Cabot Prime Pro Week Week Ending March 1, 2019
Cabot Weekly Review (Video)
In this week’s stock market video, Mike Cintolo talks about the very bullish intermediate- and longer-term outlooks for the market and leading stocks, but he also goes into some examples of short-term selling he’s seeing, as some big investors appear to be taking profits after big moves. It’s totally normal at this point, and in fact, Mike goes over a handful of stocks that are buy candidates—some that are gapping out of bases, and others that could offer opportunities on pullbacks.
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Advisory Services
Cabot Growth Investor
Bi-weekly Issue February 28: Mike says to remain bullish and continue to step into the market. Tonight, he’s averaging up in ProShares Ultra S&P 500 Fund (SSO) and buying a full-sized position in Chipotle Mexican Grill (CMG), though he’s placing Planet Fitness (PLNT) on hold. The cash position will now be around 10%.
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%.
Other Stocks of Interest February 26: Follow ups to stocks featured September 12, 2018 (issue 1402) to February 14, 2019 (issue 1413). 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 March 1: Mike says the odds continue to favor meaningfully higher prices in the months ahead. His buy ideas this week are: Broadcom (AVGO), Cronos Group (CRON), Etsy (ETSY), and Glaukos (GKOS). Besides the general advice to book some partial profits in stocks that have had good runs, there are no outright sells today.
Weekly Issue February 25: Pinpointing short-term moves is a tough game and rarely helps you make good money over time—the key is sticking with the major trend (up) and focusing on leading stocks and proper setups. Overall, Mike remains open to anything, but just going with the evidence, you should be mostly bullish. This week’s list has a mix of stocks and sectors, from retail to medical to Internet. A bunch of the names look good, but for his Top Pick, Mike will go with Trade Desk (TTD), which looks like a real leading glamour stock. Try to buy on dips.
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 March 1: Now that the market is open and Zscaler (ZS) has traded for a couple hours Jacob wanted to update you on where our position stands. ZS held its pre-market indication and is trading even higher at 59.5. Because of this he will likely put in a new mental stop on our position Monday morning once the stock has settled down.
Cabot Options Trader Earnings Update March 1: Zscaler (ZS) reported earnings, revenue and guidance yesterday afternoon that easily beat expectations. In reaction the stock is indicated higher by 17% at 58.25. Jacob is going to continue to hold his position for the time being, and will determine how he will manage it based on stock strength and option activity in the days to come.
Cabot Options Trader Earnings Update February 28: This afternoon after the close Zscaler (ZS) will report earnings. We are currently holding half of a position, having sold the first half for a profit of 23%. Jacob has an earnings breakdown for ZS as well as the expected stock move for a couple of other stocks of interest to subscribers.
Cabot Options Trader Position Update February 27: Jacob received a great question from a subscriber that he thought he would share with the larger group, along with his response. “Regarding the Cronos call buy ... why not buy CGC instead as the earnings risk has passed and growth was good?”
Cabot Options Trader Alert February 27: Buy the Cronos Group (CRON) July 22 Calls (exp. 7/19) for $3.80 or less.
Cabot Options Trader Stocks on Watch February 27: Two other stocks that are on Jacob’s radar because of bullish option activity are Roku (ROKU) and Microsoft (MSFT).
Cabot Options Trader Sector on Watch February 26: The Marijuana sector has gone in and out of favor several times in the last year. The reasons behind the wild rotations are anyone’s guess. But today’s option activity across the Marijuana sector is peaking my interest as call buyers have been actively targeting three of the sector’s leading stocks.
Cabot Options Trader Alert February 25: Sell Half of Existing Position: Sell HALF your Corning (GLW) August 34 Calls for $2.95 or more.
Cabot Options Trader Weekly Market Update February 25: The Chicago Board of Options Exchange Volatility Index (VIX) closed the week at 13.5, or lower by 9%. The close below 14 on Friday was the lowest level for the VIX in four months, which isn’t terribly surprising given the steady advance by the S&P 500 since the start of the year.
Cabot Options Trader Pro Weekly Market Update February 25: Jacob has six long positions: CIEN, GLW, ON, RF, SBUX and ZS and one short position, QQQ.
Cabot Undervalued Stocks Advisor
Special Bulletin March 1: Southwest Airlines (LUV) moves from Hold to Strong Buy.LUV is an undervalued growth stock. Crista was waiting for a pullback so that she could return LUV to a Buy recommendation. The pullback was quick!
Special Bulletin February 28: Alexion Pharmaceuticals (ALXN) moves from Buy to Hold and Crista has price action and/or news on KLX Energy Services (KLXE), Supernus Pharmaceuticals (SUPN)and TiVo (TIVO).
Special Bulletin February 27: Supernus Pharmaceuticals (SUPN) reported strong fourth-quarter results yesterday, with EPS and revenue above all analysts’ estimates. TiVo (TIVO) also reported fourth-quarter results. The company continues to work on strategic initiatives, with the implication that they are discussing the sale of one or both divisions of the company with prospective buyers. Plus Crista reports on price action on Guess? (GES) and Abercrombie & Fitch (ANF).
Weekly Update February 26: Crista’s decided to add the occasional paragraph or two about current international trade negotiations to these weekly updates. Maybe you can get a jump on some trade-related stock market action, like we’re seeing recently among Chinese stocks.There are two portfolio changes today: Skechers (SKX) moves from Hold to Retired and Total SA (TOT) 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 26: Over the past two months, every one of Cabot’s market-timing indicators has turned positive, from the “blastoff” indicators to the short-term trend-following indicator to finally (just last Friday) the long-term trend-following indicator. Of course, a pullback will come eventually, but by then the odds are that the market will be a lot higher. So if you’ve been holding back out of an abundance of caution, Tim suggests you face the facts, recognize the trend, and get back in the market now. This week’s recommendation, Exact Sciences (EXAS), is a medical technology stock that provides an innovative service that’s a welcome alternative to a standard procedure that most of us have experienced. The stock was recently recommended by Mike Cintolo in Cabot Growth Investor. Here are today’s portfolio changes: Apollo Global Management (APO) moves from Hold to Buy, Delek US Holdings (DK) from Buy to Hold, Green Dot (GDOT) from Hold to Sell, Match.com (MTCH) from Hold to Buy and NIO (NIO) from Buy to Hold.
Cabot Emerging Markets Investor
Bi-weekly Update February 28: Our Emerging Markets Signal is still positive as the MSCI Emerging Market index (EEM) basket—containing 800 stocks worth $1.9 trillion—pulled back only slightly. U.S.-China tensions appear to be easing and a couple of our portfolio positions made some nice moves this week. Carl has several portfolio changes today: Brasil Foods (BRFS) was moved to a hold last week due to weak relative performance and now he is recommending that it be Sold. NIO (NIO) surged 30% in three days this week and is getting more media attention including a spot on 60 minutes. Carl suggests that you sell one-third of the position and leave the 20% trailing stop loss in place for the rest of your position. Regarding SEA (SE), he recommends you sell 50% of your position and put in place a 20% trailing stop loss for the remaining position. Wait for a pullback before buying more shares.
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.
Cabot Small-Cap Confidential
Monthly Issue March 1: Today’s stock, Upland Software (UPLD) is a $761 million market cap company that provides cloud-based Enterprise Work Management (EWM) software to companies where collaboration and teamwork are critical to their operations. Tyler also updates all the stocks in the portfolio and has one change for today: Q2 Holdings (QTWO) moves back to Buy.
Special Bulletin February 27: Arena Pharmaceuticals (ARNA) reported after the bell yesterday and delivered results that were better than expected, with EPS of $1.35 and revenue of $8.7 million both well ahead of expectations and Codexis (CDXS) also reported after the closing bell yesterday, with revenue of $16 million coming in just shy of expectations, while EPS of $0.03 beat by $0.05. 2018 revenue was up 50%, to $61 million.
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.
Cabot Dividend Investor
Monthly Issue February 27: Tom writes that in just a few years this country has gone from a state of hopeless dependency on foreign energy to the world’s largest producer of both oil and natural gas. It is a global economic phenomenon of staggering proportions that will materially affect the economic well-being of the country for many decades to come. Who knew? As an investor, you need to know this story. His featured stock this month is, Enterprise Product Partners (EPD), one of the largest midstream energy companies in the country, with a vast portfolio of service assets connected to the heart of American energy production. There are no rating changes since last week’s update.
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.
Cabot Marijuana Investor
Monthly Issue February 28: While the S&P 500 is up 11.1%, year-to-date, the Marijuana Index is up 40.0%, and our own Marijuana Portfolio is up 44.4%. Times are good. Demand for marijuana stocks continues to exceed supply, as new investors are drawn to the sector by a combination of a desire to buy the hottest stocks and a growing acceptance of this increasingly legal American industry. Today Tim is selling all of CV Sciences (CVSI), MedMen (MMNFF) and Tilray (TLRY) and a third of Cresco Labs (CRLBF) and Innovative Industrial Properties (IIPR). After the sales, the portfolio will be about 30% in cash, which he hopes to reinvest soon—and at more advantageous buy points.
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.
Wall Street’s Best Investments
Daily Alert March 1: Raytheon Company (RTN) from The Personal Capitalist
Daily Alert February 28: Lamb Weston Holdings, Inc. (LW) from DRIP Investor
Daily Alert February 27: Okta, Inc. (OKTA) from Cabot Growth Investor
Daily Alert February 26: Illumina, Inc. (ILMN) from Pivotal Point
Daily Alert February 25: Becton Dickinson and Company (BDX) from Wall Street Stock Forecaster
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 March 1: iShares Morningstar Large-Cap Value ETF (JKF) from Dow Theory Forecasts
Daily Alert February 28: Royal Dutch Shell plc (RDS-A) from Argus Weekly Staff Report
Daily Alert February 27: Citizens Financial Group, Inc. (CFG) from AlphaProfit Sector Investors’ Newsletter
Daily Alert February 26: Energy Transfer LP (ET) from Sure Retirement Newsletter
Daily Alert February 25: Inter Pipeline Ltd. (IPL.TO) from Income 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: I have been doing some “research” on NIO which I believe was mentioned in one of the Cabot newsletters. I am a small investor so I take small bites, in this case a small block of the stock on which I wrote a covered call. I paid in the high $700 for the stock and sold the July $8 call. Today I saw the start of what I believe is an upward movement in the stock. I believe the stock has good growth potential. As a result of today’s movement I bought back the covered call, at a slight gain and purchased 2 May 17 $ 7 Calls. I am fighting the urge to buy a few out of the money calls.
Jacob: I have NO issue with you buying out-of-the-money calls at the 8 or 9 strike. That is the point of calls. Taking cheap shots. Especially in a speculative stock like NIO. Will they work? Only time will tell. But to pay $0.75 for the July 9 calls (just an example) seems like a great risk reward.
Cabot Top Ten Trader
Question: Paycom Software (PAYC) is in the dropped category on the latest issue of Cabot Top Ten Trader. Does that mean sell?
Mike: No -- if you own it, by all means hang on. As we write in the tiny print above, Drop simply means the stock did not fall into our suggested buy range within two weeks from the writeup; hence, we didn’t get our price, so we have to assume few subscribers bought it. So we “drop” coverage. That said, usually this means the stock hasn’t pulled back, which is a good thing -- though it could increase risk in the near-term. Plus, there’s nothing that says we can’t re-recommend it in the weeks ahead. But we have to follow the system, so if something doesn’t fall into our range within two weeks, we drop it and focus on those that have.
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