Cabot Prime Week Ending June 29, 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!
If you haven’t yet registered for the 2018 Cabot Wealth Summit, now’s the time because the hotel rooms sell out. A rich and intense program of stock picks, market analysis, investing tips and techniques and a chance for face-to-face Q&A with Cabot’s experts and analysts. We will also have great social activities! All in beautiful, historic Salem, Mass.
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!
Register here at super-low Cabot Prime member pricing.
Cabot Weekly Review (Video)
In this week’s stock market video, Mike Cintolo talks about the overall evidence of the market and leading stocks (still mostly bullish), but recognizes that the recent selloff did show some abnormal action in many areas. Overall, Mike is leaning bullish, but is mostly watching and waiting for the market to show its hand. That said, he’s still seeing plenty of resilient growth stocks, and he runs through a bunch of them that should do well once the buyers step up.
Next Quarterly Analyst Call July 18, 2018
Free for Prime Members: Register now
Advisory Services
Cabot Growth Investor
Bi-weekly Update June 27: Mike says it’s time to raise some cash. The Cabot Tides are on the fence but more importantly, individual stocks have been hammered during the past week. Longer-term we are still in an uptrend, but it’s vital to sell any stocks that breakdown. In the Model Portfolio, Mike sold half of Splunk (SPLK) and all of Alibaba (BABA) on Special Bulletins on Monday, and tonight, Mike is selling the rest of his SPLK, leaving you with around 40% in cash.
Special Bulletin June 25: As Mike noted in last week’s issue and this morning’s bulletin, we have seen some yellow flags during the past couple of weeks, including growing divergences among the major indexes and complacent sentiment as many speculative stocks went vertical. Tonight, he’s selling Alibaba (BABA), as the stock tripped his mental stop and we have a small loss.
Special Bulletin June 25: With many of the stocks being hit hard in the portfolio on Friday with some mixed messages for the overall market, Mike says it’s important to take some action. Sell half of your shares in Splunk (SPLK) and put Grubhub (GRUB) and Nutanix (NTNX) on Hold.
Other Stocks of Interest June 22: Follow ups to stocks featured January 17, 2018 (issue 1385) to June 20, 2018 (issue 1396). 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.
Bi-weekly Issue June 20: Mike says most of our stocks are performing well, but we’re standing pat for the moment, holding about 20% in cash as we look for solid entry points in fresh leading stocks. He touches upon on the sentiment backdrop, while highlighting a few potential new buys if things settle down a bit.
Cabot Top Ten Trader
Movers & Shakers Weekly Update June 29: Mike says the yellow flags of the past couple of weeks finally hit a breaking point starting late last week, with most indexes and leading stocks hitting a good-sized pothole. If the sharp dip is over, there should be plenty of stocks that are providing new and/or follow-on entry points (rebounds from their 50-day lines, for instance). But we’re still tightening stops, too, and could easily turn more cautious if the market/stocks crack further from here. Today’s Buy Ideas: Advanced Micro Devices (AMD), Align Technology (ALGN), G-III Apparel (GIII), Kohl’s (KSS), Ligand Pharmaceuticals (LGND),and WPX Energy (WPX). Mike has ten sells: 51Job (JOBS) , Autohome (ATHM) , GoDaddy (GDDY), E*Trade (ETFC), Insulet (PODD), LPL Financial (LPLA), Momo Inc. (MOMO), Penumbra (PEN), Semtech (SMTC) and Zendesk (ZEN).
Weekly Issue June 25: Mike says this week’s list has stocks that have been yanked down recently, but the action looks normal after strong prior advances. His Top Pick is Carvana (CVNA), which is early stage and holding up well after a big run. Again, keep new positions small and try to buy on dips.
Cabot Undervalued Stocks Advisor
Weekly Update June 26: In today’s update, Crista outlines the reasons why she will have every intention of remaining invested in various oil industry stocks in the foreseeable future. No rating changes to the portfolio but she breaks down each position in full detail.
Special Bulletin June 22: With the shocking news that Intel Corp. (INTC) CEO Brian Krzanich is resigning, Crista gives her take on what do with if you own any shares. In short, sell your shares and move to a company with stronger earnings growth.
Special Bulletin June 21: Crista writes about Commercial Metals (CMC) which just reported earning this morning and now rated Strong Buy. She also has Skechers USA Inc. (SKX) as Strong Buy due to recent coverage from UBS.
Monthly Issue June 5: Crista, with her expertise on trade issues, discusses international trade negotiations and NAFTA. Today, DowDuPont (DWDP) joins the Growth & Income Portfolio as a Strong Buy. Martin Marietta Materials (MLM) moves from Buy to Hold, Schlumberger (SLB) moves from Buy to Strong Buy and Supernus Pharmaceuticals (SUPN) moves from Buy to Strong Buy.
Cabot Stock of the Week
Weekly Issue June 27: Tim’s recommendation this week is DowDuPont (DWDP), a stock that has been ratcheting upward since bottoming in early April. The stock was originally recommended by Crista Huff in Cabot Undervalued Stocks Advisor. Tonight Tim is moving Autohome (ATHM) from Buy to Hold and Broadridge Financial Solutions (BR)from Hold to Buy.
Cabot Emerging Markets Investor
Bi-weekly Issue June 28: This issue’s featured stock is JD.com (JD), a stock Paul recommended numerous times before, but it’s on watch for now given the recent market action. In response, Paul has raised cash- he sold 58.com (WUBA) and our remaining half position in Tal Education (TAL) on a Special Bulletin on Monday, and yesterday let go of Momo (MOMO), which has fallen sharply. We’ve also placed most of our stocks on Hold. All in all the portfolio is now sitting on a large 50% in cash, which gives us a cushion to withstand further declines, as well as buying power when the next uptrend gets underway.
Special Bulletin June 27: With heavy selling pressure today and stiff losses in both the Golden Dragon ETF (PGJ) that tracks Chinese ADRs and the iShares MSCI EM ETF (EEM), it’s time to sell MOMO Inc (MOMO) which broke down due a recent announcement and a report questioning several aspects of Momo Inc’s business practices.
Special Bulletin June 25: With today’s selloff of more than 4%, dropping PGJ decisively below its 50-day moving average, it’s time to make some changes. We are selling the remaining half position in TAL Education (TAL) and selling 58.com (WUBA). Paul is also moving ZTO Express (ZTO) and Alibaba (BABA) to hold.
Bi-weekly Update June 21: Emerging market stocks have had a nasty week, with the iShares EM Fund (EEM) dropping decisively below its 25- and 50-day moving averages. The portfolio has several stocks that are vulnerable, but Paul is going to stand pat for now with no changes to the portfolio.
Cabot Benjamin Graham Value Investor
Weekly Update June 28: Crista has no rating changes today, but she covers all the corporate news splashes and media headlines impacting the portfolio. Apple (AAPL) and Discovery Communications (DISCA) are rated Buy due to recent pullbacks and are two of Crista’s favorite undervalued positions.
Cabot Dividend Investor
Monthly Issue June 27: This month’s featured buy, Occidental Petroleum (OXY) is is a large oil and gas company with a 3.7% yield, a 15-year history of dividend growth, and rapidly rising earnings. It’s being added to the Dividend Growth tier. Chloe is selling half of Intel (INTC), and replacing Invesco BulletShares 2018 High Yield Corporate Bond ETF (BSJI) with Invesco BulletShares 2022 High Yield Bond ETF(BSJM).
Special Bulletin June 22: Chloe writes about the markets pulling back yesterday with the Dow, S&P 500 and Nasdaq all closing lower. Intel (INTC) and General Motors (GM) were hit particularly hard, so she wanted to send a quick update even though she’s not recommending any action. Continue to Hold these positions.
Weekly Update June 20: Chloe writes that the market’s intermediate-term trend remains up. She advises to stay the course, and resist overreacting to the oscillations. One rating change, with Intel (INTC) being moved back to Hold.
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 June 29: CME Group (CME) from Cabot Dividend Investor
Daily Alert June 28: Booking Holdings Inc. (BKNG)) from Hendershot Investments
Daily Alert June 27: Obsidian Energy (OBE.TO) from Contra the Heard Investment Letter
Daily Alert June 26: Roku (ROKU) from Cabot Top Ten Trader
Daily Alert June 26: Five Below (FIVE) from Cabot Growth Investor
Monthly Issue June 20: Our June Spotlight Stock is, SVB Financial Group (SIVB), financial services company, as well as a bank holding and a financial holding company. Nancy’s Feature article discusses the correlation between venture capitalists and the Spotlight Stock.
Wall Streets Best Dividend Stocks
Daily Alert June 29: Quarterhill (QTRH.TO) from Contra the Heard Investment Letter
Daily Alert June 28: Vale S.A. (VALE) from Global Investing
Daily Alert June 27: UnitedHealth Group (UNH) from Cabot Dividend Investor
Daily Alert June 26: TJX Companies, Inc. (TJX) from Hendershot Investments
Daily Alert June 25: Newell Brands (NWL) from Forbes Dividend Investor
Monthly Issue June 13: The Spotlight Stock is Community Healthcare Trust (CHCT), a real estate investment trust (REIT) paying a high yield, that operates in non-urban locales—a pretty rare find, indeed—as most REITs concentrate their holdings in large cities. Nancy’s Featured article is Equity REITs aren’t Afraid of Rising Rates
Premium Reports
Cabot’s 10 Best Buy and Hold Stocks for 2018
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 May 3: 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 June 18: 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 Emerging Markets Investor
Question: I remember that few years ago you suggested sell all portfolio and just wait. It was one of the best decisions which saved me money. During the last week my portfolio lost about 10%. Looking for both charts and political environment, may be now we have repeat the action?
Paul: Yes, I remember that call. But at this point, I think it’s more likely that the bears will wear themselves out pretty quickly. This correction is happening because investors are starting to take the idea of a trade war seriously, but it’s still a matter of pricing in probabilities, not a full-scale market exit. There was too much optimism in the market and the market is squeezing some of it out. If I decide to exit all of our positions, I’ll let you know first thing.
Question: I have a 13.5% loss in MOMO. Have 5% loss in ATHM. Should I sell or hold?
Paul: The portfolio is also getting close to a 15% loss in MOMO (bought at 45.4). I’m willing to give the stock the benefit of the doubt, but will definitely cut it loose if it hits that 15% limit. ATHM is a different matter. The stock is still above its 50-day moving average and has some technical support (May resistance) right where it is now. I think I’d hold on. I should know more about both stocks by Thursday, as Chinese ADRs made a tiny bounce today. Lots of issues balanced on the knife edge right now. If you would be more comfortable holding more cash, I’d definitely sell MOMO. But I think ATHM deserves a little more slack.
Question: I bought some IQ and made money then lost it. I ended up even today do I sold it so I wouldn’t end up losing. But I see you still have it as “buy a half”. Should I buy some back or just move on?
Paul: I think the extreme volatility in IQ will run out of gas soon. I have it still on Buy a Half because the basic story seems very attractive and the fundamentals are sound. The portfolio’s original buy was at 20, so we have some profit to work with. Still, I think IQ below 33 looks good. but I’d hold off to see what happens today. I think we should get a bounce in pretty short order, but there may still be some optimism that the market needs to squeeze out.
Cabot Dividend Investor
Question: Your thoughts on Cummins? Been lagging all year I am down 20%.
Chloe: We sold CMI back on May 2, so I haven’t been following it closely. We sold after revelations about engine repair costs caused a big, high-volume selloff in the stock. At the time I wrote: “The selloff is CMI’s second major drop in two weeks, and brought CMI to a new 52-week low. The chart looks terrible, and I’m going to Sell CMI today. After four high-volume selloffs since the start of the year, and two failed attempts to bounce off its 200-day, CMI has run out of chances to get its act together. SELL.” So I’m not surprised that the stock is even lower today. I know it’s hard to do at this point, but I still think the best choice is cutting your losses. CMI is trending down and there’s no obvious support levels to look forward to -- look at a long-term chart. Yes, the stock will find support and turn around eventually, but it’s impossible to know when, and a 20% loss is a lot easier to recover from than a 50% loss. Sorry I don’t have anything more encouraging to tell you. Some trades just don’t work out; that’s why it’s important to be disciplined about cutting losses short.”
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.