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Weekly Summary August 7, 2020

Cabot Prime Week Ending August 7, 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, In this week’s video, Mike Cintolo reaffirms his overall bullish view, but also talks a bit about some abnormal action that’s beginning to pop up in a few leading stocks; it’s probably time to tighten stops or at least have a plan in place in case big investors begin to ring the register more broadly. That said, there’s some fresh leadership that’s emerged, too, and many stocks that aren’t as extended continue to look good -- and potentially buyable.

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Advisory Services

Cabot Growth Investor

Special Bulletin August 7: This week has been good for the overall market, but for the leading growth titles, Mike is seeing more abnormal selling than he has in a while. That’s not to say everything is in tatters, but he’s going to prune a bit more in a special bulletin this afternoon—right now, he’s going to sell our remaining shares of Teladoc (TDOC), which is breaking support, and he’s going to sell one-third of our stake in Twilio (TWLO), which looks tired after a big run. That should boost our cash position into the 31% range.

Bi-weekly Update August 5: Remain bullish, but continue to keep your antennae up. The Nasdaq has pushed to new highs, our trend-following indicators are positive and most leading stocks remain in uptrends, so we’re still in a bullish frame of mind. But things are becoming more challenging with repeated bouts of rotation and some earnings hiccups, too. We’re not opposed to doing a little buying as we’re seeing some decent setups, but tonight, we’ll hold off. Mike’s only change is he’s placing Teladoc (TDOC) on Hold and throwing up a mental stop after today’s sharp acquisition-induced decline. Our cash position remains around 19%.

Bi-weekly Issue July 30: Looking at the entire picture, we think you should stay on the freeway (remain mostly bullish), but it’s prudent to get out of the passing lane and ease off the accelerator (prune a bit and/or tighten mental stops). In the Model Portfolio, we pared back a couple of weeks ago and are still sitting with around 19% in cash and are up handsomely on the year; from here, we’re willing to move in either direction, but tonight Mike has no changes as he sees what earnings season brings.

Other Stocks of Interest July 16: Follow ups to stocks featured March 12, 2020 (issue 1441) to July 16, 2020 (issue 1450). 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 7: It’s been a very good week for the major indexes, with all of them up more than 2%, but in a change of pace, it’s been a sour week for the leading stocks. Last week saw a bunch of positive earnings reactions, but this week, we’ve seen a swarm of selling on “good” news in some of the market’s hottest stocks. Mike’s suggested buys today are: Arconic (ARNC), LGI Homes (LGIH) and Pacira Pharm. (PCRX). There are five outright sells today: Datadog (DDOG), Fastly (FSLY), Owens & Minor (OMI)—tripped our loss limit, Seattle Genetics (SGEN) and Vapotherm (VAPO).

Weekly Issue August 3: Mike still thinks picking your stocks and buy points is important; try to avoid chasing any old thing just because it’s going up. But there’s no question most of the evidence remains bullish, so we advise you to stick with a heavily invested position and buy fresh leaders either on initial pullbacks or powerful earnings moves. This week’s list has a growth-ier feel as we highlight many of the recent earnings winners. Mike’s Top Pick is Qualcomm (QCOM), which won’t be the fastest horse but just emerged from a huge consolidation and has giant earnings estimates thanks to a huge deal and the 5G boom.

Cabot Undervalued Stocks Advisor

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.

Weekly Update July 29: In the past few weeks, Bruce has received a number of questions from subscribers about energy stocks. While we probably have reached “peak oil” at 100 million barrels/day, global demand will remain sturdy and needs to be filled. Permanent impairment of many U.S. oilfields along with the broken E&P business model, and possible civil unrest in 3-5 years as currently-stable Mid-East regimes lose their ability to subsidize their populations, could weaken supplies. Eventually, demand for energy services will return while many low-quality providers will have vanished. It is very unclear yet when and at what price oil and natural gas will begin to reflect this scenario. Yet, while the near-term looks grim, these scenarios paint an optimistic longer-term picture. Bruce has two portfolio changes today: Dow (DOW) moves from Buy to Hold and Nvidia (NVDA) moves from Strong Buy to Buy.

Cabot Stock of the Week

Weekly Issue August 3: The market’s main trend remains up, and thus our goal continues to be maintaining a full and diversified portfolio of high-potential stocks. This process of diversification is actually fun for Tim because it allows him to recommend a very wide variety of stocks. Last week’s featured stock, for example, was a low-risk, high-yielding food company with a massive 7.3% yield, while today’s recommendation, Bloom Energy (BE), is a high-risk bet on a small company in a new energy field with great potential. The stock was originally recommended by Tyler Laundon in Cabot Early Opportunities Tim has one portfolio change today, Columbia Sportswear (COLM) moves from Buy to Hold.

Cabot Global Stocks Explorer

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.

Bi-weekly Update July 30: Today, Carl addresses an issue that some of you have been asking about – the Holding Foreign Companies Accountable Act, which has already passed the U.S. Senate and will likely become law by the end of the year. The legislation’s aim is to bring Chinese companies listed on U.S. exchanges into compliance with Public Company Accounting Oversight Board policies regarding review of corporate audits. Carl has no portfolio changes today.

Cabot Dividend Investor

Weekly Update August 5: There is still lots of risk out there. Tom doesn’t know what will happen with the course of the virus or a vaccine. It is very possible that events will not unfold as pleasantly as the market expects. There’s also the election. It’s about to get in our faces. There’s the uncertainty about who will win along with the probability of a very ugly situation if the results are close. But it’s the dog days of summer. Investors will increasingly be in slacker mode in the weeks ahead. We’ll see where all this goes when the rubber hits the road after Labor Day. But the market looks good for now. The majority of the positions in the portfolio should thrive as the economy recovers but also have resilient business models that will support the stocks if things get ugly again in the fall. Tom has no rating changes today.

Monthly Issue July 8: While everyone is focused on the near-term risks and inconveniences of this pandemic, lasting changes are being forged. Major events have a way of reshaping the American psyche and changing behavior. This pandemic ordeal is forever altering aspects of our culture, creating an a unique opportunity for investors. In this month’s issue Tom highlights a stock that directly benefits from the fact that people will continue to do more things from home than they did before the pandemic. B&G Foods Inc. (BGS), sells popular packaged food brands. Business is booming and should stay good for a long time. He has no other portfolio changes.

Cabot Marijuana Investor

Update August 5: Over the past week, marijuana stocks have been particularly strong, with the strongest being the four leading U.S. multi-state operators that we own—and that means it’s time for another brief update on strategy. For our portfolio, which is fully invested, Tim is standing pat today, but he will be keeping a close eye on all these stocks, as well as the quarterly reports that will coming in the weeks ahead. (APHA and TPB have already reported, but the rest are still to come, with IIPR after the close today.)

Monthly Issue July 29: The 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. Short-term, Tim has a few pointers on playing hot stocks in hot times like the present. If you’re an aggressive investor keeping a close eye on your stocks, feel free to load up on the strongest ones and ride them as long as they go up—while cutting losses short. A concentrated portfolio in the hottest stocks can make big money fast (but sometimes lose it fast, too). If you’re less aggressive, however, and don’t like the risk, take your time. Wait for lower-risk entry points. Wade in slowly. The game is still in its early innings. Our portfolio became fully invested last week and remains so today, in the black for the year while the index is still in the red.

Special Report: April 29, 2020

U.S. Vertically Integrated Multistate Operators (MSOs)

Cabot Early Opportunities

Special Bulletin August 7: Tyler has a number of notes and recommended actions regarding several of our stocks that have made earnings-related moves recently. Stocks covered: GFL, SPT, BAND, SPCE, SEDG, FIVN, SCPL, BL, DDOG, FRPT and NET.

Special Bulletin August 6: Livongo (LVGO) and Teladoc (TDOC) – What To Do Now? Tyler aims to get into great stocks early and then give them a chance to prove themselves. So far, LVGO has done that, and we’re up roughly 375%. Tyler is giving it a chance to show us what’s next. Keep holding. If it starts to falter, we can take action then. HOLD.

Monthly Issue July 15: This month’s Issue of Cabot Early Opportunities features a fresh group of stocks that offer varying risk profiles and exposure to rapid-growth markets. Tyler has a company with a disruptive security platform that acts as a guardian of the internet, a MedTech innovator, Schrodinger (SDGR), (his top pick) with two exciting growth businesses, a clean-energy stock looking to put a troubled past behind it, a little-known gaming company and another software player that’s offering crucial communication services during the pandemic.

Cabot Profit Booster

Weekly Issue August 4: The Stock –Pinterest (PINS) PINS came public last April, had a decent first few months, but then had the typical post-IPO droop, culminating with a plunge to 10 during the crash. The stock bounced with everything else after that, but it was more of a two-steps-forward, one-step-back type of advance as it rode its 10-week line higher. But last week PINS changed character, exploding higher on its heaviest weekly volume ever. Stop - 28.5. The Covered Call Trade: Buy Pinterest (PINS) Stock at 34.5, Sell to Open September 35 Strike Calls (exp. 9/18) for $2, or a Net Price of 32.5 or less.

Update July 17: It was another fantastic month for the Cabot Profit Booster portfolio, and with today being the expiration of July options we are likely going to close seven positions for full profits ranging from 5.4% to 12.3%. Jacob updates us with the details and instructions.

Cabot Income Advisor

Weekly Update August 5: Tom writes that two portfolio stocks are making big moves. Qualcomm had a huge week following its earnings report and the stock soared 20% and Innovative Industrial Properties is also putting together a strong run and is now at just about the 52-week high.

Monthly Issue July 22: Although the prices of all the portfolio positions are higher than when originally purchased, they all still represent good value at current prices and are BUY rated. The market is still trending higher and has shown strong resilience in the face of bad virus news. The trend is good but things can change. Tom’s featured stock today is: U.S. Bancorp (USB), the fifth largest bank in the United States and the country’s largest regional bank with over 3000 bank branches in 25 states in the Western and Northern U.S.

Special Report:

Off the Radar Cash Generators

Special Report:

The Covered Call Income Machine

Wall Street’s Best Investments

Daily Alert August 7: Philip Morris International (PM) Contrarian Outlook
Daily Alert August 6: Quanta Services, Inc. (PWR) Cabot Undervalued Stocks Advisor
Daily Alert August 5: Invesco S&P 500 Equal Weight Consumer Staples ETF (RHS) Sound Advice
Daily Alert August 4: Federal Realty Investment Trust (FRT) Sure Dividend
Daily Alert August 3: Trimble Inc. (TRMB) Dow Theory Forecasts

Monthly Issue July 16: Nancy writes that the markets are certainly keeping us on our toes! She really didn’t know what to expect when she began calculating the returns for this Mid-Year Top Picks issue. We’ve had so much volatility; a big disruption in March, as coronavirus took hold; and many sectors that just haven’t bounced back. Despite the ongoing devastation of COVID-19, our contributors have broken all of our records, averaging a gain of 16.41%, while the Dow fell 8.6%, the S&P 500 is down 1.2% and only the Nasdaq is in positive territory, with gains of 18.3%. Even better, our Top 5 picks averaged 221.48%! In this month’s issue, she brings you an update on many of our 2020 Top Picks, along with several new non-Top Picks ideas.

Ask the Experts

Cabot Growth Investor

Question: Hi Mike - I’ve just subscribed to Cabot Growth Investor. Where do I find your strategy such as target gain, stop loss, etc? Where do I find the YTD performance report? Do you benchmark Growth with S&P 500?

Mike: Thanks for writing. So, first, there should plenty of “strategy” articles on the Growth Investor “home page” if you log in with your password. But here’s the synopsis. We don’t have target gains, we let our winners run. However, we’ll often take partial profits on the way up, though not as preset levels, usually after we have a multiple of our risk in profits and something is getting wobbly (the stock, the sector, the market, etc.). Our loss limits are usually in the 10% to 15% range, though sometimes we’ll start with a half position (half the normal buy) and use something looser. A “normal” new position to us is 10% of the account; half is obviously 5%. And we’ll look to fill out the other half if we get off to a good start. Either way, we’re probably risking 1% to 1.5% per trade, hopefully less, in terms of equity. So far this year, we’re up more than 30%, though it’s been great for our kind of stocks. Since I took over at the start of 2007 (13.5 years) we’re outdoing the S&P by something like 2% to 3% annually even including dividends and excluding any interest on cash, etc etc. Most important, we tell you exactly what we’re doing – so if we’re selling something, we say so, or buying something, etc. We don’t have specific updated stops on every stock, but we let it be known that “a drop back into the 55 range would be a red flag” that sort of thing.

Question: Hi Mike, TDOC given the news today is under 15% are we still sticking to buy on this fundamentally. It did bounce from 50 day after the merger news ?

Mike: Thanks for writing. So, my biggest take is I’ll just watch the stock -- believe it or not, this morning’s drop hasn’t broken the stock’s uptrend, as it’s had a huge run in recent weeks. That said, I admit I’m skeptical -- my mind’s eye tells me that these huge, stock-heavy buyouts after a huge run often hurt the stock, both because the story has become muddied and because there will be a bunch of new shares issued, which can often bring out some sellers. I still think the underlying story of the two is great, but TDOC broke out at 90 and ran to 235 in the past few months so the question is whether it needs a correction and time (and a quarter or two of earnings reports) for big investors to have confidence, especially as the “regular” TDOC story was so pristine.

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
ABBVHoldBuy
AMZNHold
APHASee Advisory
AREHold
AVGOHold
BABAHold
BEBuy
BGSBuyBuy
BIGHold
BIPBuyBuy 2/3
BMYStrong Buy
BSCL Buy 1/2
BUGHold 1/2Buy
CCIHold 1/2
CGCSee Advisory
CHGGBuyBuy
COLMHoldBuy
CRLBFSee Advisory
CRONSee Advisory
CURLFSee Advisory
DBSDYHold 1/2
DOCUHold
DOWHold
DXCMHold
EPDHold
EQHStrong Buy
GFLBuy
GILDBuy 1/2
GMStrong Buy
GRWGSee Advisory
GTBIFSee Advisory
GTLSBuy
GWPHSee Advisory
HTHTHold
IIPRSee AdvisoryHold 2/3
KLBuy 1/2
LGIHBuy
MKSIHold
MOBuy
MPCHold
NEEHoldHold 1/2
NETBuyBuy
NVCRBuy
NVDAHoldHold
OKTAHold
PGX Hold 1/2
PWRBuy
QCOMHold 2/3
REMXBuy 1/2
RNGHold
SEHold 1/2Hold
SLQTSold
SPCEBuyBuy
SSOBuy
STAGHold 1/2
SWRAYBuy
TAPBuy
TCNNFSee AdvisoryBuy
TDOCSell
TLRYSee Advisory
TOTHold
TPBSee Advisory
TSLAHold
TSMBuy 1/2
TSNBuy
TWLOSell 1/3
UEICStrong Buy
VLOHold 1/2
VOYAStrong Buy
VRTXSold
VZBuy
WINGBuy
XELHold 2/3
ZMBuy
ZSHold