Cabot Prime Pro Week Ending May 22, 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 the broad market’s rally this week (keeping the intermediate-term trend pointed up) and the mixed action in growth stocks–so far, there’s been no abnormal selling, and further dips among the leading names could easily present lots of buying opportunities. Mike relays a bunch of potential buys and shares a couple of good-looking sectors, too.
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Advisory Services
Cabot Growth Investor
Bi-weekly Issue May 21: Remain optimistic, but don’t get ahead of yourself. Last week, Mike sold one-quarter of our position in both Dexcom (DXCM) and DocuSign (DOCU), but tonight, we’re adding a half-sized (5% of the portfolio) position in Chegg (CHGG), which has a great story and chart. After the buy, our cash position will be around 34%. Also, Chewy (CHWY) moves from Buy to Hold.
Bi-weekly Update May 14: The market’s evidence has worsened some this week—our Cabot Tides are now on the fence as the broad market has softened. Growth stocks are still in generally good shape, so Mike is happy to hang on, but he’s going to take a couple of chips off the table tonight—specifically, he’s selling one-quarter of our remaining shares in both Dexcom (DXCM) and DocuSign (DOCU). He does have a few stocks he’s watching to buy if he sees better entry points, but tonight he has just the two partial sales, which will give us around 40% in cash.
Other Stocks of Interest May 8: Follow ups to stocks featured December 19, 2019 (issue 1435) to May 7, 2020 (issue 1445). 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 May 22: Mike’s thoughts haven’t changed much: He remains optimistic the path of least resistance is up, especially for the market’s top stocks, but he’s still picking his spots on the buy side and taking some partial profits when names go nuts on the upside, too. He’s likely to leave our Market Monitor at a level 7 heading into next week. Mike’s buy ideas today are: Bandwidth (BAND), DraftKings (DKNG), Franco-Nevada (FNV) and Halozyme (HALO). Today’s sell recommendations are: Exelixis (EXEL), Lattice Semi (LSCC) and RingCentral (RNG).
Weekly Issue May 18: There’s still more positive evidence than negative, but there remain lots of crosscurrents, too. Given it all, Mike doesn’t advise going hog wild on the buy side, but he continues to think holding your strong performers (maybe with some partial profits here or there) and looking for decent entry points on strong names is the way to go. This week’s list is a bit more diversified than those we’ve seen recently. His Top Pick is PayPal (PYPL), which appears to have resumed its run after a multi-month rest period. 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 May 22: JD.com (JD) is trading lower by $2.25 today as tensions between the U.S. and China have again heated up, the Senate passed legislation that could bar Chinese companies from listing their shares on U.S. exchanges, and Alibaba released an “ok” earnings report. That is quite the threesome of bad news. Jacob is going to give this position a bit more rope as we already have profits in the bank.
Cabot Options Trader Stock on Watch May 21: This morning there has been a flurry of call buying in Sonos (SONO) as rumors circulate that the company may be a takeover target.
Cabot Options Trader Basic and Pro Alert May 20: Covered Call: Buy DraftKings (DKNG) Stock and Sell the June 30 Call (exp. 6/19) for a net price of $27 or less.
Cabot Options Trader Basic Position Update May 18: JD.com (JD) is trading higher by another $4.50 at 55. At these levels our June 39 Calls that were originally purchased for $3.58 are now worth $16.30, or a potential profit of 355%. While Jacob is going to continue to hold the position, he is raising the mental stop from $9 to $13 today. Today’s sector rotation has brought our Financials ETF (XLF) position back to life as the ETF is trading higher by 5% today.
Cabot Options Trader Basic and Pro Alert May 18: Adjust Existing Position: Against your ON Semiconductor (ON) Stock, Sell the June 16 Call (exp. 6/19) for $0.55 or more.
Cabot Options Trader Pro Weekly Update May 18: Jacob has five Long positions: JD, GILD, ON, SNAP and XLF, one position not impacting his decision making: QQQ July Bear Call Spread and one short position: QQQ December Puts
Cabot Options Trader Weekly Update May 18: The Chicago Board of Options Exchange Volatility Index (VIX) closed the week at 32, or higher by 14%. The gain of 14% on the week for the VIX isn’t terribly surprising as many of the sectors that have been yellow flags for the market for the past two months (financials, real estate, retailers, airlines, etc.) have largely not shown any signs of strengthening, and may actually be weakening. And until these sectors, especially the financials, real estate, and other less well-known hot spots, can recover Jacob doesn’t believe traders will believe in the market rally, and thus the VIX will remain elevated.
Cabot Undervalued Stocks Advisor
Special Bulletin May 22: Today’s news: Apple Inc. (AAPL) is now Retired from the Buy Low Opportunities Portfolio, NVIDIA (NVDA) reported first-quarter results and remains a Hold, Crista gives us her take on Today’s Stock Market and Today’s Bullish Price Charts.
Weekly Update May 20: Crista expects 2020 to favor traders, while disappointing buy-and-hold investors. Be nimble. Keep more cash in your investment account than normal, trade out of stocks that are retracing former highs, buy low during market pullbacks, and don’t go bargain-hunting among problem industries. As a matter of fact, if you’re up for it, consider short sales, bearish ETFs or bearish option positions within industries that are hard hit from global business lockdowns and their aftermath. Here are today’s portfolio changes: Adobe Systems (ADBE) moves from Buy to Hold, Amazon.com (AMZN) moves from Hold to Buy, LGI Homes (LGIH) moves from Buy to Hold, MKS Instruments (MKSI) moves from Hold to Strong Buy and NVIDIA (NVDA) moves from Buy to Hold.
Monthly Issue May 6: As the stock market recovers from the steep downturn in March, Crista would like to stress that this downturn bears no resemblance to any previous stock market downturn. It wasn’t created by corporate excesses or a housing bubble or any specific financial problem. And while she had certainly warned investors, beginning in December 2019, that we were due for a normal correction, simply because the S&P 500 index had risen so rapidly beginning in late October, the eventual downturn had far more to do with the global virus pandemic than anything else. She is more convinced than ever that the U.S. is in for rough seas ahead. Here are today’s portfolio changes: NVIDIA (NVDA) moves from Buy to Strong Buy and Total S.A. (TOT) moves from Hold to Strong Buy.
Cabot Stock of the Week
Special Bulletin May 21: This morning, Carl Delfeld, who originally recommended Luckin Coffee (LK), sent an update to his readers: ... I suggest that most subscribers should sell any remaining shares. For those of you who choose to be all-in to the end, I will continue to carefully watch and report on this unfolding situation.” And Tim will concur. Long-term, the odds are very good that LK will move higher, so there is an argument for holding patiently. However, Tim will Sell—It’s far better to put the money to work in a positive situation, and to hold long-term winners.
Weekly Issue May 18: The overall market continues to look healthy—though we still haven’t yet received an “all-clear” signal from our long-term timing indicator—and our stocks, in general, continue to reward, with many hitting new highs in recent days as the economic outlook improves. Today’s recommendation, Barrick Gold (GOLD), is a very unusual one for Tim. But the chart is strong and the story has some validity, so he’ll give it a shot! Tim has three portfolio changes today: Nvidia (NVDA), Zoom Video (ZM) and Zscaler (ZS) all move from Buy to Hold.
Cabot Global Stocks Explorer
Bi-weekly Update May 21: Carl writes that our positions for the most part performed well this week. Most recent idea Trip.com (TCOM) was up 14% in its first week in the portfolio, Sea Limited (SE) surged 20% after reporting high revenue and user growth, Alibaba (BABA) made a nice move, and problematic Luckin Coffee (LK) resumed trading Wednesday morning. He has two portfolio changes today: Virgin Galactic (SPCE) moves from Hold to Buy and Luckin Coffee (LK) moves from Hold to Sell.
Bi-weekly Issue May 14: Markets have pulled back a bit over the last few days as investors hit the pause button to digest a Nasdaq in the black for 2020 while the real economy struggles to reopen. Our emerging market (EEM) momentum timer has turned positive by the slightest of margins. Carl’s recommendation today is: Trip.com Group (TCOM), a contrarian recommendation that is known as the “Expedia of China” and, as you might guess, its stock has been struggling since January. Today’s one portfolio change is to Sell Ping An (PNGAY).
Cabot Small-Cap Confidential
Weekly Update May 21: Enjoy the current strength but be aware of the environment we’re in, and why. Accept that we could see a significant retreat in the prices of many of our stocks in the near term, but that the fundamental reasons behind their current strength should persist despite a retreat, and drive them higher over the coming years. Tyler has three changes this week: Avalara (AVLR), Cardlytics (CDLX) and Q2 Holdings (QTWO) all move from HOLD to BUY.
Monthly Issue May 7: This month Tyler is adding a high-growth biotech name that has just begun to commercialize a unique compound for fighting aggressive cancers and other diseases including, potentially, COVID-19. Karyopharm Therapeutics (KPTI) just began booking revenue from its first cancer treatment. That launch significantly de-risks the stock and raises the potential for future approval of the same compound for other indications.
Cabot Dividend Investor
Weekly Update May 20: Tom believes the odds are high that the market has another significant selloff before it climbs to a new a new high, for two primary reasons. One is that even with an optimistic scenario, the economy will take a long time to get back where it was. Two, there is a high risk of disappointments and setbacks along the way. For that reason, the Cabot Dividend Investor portfolio has not yet been buying aggressively. He think things are going in the right direction but the market has likely gotten ahead of itself as more stumbles probably lie ahead. There are no rating changes today.
Monthly Issue May 13: Cabot Dividend Investor portfolio is only buying very selectively. While the overall market may be shaky at this point, certain companies are thriving during the pandemic. There are niches where business is actually booming. In this issue Tom highlights two stocks that are selling at bargain prices, have businesses barely affected by the pandemic, and stand to thrive in the post-Covid-19 market as well. He has one portfolio change today, Innovative Industrial Properties (IIPR) moves from HOLD to BUY.
Cabot Marijuana Investor
Update May 19: While the broad market enjoyed a powerful upmove yesterday, the marijuana sector was even stronger, with the Marijuana Index surging 15%. Short-term, Tim’s general advice is this: Try to own the leaders (as opposed to ex-leaders like HEXO, ITHUF, OGI and MMNFF). Try to buy on pullbacks, when the news is bad, and take profits at times like this, when the news is good. And try to diversify enough so that your fortunes aren’t tied to just one or two of these stocks. With a two-year bear market in the rear-view mirror, the future is bright for this sector!
Monthly Issue April 29: Tim’s advice is to aim long-term, and remember that the best way to complete a long trip is to make a smart start. Try to buy on dips. Diversify, spreading your investments both geographically and among business models. As both the marijuana sector bear market and the flash coronavirus bear market recede into history, and investors again look forward to economic progress, it’s appropriate to put some of our cash to work. The portfolio will now use a third of its cash to buy equal dollar amounts of Aphria (APHA), Cresco Labs (CRLBF), Green Thumb Industries (GTBIF) and Tilray (TLRY). This will take our cash position down to roughly 30%.
Special Report: April 29, 2020
U.S. Vertically Integrated Multistate Operators (MSOs)Cabot Early Opportunities
Monthly Issue May 20: In this month’s Issue of Cabot Early Opportunities, Tyler sifts through all his ideas to feature a compelling mix of five stocks that still look to have significant upside potential over the coming months. Several of these names should represent new ways for investors to participate in long-term growth trends. The month’s Top Pick, Formula One Group (FWONK). If you want to invest 100% in Formula 1 (along with a smattering of other minority interests, including the Braves MLB team, Drone Racing League and Tastemade), now you can.
Cabot Profit Booster
Weekly Issue May 19: The Stock – Inphi (IPHI) Inphi continues to look like the market’s top networking-related play, as it’s one of the only firms out there that’s firing on all cylinders. The company’s products are all about speed, helping quicken data transmissions for a variety of end users and environments, be it within a data center, interconnecting data centers or for 5G-related mid- and back-haul connections. The Covered Call Trade — Buy Inphi (IPHI) Stock at 112, Sell to Open July 115 Calls (exp. 7/17) for $6, or a Net Price of 106 or less.
Cabot Micro-Cap Insider
Weekly Update May 20: Rich published the latest issue last week and profiled his newest idea, Medexus Pharmaceuticals (PDDPF). The stock has rallied from our recommendation price but still looks attractive. He believes next quarter will be a positive catalyst as it will be the first time that management provides an outlook that includes the recent accretive XINITY transaction. He has no portfolio changes today.
Monthly Issue May 13: If you have not already, Rich recommends that you read his Cabot Micro-Cap Insider Guide. It will help you get the most out of your Cabot Micro-Cap Insider membership, and make your investing decisions easier and more profitable. It will also explain much of the shorthand we use in Cabot Micro-Cap Insider, and explain our ratings. His newest recommendation is: Medexus Pharmaceuticals (MDP.V), a Canadian specialty pharma company that is growing at a rapid clip.
Special Report
A Defensive Healthcare Stock with 100% UpsideSpecial Report
The Best Way to Play the Oil Market DislocationWall Street’s Best Investments
Daily Alert May 22: Hersha Hospitality Trust (HT-PD) Sound Advice
Monthly Issue May 21: Nancy’s Spotlight Stock this month, Curaleaf Holdings, Inc. (CURLF), is also one of the few marijuana stocks that sports a strong balance sheet. It has roughly $42 million worth of cash on its balance sheet and nearly $150 million when you count current assets and cash equivalents. It has the financial heft to survive this crisis. And her Feature article delves further into the pot industry.
Daily Alert May 21: Reliance Steel & Aluminum Co. (RS) IQ Trends
Daily Alert May 20: Lamb Weston Holdings, Inc. (LW) The Turnaround Letter
Daily Alert May 19: Zynga Inc. (ZNGA) The Cheap Investor
Daily Alert May 18: Watsco, Inc. (WSO) Positive Patterns
Ask the Experts
Cabot Growth Investor
Question: It was great speaking with you a couple of weeks ago. After our conversation, I subscribed to the Cabot Growth Investor, too! So now I’m fully on board with you with that and the Top Ten Trader! I was recalling my time working at Merrill Lynch back in the 80’s where I worked for a broker who loved to trade his account in a big way. He was always adding to positions as a stock went up, provided it was going up. But he just flew by the seat of his pants, trusting his instincts…Although you may have answered this question in one of the many special reports, I haven’t seen it: How would you suggest adding to winning positions? Thanks to your research, I’m doing very well with a few stocks, and they continue look very strong: DOCU, EXEL to name two. I have nice gains in these. I think it really does make sense to start small and add along the way as you often write in your commentaries. But to make really big money I have to find some kind of methodology of pyramiding. Percentage gain? Taking it off a chart formation? Etc., etc….
Second question: at what point would you consider raising your stop to break-even? With a number of these positions, I’m still using the initial stop loss point and I have a feeling it would make sense to raise it. I would really appreciate your thoughts on these issues. I’ve been really enjoying both newsletters…and am making money, too!
I really appreciate your help and good council!
Mike: Hi Adam – weird, I never got your other one for sure. Maybe the spam folder ate it? Should be good after I respond to this one. Sorry about that. In any case – glad to have you onboard Growth Investor as well.
As for averaging up, I mean, there are many ways to do it. But assuming you already have your “full” position I would tend to do it slowly and in small pieces – if you have 100 shares, add 15 to 20 when something comes up and you want to add more. You don’t want to run your average cost too high. I’d tend to do it off the chart at this point, as opposed to just buying more and more. If you want an averaging up program, then you have a plan before you buy – meaning, you buy 50 shares initially, then 30 when you’re up x%, then another 20 when you’re up y%, etc. Then, after that, you would do the above. Those percentages in this case would be small (up 2% to 4% type thing) as you’re looking to build your initial position as the stock proves itself.
The stop question is intertwined with the buying – you want to make sure your potential loss is relatively capped, so you generally want to start “tight” (-ish) and loosen the stop as you have a profit cushion. But when pyramiding, your clearly giving up some initial “lessening of potential risk” in an effort to build a position for a possible larger gain down the road.
Cabot Undervalued Stocks Advisor
Question: You mentioned to consider bearish ETFs. Do you have any that you would consider?
Crista: These are some bearish ETFs that I will likely buy, either as economic problems become more pronounced, or as the current S&P 500 run-up is peaking:
Direxion Daily Financial Bear 3x Shares (FAZ) -- I expect banks and credit card companies to eventually decline as unemployed consumers and struggling businesses fail to remain current on loan payments. Direxion Daily Real Estate Bear 3x Shares (DRV) -- I expect owners of apartment buildings and commercial office space to suffer as businesses downsize and unemployed people fail to make rent payments during the coming recession. Direxion Daily Semiconductor Bear 3x Shares (SOXS) -- A good ETF to trade during any market pullback. You can also do an internet search for Direxion Daily bearish ETFs, and you’ll find others.
Premium Reports
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.
| Stock | Cabot Small-Cap Confidential | Cabot Global Stocks Explorer | Cabot Growth Investor | Cabot Marijuana Investor | Cabot Stock of the Week | Cabot Undervalued Stocks Advisor | Cabot Dividend Investor |
|---|---|---|---|---|---|---|---|
| AAPL | Retired | ||||||
| ABBV | Hold | Buy | |||||
| ADBE | Hold | ||||||
| ALXN | Hold | ||||||
| AMZN | Buy | ||||||
| APHA | See Advisory | ||||||
| APPF | Hold | ||||||
| ARE | Hold | ||||||
| ARNA | Buy | ||||||
| AVGO | Buy | ||||||
| AVLR | Buy | ||||||
| BABA | Watch | ||||||
| BIP | Buy 2/3 | ||||||
| BKR | Hold | ||||||
| BL | Sold | ||||||
| BMY | Strong Buy | ||||||
| BSCL | Buy 1/2 | ||||||
| BUG | Buy 1/2 | ||||||
| CCI | Hold | ||||||
| CDLX | Buy | ||||||
| CGC | See Advisory | ||||||
| CHCT | Hold 1/3 | ||||||
| CHGG | Buy 1/2 | ||||||
| CHWY | Hold 1/2 | ||||||
| CRAK | Strong Buy | ||||||
| CRLBF | See Advisory | ||||||
| CRON | See Advisory | ||||||
| CURLF | See Advisory | ||||||
| DBSDY | Buy 1/2 | ||||||
| DOCU | Hold 3/4 | ||||||
| DOMO | Hold 1/2 | ||||||
| DOW | Buy | ||||||
| DXCM | Hold 3/4 | ||||||
| EPD | Hold | ||||||
| EQH | Strong Buy | ||||||
| EVBG | Hold | ||||||
| EVER | Hold 1/2 | ||||||
| FANUY | Buy 1/2 | ||||||
| FVRR | Hold | ||||||
| GM | Strong Buy | ||||||
| GOLD | Buy | ||||||
| GRWG | See Advisory | ||||||
| GSHD | Hold 3/4 | ||||||
| GTBIF | See Advisory | ||||||
| HCAT | Sold | ||||||
| HTHT | Hold | ||||||
| IIPR | See Advisory | Buy | |||||
| INSP | Hold | ||||||
| KPTI | Buy | ||||||
| LGIH | Hold | ||||||
| LK | Sell | Sell | |||||
| MCY | Hold | ||||||
| MKSI | Strong Buy | ||||||
| MO | Hold | ||||||
| MPC | Buy | Strong Buy | |||||
| NEE | Hold | Hold 1/2 | |||||
| NET | Buy 1/2 | Buy 1/2 | |||||
| NFLX | Buy | ||||||
| NVDA | Hold | Hold | |||||
| NVEE | Strong Buy | ||||||
| OKTA | Buy | ||||||
| PGX | Hold 1/2 | ||||||
| PNGAY | Sold | ||||||
| PWR | Hold | ||||||
| QCOM | Hold | ||||||
| QTWO | Buy | ||||||
| RGEN | Hold | ||||||
| RNG | Hold | ||||||
| SE | Hold 1/2 | Hold | |||||
| SPCE | Buy 1/2 | Hold | |||||
| STAG | Hold | ||||||
| TCNNF | See Advisory | Buy | |||||
| TCOM | Buy 1/2 | ||||||
| TDOC | Hold | ||||||
| TLRY | Buy | ||||||
| TOT | Strong Buy | ||||||
| TPB | See Advisory | ||||||
| TSLA | Hold | ||||||
| TSN | Buy | Buy | |||||
| TWLO | Buy | ||||||
| UEIC | Buy | ||||||
| VLO | Hold | ||||||
| VOYA | Strong Buy | ||||||
| VRTX | Buy | Buy | |||||
| VZ | Buy | Buy | |||||
| XEL | Hold 2/3 | ||||||
| ZM | Hold | ||||||
| ZS | Hold |