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Weekly Summary November 6, 2020

Cabot Prime Pro Week Ending November 6, 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, Mike Cintolo talks about the market’s stunning turn up this week, which, while not decisively turning the intermediate-term trend up, is very encouraging, especially coming on the heels of what looks like a normal 10-week consolidation. He’s not diving in head first but Mike does think doing some buying makes sense, and the next week or two will probably tell us whether this is the start of a new, sustained upmove.

UPCOMING CABOT EVENTS:

Cabot Micro-Cap Insider Member Call – November 2020

FREE WEBINAR FOR PRIME PRO MEMBERS ONLY: Thursday, November 12 Sign up now.
Software Stocks Today: Buy, Sell, or Hold? with Tyler Laundon

FREE WEBINAR: Thursday, November 19 Sign up now.
Cabot Retirement Club Member Call - November 2020

FREE WEBINAR FOR PRIME MEMBERS ONLY: December 1, 2020 Sign up now.

Advisory Services

Cabot Growth Investor

Bi-weekly Issue November 5: Hold your strong performers and be selective on new buys as we see if this pop is the Real McCoy. In the Model Portfolio, we cut loose our weakest performers during the October slide, but tonight, we’ll add a half-sized position in NovoCure (NVCR), bringing our cash position down to around 41%, while aiming for some new buys in the days ahead depending on the evidence.

Bi-weekly Update October 29: Be cautious. Growth stocks have been under pressure since early/mid-October, and our Cabot Tides buy signal has fallen by the wayside. It’s not a disaster out there, of course, but we continue to focus mostly on individual stocks, pruning those that crack while holding those that are pulling back normally. We sold Dexcom (DXCM) and Penn National (PENN) and are sitting with a cash position of 37%. Mike has no new changes tonight.

Other Stocks of Interest October 8: Follow ups to stocks featured June 4, 2020 (issue 1447) to October 8, 2020 (issue 1456). 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 November 6: Put it all together, and this week has the potential to be a decisive one, but we still need to verify that going forward. In terms of what to do, yes, we think you can extend your line, but do so in a step-by-step process—if this really is a kickoff, then it will last months, not days, so some buying now followed by more buying if you develop profits makes sense. We’re likely to move our Market Monitor back up a notch or two to reflect the evidence this week. Mike’s buy ideas today are: Exact Sciences (EXAS), Freshpet (FRPT), Roku (ROKU) and Zendesk (ZEN). After a wave of sells in recent weeks, Mike has none today.
Weekly Issue November 2: Near-term, stocks are back in the soup, and while the headlines will be coming fast and furiously this week (earnings and the election), the onus is on the buyers to step up. Until that happens, we advise a cautious stance—holding a good chunk of cash makes sense, while keeping new positions on the small side and honoring your stops and loss limits. We’re pulling down our Market Monitor another notch to a level 5. Meanwhile, it’s easiest to spot strength in a down market, so the next couple of weeks should be telling. This week’s list has a broad array of stocks and sectors on it, and Mike’s Top Pick is Pinduoduo (PDD), one of many resilient Chinese names that’s actually picking up steam while the market sags.

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 Basic and Pro Trade Alert November 6: Buy the Cloudflare (NET) May 70 Call (exp. 5/21/2021) for $12.50 or less.

Cabot Options Trader Earnings Update November 6: Last night Uber (UBER) reported earnings that were “ok.” However, it appears the mixed earnings and revenue numbers don’t matter in the minds of investors as UBER is trading higher by $2.50 today.

Cabot Options Trader Earnings Update November 5: Qualcomm (QCOM) smashed earnings expectations yesterday. In early trade today the stock is higher by 19, which has helped push our calls originally purchased for $9.85 to be worth $29. Option activity remains bullish, so Jacob is going to stick to the position … for now. Zynga (ZNGA) also reported earnings last night. The company reported “ok” numbers and in reaction the stock is lower by 8%. At this point he would expect the November 10 calls that we sold for $0.48 will expire worthless in two weeks … a totally fine situation. General Motors (GM) reported earnings this morning that beat expectations. In early trade today the stock was higher by 3% before fading. Our calls originally bought for $4.30 are now worth $7.20. Next up in our earnings week bonanza is Uber (UBER), which will report earnings today after the close. Having locked in a profit of 23% on half of our position yesterday, Jacob is going to take the earnings risk and hold the position through the event.

Cabot Options Trader Earnings Update November 5: Last night Qualcomm (QCOM) reported a monster earnings beat, as well as raised guidance for the current quarter. In reaction to this news QCOM stock is trading higher by 18 this morning at 147, a new multi-year high. Jacob’s plan as always will be to continue to watch the stock and option activity today, and in the days to come, to help guide how he will manage this position going forward.

Cabot Options Trader Position Update November 4: As JD.com (JD) is breaking out to a new all-time high Jacob has received several questions about how we are going to manage our position. He shares two of those questions with the bigger group.

Cabot Options Trader Earnings Update November 4: Tonight, we will receive earnings from Zynga (ZNGA) and Qualcomm (QCOM), and tomorrow before the open we will get numbers from General Motors (GM). Jacob is going to hold his position in all three of these stocks, as they all look fairly strong and we have profits in the bank in QCOM and GM.

Cabot Options Trader Basic and Pro Trade Alert November 4: Sell Half of Existing Position: Sell Half of your Uber (UBER) March 38 Calls for $6.30 or more.

Cabot Options Trader Election Preview November 2: How much movement is the options market pricing in this week for stocks? To figure that out we add together the value of the at-the-money call, and at-the-money put, in the SPY and QQQ. Today, with the SPY trading at 332 the options market is pricing in a move of: $11 by November 4 (Wednesday), or 3.3%, $13 by November 6 (Friday), or 3.91% Today, with the QQQ trading at 273 the options market is pricing in a move of: $11 by November 6 (Friday), or 4.02%.

Cabot Options Trader Basic and Pro Weekly Update November 2: Since we are headed into a binary event for the market, and any comments about our positions, the VIX, or stocks Jacob is watching will be of little value by Wednesday morning after the election, for this week’s Market Review he thought he would share some general thoughts, and historical data, about the market and presidential election cycles.

Cabot Undervalued Stocks Advisor

Monthly Issue November 4: This past week at least modestly illustrated the merits of a value strategy. Two of our three “Strong Buy” stocks, Molson Coors Beverage Company and Equitable Holdings, surged on company-specific news that highlighted their underlying value. Other “non-value” stocks not on our recommended list, like Apple, Amazon, Microsoft and Facebook, provided company-specific news that should have been flattering but instead sent their stocks down between 5% and 9%. For investors that focus on high-growth and momentum-driven stocks, having at least a few value stocks can provide portfolio stability. This added stability can help boost investor resolve to stay the course when markets get sloppy and the macro news looks grim, as it did late last week. Bruce has two portfolio changes today: Columbia Sportswear (COLM) and Marathon Petroleum (MPC) both move from Hold to Buy.

Weekly Update October 28: While the market action has been somewhat exciting this week (though in the wrong direction), it was fairly dull for Cabot Undervalued Stocks Advisor recommended stocks in terms of news. This news drought will fade as five companies report later this week, with six more the following week. In a market that is nervous about the pandemic, next week’s elections and the ongoing lack of a stimulus package, investors will look to this company-specific information to price the shares. Bruce has no changes to the portfolio today.

Cabot Stock of the Week

Weekly Issue November 2: With the election tomorrow, the biggest cause of uncertainty will soon be behind us, leaving investors able to focus once again on what’s important—growth and valuation. In the meantime, it’s worth noting that the market’s technical strength deteriorated last week, turning our intermediate-term timing indicator negative once again. For that reason, among others, we have a couple of sell recommendations today. As for today’s recommendation, General Motors (GM), it’s one of America’s most well-known companies, and selling for a bargain price as management steers the big old beast into what could be an exciting future. Here are today’s portfolio changes: Datadog (DDOG) and Quanta Services (PWR) both move to Sell and Digital Realty Trust (DLR) moves to Hold.

Cabot Global Stocks Explorer

Bi-weekly Update November 5: It appears that we will have a sharply divided government in Washington, which Wall Street initially is taking as a positive. A better way of putting it is that it could have been much worse for investors. From time to time, Carl is going to give you a more extensive update on a recommended stock in the Explorer portfolio. This week, NovoCure (NVCR), which has almost doubled in the last six months, is center stage. There are no portfolio changes today.

Bi-weekly Issue October 29: Markets are choppy, which is normal considering uncertainty is high and we’re less than a week from the presidential election. Today, Carl looks at what history can teach us about politics and markets and why it might be a bit different this time. Today’s new idea, ElectraMeccanica (SOLO), is an electric vehicle play from Canada that is under the radar of even the trends of most avid supporters. There is one portfolio change today: Visa (V) moves from Buy to Sell.

Cabot Small-Cap Confidential

Special Bulletin November 6: BioLife Solutions (BLFS) reported Q3 results yesterday that came in about as Tyler expected and there are numerous positives that keep the bullish thesis well intact, Avalara (AVLR) reported a great Q3 as expected and shares are up around 6% to a new all-time high and Everbridge (EVBG) is rallying again after reporting Q3 results yesterday. They all rated Buy.

Special Bulletin November 5: Q2 Holdings (QTWO) reported Q3 results that were largely consistent with expectations and on trend with what the company experienced in Q2. More consumers are using digital banking tools, driving user growth up 700,000 to 17.1 million (up 21%) and helping to fuel 31.5% revenue growth. And, Repligen (RGEN) reported another terrific quarter this morning that surpassed expectations on Covid-19 and gene therapy demand. Both stocks remain at BUY

Monthly Issue November 5: Today’s recommendation, BioLife Solutions (BLFS), designs and manufactures bioproduction tools, hypothermic storage solutions and cryopreservation freeze media for the tissue engineering, cell therapy and gene therapy markets. Products include biopreservation media, automated thawing devices, cloud-connected shipping containers and freezer technologies. In the near-term, look to buy down to support around 26 and up to 35. Following the Q3 earnings report tonight Tyler will update his rating and outlook. Average in!

Special Bulletin November 3: EverQuote (EVER) reported Q3 results that beat on the top line and missed on the bottom line. Even after the summer retreat we’re still up over 200%. Let’s take the gain and move on. EverQuote will go back on the watch list. SELL. Cardlytix (CDLX) beat expectations that had been slashed in the face of the pandemic. I think it’s worth staying patient here as we look into 2021 and see potential for better than 50% revenue growth. HOLD. Last week Tyler advised taking partial profits in Inspire (INSP). Still, with a big rally in the stock today and a wave of analyst upgrades it looks like we should stick with Inspire. HOLD. Karyopharm Therapeutics (KPTI) reported Q3 results yesterday and gave a positive update on the Phase 3 SEAL trial for Xpovio in 3L liposarcoma. HOLD.

Weekly Update October 29: As Tyler has been telegraphing, he’ll likely hold each of our stocks through their earnings reports, then assess each one based on the current trends and management’s signals for the future. For the most part, he’s expecting solid reports and encouraging guidance, though clearly the trajectory of the virus over the past 10 days is concerning and management teams will likely bake in some conservativism as a result. He has one portfolio change today: EverQuote (EVER) moves from BUY to HOLD.

Cabot Dividend Investor

Weekly Update November 4: The market doesn’t care about politics. It only cares about money. We may not be out of the woods yet though. We’ll have to see how ugly this gets. But the market likes what it sees so far. In the not-too-distant future, the focus should move to the virus and a vaccine. Good news on that front should enable the market to really take off. Bad news will probably lead to more of the same. There is a likely robust recovery and bull market ahead regardless of who wins. Don’t forget that.

Monthly Issue October 14: Certain portfolio positions are breaking out and we’ll let them ride. Most notably, IIPR and QCOM have soared to brand new all-time highs over the past three weeks and could continue to run higher for a while. Additionally, CCI and ARE, as well as DLR, have all started to move higher after a long sideways period. They might continue to move in the near term. While several positions are perking up, there’s a couple that haven’t been working and still aren’t working, namely EPD and VLO. The choppy market hated these stocks just as much as the good market, and there are no signs of life. However, both companies will report third-quarter earnings in the weeks ahead, and Tom is hoping the reports will act as a catalyst for improved performance in the months ahead. Today’s featured stocks are: AbbVie Inc. (ABBV) and Eli Lilly and Company (LLY).

Cabot Marijuana Investor

Update November 4: Yesterday, voters in all five states where it was on the ballot—Arizona, Mississippi, Montana, New Jersey and South Dakota—said they were in favor of legalization, and in every case, the majority vote was clearly positive, not even close. Thus Tim is optimistic that marijuana stocks have farther to run in this phase, hitting an eventual big peak (perhaps) when legal sales in New Jersey (the big prize last night) truly begin. The broad market, however, is still a big question mark. Even after the strength of yesterday and today, the intermediate trend is effectively neutral, which means there’s a good chance the broad market may turn down right around the corner. But until that happens, he’s happy staying heavily invested in our current portfolio—and holding our 17% cash position. As of today, our portfolio is up 33.4% YTD, while the Marijuana Index is down 4.6%,

Monthly Issue October 28: Remain heavily invested in a diversified group of the stocks recommended here, but keep an eye on the stocks in case trends change. And remember the importance of position sizing; a major reason that our portfolio has outperformed the index this year is that we’ve overweighted the strongest stocks, while underweighting the weakest. The only substantial change in the portfolio today is a downgrade of Innovative Industrial Properties (IIPR) to Hold.

Cabot Early Opportunities

Special Bulletin October 30: We added Kinsale Capital in September and have been up around 10% at the most since. However, in the short term there may be a lack of incentive for new money to flow in and as a recent addition with no gain and no loss this is a natural one for us to step aside from now. Kinsale goes on Tyler’s watch list for potential inclusion in the future. SELL. He also gives earnings updates on: Pinterest (PINS), Five9 (FIVN), Bandwidth (BAND), Dynatrace (DT) and Livongo (LVGO).

Special Bulletin October 27: In last week’s Issue of Cabot Early Opportunities, Tyler suggested that we’d kick DraftKings (DKNG) to the curb if it couldn’t find firm footing around 41. He’s stepping aside here and putting the stock back on our watch list. He’s not opposed to buying it back when it looks better. He’s buying another half of both Jamf Holding (JAMF) and Vital Farms (VITL). And, Varonis (VRNS) remains at Buy after a great Q3 report.

Monthly Issue October 21: Given that we’re entering the busy part of earnings season, the election is just under two weeks away, stimulus is being debated and the pandemic is anything but contained there are a lot of big factors that could drive the market materially higher or lower in the coming month. That doesn’t mean we can’t do any buying. As always, continue to average into the stocks that are most attractive to you and which you think you’ll have the best chance at holding through the inevitable ups and downs. Overall, Tyler would say this is a good time to keep new positions smaller than in the past. Remember, the big money isn’t typically made over a couple days or weeks, but in the sustained uptrends that great stocks enjoy. Our goal is to hitch a ride on those and keep buying on the way up, preferably before they’ve run too far. Today’s Top Pick is Upwork (UPWK), a direct beneficiary of the pandemic-induced rise of freelance work.

Cabot Profit Booster

Update November 3: Adjust Existing Marvell Technology (MRVL) Position - As Jacob noted in this morning’s Covered Call email our Marvell Technology (MRVL) position broke his mental stop last week. However, the trigger for the stock decline is an interesting situation.

Weekly Issue November 3: The Stock – Pinterest (PINS) - PINS gapped up on Q2 earnings in August, then went dead for a few weeks just south of its old highs, putting the finishing touches on a yearlong post-IPO consolidation. The breakout came in September, and the stock has acted well since then, including last week’s big-volume gain after Q3 earnings. PINS definitely looks like a fresh leader that should head higher over time.Stop - 45. The Covered Call Trade - Buy Pinterest (PINS) Stock at 59, Sell to Open December 60 Strike Calls (exp. 12/18/2020) for $4.50, or a Net Price of 54.5 or less.

Cabot Micro-Cap Insider

Weekly Update November 4: While volatility has picked up recently, history suggests the market will end the year with a strong run. This week, we have no changes to our recommendations. Over the next couple quarters, Rich looks forward to reviewing quarterly results for Liberated Syndication, Dorchester Minerals, Medexus Pharmaceuticals, and U.S. Neurological Holdings.

Monthly Issue October 14: Today, Rich is being a little contrarian and recommending an investment in a company that operates in a down and out industry. Nonetheless, he believes there is significant upside over the next couple of years. Dorchester Minerals LP (DMLP) characteristics include: High margins, no capex requirements, an 8% dividend yield and a cheap valuation.

Cabot Income Advisor

Weekly Update November 4: In the absence of one-party rule, it is unlikely that anything draconian gets done. Neither president can really screw things up too badly. Healthcare stocks are on fire. The indexes are up more than 5%. ABBV is almost 10% higher on the day. It’s because the risk of game-changing legislation is now off the table. Technology stocks are also rallying on a much lower chance of antitrust legislation. That’s the way the market is seeing things anyway. We might not be out of the woods yet, depending on how ugly things get or how long the battle drags on. But we’ll get through this at some point in the not-too-distant future. Then the market can focus on the virus and a vaccine.

Monthly Issue October 28: Several portfolio positions on which covered calls were written exceeded the strike price on options expiration and were likely called away. These stocks include IIPR, QCOM, USB, SBUX and BIP. This happens in an up market. You were rewarded for your troubles will a high income return from capital appreciation as well as the call premium and dividends. Tom’s featured stock this month is: B&G Foods, Inc. (BGS).

Cabot Turnaround Letter

Weekly Update November 6: This week, ten companies reported, with Berkshire Hathaway (BRK.B) reporting tomorrow (Saturday): Barrick Gold (GOLD), Conduent (CNDT), Gannett (GCI), GCP Applied Technologies (GCP), General Motors (GM), Jeld-Wen Holdings (JELD), LaFargeHolcim (HCMLY), Meredith Corporation (MDP), Mosaic (MOS), and ViacomCBS (VIAC). Bruce has no rating changes this week. To listen today’s podcast and view the latest Catalyst Report click here.

Wall Street’s Best Investments

Daily Alert November 6: Terminix Global Holdings, Inc. (TMX) Cabot Undervalued Stocks Advisor
Daily Alert November 5: InfraCap MLP ETF (AMZA) The Dividend Hunter
Daily Alert November 4: Short: Acuity Brands, Inc. (AYI) Shortex Market Letter
Daily Alert November 4: Quest Diagnostics Incorporated (DGX) Shortex Market Letter
Daily Alert November 3: Sell: ManTech International Corporation (MANT) Upside
Daily Alert November 3: MYR Group Inc. (MYRG) Upside
Daily Alert November 2: Stanley Black & Decker, Inc. (SWK) Dividend Advisor

Monthly Issue October 15: Market volatility has eased a bit this past month, with the Dow Jones Industrial Average gaining almost 1,000 points. The service industry, according to ISM, improved, and the unemployment rate dropped to 7.9% for September. As you’ll see in our Advisor Sentiment Barometer and Market Views, sentiment remains about the same. It seems investors are awaiting the election results before they make any big moves. Nonetheless, our contributors have been very busy selecting ideas that look interesting—no matter how the election turns out. Nancy begins this issue with our Spotlight Stock, Celanese Corporation (CE), a specialty chemical company that is growing its global market share. In Nancy’s Feature article, she explores the catalysts that are driving industry growth, as well as the unique properties that should keep our Spotlight Stock in an industry-leading position.

Ask the Experts

Cabot Profit Booster

Question: I have 3500 shares of PEIX Is there a way for me to protect from more downside but I don’t want to sell the stock.

Jacob: The best way to protect yourself from stock declines is to buy Put options.However, when you buy a put, you have to Pay a premium, which is opposite of Collecting a premium with covered calls. Essentially you are paying for an insurance policy. One way to do this is to buy the January 5 puts. If you were to buy 1 of those puts it would cost you $95. To protect 3,500 shares you would have to buy 35, or a total outlay of $3,325 (not cheap). However, if PEIX were to drop well below 5 you would be happy you owned those puts. Super tough call on buying those puts as the insurance would eat into your profits in that stock.

Cabot Top Ten Trader

Question: As a subscriber to CTT and Profit Booster, I owned both IPHI and MRVL when the acquisition was announced last week. I also have covered call options against MRVL based on the Profit Booster recommendation. So my main question is whether it is better to hold IPHI through the acquisition or is it generally better financially to close the IPHI position as soon as possible? Or said another way, is there some advantage on waiting to the closing of the acquisition? Should this decision be based on my expectations on MRVL (stop loss was just hit on CTT and almost on PB). I was kind of waiting for the election volatility to die down before making any decisions about market direction and evaluate the most recent sell signals. Any other thoughts or recommendations based on this complex situation?

Mike: All I can say is how I usually handle things – we tend not to look a gift horse in the mouth so we would have sold IPHI on the buyout announcement, either right away or within a day or two. And MRVL broke down on the news, so we would have sold that, too. I hear you on the covered call, so I’ll let Jacob handle that aspect of it. But we’d at least be paring back on both given the action and news. But that’s simply how I have handled things over time.

Quarterly Cabot Analyst Meeting

The recording of the Cabot Prime Members Meeting with the Analysts from October 21, 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.

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.

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StockCabot Small-Cap ConfidentialCabot Global Stocks ExplorerCabot Growth InvestorCabot Marijuana InvestorCabot Stock of the WeekCabot Undervalued Stocks AdvisorCabot Dividend Investor
ABBVHold
ACCDBuy 1/2
AEMBuy
APPFHold
APT.AXBuy 1/2
AREHold
ARNABuy
AVGOHold
AVLRBuy
AZEKHold
BABAHold
BESold
BGSBuyBuy
BIPBuy 2/3
BLFSBuy
BMYBuy
BSCLBuy 1/2
CCIHold 1/2
CDLXHold
CGCSee Advisory
COLMHoldBuy
CRLBFSee Advisory
CRNCBuy
CURLFSee Advisory
DDOGBuySell
DLRHoldBuy
DOWHold
DXCMSold
EPDHold
EQHStrong Buy
EVBGBuy
EVERSell
FIVEBuy
FVRRHold 3/4
GMBuyStrong Buy
GRWGSee Advisory
GSHDHold 3/4
GTBIFSee Advisory
HTHTHold
IIPRSee AdvisoryHold 2/3
INSPHold 3/4
JUSHFSee AdvisoryHold 2/3
KPTIHold
LGIQBuy 1/2
LLYBuyBuy
MKSIHold
MOBuy
MPCBuy
NEEHoldHold 1/2
NETHold 1/2
NUANBuy
NVCRBuy
PENNSold
PGXHold 1/2
PINSBuyBuy
PLMRBuy
PWRSellSold
QCOMBuyHold 2/3
QTWOBuy
REMXBuy 1/2
RGENBuy
ROKUBuy 1/2
RPAYBuy
SEHold 1/2Hold
SGENSold
SOLOBuy 1/2
SPCEBuyBuy
SPTBuy
SSOHold
STAGHold 1/2
TAPBuyStrong Buy
TCNNFSee AdvisoryBuy
TMXBuy
TOTHold
TPBSee Advisory
TRSSFSee Advisory
TSLAHold
TSMBuy 1/2Buy
TSNBuy
TWLOBuy
UEICBuy
VSold
VIACBuy
VIPSBuy 1/2
VLOHold 1/2
VOYABuy
VZBuy
XELHold 2/3
ZMHold