Cabot Prime Week Ending April 3, 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 discusses the plusses and minuses of the market’s nascent bounce; in general, there’s more to like than not, and he’s still fine with a nibble or two given that we’ve likely hit a workable low. But short-term stuff aside, he’s advising a defensive stance until the trends turn up, while keeping a close eye on the surprising number of stocks that are holding up well.
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Cabot Growth Investor
Bi-weekly Update April 2: Remain defensive. There are good and bad aspects to the market’s short-term action; overall, Mike is optimistic a bottom-building process is underway, but he’ll see how it goes. He’s not ruling out nibbling on one or two stocks if the buyers show some mettle, but with our market timing indicators negative, he’s content to hold plenty of cash and patiently wait for the next move up. The Model Portfolio remains in good shape; Mike has no changes tonight and is holding 70% in cash.
Bi-weekly Issue March 26: Mike recommends that you should wait to buy until the trends turn up and (most importantly) fresh leaders begin their advances. He could put a little cash to work if this bounce gains steam, but right now he’s remaining patient. In the Model Portfolio, his only change of late was a small trimming of our Teladoc (TDOC) position yesterday, leaving us with around 72% in cash.
Other Stocks of Interest March 26: Follow ups to stocks featured November 7, 2019 (issue 1432) to March 26, 2020 (issue 1442). 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 April 3: Mike’s overall view hasn’t changed: With the intermediate-term trend still clearly down, he continues to advise a defensive stance. For the record, for our models to flash a green light, most indexes we track would have to rise above the level they were five weeks prior. Never say never, but such a signal is still likely to take some time. Once again, Mike is not going to advise specific buys, but there are 13 that are showing relative strength and/or resilient patterns: There are no specific sells right now, but he’s keeping a close eye on stocks that aren’t really bouncing.
Weekly Issue March 30: Given that the evidence is slightly better, Mike is open to some nibbles here or there, especially among the stocks that have shown strong signs of accumulation. That said, he still believes it’s best to be mostly defensive—the intermediate-term trend remains strongly down, and even if a bottoming process has begun, the odds favor a volatile, news-driven few weeks. Long story short, the rain has stopped for now, but the overall storm system hasn’t yet moved out to sea. Encouragingly, for the second straight week, Top Ten is finding a lot of growth-oriented stocks that are showing peppy action. Mike’s Top Pick is Seattle Genetics (SGEN), which has a nice four-month launching pad and isn’t far from new highs.
Cabot Undervalued Stocks Advisor
Monthly Issue April 1: Crista’s featured companies today are benefiting from the current focus on healthcare, online commerce, dining at home and limited travel behaviors. These companies are Amazon.com (AMZN); Bristol-Myers Squibb (BMY), a new addition to the Growth & Income Portfolio; Mercury General Group (MCY) and Tyson Foods (TSN). Here are today’s portfolio changes: Abercrombie & Fitch (ANF) moves from Hold to Buy, Adobe Systems (ADBE) moves to the Special Situation and Movie Star Portfolio, Bristol-Myers Squibb (BMY) joins the Growth & Income Portfolio as a Strong Buy, General Motors (GM) moves from Hold to Buy, Goldman Sachs Group (GS) moves from Hold to Retired, MKS Instruments (MKSI) moves from Hold to Strong Buy, Netflix (NFLX) moves from Strong Buy to Hold, Quanta Services (PWR) moves from Hold to Buy, Total SA (TOT) moves from Hold to Buy, Universal Electronics (UEIC) moves from Hold to Strong Buy and VanEck Vectors Oil Refiners ETF (CRAK) moves from Hold to Strong Buy.
Weekly Update March 25: Today, Crista advises us on how to manage stock opportunities during a market correction and recession. She has four portfolio changes: Alexion Pharmaceuticals (ALXN) moves from Hold to Buy, Guess? Inc. (GES) moves from Hold to Buy, Mercury General (MCY) moves from Hold to Strong Buy and Tyson Foods (TSN) moves from Hold to Strong Buy.
Cabot Stock of the Week
Special Bulletin April 2: Luckin Coffee (LK) shares fell sharply today after the company announced that it had suspended CFO Jan Liu and several employees reporting to him for misconduct related to “fabricated transactions.” Tim believes that the stock is now unsuited for the Cabot Stock of the Week portfolio and thus he will attempt to identify a better sell point in the days ahead.
Weekly Issue March 30: As the market gets back on its feet after the recent 33% drawdown, all Cabot analysts are looking for opportunities—with the growth-oriented analysts looking for strength and the value-oriented analysts looking for value—and it’s value that describes today’s featured stock perfectly. AbbVie (ABBV), is a well-known pharmaceutical giant, the stock is a bargain today. Tim has no portfolio changes today.
Cabot Global Stocks Explorer
Special Bulletin April 3: As Carl mentioned in yesterday’s issue, we got some bad news on Luckin Coffee (LK) before the market opened regarding an internal investigation of fraud by the company’s COO and several other employees who apparently significantly overstated sales in 2019. Luckin Coffee had been a winner for us, trading as high as 50, and he’s hoping that most subscribers sold some of their stock earlier as he recommended in a number of previous issues. What to do now if you have a position in LK? The uncertainty is high but Carl would not sell at the current price of 6.40.
Bi-weekly Issue April 2: With the cash we have in the portfolio, Carl is moving forward with a dual strategy. First, on market weakness, he’ll incrementally add stocks with the goal of doubling their value within a 12-month period. Second, under the assumption that markets will remain volatile and in some sort of trading range, he’ll be looking for great trading opportunities with buys on pullbacks and sells on surges. Today’s featured stock is DBS Bank (DBSDY), one of the largest banks in Southeast Asia with a presence in 18 markets. Carl also updates us on Luckin Coffee (LK), who suspended its CFO Jian Liu and “several employees reporting to him” for misconduct related to “fabricated transactions.” He is also recommends moving Direxion S&P 500 Bear (SPDN) from a 15% Position To 10% Position.
Bi-weekly Update March 26: In such an environment it’s easy to assume the worst and miss the flipside of the equation – great companies trading at prices that just a month ago we would have considered incredible. Market volatility and uncertainty are creating great opportunities. Carl has one portfolio change today, NovoCure (NVCR) moves to Sell.
Cabot Dividend Investor
Weekly Update April 1: Market volatility in this Coronavirus stricken world will likely continue for some time. After falling over 30% in record time, the market has had a nice rebound. In less than a week the market jumped 15% from the lows. It has since stabilized somewhat with less volatility. While the worst may be over, Tom doesn’t think we’re out of the woods yet. He has one rating change today: Brookfield Infrastructure Partners (BIP) moves from Hold to Buy.
Monthly Issue March 11: In this issue, Tom discusses the ramifications and measures to protect your investments. As well, he identifies rare securities that are timely opportunities while the market is down. These stocks have limited downside if the market continues to fall and huge upside leverage when it recovers. He has three portfolio changes today. Innovative Industrial Properties (IIPR), Qualcomm (QCOM) and Valero Energy (VLO) all move from BUY to HOLD.
Cabot Marijuana Investor
Monthly Issue March 25: Coming into this week, the portfolio was more than 60% in cash, though that’s been reduced as the stocks have bounced. And today Tim is going to take the cash level down to 50% by averaging up (using equal amounts) in both Canopy Growth (CGC) and Innovative Industrial Properties (IIPR). Note, he’s like to buy more of CURLF and GRWG, but he learned long ago that averaging down is a bad idea, so he’s just wait until our position is profitable in them. Canopy Growth (CGC), GrowGeneration (GRWG) and Innovative Industrial Properties (IIPR) all move to BUY.
Update March 19: Looking ahead, there’s no question that this bear market will bottom someday and Tim has little doubt that there will be some big up days, as good news sparks buying by opportunistic bargain hunters. But, today he is going to get even more heavily into cash by selling two more stocks, Akerna (KERN) and Planet 13 (PLNHF), and selling half of Curaleaf Holdings (CURLF). After these moves, the portfolio will be roughly 65% in cash.
Cabot Early Opportunities
Special Bulletin March 27: Kornit Digital (KRNT) has just pulled Q1 2020 guidance, saying revenue will be roughly 35% to 45% below the low end of its prior revenue guidance ($47 million) due to global disruptions from COVID-19. Management cited several customers postponing orders or ceasing operating entirely for now. Tyler is dropping Kornit to focus on titles that have a better chance of performing well in the near-term. It will go back on my watch list for potential inclusion in the future. SELL.
Monthly Issue March 19: These are harrowing times to be an investor but we’re always on the hunt for emerging opportunities, regardless of market conditions. As always Tyler is spreading things around this month, with the focus on two defensive names (including one larger company), two beaten and battered names that seem mis-priced (depends on what happens) and one stock that seems to be in high demand, despite the market conditions. Suffice to say, there’s little incentive to place big bets right now. But we’d be remiss not so send some ideas your way. These new names will come with a short leash! His Top Pick is BlackLine (BL), which was featured in one of his Special Reports last September. It is a Software-as-a-Service (SaaS) business with products for finance and accounting departments.
Monthly Issue March 18: Tyler writes that we will get through this and there will be plenty of opportunities. His overarching message right now is to get (and stay) in a safe financial (and physical) position to be able to take advantage of them when they do. In terms of stocks to buy today, he is not recommending anything. He’ll be following up tomorrow with ideas of what’s looking enticing right now, including some names both in our portfolio and beyond.
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Cabot Profit Booster
Weekly Issue March 31: Barrick Gold (GOLD) - With COVID-19, plunging oil prices, credit/health worries and central bank printing, it’s a time of maximum uncertainty—and such uncertainty plays right into the hands of gold, which has popped back toward multi-year highs. Barrick Gold, the world’s second-largest gold mining company, is well positioned to benefit from this strength. The Covered Call Trade — Buy Barrick Gold (GOLD) Stock at 19, Sell to Open May 19 Calls (exp. 5/15/2020) for $1.50, or a Net Price of 17.50 or less.
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Daily Alert April 3: Brown & Brown, Inc. (BRO) Positive Patterns
Daily Alert April 2: Virtus LifeSci Biotech Products ETF (BBP) Sound Advice
Daily Alert April 1: Keysight Technologies, Inc. (KEYS) Dow Theory Forecasts
Daily Alert March 31: Tyson Foods, Inc. (TYS) Cabot Undervalued Stocks Advisor
Daily Alert March 30: T. Rowe Price Group, Inc. (TROW) Pad System Report
Monthly Issue March 19: Nancy’s Spotlight Stock, DuPont de Nemours, Inc. (DD), is a very old company, founded in 1802. It’s pretty much seen it all—recessions, depressions, booms and busts. And while it’s gone through a number of transformations (including one currently), it’s a steady name and being the largest chemical company in the United States gives it a good base of customers and products. Her Feature article adds a bit more information about the company, the industry, and why investors should keep it in mind.
Ask the Experts
Cabot Stock of the Week
Question: Hello, I am very new to the investing world and recently joined your Cabot stock of the week ranks. I currently hold 30 shares of Facebook and 150 shares of Starbucks stock for a total of about $15,000.00. I would like to take approx $10,000.00 of those shares and use it to invest in your stock of the week program. My question is what should my portfolio consist of as far as stocks to start? I’ve been reading your articles about your picks and see what your portfolio looks like but a lot of your stocks are a hold right now. Can you give me suggestions as for what stocks and how much to buy to start? Thanks for helping this newbie finally take the steps I’ve always wanted to take into the world of investing!
Tim: Thanks for writing. I like your plan. Keep some of your current stocks, as they’re quality companies, but beyond their best days, and venture into higher potential stocks gradually. Of course, this is a great time to start. My simple advice is to focus on my latest recommendation, if the company’s business makes sense to you and if the stock would make strategic sense in your portfolio. For example, since you already own SBUX, adding Luckin Coffee would not be advised yet—too much concentration in retail coffee. Then, as you add more stocks, don’t buy a bunch of stocks all at once; spread out your buying over time, so the market’s gyrations average out. Time is your ally. Today, chart-wise, I like BL, SE, SPCE, RNG and TSLA.
Cabot Dividend Investor
Question: Thank you for a very good explanation how how they can go thru the shutdown of oil thru the pipelines. I have had EPD for many years even before you recommended it.
It does take me a couple of weeks to deal with taxes on the limited partnerships.
Tom: What a great question! You’re right to be concerned. Storage is near capacity and midstream companies, including EPD, have requested that oil producing companies limit shipments. EPD has 86% of revenues in fee-based business backed up by long term contracts. But I don’t know the status of those contracts and regular payments if companies stop shipping with a special situation. Cash flow could be disrupted. That said, EPD has the strongest financials in the business with limited debt, a low payout ratio and investment grade credit ratings. The company has raised the payout every single year since its IPO in 1998, including through the financial crisis and the oil price crash between 2014 and 2016. EPD has the lowest payout ratio of all large midstream MLPs (83%) and it is suspending growth expenditures for this crisis. It pays out less than $4 billion in distributions per year and has $6.4 billion available in cash and short term securities. The company can easily weather the storm without cutting the dividends and the revenue disruptions are already baked into the stock price. Of course, if this economic shutdown lasts another 6 months or a year, all bets are off. But I doubt that will happen. EPD has the most solid and well supported dividend in the space. If these guys cut the dividend, every other company will too. I can’t say that things won’t get worse before they get better. But, at this point, EPD is paying a double digit yield that I think is safe and it’s selling at an absurd valuation. I hope this helps. Have a nice weekend.
Premium Reports
Special Market Update for Cabot Prime Members
The recording of the Special Market Update for Cabot Prime Members Meeting from March 31, 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 member benefits.
A Richer Retirement
Special Report This handbook is designed to help you secure a better, longer, richer retirement for yourself by making the most of your savings both before and during retirement.
Guide to Cabot Prime
This Guide to Cabot Prime 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 Global Stocks Explorer | Cabot Growth Investor | Cabot Marijuana Investor | Cabot Stock of the Week | Cabot Undervalued Stock Advisor | Cabot Dividend Investor |
|---|---|---|---|---|---|---|
| AAPL | Strong Buy | |||||
| ABBV | Buy | Buy | ||||
| ADBE | Strong Buy | |||||
| ALXN | Buy | |||||
| AMZN | Strong Buy | |||||
| ANF | Buy | |||||
| ARE | Hold | |||||
| AVGO | Buy | |||||
| BABA | Buy | |||||
| BIP | Sold | Hold | ||||
| BKR | Hold | |||||
| BL | Buy | |||||
| BMY | Strong Buy | |||||
| BP | Buy 1/2 | |||||
| BSCL | Buy 1/2 | |||||
| CCI | Buy | |||||
| CGC | See Advisory | |||||
| CHCT | Hold 1/3 | |||||
| CRAK | Strong Buy | |||||
| CRON | See Advisory | |||||
| CURLF | See Advisory | |||||
| DBI | Buy | |||||
| DBSDY | Buy | |||||
| DOCU | Hold | |||||
| DOW | Buy | |||||
| DXCM | Hold | |||||
| EPD | Hold | |||||
| EQH | Hold | |||||
| GES | Buy | |||||
| GM | Buy | |||||
| GRWG | See Advisory | |||||
| GS | Retired | |||||
| HTHT | Hold | |||||
| IIPR | See Advisory | Hold | ||||
| LGIH | Hold | |||||
| LK | Buy 1/2 | Hold | ||||
| LX | Buy 1/2 | |||||
| MCY | Strong Buy | |||||
| MKSI | Strong Buy | |||||
| MO | Hold | |||||
| MPC | Buy | |||||
| NEE | Hold | Hold 1/2 | ||||
| NFLX | Hold | |||||
| NVCR | Sold | |||||
| NVDA | Buy | Strong Buy | ||||
| PGX | Buy 1/2 | |||||
| PNGAY | Buy | |||||
| PWR | Buy | |||||
| QCOM | Hold | |||||
| RNG | Hold | |||||
| SE | Buy 1/2 | Hold | ||||
| SPCE | Buy 1/2 | Hold | ||||
| SPDN | Buy | |||||
| STAG | Hold | |||||
| TCNNF | See Advisory | |||||
| TDOC | Hold | |||||
| TOT | Buy | |||||
| TPB | See Advisory | |||||
| TSLA | Hold | |||||
| TSN | Strong Buy | |||||
| UEIC | Strong Buy | |||||
| VLO | Hold | |||||
| VOYA | Hold | |||||
| VRTX | Hold | Hold | ||||
| VZ | Hold | |||||
| XEL | Hold 2/3 | |||||
| ZM | Buy |