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Weekly Summary August 10, 2018

Cabot Prime Week Ending August 10, 2018

2018 Cabot Wealth Summit Registration — August 15-17

What do Cabot’s most successful investors have in common? They come to the Cabot Wealth Summit!

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Also, for those that have had the pleasure of meeting Roy Ward in years past, the good news is that he will be joining us again this year! We’re excited and we can look forward to seeing him again!

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Cabot Weekly Review (Video)

In this week’s stock market video, Mike Cintolo discusses his encouragement with the market’s action during the past two weeks—the major indexes have held support and bounced, some new leadership has emerged on earnings and there are many solid bases forming. That said, the uptrend, while positive, isn’t powerful, so Mike is still big on picking your spots and being selective until we see the buying pressures intensify—and if they do, he goes over many candidates that have a great chance to lead the next sustained upturn.

Advisory Services

Cabot Growth Investor

Bi-weekly Update August 8: The market (at least for growth stocks) remains tricky and relatively narrow, which is a good reason to go slow, pick your spots and, of course, limit losses if you own a stock that gets nailed. Tonight, Mike is adding Neurocrine Biosciences (NBIX) and buying a bit more of Grubhub (GRUB), leaving us with around 38% cash.

Special Bulletin August 6: This Special Bulletin is in regards to Shake Shack (SHAK), which released a good-not-great quarterly report last Thursday, which, combined with Friday’s sour market for growth stocks, pushed shares back below our buy price. One of Mike’s rules is to not let a decent gain turn into a meaningful loss, so he’s selling the stock from the Model Portfolio today.

Bi-weekly Issue August 1: In tonight’s issue, Mike gives you all his thoughts about our stocks and what he’s looking for going forward. He also writes about one of his favorite secondary market timing indicators which is the action of defensive-oriented stocks compared to growth-oriented areas of the market. There are no additional portfolio changes tonight after selling two stocks and a portion of a third earlier this week. The portfolio is now 42% in cash.

Other Stocks of Interest August 3: Follow ups to stocks featured February 28, 2018 (issue 1388) to August 1, 2018 (issue 1399). Since they’re not in the Model Portfolio, you don’t see them followed on a regular basis. However, we are monitoring these stocks, and this listing gives their current momentum status.

Cabot Top Ten Trader

Movers & Shakers Weekly Update August 10: Mike says that given the realities of the current environment, it’s important to be discerning—focus on fresher leadership that’s shown powerful accumulation, look for decent entry points and don’t be afraid to take some partial profits on the way up. And on the sell side, raise your stops a bit for stocks that have bounced back, and of course honor your stops should we see some more sloppy action going forward. Today’s Buy Ideas: Coupa Software (COUP), Grubhub (GRUB) Roku (ROKU), Spotify (SPOT) and Square (SQ). Mike has two sells this week: Axon Enterprises (AAXN), which broke its intermediate-term uptrend this week after earnings, and Grand Canyon Education (LOPE), which tripped its stop.

Weekly Issue August 6: This week’s Top Ten has a diverse mix of stocks, and happily, it includes a good number of stocks with solid growth stories. Mike’s Top Pick is Paycom Software (PAYC), which staged a fantastic earnings gap (and follow-through) last week.

Cabot Undervalued Stocks Advisor

Special Bulletin August 9: Today’s News: Earnings reports from Delek US Holdings (DK), Supernus Pharmaceuticals (SUPN) and TiVo (TIVO). Crista has no changes to her ratings.

Monthly Issue August 7: Crista writes that if you’re not in the habit of listening to quarterly earnings conference calls, she suggests that you pick one of your stocks, and visit the company’s investor relations page. You’ll likely find their earnings press release, a webcast of the management conference call (complete with a Q&A between analysts and management), and sometimes there’s also a graphic presentation of interesting data. These conference calls are highly informative, especially when you own small-cap stocks that don’t have very much news or research coverage. Today, Royal Caribbean Cruises (RCL) joins the Buy Low Opportunities Portfolio.

Weekly Update July 31: Crista writes that on the bright side, the short-term volatility that’s created by all the fear-mongering has created tremendous opportunities in stocks like Knight-Swift Transportation (KNX), PulteGroup (PHM), Netflix (NFLX) and many more. Stick with companies that are thriving and add to your positions when the market whimsically pummels them. She has one portfolio change today: Alexion Pharmaceuticals (ALXN) moves from Buy to Strong Buy.

Cabot Stock of the Week

Weekly Issue August 7: This week’s recommendation, GrubHub (GRUB), was originally recommended by Mike Cintolo for Cabot Growth Investor. Tim had previously recommended GRUB in August 2016, when it was trading around 39 (and much less established)—but sold it three months later for a loss of about 10% as the company projected slower growth. There is one rating change today: McGrath RentCorp (MGRC) moves from Buy to Hold.

Cabot Emerging Markets Investor

Bi-weekly Issue August 9: Our Emerging Markets Timer is technically still on the Buy signal from two weeks ago, though the next few trading days will be crucial. Paul says to take things on a stock-by-stock basis, dumping names that crack but keep your eyes open for indications of new leadership should the EM Timer push higher from here. This issue’s featured stock is Huya Inc. (HUYA), a Chinese esports company, and the top live streaming platform for esports in China, with the largest number of monthly average users (86.7 million), the most time spent on its mobile app per user and the most active broadcasters. Paul doesn’t advise taking a position in HUYA two days before earnings. The pressure on Chinese issues is just too strong right now. But this is an ideal candidate for our watch list, one with a strong position in a large, growing industry with enormous potential.

Bi-weekly Update August 2: Paul has no moves in the portfolio today, as he waits for earnings season to play out. Previous moves to put the portfolio in a defensive stance have given us some protection. But today’s slump in emerging market stocks has put our Buy signal in question and further weakened many of our stocks.

Cabot Benjamin Graham Value Investor

Final Update August 9: In recent months, Crista has helped investors unwind some of their Benjamin Graham Value stocks, while keeping those with sound fundamentals and good earnings growth prospects. She’s talked about how to assess stocks based on earnings growth, value (as represented by price/earnings ratio and debt), and price chart activity. Today she’s wrapping up this stock coverage with some basic guidelines for how to handle the remaining portfolio stocks.

Cabot Dividend Investor

Weekly Update August 8: Chloe says this earnings season has seen some huge reactions, and this week brought the drama to our portfolio. While some of the selloffs (and jumps) were quite sharp, she thinks it’s important not to overreact just yet. Today she is moving AllianceBerstein (AB) and ONEOK (OKE) to Hold: the former because of an industry-wide selloff and the latter because of a negative reaction to earnings.

Monthly Issue July 25: This month’s featured buy, McCormick & Company (MKC) was founded in 1889 and has grown to become one of the largest spice and flavoring companies in the world. In addition to their eponymous line of spices, McCormick makes condiments, stocks, oils, recipe mixes, salad dressings, baking ingredients and more. Consumer products make up about 62% of sales. Chloe is adding MKC to the Safe Income tier. Also, she is selling half of BB&T (BBT) today, due to poor technical performance and a lack of support. There are no other changes, but Chloe includes details on plenty of earnings reports.

Cabot’s 10 Best Marijuana Stocks

Update June 14: Tim recently attended the Cannabis World Conference and Business Expo in New York City. His main takeaway from that conference was that the trend continues to gain strength, at a faster rate than expected. He also updates the 10 stocks in the portfolio.

Summer Issue May 24: With this issue, Tim is replacing two of the portfolio stocks—Emerald Health (EMHTF) and CannaRoyalty (CNNRF)—with new recommendations—Hydropothecary (HYYDF) and iAnthus Capital (ITHUF).

Wall Street’s Best Investments

Daily Alert August 10: Perspecta Inc. (PRSP) from Sure Dividend
Daily Alert August 9: iShares Nasdaq Biotechnology ETF (IBB) from Stock Trader’s Almanac
Daily Alert August 8: Atlas Air Worldwide Holdings, Inc. (AAWW) from Upside
Daily Alert August 8: Sell: Stoneridge (SRI) from Upside
Daily Alert August 7: Walgreens Boots Alliance, Inc. (WBA) from DRIP Investor
Daily Alert August 6: II-VI (IIVI) from The Cutting Edge

Monthly Issue July 18: This month’s issue is our Top Picks for 2018 mid-year update. Capturing first place is Paul Goodwin and Tim Lutts, Chief Investment Analysts for Cabot Emerging Markets Investor and Cabot Stock of the Week. Both picked GDS Holdings (GDS), for a stunning 116.58% return! Also, Nancy updates many of our Top Picks from our January 2018 issue, as well as some additional investment ideas.

Wall Streets Best Dividend Stocks

Daily Alert August 10: CMS Energy Corp.; 5.625% Fixed Rate, Junior Subordinated Notes (PET Bonds) from Forbes/Lehmann Income Securities Investor
Daily Alert August 9: Union Pacific Corporation (UNP) from Directinvesting.com

Monthly Issue August 8: This month’s Spotlight Stock is Sanofi (SNY), a global pharmaceutical leader that is in turnaround mode. Nancy delves more into the drug sector in her Feature article, which focuses on the tremendous growth in the industry, particularly in emerging markets.

Daily Alert August 8: BP Plc (BP) from High Yield Wealth
Daily Alert August 7: Broadcom Inc. (AVGO) from Canaccord Genuity Research
Daily Alert August 6: First Bank of Long Island (FLIC) from Hughes Investment Management

Premium Reports

10 Monthly Dividend Stocks to Buy for Year-Round Income

Special Report

August 9: Dividend-paying stocks are favorites of retirees and other investors who live off income from their investing portfolios. Like bonds, dividend-paying stocks provide a steady income stream that you can spend without eroding your principal. Unlike bonds, many stocks increase their dividends over time, so your income stream can actually rise each year. This report includes profiles of Chloe’s 10 favorite monthly dividend payers, each of which offers a unique mix of yield, capital appreciation and safety. If you’re looking for monthly income, you’re sure to find at least one that’s right for you.

Cabot’s 10 Best REITs to Buy Now

Special Report

July 18: Nancy has always loved real estate; in fact, she owns a small real estate franchise. But she loves the idea of a diversified real estate portfolio and REITs fit the bill. They have been excellent investments for her subscribers over the years as they offer the perfect opportunity to buy real estate with very little capital. And she believes the boom cycle in real estate is far from over. With that in mind, she set out to find the 10 Best REITs for today’s economy and market. She looked at growth, valuation, dividend yield, and fundamental and technical strength.

Cabot’s 10 Best Buy and Hold Stocks for 2018

Update July 13, 2018: Today, Crista updates investors on portfolio news and performance of the stocks in Cabot’s 10 Best Buy and Hold Stocks for 2018. In terms of individual stock performance, Supernus Pharmaceuticals (SUPN) is up 34.6% YTD through July 12, while Universal Electronics (UEIC) is down 28.0% YTD. The performance of the remaining stocks ranges between +19.5% and -18.2%.

Update June 12, 2018: On June 11, 2018, USG Corporation (USG) announced that its Board of Directors agreed for the company to be acquired by Gebr. Knauf KG for $44 per share in cash. Crista suggestion is that investors sell USG now, rather than wait for the remaining $0.96 per share to accrue from the special dividend and the remaining potential capital appreciation.

Cabot’s 10 Best Takeover Stocks

Special Report

Updated August 10: There are a variety of reasons that a corporation might want to purchase another company. They might want to acquire a company’s patents or products to enhance their product lines; access the company’s distribution network and sales relationships; or simply aim to increase their earnings growth rate by purchasing a very profitable company within a related industry. After all, stronger earnings growth leads to better share price appreciation—a topic that boards of directors care very much about. Crista’s investment strategy, which combines both growth and value criteria, inadvertently identifies potential takeover targets. That’s because big companies and she often seek the same thing: stock investments in undervalued, financially thriving companies that can deliver profits to investors. The ten companies are all undervalued growth stocks. What’s more, they’re small enough that big competitors and peers within their sectors could easily finance their acquisitions, often through current cash flow.

Cabot’s 10 Best Covered Calls on Dividend Stocks

Special Report April 12: With interest rates just coming off of historically low levels, income investors have been desperately searching for alternative sources of yield. Dividend stocks are the obvious answer. But there’s an even better way to create yield: by executing a covered call strategy on stocks that pay dividends.

Cabot’s 10 Best Small-Cap Cloud Computing Stocks to Buy Now

Special Report

Updated August 10: If you’re a growth investor, you need to own cloud software stocks. It’s just that simple. Cloud computing is changing the world. It’s powering massive growth in companies across sectors, empowering digital transformations, enabling new generations of connected technologies and changing how people live their lives. Tyler Laundon lays out the landscape and names his 10 best small-cap cloud computing stocks.

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.

Ask the Experts

Cabot Stock of the Week

Question: I’m a longtime fan of the Cabot Wealth Network. My father has been a subscriber for over a decade and instilled in me a need to manage my own wealth responsibly at a very young age. I have never messaged you before but today had a question. Last year I took your advice and purchased some shares of your first stock to buy and hold “forever” for my son who was then 2 years old! That stock, Autohome, turned out to be a great addition to his very new portfolio. After watching the stock soar for the better part of a year I decided it was time to purchase some for myself as well in early June. Since that time the stock has tanked quite literally losing close to 25% in value over the past 2 months including 10% today! I was curious if this is still a stock you recommend to hold, if there are other factors at play here, or if I just got unlucky in the short term and should have heeded your advice to sell once I lost 10-15% in value? Thank you in advance for your reply and here’s to building wealth!

Tim: Thanks for asking. The major factor in ATHM’s decline over the past two months has been the weak China market, and that will pass. Yes, you should have sold ATHM earlier (especially because you bought near a high—and the stock thus had more potential downside), but now that the stock is down at its 200-day moving average, it’s tempting to say that the stock “should” bottom here. On the other hand, I’ve long preached that trends go farther than expected, and a look at the monthly chart of the stock shows the potential to go to the 50 area. So there’s no easy answer, and part of the answer evolves around your own portfolio: what you already own and the role of ATHM in meeting your investment goals. But if it’s any comfort, I’m sticking with it.

Cabot Wealth Network

Question: (a tweet) You recently declared Zillow (Z) a “Forever Stock.” Is it still a forever stock given what is happening after hours?

Tim: Absolutely. However, I will note that if you’re paying attention to after-hours trading and you’re a regular Twitter user, you may not have the temperament to hold stocks “forever.”

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.