Cabot Prime Pro Week Ending September 18, 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, Tyler Laundon discusses the market’s ongoing consolidation and advises investors remain patient. He also serves up ten growth stocks that look compelling, for different reasons, right now.
UPCOMING CABOT EVENTS:
Cabot Retirement Club Member Call - September 2020
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Cabot Micro-Cap Insider Member Call - October 2020
FREE WEBINAR FOR PRIME PRO MEMBERS ONLY: Thursday, October 15 Sign up now.
Turnaround Investing with Bruce Kaser
FREE WEBINAR: Thursday, October 22 Sign up now.
Advisory Services
Cabot Growth Investor
Bi-weekly Update September 17: The market and big-winning growth stocks from this year remain iffy—today’s drop put our Cabot Tides on the fence and many growth stocks are still in a rough patch. However, there’s also some fresher leadership that’s acting resiliently, looking to take pole position for the market’s next sustained advance. All told, tonight, we’re going to remain cautious, but we are repositioning the portfolio a bit—we’re selling our half position in Spotify (SPOT) but adding a full position in Five Below (FIVE) and half positions in both Pinterest (PINS) and Seattle Genetics (SGEN). We’ll still have about 40% in cash even after these moves.
Bi-weekly Issue September 10: In tonight’s issue, Mike reviews all our stocks, dives into the two main factors to your investment returns and goes over many fresher names that could help lead the market’s next upmove. There are no additional changes as the Model Portfolio remains in very good shape for the year (handily outpacing the major indexes) and the evidence for growth stocks is iffy at best. Since the last issue, we’ve sold four stocks and are sitting on 55% cash—we’ll be on the horn if we have any changes (buy or sell) in the days ahead.
Other Stocks of Interest September 10: Follow ups to stocks featured May 7, 2020 (issue 1445) to September 10, 2020 (issue 1454). 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 September 18: All in all, we’re a bit more positive than we have been a week or two ago because of the growing number of resilient names, though it’s not time to be plowing into a ton of names thinking they’re about to soar, either. Net-net, we’re open to putting some money to work, especially if you have a bunch of cash on the sideline, but it remains important to pick your spots and honor loss limits in case the market gives up the ghost. We’ll likely nudge up our Market Monitor a notch to a level 6 next week—still cautious, but a few more rays of light are out there than two weeks ago. Mike’s suggested buys today are: Anaplan (PLAN), Horizon Therapeutics (HZNP) and Whirlpool (WHR). Today’s suggested sells: PayPal (PYPL), Scott’s Co. (SMG) and Spotify (SPOT).
Weekly Issue September 14: Overall, nothing has really changed from our point of view—most growth leaders are still under pressure after suffering abnormal selling the prior couple of weeks, which, coming after a prolonged upmove, raises the odds that further potholes are ahead. Of course, it’s not all bad—today was a stick save for the major indexes, and while the broad market has pulled back, many areas are doing so normally. All told, we remain flexible, and are open to the possibility that the recent dip was more of a shakeout than the start of a rough patch, but the burden of proof is on the bulls to step up. Until then, we prefer being cautious. The good news is that our stock screens continue to pick up on some potential fresh leaders should the market find its footing. Mike’s Top Pick this week is Novocure (NVCR), an innovative player in the cancer market that’s come to life after a year-long rest.
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 September 17: The one stock in our portfolio that Jacob feels like may fall into this “done” category is JD.com (JD). We have a stop set at $12.5 for our JD November 62.5 calls, and should the stock fall much further this stop may get tripped. If that is the case, we will take our profits, and sell.
Cabot Options Trader Pro Trade Alert September 16: Adjust Existing Position: Buy back your Peloton (PTON) September 85 Call, and Sell the October 90 Call (exp. 10/16) for $4 or more.
Cabot Options Trader Position Update September 15: Jacob’s has position updates on Taiwan Semiconductor (TSM) and General Motors (GM).
Cabot Options Trader Stocks on Watch September 14: A stock that is on Jacob’s radar for a new position is Uber (UBER) which has grossly underperformed its technology peers the last several months, but has attracted several days of call buying.
Cabot Options Trader Pro Weekly Update September 14: Jacob has 9 long positions: DIS, GM, JD, MSFT, PTON, SNAP, TSM, XLF, ZNGA and one short position: QQQ December Puts.
Cabot Options Trader Weekly Update September 14: This week’s “Stocks on Watch” is made up of a stock that initially popped on an earnings beat, Oracle (ORCL), two call buys in gold stocks, Newmont (NEM) and Barrick Gold (GOLD) and yet another put buy in a REIT, Equity Residential (EQR).
Cabot Undervalued Stocks Advisor
Weekly Update September 16: Election season is now in full swing. One way to help identify and weaken the emotional pull from the election is to ask, “Is my investment decision based on what I think will happen, or is it based on what I think should happen?” The should is probably based on the emotions, whereas the will is more likely to be based on reason. Either way, simply being aware of the risks is probably half the cure. Investing smartly is hard enough with all the usual noise and now the pandemic-related complications. Investing smartly during an election season is challenging at best. But remember, it will all be over (hopefully) come November 4. He has no changes to the portfolio today.
Monthly Issue September 2: With this issue, Bruce is setting price targets for many of our stocks. In subsequent issues, he will provide targets for the remaining stocks as well as for each newly recommended stock. Price targets help us stay the course when our stocks weaken on noise, and help provide a tangible exit point. The assumptions behind the price targets provide a roadmap to gauge the company’s recovery process. Bruce has two portfolio changes today: Molson Coors Beverage Company (TAP) moves from Buy to Strong Buy and Voya (VOYA) moves from Strong Buy to Buy.
Cabot Stock of the Week
Weekly Issue September 14: The sharp technology stock selloff that kicked off just two weeks ago may or may not be over, but it has brought opportunities in former high-flyers, and today’s recommendation is one of them. The stock, Nikola Corporation (NKLA), which was originally recommended by Tyler Laundon in Cabot Early Opportunities, is not for beginners—but the company behind it has a chance to change the world so it’s worth knowing about. There are two portfolio changes today: LGI Homes (LGIH) moves to Hold and Zscaler (ZS) moves to Sell.
Cabot Global Stocks Explorer
Bi-weekly Issue September 17: The trend favoring highly scalable, high growth U.S. technology stocks is unlikely to change in the near future but diversifying into different countries and sectors is a good idea as we move into the fourth quarter. So today, Carl heads to Australia for a high-flying fintech stock. Many consumers, particularly millennials and Asian consumers, don’t like credit cards. Because of the fees and chargeback, retailers don’t like them either. Enter Afterpay AFTPF, which is revolutionizing the retail payment industry by effectively enabling interest-free loans at a growing number of retailers. Carl has it rated Buy a Half. There is one portfolio change today: Swire Pacific (SWRAY) moves from Hold to Sell.
Bi-weekly Update September 10: Markets were abuzz this week with talk of a “tech meltdown,” with Tesla (TSLA) getting hit rather hard on Tuesday, falling more than 20% before bouncing back 10% yesterday. The next couple of months are sure to be impacted by what is shaping up to be a turbulent election. The Explorer portfolio after today’s changes has a 25% cash position, which Carl would like to keep, and perhaps increase a bit. He has two portfolio changes today: Cloudflare (NET) from Buy to Sell a Half/Hold a Half and Swire Pacific (SWRAY) from Buy to Hold.
Cabot Small-Cap Confidential
Weekly Update September 17: Our strategy continues to be to try to focus on specific companies that are executing rational growth strategies that are helping them do something better, faster, bigger than the competition. And there’s no shortage of that going on right now given all the changes in the world! For now, we’ll stay the course and keep plowing ahead. There are no portfolio changes today.
Monthly Issue September 3: This month we’re jumping back into the pure-play software space with an up and coming SaaS company that has remained under the radar since going public in December, just a few months before the market tanked. Sprout Social (SPT) specializes in social media management solutions, which are increasingly important as the trend toward digital transformation strategies gets stronger. Organizations increasingly recognize they must market to consumers through social networks. Tyler has it rated Buy.
Cabot Dividend Investor
Weekly Update September 16: The raging bull market took a breather. The S&P 500 actually pulled back 7% from the high at the peak of the recent Labor Day selloff. But that seems to be over. The market has since regained some traction and appears to be resuming an uptrend. We saw a similar pullback in early June. That selloff seemed like a long overdue end to the relentless march ever higher. But it wasn’t. It turned out to be a necessary consolidation on the market’s path ever higher. But this time it could be different. The portfolio performance, with the exception of the two energy stocks, is stellar. Tom has no rating changes today.
Monthly Issue September 9: In this uncertain environment, Tom found a rare stock. It is a company that benefits from the undeniable trend toward technological proliferation. It has solid earnings growth and stock performance. But it provides these benefits with remarkably low volatility. Digital Realty Trust (DLR) is off the high after a rare pullback and selling at a cheap price. Historically, it has less than a quarter of the volatility of the overall market. It’s a great forward-looking investment for this uncertain environment. He has no other portfolio changes.
Cabot Marijuana Investor
Update September 16: There hasn’t been any real news about our stocks in the past week, but Tim has been watching the charts carefully, trying to decide whether it’s time to put some of our 35% cash back into the market, or to take more out, or to simply stand pat. And today he’s decided to stand pat, though the decision is a tough one.
Monthly Issue August 26: Our long-term strategy remains unchanged. Own the leaders. Sell the losers. And remember that someday, when marijuana is declared legal across the U.S., the institutions will come running. Technically, Cabot’s major market-timing indicators remain bullish, so overall, Tim is bullish. But two weeks ago, he sold 25% of each of our U.S. operators because the stocks had grown so overbought over the past few months—and all four of those stocks are lower today. In short, buying power in the sector has dried up in recent weeks, even as investor sentiment has heated up, and that’s a dangerous combination. So short-term, he is turning a little more cautious today, not by selling anything but simply by downgrading more stocks to hold. Ideally, this soft patch will pass and buyers will return, but for now, the tide is going out slowly so be careful where you dive.
Special Report: April 29, 2020
U.S. Vertically Integrated Multistate Operators (MSOs)Cabot Early Opportunities
Monthly Issue September 16: Tyler’s advice today is to continue to average into the stocks that are most attractive to you and which you think you’ll have the best chance of holding onto through the inevitable corrections. The September selloff may or may not be over. The market is trying to look forward into the first half of 2021 at a time when vaccines could hit the market. There is lot of uncertainty surrounding what could happen, and how evolving business and consumer trends will shift. And that’s going to continue to work through the market in hard-to-predict ways. Our game plan will continue to be to find companies that can excel now, in 2021, and beyond. Since we often don’t know exactly how things will play out it’s important to always average in. Today’s Top Pick is Kinsale Capital (KNSL), the only publicly traded property and casualty (P&C) insurer focused exclusively on the excess and surplus (E&S) lines market in the U.S.
Cabot Profit Booster
September Expiration September 17: Tomorrow is the expiration of five of our September covered call trades. It was another great month for the Cabot Profit Booster portfolio! The good news is three will almost certainly be closed for full profits (PINS, APPS, BLDR), one is trading just above our strike price (MTH) and will be a nice winner, and only one is at a super tiny loss (JD).
Weekly Issue September 15: The Stock – Mosaic (MOS) MOS has been out of favor for years, with its latest slide coming to an end in March at 6.5. The upmove after that was choppy, with a sharp dip in April and a shallow eight-week consolidation in June and July. But the Q2 report has changed the stock’s character, causing MOS to rip above its 200-day line last month, and the tight consolidation of that move in recent weeks is constructive. We’re OK starting a position here with a stop under the 50-day line. Stop 15.4. The Covered Call Trade: Buy Mosaic (MOS) Stock at 18.25, Sell to Open October 19 Strike Calls (exp.10/16) for $0.60, or a Net Price of 17.65 or less.
Cabot Micro-Cap Insider
Weekly Update September 16: Rich writes that Joel Greenblatt is probably his favorite investor of all time. He wrote a book called You Can Be a Stock Market Genius that explains how to make money from investing in special situations. Rich personally agrees with Greenblatt that “value” stocks are on the verge of an epic period of outperformance. But it’s painful to wait around while unprofitable growth stocks continue to surge higher. There is one change this week: The buy limit for LSYN increases to Buy under 3.75.
Monthly Issue September 9: Today, Rich is profiling a Canadian SaaS company that is trading for a “value” multiple. NamSys Inc (NMYSF) has sticky, recurring revenue. Other characteristics include: Strong historic revenue growth (25% CAGR), over 40% insider ownership, a strong balance sheet (a significant net cash position) and a cheap valuation. Here are today’s portfolio changes: Increase Buy limit for HopTo (HPTO) To 0.50 from 0.45, move Greystone Logistics (GLGI) from Hold to Buy under 1.00 and move P10 Holdings (PIOE) to Hold.
Special Report
A Defensive Healthcare Stock with 100% UpsideSpecial Report
The Best Way to Play the Oil Market DislocationCabot Income Advisor
Weekly Update September 16: Several of the positions on which we wrote covered calls are trading above the strike price and are likely to be called away. IIPR, QCOM and USB have run well beyond the strike price on options expiration on Friday. They are certain to be called away. Other positions with calls that don’t expire for another month also have prices that have moved well beyond the strike price, including BIP and SBUX. It may seem unnecessary to write covered calls in a raging bull market. but that’s seldom the case. Over time you are likely to get a better return with this income strategy than just holding a market index.
Monthly Issue August 26: Tom did not suggest calls to write on the two recommendations in this issue. The stock prices moved yesterday and knocked the call premiums out of my targeted range. But he is looking to write calls on these positions very soon. Please be on the lookout for a “special alert” in your email in the next few days, or next week. His featured stocks are: Valero Energy Corp. (VLO) and Starbucks Corp (SBUX)
Special Report:
Off the Radar Cash GeneratorsSpecial Report:
The Covered Call Income MachineWall Street’s Best Investments
Daily Alert September 18: SPDR S&P Biotech ETF (XBI) Moneyletter
Monthly Issue September 17: The markets have been a bit choppy of late, with the Dow Jones Industrial Average rising to 29,000 at the beginning of the month, then retreating and rising again. It looks like Fall may be a little volatile. As you’ll see in our Advisor Sentiment Barometer and Market Views, sentiment remains bullish, with a hint of caution. Nancy begins our issue this month with her Spotlight Stock, Realty Income Corporation (O), a REIT with above average yield, and a Dividend Aristocrat. In her Feature article, she further explores the REIT industry and explains why it’s almost always a good time to hold a REIT or two in your portfolio.
Daily Alert September 17: FedEx Corporation (FDX) Argus Weekly Staff Report
Daily Alert September 16: Bank of Hawaii Corporation (BOH) Hendershot Investments
Daily Alert September 15: Vale S.A. (VALE) AlphaProfit Sector Investors’ Newsletter
Daily Alert September 14: Griffon Corporation (GFF) Upside
Ask the Experts
Cabot Early Opportunities
Question: Hi Tyler and thanks for the great advisory once again. I know that fresh IPOs are a hard play and might go up fourfold and then down again in days. Which is why I usually stay out (BIGC was a recent exception and been ok). But one company that I’ve had in my sights for some time now is snowflake / SNOW that looks like it is simply bound to bounce on day 1 and the days after. With even Warren Buffett wanting in, do you see that this has sufficient odds of being something to invest in right away - or are there reasons to stay away? Small bets of course, not your life savings.
Tyler: Snowflake, the company is interesting. Will be looking at it for sure. SNOW the stock? Man, who knows. These “hot” IPOs are just too unpredictable to want to have a strong opinion on since the price is going to be changing so much, so fast. I think you just have to rely on your own judgement here - anything I say now might be different in an hour after the IPO opens. I do believe Buffett has his price locked in at the IPO price. Also, while I certainly respect the man I don’t trade based on what he does, or not. We’re in a different game than he is. Best of luck!
Cabot Retirement Club
Question: I’m a new subscriber and would like to ask you a couple of relatively basic questions about your retirement-related portfolios and advice.
1. For the positions/instruments you recommend, what percentage of a portfolio should one allocate to each (including any covered calls you recommend)?
2. Do you advocate a core position in any ETF (or several ETFs), or do you strictly suggest allocating an entire retirement portfolio across the individual holdings you recommend?
Tom: Nice to have you aboard. This newsletter will typically have between 10 and 15 positions as time goes on. The allocation you have for this portfolio should consider that. Also, covered calls require no allocation because you’re selling them and receiving money. I can’t speak to how you should generally allocate your investment funds because I don’t know your situation. In this newsletter and portfolio, just consider the securities recommended.
Quarterly Cabot Analyst Meeting
The recording of the Cabot Prime Members Meeting with the Analysts from July 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 |
|---|---|---|---|---|---|---|---|
| ABBV | Buy | ||||||
| ACCD | Buy 1/2 | ||||||
| AFTPF | Buy 1/2 | ||||||
| APHA | See Advisory | ||||||
| APPF | Hold | ||||||
| ARE | Hold | ||||||
| ARNA | Buy | ||||||
| AVGO | Hold | ||||||
| AVLR | Hold | ||||||
| AZEK | Buy | ||||||
| BABA | Hold | ||||||
| BE | Buy | ||||||
| BGS | Buy | Buy | |||||
| BIG | Hold | ||||||
| BIP | Buy 2/3 | ||||||
| BMY | Strong Buy | ||||||
| BSCL | Buy 1/2 | ||||||
| BUG | Hold 1/2 | Hold | |||||
| CCI | Hold 1/2 | ||||||
| CDLX | Buy | ||||||
| CGC | See Advisory | ||||||
| CHGG | Sold | ||||||
| COLM | Hold | Buy | |||||
| CRLBF | See Advisory | ||||||
| CRON | Sold | ||||||
| CURLF | See Advisory | ||||||
| DLR | Buy | ||||||
| DOW | Hold | ||||||
| DXCM | Hold | ||||||
| EPD | Hold | ||||||
| EQH | Strong Buy | ||||||
| EVBG | Hold | ||||||
| EVER | Buy | ||||||
| FIVE | Buy | ||||||
| FVRR | Hold 3/4 | ||||||
| GM | Strong Buy | ||||||
| GRWG | See Advisory | ||||||
| GSHD | Hold 3/4 | ||||||
| GTBIF | See Advisory | ||||||
| GTLS | Buy | ||||||
| HTHT | Hold | ||||||
| IIPR | See Advisory | Hold 2/3 | |||||
| INSP | Buy | ||||||
| KL | Buy 1/2 | ||||||
| KPTI | Hold | ||||||
| LGIH | Hold | ||||||
| LLY | Buy | Buy | |||||
| MKSI | Hold | ||||||
| MO | Buy | ||||||
| MPC | Hold | ||||||
| NEE | Hold | Hold 1/2 | |||||
| NET | Hold 1/2 | ||||||
| NKLA | Buy | ||||||
| NVCR | Buy | ||||||
| PGX | Hold 1/2 | ||||||
| PINS | Buy 1/2 | ||||||
| PLMR | Buy | ||||||
| PWR | Buy | ||||||
| QCOM | Hold | Hold 2/3 | |||||
| QTWO | Buy | ||||||
| REMX | Buy 1/2 | ||||||
| RGEN | Buy | ||||||
| RNG | Hold | ||||||
| ROKU | Buy 1/2 | ||||||
| RPAY | Buy | ||||||
| SE | Hold 1/2 | Hold | |||||
| SGEN | Buy 1/2 | ||||||
| SPCE | Buy | Buy | |||||
| SPOT | Sell | ||||||
| SPT | Buy | ||||||
| SSO | Buy | ||||||
| STAG | Hold 1/2 | ||||||
| SWRAY | Sell | ||||||
| TAP | Buy | Strong Buy | |||||
| TCNNF | See Advisory | Hold | |||||
| TOT | Hold | ||||||
| TPB | See Advisory | ||||||
| TSLA | Hold | ||||||
| TSM | Buy 1/2 | Buy | |||||
| TSN | Buy | ||||||
| TWLO | Hold | ||||||
| UEIC | Buy | ||||||
| V | Buy | ||||||
| VIAC | Buy | ||||||
| VLO | Hold 1/2 | ||||||
| VOYA | Buy | ||||||
| VZ | Buy | ||||||
| WING | Hold | ||||||
| XEL | Hold 2/3 | ||||||
| ZM | Hold | ||||||
| ZS | Sell |