’m just now entering the “options world” of investing. I’ve read many of the articles on Cabot’s website regarding options. Now I’m ready to take my first step.The covered call is laid out nicely, and is clear. My question involves the “Stop - 23.5". I understand what a “stop” is, but am unclear how to correctly execute this with the covered call. If the stock gets to this point, do I sell the 100 shares of RUN and close the call? If so, what are the technical terms to correctly execute? If not, then what?

Jacob: First off Welcome to the World of Options! Glad to have you onboard.As to your question ... IF we have to close the trade down the road you would: Sell the Stock, Buy to Close the Option. However, please note, don’t worry about the Stop. I’m in charge of that, and if we hit that level I will send a trade alert giving you specific instructions on how to exit the trade. Now let’s hope that doesn’t happen.

Quarterly Cabot Analyst Meeting

The recording of the Cabot Prime Members Meeting with the Analysts from April 15, 2020 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.

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.

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 Global Stocks ExplorerCabot Growth InvestorCabot Marijuana InvestorCabot Stock of the WeekCabot Undervalued Stocks AdvisorCabot Dividend Investor
ABBVHoldBuy
ADBERetired
AMZNHold
APHASee Advisory
APPFHold
AREHold
ARNABuy
AVGOHold
AVLRHold
BABAHold
BGSBuy
BIGBuy
BIPBuyBuy 2/3
BMYStrong Buy
BSCLBuy 1/2
BUGHold 1/2Buy
BYNDHold
CCIHold 1/2
CDLXHold
CGCSee Advisory
CHGGBuyBuy
COLMBuy
CRAKRetired
CRLBFSee Advisory
CRONSee Advisory
CURLFSee Advisory
DBSDYBuy 1/2
DOCUHold
DOWBuy
DXCMHold
EPDHold
EQHStrong Buy
EVBGBuy
EVERHold 1/2
FVRRHold 3/4
GFLBuy
GILDBuy 1/2
GMStrong Buy
GRWGSee Advisory
GSHDHold 3/4
GTBIFSee Advisory
GTLSBuy
HTHTHold
IIPRSee AdvisoryHold 2/3
INSPHold
KERNSee Advisory
KLBuy 1/2
KPTIBuy
LGIHBuy
MKSIHold
MOBuy
MPCHold
NEEHoldHold 1/2
NETBuyBuy
NFLXHold
NVDAHoldStrong Buy
OKTASell 1/3
PGXHold 1/2
PLMRBuy
PWRBuy
QCOMHold 2/3
QTWOBuy
REMXBuy 1/2
RGENBuy
RNGHold
RPAYBuy
SEHold 1/2Hold
SLQTBuy
SPCEBuyBuy
SSOBuy
STAGHold 1/2
SWRAYBuy
TCNNFSee AdvisoryBuy
TCOMHold 1/2
TDOCBuy
TLRYSee Advisory
TOTHold
TPBSee Advisory
TSLAHold
TSNSoldBuy
TWLOBuy
UEICStrong Buy
VLOHold 1/2
VOYAStrong Buy
VRTXSellHold
VZBuy
WINGBuy
XELHold 2/3
YINNSell
ZMHold
ZSHold