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Weekly Summary June 7, 2019

Cabot Prime Pro Week Ending June 7, 2019

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, Mike Cintolo discusses the very encouraging action of the market since Monday—given the overall correction, he thinks the pieces are in place for a new upleg, especially among individual growth stocks. He’s not yet pounding the table, as the intermediate-term trend is down, but he’s OK with a little buying here and there, and it’s paramount to have your shopping list in order if this rally continues.

CABOT EVENTS:

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Cabot Wealth Summit 2019

7th Annual Conference | Wed-Fri, Aug 14-16 | Salem, Mass.

We’ve added a beginning investors workshop to help you understand the terminology and concepts of investing so you will be better prepared to make more money.The cost of the workshop is $197 but as a Cabot Prime member, once you register for the summit, you can attend the additional workshop for FREE.

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Advisory Services

Cabot Growth Investor

Bi-weekly Issue June 6: Mike says to continue being cautious. Having boosted the cash position north of 40% over the past few weeks, Mike is going to redeploy a little of that tonight and keep his eyes open for signs the bulls are retaking control. There are two changes in the portfolio tonight: Buy half positions in Array Biopharma (ARRY) and Coupa Software (COUP).

Special Bulletin June 3: The market suffered another round of selling today, and this time it was concentrated in the Nasdaq and many resilient growth stocks. Mike says that he’s been steadily paring back in recent weeks as the evidence has grown more negative, and tonight he’s going to continue that by selling the remaining shares of Workday (WDAY), which remains under pressure.
Other Stocks of Interest June 6: Follow ups to stocks featured December 19, 2018 (issue 1409) to June 6, 2019 (issue 1421). 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 June 7: Mike is encouraged by the overall picture—in fact, the title of his latest Cabot Growth Investor issue this week was “Pieces are in Place,” referring to the fact that the evidence is coming together to support a new leg up. He still needs to see the trend turn positive and some other things fall into place (the broad market is still iffy; defensive stocks are some of the best performers) before getting aggressive on the buy side. Net-net, he’s likely to bump up our Market Monitor a notch or two come Monday (from a 4 to a 5 or 6). Mike’s buy ideas this week are: Advanced Micro (AMD), Tandem Diabetes (TNDM), Snap (SNAP) and Zoom Communications (ZM). There are no sells this week.

Weekly Issue June 3: The sellers continue to be in control of the market, with the major indexes making new correction lows on Monday morning. Mike is also seeing the selling broaden out—today, some of the resilient growth stocks took hits, though to be fair, many names remain in decent shape. All told, though, Mike advises a cautious stance. Mike’s Top Pick is Guardant Health (GH), a recent IPO from the medical sector that, while not tearing up the charts, has shown solid buying of late and is actually trading tightly.

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 Stocks on Watch June 7: Jacob added two stocks to his watch list today: Medtronic (MDT) and Blackstone (BX).

Cabot Options Trader Alert June 4: Buy-Write: Buy Snap (SNAP) Stock and Sell the June 12.5 Call (exp. 6/21) for a net price of $12.10 or less.
Cabot Options Trader Weekly Update June 3: The Chicago Board of Options Exchange Volatility Index (VIX) closed the week at 18.7, or higher by 18%. Interestingly even as the Nasdaq fell approximately 7% for the month of May, the VIX continues to trade very calmly.

Cabot Options Trader Pro Weekly Update June 3: Jacob has nine long positions: DIS, GLW, JD, LVS, MSFT, RF, SBUX, SE and Z and one short position, QQQ.

Cabot Undervalued Stocks Advisor

Monthly Issue June 4: This week Crista points out that the stock market recently rose a ridiculously large amount in a very short amount of time and that it cannot continue rising until it pulls back and rests for a while. That process could normally take 2-6 months. (That’s a rough estimation.) We’re one month into the pullback, which means we’re one month closer to the eventual market rebound. She concludes that the stock market will eventually offer up new, lucrative opportunities. Here are today’s portfolio changes: CIT Group (CIT) moves from Strong Buy to Hold, Corteva Inc. (CTVA) spun off from DowDuPont (DWDP) and joined the S&P 500 index, DowDuPont (DWDP) changed its name to DuPont de neMours (DD), Guess? (GES) moves from Buy to Hold, Sanmina (SANM) moves from Strong Buy to Hold and Southwest Airlines (LUV) moves from Buy to Hold.

Special Bulletin May 29: Shares of Abercrombie & Fitch (ANF) are down dramatically today subsequent to reporting first-quarter 2019 results. There is no significant problem with Abercrombie’s operations or outlook but Crista is moving Abercrombie & Fitch (ANF) from Buy to a Hold while she waits for the share price to settle down.

Cabot Stock of the Week

Weekly Issue June 4: The Cabot Tides trend-following indicator says the intermediate-term trend of the market is still down, while our Cabot Trend Lines tells us the long-term trend of the market is still up. Combined with the Blast-Off signals seen in December, it tells us the odds favor the market resuming its uptrend—and hitting new highs—once this correction has run its course. Tim continues to recommend that you hold a diversified portfolio of high-potential stocks, while continually pruning your portfolio of its weakest stocks. Today’s recommendation is Axis Capital Holdings (AXS), a low-risk financial stock with a good dividend and a chart primed to break out to new highs. Tim also changes the rating in Apple (AAPL) to Hold, CIT Group (CIT) to Hold, Cresco Labs (CRLBF) to Sell, LexinFintech Holdings (LX) to Sell, Rapid7 (RPD) to Sell and Twilio (TWLO) to Hold.

Cabot Emerging Markets Investor

Bi-weekly Update June 6: Emerging markets (EEM) and Chinese stocks in particular continue to struggle a bit this week. The EEM is trading right at its 200-day moving average and below its 50-day moving average so the portfolio remains in a defensive stance. Carl has one position change this week: LexinFintech (LX) moves from Buy a Half to Hold.
Bi-weekly Issue May 30: The MSCI Emerging Markets ETF (EEM) remains in a negative position, just below 20-day and 50-day moving averages. Our portfolio has a 35% cash position and maintains 10% allocation to an ETF that moves opposite the EEM. In today’s issue Carl is bringing back his previous rare earths recommendation, VanEck’s Rare Earth/Strategic Metals (REMX), an exchange-traded fund (ETF) launched in 2010. It’s now in an uptrend and it’s rated Buy a Half. He has one portfolio change today: Daimler (DDAIF) moves from Hold to Buy a Half.

Cabot Small-Cap Confidential

Monthly Issue June 7: Today’s stock, EverQuote (EVER) runs an online marketplace that matches insurance buyers with sellers where over $120 billion is spent each year. It is a simple concept with big potential. Tyler also updates all the stocks in the portfolio and has one change today: Quanterix (QTRX) moves from Buy to Hold.

Special Bulletin June 7: Domo (DOMO) reported Q1 earnings last night and fell as much as 19% after hours. But Tyler doesn’t plan to sell now! In fact, he says that aggressive investors can buy into this morning’s weakness (shares are down 10% to 15%). Tyler suspects there are too many investors realizing that the growth story is intact and the current price is too tempting to pass on. He’s keeping the stock rating on BUY.
Weekly Update May 31: Considering the worsening performance of the S&P 600 Small Cap Index, which broke below its comfort zone, and the S&P 500, now 6% off its high, Cabot Small-Cap Confidential portfolio’s resiliency continues to stand out. That said, Tyler is suggesting to pull back on buying a little. He has one portfolio change today, Codexis (CDXS) moves from Buy to Hold.

Cabot Dividend Investor

Weekly Update June 5: Tom says that the market hates trade wars and the Trump Administration just opened another front with Mexico. But the Fed came to the rescue, insinuating an open mindedness to cutting the Fed Funds rate before the end of the year. Now the market looks strong again. But amidst the uncertainty investors are gravitating toward dividend stocks. The relative outperformance of safe dividend paying stocks over the past year has been the best in a long time. The strong performance should continue as rates have a downward bias in the foreseeable future. Dividend stocks significantly outperform non-dividend stocks as a group over the long term. But now, dividend stocks look great in the short term as well. You’re in the right place at the right time. Tom has no changes to his portfolio today.

Monthly Issue May 29: Tom writes about the new technology called 5G. The term means “fifth generation” as it represents the fifth generation of cellular wireless technology. 5G will pave the way for autonomous vehicles artificial intelligence, smart houses and cities and much more. In short, it will pave the way for a new wave of technological advancement. His featured recommendation this month is, Crown Castle International Corp. (CCI), a REIT that leases cellular wireless technology infrastructure (cell towers, small cells, fiber optic cables). It is a huge player that is front and center of the 5G build out and the business is likely to grow rain or shine and regardless of the economy.

Cabot Marijuana Investor

Update June 6: The broad market has advanced nicely since mid-day Monday when news that the Fed might lower interest rates sparked a wave of buying. Long-term, the future is bright. But short-term, the portfolio is happy holding a cash level of 23%, deferring new buying until the sector strengthens. News in the sector this week:

Illinois has become the 11th state to legalize marijuana—effective January 2020.

Oregon lawmakers have given the Oregon Liquor Control Commission more leeway to deny new pot-growing licenses based on supply and demand.

The FDA hearing on cannabis (mainly CBD) last Friday didn’t help short-term, as it “highlighted the messy state of the industry, with widespread use of CBD products with minimal standardization, evidence for benefit and understanding of safety profile,” according to Evercore ISI analysts led by Josh Schimmer. Long-term, Tim expects it to lead to studies that help reveal the benefits of CBD.
Monthly Issue May 30: The main trend remains up, in both the broad market and the cannabis sector in particular, but in the intermediate-term, we are now in a correction, and thus a little more caution is advised. The portfolio is 17% in cash and Tim is going to increase that today via three actions—He’s selling half of our positions in both Cresco Labs (CRLBF) and Curaleaf (CURLF), which up until now have both been overweight; and he’s doubling our position in Turning Point Brands (TPB), making that position slightly overweight. The result of it all is that the portfolio will be about 22% in cash.

Wall Street’s Best Investments

Daily Alert June 7: First Financial Bankshares, Inc. (FFIN) from 2 for 1 Stock Split Newsletter
Daily Alert June 6: Zoom Video Communications, Inc. (ZM) from Cabot Stock of the Week
Daily Alert June 5: Fidelity Worldwide Fund (FWWFX) from Fidelity Monitor & Insight
Daily Alert June 4: Kirkland Lake Gold Ltd. (KL) from Jack Adamo’s Insiders Plus
Daily Alert June 4: Sell: VanEck Vectors Vietnam ETF (VNM) from Jack Adamo’s Insiders Plus
Daily Alert June 4: Sell: Pretium Resources Inc. (PVG) from Jack Adamo’s Insiders Plus
Daily Alert June 3: Descartes Systems Group Inc. (DSGX) from Internet Wealth Builder
Monthly Issue May 15: Nancy begins this issue with our Spotlight Stock, Facebook (FB) a social media company that used to be a media darling, but became its favorite punching bag in the last couple of years, and not unjustly. The company stumbled when it neglected to care for its members, while allowing fraudulent invasions by not-so-nice folks. But, with an exciting new venture, it’s ready to take on some pretty big competitors in the payments business. You’ll find the details in her Feature article.

Wall Streets Best Dividend Stocks

Daily Alert June 7: BBVA Banco Francés S.A. (BFR) from Validea Hot List Newsletter
Daily Alert June 6: Analog Devices, Inc. (ADI) from Argus Weekly Staff Report
Daily Alert June 5: Ventas, Inc. (VTR) from Forbes Real Estate Investor
Daily Alert June 4: The Timken Company (TKR) from Upside
Daily Alert June 4: Sell: Annaly Capital Management, Inc. (NLY) from Jack Adamo’s Insiders Plus
Daily Alert June 3: Suburban Propane Partners, L.P. (SPH) from Conrad’s Utility Investor
Monthly Issue June 5: Nancy’s Spotlight Stock, Gilead Sciences (GILD), is a major biopharmaceuticals producer focusing on life-threatening diseases. Founded in 1987 by Michael Riordan, a 29-year-old medical doctor, Gilead has grown to over $22 billion in revenues through both internal growth and by acquisitions. Her Feature article uses Gilead as an example of when to sell and when to buy and Nancy provides two lessons learned.

Ask the Experts

Cabot Options Trader

Question: I’ve been enjoying your service for some time now, and I appreciate the insight, guidance (and returns!) that your picks have generated. My question is about options on leveraged ETFs, specifically in this case TQQQ. The tech sector has been beaten down recently, and while there’s no telling exactly when a turnaround will happen, I was wondering if there’s an opportunity to perhaps look at a longer-dated expiration such as Dec $49 calls. I think this is in line with your thinking of finding calls that are at or near the money, and with 6+ months until expiration, I think it follows your process of allowing time to work through some of the current market issues. Obviously the nature of this position is very volatile, but in terms of looking for exposure to a sector (such as the oil ETF you recently wrote about), I’m just curious as to whether or not this would be considered too risky.

Thanks as always, and keep up the great work!

Jacob: I have no issue with you trying to get bullish exposure via the December 49 Calls ... that is exactly the call I would buy if I wanted uber upside exposure. The only issue I have is that these options may decay at a faster rate than normal options. (though I have to be honest I have never traded this product) My line of thinking on this increased rate of decay is that the leveraged ETFs move at a greater speed than typical options, as they are leveraged ... and because of that I believe the options decay at a greater rate.

Cabot Growth Investor

Question: Mike, I’ve seen you mention that the outperformance in “defensive” stocks (XLP) could be a market negative. But couldn’t this just be because of the expectation of interest rate cuts by the Federal Reserve?

Mike: Sure, it could, and to be clear, looking at stuff like XLP is, at best, a secondary timing thing -- the trend of the major indexes and action of leading growth stocks is what counts most. That said, I try to just go with what I see—you can always find a “reason” why a stock or group isn’t acting well, but that doesn’t change what is. And I do notice when, during the first three days of a rally attempt, when small caps (which also benefit from rate cuts usually) lag and defensive stocks help lead. Just another piece of evidence out there—but to answer your question, I just take action at face value and try not to make excuses for it.

Premium Reports

Cabot’s 10 Best REIT’s to Buy Now

Special Report

May 2, 2019: JUST UPDATED—REITs are a way for investors to have a diversified portfolio of real estate-related investments even if you don’t have millions of dollars, much like mutual funds did for stocks. And REITs are traded on the market, just like stocks. In this new, exclusive report, you’ll discover how to profit in REITs, even when interest rates are rising.

Cabot Prime Pro Quarterly Report

Special Report

April, 2019: The first quarter of 2019 was as good as the previous one was bad. And that’s not surprising. In fact, in his last quarterly report, Tim concluded by writing, “What the charts are signaling now is quite bullish! So don’t be afraid. Follow your favorite Cabot analyst. Use appropriate risk management tools. And make some money while the market is once again going the right way.”

Cabot’s Ten Best Canadian Small-Cap Stocks

Special Report

Updated March 6, 2019: 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 relative performance of ex-U.S. markets is showing that’s no longer the case. There are market-beating returns available to those investors willing to step abroad. And one of the easiest steps to take is just over the border with our neighbor to the north, Canada. For the modestly adventurous investor, I think there are quite a few Canadian stocks worth a look right now.

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.

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.

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 Emerging Markets InvestorCabot Growth InvestorCabot Marijuana InvestorCabot Stock of the WeekCabot Undervalued Stocks AdvisorCabot Dividend Investor
AAPLHoldStrong Buy
ABBVBuyBuy
ACBSee Advisory
ADBEBuy
ALXNBuy
ANFHold
APHASee Advisory
APPFHold
ARNABuy
ARRYBuy 1/2
AVLRBuy
AXPHold 1/2
AXSStrong Buy
BABABuy 1/2
BHGEHold
BIPBuyBuy
BSCJBuy 1/2
BSCLBuy 1/2
BXStrong Buy
CCIBuy
CDNABuy
CDXSHold
CFStrong Buy
CGStrong Buy
CGCSee Advisory
CHCTHold
CITHoldHold
CMCHold
CMGHold
COUPBuy 1/2
CRLBFSee AdvisorySell
CRONSee Advisory
CURLFSee Advisory
DALBuyStrong Buy
DBIStrong Buy
DDAIFBuy 1/2
DOMOBuy
DOWStrong Buy
DWDPHold
EDHold 2/3
ELLXFSee Advisory
EPDBuy
EUMBuy
EVBGHoldHold
EVERBuy
EXASHold
FIVEHold
GESHold
GSHDBuy
GTBIFSee Advisory
HEXOSee Advisory
HTHTHold
IBNBuy 1/2
IIPRSee Advisory
KNXHold
KSHBSee Advisory
LGORFBuy 1/2
LUVHold
LXHold 1/2Sell
MKCHold
MOBuy
MOSHold
MPCHold
MTCHBuy
NEEHoldHold
OGISee Advisory
OKTABuy
PGXBuy 1/2
PLNTBuyBuy
QTRXHold
QTWOBuy
RCLHold
REMXBuy 1/2
RGENBuy
RPDHoldSell
SANMHold
SEHold 1/2
SLBHold
SSOHold
STAGHoldHold
SUPNStrong Buy
SYFHold
TCEHYBuy 1/2
TIVOHold
TOTHold
TPBSee Advisory
TSLAHold
TTDHold
TWLOHoldHold
UEICHold
UPLDBuy
VFFSee Advisory
VOYABuyStrong Buy
WDAYSell
XELHold 2/3
ZMBuy
ZTOBuy 1/2