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Weekly Summary March 8, 2019

Cabot Prime Pro Week Week Ending March 8, 2019

Cabot Weekly Review (Video)

In this week’s stock market video, Mike Cintolo dives into the long-awaited market pullback, which has dented the major indexes and most stocks and sectors. Even so, Mike’s sticking with a bullish posture, but sees some further tricky action in the near-term. Mike relays the keys he’s watching going forward and the simple pattern he’s using to uncover lower-risk entry points in leaders.

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Cabot Growth Investor

Bi-weekly Update March 7: Remain bullish, but take things on a stock-by-stock basis. The market has begun to pull back after a great couple of months, and stocks could easily correct and consolidate further. That said, to this point, the market’s evidence remains bullish, and even the growth stocks that have been dented are so far holding key support. Tonight, Mike is sticking with his collection of stocks, though he’s watching the situation closely. In the Model Portfolio tonight, we’re placing Ciena (CIEN) on Hold but restoring our Buy rating on Planet Fitness (PLNT). The cash position is around 9%.

Special Bulletin March 4: In the Model Portfolio, Mike has no sells tonight, but he is going to place Five Below (FIVE), Okta (OKTA) and Workday (WDAY) on Hold. None have broken down, but all have shown some iffy action. Should the pressure persist, he’ll follow our usual plan, selling anything that breaks down while sticking with the stocks that hold up the best.

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%.

Other Stocks of Interest March 6: Follow ups to stocks featured September 26, 2018 (issue 1403) to February 28, 2019 (issue 1414). 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 8: After a couple of months of strong action, the long-awaited market pullback has gotten underway, and not surprisingly it’s been a bit of a doozy. Mike has a few thoughts on the recent action. His buy ideas this week are: Epam Systems (EPAM), Incyte Corp. (INCY), iRobot (IRBT), Shopify (SHOP) and Spirit Aerosystems (SPR). There are three sells today, Novocure (NVCR), Glaukos (GKOS) and Lululemon (LULU).

Weekly Issue March 4: In the short-term, given the prolonged run off the bottom, more consolidation is likely, so we’re fine taking a profit (or partial profit) here or there. Intermediate-term, though, we’re still optimistic—while some of the action looks iffy, very few (if any) leading stocks or indexes have broken down at this point, and these type of sharp, scary pullbacks (assuming they find support at logical levels) aren’t unusual during bull moves. Mike’s Top Pick is MercadoLibre (MELI), where business is reaccelerating and the stock just came out of a big consolidation.

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 March 8: Some of the stocks that have held up well recently are earnings winners like Chegg (CHGG), Floor & Décor (FND) and Yext (YEXT). Jacob has a long list of these outperforming stocks and could add one to the portfolio should the market strengthen.

Cabot Options Trader Market Update March 7: ON Semiconductor (ON) will host its Analyst Day tomorrow. Because Jacob is holding April options this may be one of the last major catalysts between now and the expiration for his position. And should the stock fall on the analyst day he will likely soon exit the position. Because Okta (OKTA) is a stock that many Cabot subscribers have interest in, and could be a good barometer for growth stocks going forward, Jacob wanted to provide you with the earnings breakdown for tonight’s earnings event.

Cabot Options Trader Stocks on Watch March 6: There have been several large options trades made in the last two days that Jacob wants to highlight. CVS Health (CVS), ConAgra (CAG) and SEA (SE).

Cabot Options Trader Market Update March 6: There are certainly some concerning trends in the market over the last week. For example, the Transports (IYT) have fallen for eight straight days, the Russell 2000 (IWM) has been negative five out of the last seven days, and leading growth stocks have been weak. Jacob is not yet terribly concerned, but he does have his eyes open watching for further trouble. And because of these concerns, and the February Jobs Report Friday, he’ll likely hold off any new buys for the time being.

Cabot Options Trader Alert March 5: Sell Half of Existing Position: Sell HALF your Cronos Group (CRON) July 22 Calls for $4.30 or more.

Cabot Options Trader Pro Earnings Update March 5: Ciena (CIEN) reported earnings, revenues and guidance this morning that beat expectations. In early pre-market trading the stock is trading higher by $1.20 at 44. If CIEN were to open at 44 this would be the ideal spot for our bull call spread. Though in reality anything above 44 is fantastic as the spread would go to its full profit potential.

Cabot Options Trader Earnings Update March 5: Ciena (CIEN) reported earnings, revenues and guidance this morning that beat expectations. In early pre-market trading the stock is trading higher by $1.20 at 44. If CIEN were to open at 44 our calls would be worth $8 approximately, or a potential profit of 285%.

Cabot Options Trader Market Update March 4: After gapping higher this morning the three leading indexes are all trading lower today by approximately 1% with the Dow performing worst, down 400 points. However, the real story is the selling pressure on many of the leading growth stocks, many of which are down 5%-8%. However, into this selling traders are accumulating big bullish positions.

Cabot Options Trader Pro Earnings Update March 4: Ciena (CIEN) will report earnings before the open tomorrow. The stock has been on a tear to start 2019, up 27.5% year-to-date. Jacob is going to hold his position through earnings as the stock looks great and option activity has been largely bullish. That said, our April 36 calls are DEEP in-the-money and will move almost 1x1 with the stock. So if the stock drops $2, the calls will lose $2 … conversely if the stock rallies $3, the calls will rise $3. However, we did sell the April 44 calls which does spread off some of our premium risk.

Cabot Options Trader Earnings Update March 4: Ciena (CIEN) will report earnings before the open tomorrow. The stock has been on a tear to start 2019, up 27.5% year-to-date. This has helped push our position to a potential profit of 260%. Jacob is going to hold his position through earnings as the stock looks great and option activity has been largely bullish. That said, our April 36 calls are DEEP in-the-money and will move almost 1x1 with the stock. So if the stock drops $2, the calls will lose $2 … conversely if the stock rallies $3, the calls will rise $3. So clearly there is event risk.

Cabot Options Trader Weekly Market Update March 4: The Chicago Board of Options Exchange Volatility Index (VIX) closed the week at 13.57, or slightly higher on the week. While the market was relatively range bound, there was certainly a bid to the VIX nearly every day—nothing overly concerning, but there were several days in which the VIX quickly popped to 15 and above. This would lead me to believe that traders are again net short volatility, and any market decline could bring a spike in the VIX.

Cabot Options Trader Pro Weekly Market Update March 4: Jacob has seven long positions: CIEN, CRON, GLW, ON, RF, SBUX and ZS and one short position, QQQ.

Cabot Undervalued Stocks Advisor

Special Bulletin March 6: Abercrombie & Fitch (ANF) reports reported fourth quarter non-GAAP EPS of $1.35 this morning (January year end), above all analysts’ estimates. So Crista is moving it from Strong Buy to Hold.

Monthly Issue March 5: Crista is adding three stocks to the portfolios today – The Mosaic Company (MOS) joins the Buy Low Opportunities Portfolio as a Strong Buy, Royal Caribbean Cruises (RCL) joins the Growth & Income Portfolio as a Strong Buy and Sanmina Corp. (SANM) joins the Growth Portfolio as a Strong Buy. She is selling Delek U.S. Holdings (DK) and Blackstone Group LP (BX) moves from Buy to Strong Buy.

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.

Cabot Stock of the Week

Weekly Issue March 5: Cabot’s market-timing indicators remain positive, telling us the odds are very good that the market will be higher in the months ahead, so Tim continues to work to get the portfolio into a fully-invested position (20 stocks) while remaining diversified among a broad variety of growth and value stocks, large and small. This week’s recommendation, The Trade Desk (TTD), is a fast-growing, and already profitable, company at the forefront of the digital advertising boom. The stock was recently recommended by Mike Cintolo in Cabot Growth Investor. Here are today’s portfolio changes: Arena Pharmaceuticals (ARNA) and Delek US Holdings (DK) both move from Hold to Sell.

Cabot Emerging Markets Investor

Bi-weekly Issue March 7: Emerging market stocks remain in a confirmed uptrend with the support of generally upbeat earnings. Investors have piled about $86 billion into emerging market stocks and bonds already this year, more than in the last nine months of 2018 combined. Carl’s new recommendation today is, ZTO Express (ZTO), a well-managed, fast-growing transportation company set to generate huge profits despite China’s slowdown. In the model portfolio today, Carl is moving AngloGold Ashanti (AU) from Buy a Half to Hold a Half.

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.

Cabot Small-Cap Confidential

Weekly Update March 8: The S&P 600 Small Cap Index has pulled back a bit more after trading up near the high end of Tyler’s expected trading range last week. He’ll continue to watch this range (900 to 1,000) as he expects the index to bounce around within it for several weeks, if not months. There are no changes to the portfolio today.

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.

Cabot Dividend Investor

Weekly Update March 6: Tom writes that we’re in an environment that is ideal for dividend stocks. And the relative performance of these stocks going forward will likely be the best in many years. Enjoy this newsletter, because you’re in the right place at the right time. He updates all the stocks in the portfolio, and says there are no rating changes today.

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.

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 8: MercadoLibre, Inc. (MELI) from Global Investing
Daily Alert March 7: Performance Food Group Company (PFGC) from Upside
Daily Alert March 6: Sell: Skechers USA Inc. (SKX) from Cabot Undervalued Stocks Advisor
Daily Alert March 6: Parsley Energy, Inc. (PE) from BI Research
Daily Alert March 5: Franco-Nevada Corporation (FNV) from Internet Wealth Builder
Daily Alert March 4: Lithium Americas Corp. (LAC) from Energy Investor

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 8: Bank of New York Mellon Corporation (BK) from Directinvesting.com
Daily Alert March 7: Broadridge Financial Solutions, Inc. (BR) from Dividend Advisor

Monthly Issue March 6: In this issue Nancy welcomes Douglas Gerlach, who is a new regular contributor to our newsletters. Doug is with Investor Advisory Service and is the editor of the SmallCap Informer newsletter. Doug contributed our Spotlight Stock this month, Silicon Motion Technology (SIMO), a powerhouse in the data storage industry. In her Feature article, Nancy delves further into the sector, noting its expansion as well as future potential.

Daily Alert March 6: The Home Depot, Inc. (HD) from IQ Trends
Daily Alert March 5: Nippon Telegraph and Telephone Corporation (NTTYY) from Conrad’s Utility Investor
Daily Alert March 4: Invesco FTSE RAFI US 1000 ETF (PRF) from Forecasts & Strategies

Ask the Experts

Cabot Options Trader

Question: Looks that tndm is strong. I like it but it is expensive. How is selling 3/15/2019 65 put with $1.5 premium. If it dose not drop to $65 at due date 3/15, I got $1.5 profit. If it dropped below $65, I got the stock with $65-$1.5. The risk is it drop much below $65, which looks low possibility. Please advise.

Jacob: I agree TNDM looks great, and more than likely that trade will work. Though I do caution, the stock has been on a monster run, and should the market weaken, TNDM is likely susceptible to a fall. But if you are willing to own the stock at 65, I have no problem with that trade.

Cabot Marijuana Investor

Question: Hope all is well. I’ve been investing alongside with you for a long time in the marijuana stocks. I’m up very nicely in almost all of them. I generally put about $100,000 in each one. The only one I’m definitely down in is MedMen. Do you think I should hold or sell?

Tim: In my latest issue, just last week, I cleaned house (and raised cash) by selling laggards CVSI, MMNFF and TLRY and also taking partial profits in a couple that were overextended and/or overweighted. MMNFF is still weak and I think your odds are better in CRLBF and CURLF and ACB and OGRMF, to name a few—but I’d defer new buying for now and see how this young correction develops.

Cabot Growth Investor

Question: Back in late December/early January you wrote about the likelihood of a retest of the December lows, but then changed your tune as we headed higher (thank you). With growth stocks taking some hits, do you think a retest is back in play should the market keep pulling back?

Mike: While I’m open to anything, I would say the odds are against a retest at this point. Not just because our trend-following indicators are positive, but bigger picture, the panic selling last year, the blastoff indicators this year and the persistent advance off the lows all mean the path of least resistance is up. Don’t get me wrong -- some more wobbling is possible (maybe even likely), but a retest of the lows doesn’t appear to be in the cards.

Premium Reports

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