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Weekly Summary August 28, 2020

Cabot Prime Week Ending August 28, 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, (done a day early, on Thursday morning), Mike Cintolo talks about a bit of improvement he’s seeing in the evidence; he’s doing a little new buying in Cabot Growth Investor tonight, though he’s still not flooring the accelerator given the iffiness he’s seeing among many growth stocks and the wild rotation that’s occurring every few days. As usual, Mike goes over his thoughts on the indexes and reviews a bunch of stocks (both cyclical and growth) that should be on your radar screen.

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Advisory Services

Cabot Growth Investor

Bi-weekly Issue August 27: Put a little money back to work. In the Model Portfolio, Mike is going to buy half-sized positions (5% of the account) in both Roku (ROKU) and Spotify (SPOT), which will leave us with 25% on the sideline. Meanwhile, we’re practicing patience with our remaining winners, though a couple names have earnings reports to get through in the next few trading days (Okta is tonight) that could have an impact. He talks about the thinning out of the advance and dives into all our stocks (a couple of which have earnings coming up), as well as talk about our new recommendations and game plan going forward.

Bi-weekly Update August 18: Remain a bit cautious. The overall market looks fine, and this week, we’re happy to see some growth stocks find their footing. But overall, our opinion hasn’t changed much from last week’s issue—many growth stocks still look tired after big runs, and while we wouldn’t mind putting a little of our 36% cash position back to work, we’ll stay patient and look for more strength to develop. Mike has no changes tonight.

Other Stocks of Interest August 13: Follow ups to stocks featured March 26, 2020 (issue 1443) to August 13, 2020 (issue 1452). 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 August 28: Looking at growth stocks, we do think the picture has improved over the past couple of weeks, both from the initial leaders (those that hit new highs in April and May) and from newer merchandise that’s acting normally or has broken out after a five- to six-week rest periods. Because of that, we’ll likely nudge our Market Monitor up a notch, but to be fair, we’re still seeing some reasons not to go wild. The number of stocks hitting new highs continues to lag what was seen earlier this month, and the rotation (into/out of cyclicals and growth titles) remain vicious and news-driven. Plus, the big-cap indexes have gotten out of trend on the upside—that’s fun if you own them, but usually it leads to some indigestion going forward. Mike’s suggested buys today are: Bill.com (BILL) and Taiwan Semiconductor (TSM). There are two suggested sells today: SailPoint (SAIL) and Ultragenyx (RARE).

Weekly Issue August 24: There’s not much negative to say about the market if you’re looking at the major indexes—all remain in solid intermediate-term uptrends, and longer-term, there are many bullish signposts for the overall market. But it’s also a fact that this rally has become awfully thin—the number of stocks hitting new highs is half (or less) of what we saw earlier this month, and the rotation between extended growth, fresher growth and cyclicals is becoming more frequent and intense. Once again, none of this necessarily portends doom, but there’s little doubt that making money has become tougher, so factor that into your plan—possibly buying smaller positions, entering on weakness, and focusing on what’s attracting buyers. That’s just what our screens do, and this week’s list has another batch of in-favor stocks. For Mike’s Top Pick, he’ll go with JD.com (JD), a well-traded name that just reacted positively to earnings, and whose group (China) is picking up steam.

Cabot Undervalued Stocks Advisor

Weekly Update August 26: Bruce writes that starting next Monday, August 31, before the market opens, the Dow Jones Industrial Average will have a new look. Out goes ExxonMobil (XOM), Pfizer (PFE) and Raytheon Technologies (RTX), to be replaced by Salesforce.com (CRM), Honeywell (HON) and Amgen (AMGN). The change was heavily motivated by the 4:1 stock split by Apple (AAPL) which takes effect after the market close this Friday. He has an addition to the portfolio today: ViacomCBS (VIAC) joins the Buy Low Opportunities Portfolio as a new Buy.

Monthly Issue August 5: The Cabot Undervalued Stocks Advisor is gradually trimming out of its successful but highly valued tech stocks, while adding newer names with clear undervaluation supported by solid fundamentals. While these may not provide the immediate rewards that Amazon or others provide, they can provide defensive traits as well as strong upside potential, particularly if the “digital economy” stocks suffer the same fate that the dot-com stocks did two decades ago. Bruce has two portfolio changes today: Molson Coors Beverage Company (TAP) joins the Buy Low Opportunities Portfolio as a new Buy and Nvidia (NVDA) moves from Buy to Hold.

Cabot Stock of the Week

Weekly Issue August 24: The market remains in good health and trending higher, though the rotation from previously hot growth stocks continues, to some degree. This week’s recommendation, Molson Coors Brewing Company (TAP), is a well-known consumer name whose stock is truly cheap, in part because the company recently discontinued dividend payments (they had been 6%) in response to the pandemic shutdown. Tim has two portfolio changes today: GFL Environmental (GFL) moves to Hold and Nvidia (NVDA) moves to Retired.

Cabot Global Stocks Explorer

Bi-weekly Update August 27: Last week at our virtual Cabot Wealth Summit, Carl outlined just why financial technology (fintech) stocks have gained so much momentum this year. This week, quite a bit of media attention is being paid to the upcoming Ant Group IPO on both the Hong Kong and Shanghai exchanges. Here he gives a brief overview of Ant. Carl has one portfolio change today: Gilead Sciences (GILD) moves from Hold a Half to Sell.

Bi-weekly Issue August 6: This week’s issue begins with an overview of the emerging high-tech rivalry between America and China, and highlights a new recommendation, Taiwan Semiconductor (TSM), a dominant company at the heart of that rivalry. Carl has one change today: DBS (DBSDY) moves from Buy a Half to Hold a Half.

Cabot Dividend Investor

Weekly Update August 26: The portfolio is doing well. Our portfolio REITs and Utilities are outperforming the market despite the fact that those sectors are significantly underperforming. Plus, Innovative Industrial Properties (IIPR) and Qualcomm (QCOM) have broken out and are off to the races. Tom has no rating changes today.

Monthly Issue August 12: In this issue Tom highlights one of the very best health care companies in the world, Eli Lilly and Company (LLY). The stock is defensive and barely budged when the market crashed. Yet there are huge growth opportunities ahead as it sells cutting-edge treatments and drugs for illnesses and diseases to a public that will demand them like never before.He has no other portfolio changes.

Cabot Marijuana Investor

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.

Update August 12: Tim is going to sell our two weakest stocks, GW Pharmaceuticals (GWPH) and Tilray (TLRY), because they’ve both broken down in the wake of last week’s second-quarter earnings reports. Additionally, he is going to sell a fourth (25%) of our holdings in each of the four strong U.S. producers: Cresco Labs (CRLBF), Curaleaf (CURLF), Green Thumb Industries (GTBIF) and Trulieve (TCNNF). We are overweighted in all four of these stocks and have substantial profits. After these sales, the portfolio will be roughly 20% in cash.

Special Report: April 29, 2020

U.S. Vertically Integrated Multistate Operators (MSOs)

Cabot Early Opportunities

Special Bulletin August 26: In today’s Issue of Cabot Early Opportunities I mistakenly left off two stocks in our portfolio, SLQT and SEDG. You didn’t miss any updates on these positions! Both are still in the portfolio and both are still rated hold.

Monthly Issue August 26: Tyler’s advice today is to take it slow and average in to new positions. Growth stocks have experienced a huge rally off the March lows and we’re seeing signs that many may have topped out, at least in the near-term. Software stock valuations are near record highs and there is likely to be a shift in expectations regarding work-from-home plays if and when vaccines start to get approved. And then there’s the upcoming election. Still, he thinks we’re in a bull market and a new economic cycle brought on by the pandemic, and that accommodative fiscal policy and more stimulus will help markets move higher over the coming 12 months. Today’s Top Pick is, AZEK (AZEK), one of the first companies to introduce a premium quality (and premium priced) engineered polymer (plastic) building material that was a viable candidate to replace wooden trim.

Special Bulletin August 21: Today we’re letting go of SciPlay (SCPL). There’s nothing wrong with the company or the story. But there’s nothing particularly exciting about it right now either. Tyler will keep SciPlay on his watch list and he’ll come back to it if and when it looks more compelling. For now, it’s moved to sell. SELL

Cabot Profit Booster

Weekly Issue August 25: The Stock – JD.com (JD) JD broke out around the turn of the year and got to 42 before starting to chop around. But even through the crash, the stock was hitting higher highs (45 in March, 48 in April), with its uptrend gaining steam in May and June. Then came a beautiful, tight five-week base before exploding to new highs following the quarterly report. Stop — 65. The Covered Call Trade: Buy JD.com (JD) Stock at 77, Sell to Open September 78 Strike Calls (exp. 9/18) for $2.50, or a Net Price of 74.5 or less.

Sell Existing Position August 24: Upwork (UPWK): On Friday Upwork (UPWK) stock closed at 14.74, which was below the August 15 strike that we had sold last month. Because the stock closed below 15 the calls that we sold for $1.65 expired worthless. This is a good situation. Today Jacob is going to sell his stock position as UPWK has been very choppy the last month, and not really participating in the markets advance.

Cabot Income Advisor

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)

Weekly Update August 19: It has been an amazing market. The S&P 500 just made a new all time high. It has rallied a staggering 55% since the lows in less than five months. The market is forward looking and anticipates a rapidly growing economy, a friendly Fed and record low interest rates and a vaccine in the months ahead. Tom has two portfolio changes today: Innovative Industrial Properties (IIPR) and Qualcomm inc. (QCOM) both move from Buy to Hold.

Special Report:

Off the Radar Cash Generators

Special Report:

The Covered Call Income Machine

Wall Street’s Best Investments

Daily Alert August 28: Enterprise Bancorp, Inc. (EBTC) Sure Dividend

Monthly Issue August 27: Nancy begins our issue this month with a deep dive into a banking company that doesn’t look at all like a traditional bank. Green Dot Corporation (GDOT) is all digital, all the time, and is rapidly expanding its product offerings. In her Feature article, she further explores the digital banking world and how it is growing, and not just for the Gen Z population. Also included is a Top Picks Healthcare update that didn’t make its way into last month’s Top Picks issue.

Daily Alert August 27: Fidelity Emerging Asia Fund (FSEAX) Moneyletter
Daily Alert August 26: Sell: Copart, Inc. (CPRT) 2 for 1 Stock Split Newsletter
Daily Alert August 26: Trex Company, Inc. (TREX) 2 for 1 Stock Split Newsletter
Daily Alert August 25: VICI Properties Inc. (VICI) Dividend Detective
Daily Alert August 24: Eli Lilly and Company (LLY) Cabot Dividend Investor

Ask the Experts

Cabot Profit Booster

Question: Under what conditions does one lose money with a covered call position?

Jacob: Our results at Cabot Profit Booster may lead you to believe you can’t lose money on covered calls, but it is certainly possible, and will happen to us at some point. So if a stock falls significantly we would lose money on a covered call trade. Though because we collected the call premium it would be less than if we just owned the stock outright. For example, let’s say BLDR falls from 30 to 25. We would lose $500 on the stock decline, but will have collected $200 on the sale of the call. So we would be down $300. (I was using round numbers to make it easy.) At some point Mike and Jacob will make a bad stock pick and we will lose on a trade, but until then we will keep racking up those profits.

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 member benefits.

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.

StockCabot Global Stocks ExplorerCabot Growth InvestorCabot Marijuana InvestorCabot Stock of the WeekCabot Undervalued Stock AdvisorCabot Dividend Investor
ABBVBuy
APHASee Advisory
AREHold
AVGOHold
BABAHold
BEBuy
BGSBuyBuy
BIGBuy
BIPSoldBuy 2/3
BMYStrong Buy
BSCL Buy 1/2
BUGHold 1/2Buy
CCIHold 1/2
CGCSee Advisory
CHGGHoldHold
COLMHoldBuy
CRLBFSee Advisory
CRONSee Advisory
CURLFSee Advisory
DBSDYSold
DOCUHold
DOWHold
DXCMHold
EPDHold
EQHStrong Buy
GFLHold
GILDSell
GMStrong Buy
GRWGSee Advisory
GTBIFSee Advisory
GTLSBuy
HTHTHold
IIPRSee AdvisoryHold 2/3
KLBuy 1/2
LGIHBuy
LLYBuy
MKSIHold
MOBuy
MPCHold
NEEHoldHold 1/2
NETBuyHold
NVCRBuy
NVDARetired
OKTAHold
PGX Hold 1/2
PWRBuy
QCOMBuyHold 2/3
REMXBuy 1/2
RNGHold
ROKUBuy 1/2
SEHold 1/2Hold
SPCEBuyBuy
SPOTBuy 1/2
SSOBuy
STAGHold 1/2
SWRAYBuy
TAPBuyBuy
TCNNFSee AdvisoryHold
TOTHold
TPBSee Advisory
TSLAHold
TSMBuy 1/2Buy
TSNBuy
TWLOHold
UEICBuy
VIACBuy
VLOHold 1/2
VOYAStrong Buy
VZBuy
WINGBuy
XELHold 2/3
ZMBuy
ZSHold