Cabot Prime Week Ending November 13, 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 wild action among the market and growth stocks. Overall, he’s optimistic and thinks the market will have a good run in the months ahead, but the trick is near-term timing given the crosscurrents, volatility and rotation. Bottom line, the next few days will be key, and if things go well, there should be a lot of leaders to sink your teeth into.
UPCOMING CABOT EVENTS:
Software Stocks Today: Buy, Sell, or Hold? with Tyler Laundon
FREE WEBINAR: Thursday, November 19 Sign up now.
Cabot Retirement Club Member Call - November 2020
FREE WEBINAR FOR PRIME MEMBERS ONLY: December 1, 2020 Sign up now.
Advisory Services
Cabot Growth Investor
Bi-weekly Update November 12: Stay cautious for now as we wait to see whether growth stocks can find their footing (which they’ve done for a couple days in a row now). The overall market looks good, and after taking partial profits in Pinterest (PINS) and cutting our loss in Datadog (DDOG) this week, our cash position is well over 50%, which is likely too high. However, given the action, we’d like to see a couple more days of stabilization before putting money back to work. Mike has no new changes tonight.
Special Bulletin November 11: Though we gave it every chance to hold up, Datadog (DDOG) is taking on more water after earnings last night. We’re forced to cut our loss today, which will leave us with north of 50% on the sideline. Sell Datadog (DDOG).
Special Bulletin November 10: Growth stocks have taken a beating so far this week as a sharp rotation is underway. Given that the Model Portfolio was 41% cash coming into this week, we’re not craving more cash, but we are making one small move tonight—selling one-third of our position in Pinterest, booking partial profits—and keeping some relatively tight stops on a couple of others. Sell 1/3 shares in Pinterest (PINS).
Bi-weekly Issue November 5: Hold your strong performers and be selective on new buys as we see if this pop is the Real McCoy. In the Model Portfolio, we cut loose our weakest performers during the October slide, but tonight, we’ll add a half-sized position in NovoCure (NVCR), bringing our cash position down to around 41%, while aiming for some new buys in the days ahead depending on the evidence.
Other Stocks of Interest November 5: Follow ups to stocks featured July 2, 2020 (issue 1449) to November 5, 2020 (issue 1458). 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 November 13: The last three weeks have been as whippy as we can remember, with a huge selloff three weeks ago, a buoyant rally last week, and then a rotation (and, to some extent, a re-rotation) all within the past few trading days. As of Friday morning, the big-cap indexes are mixed, while small- and mid-cap indexes are up 2% to 4%. Mike’s Buy ideas today are: Axon Enterprise (AAXN), Shift4 Payments (FOUR), Uber (UBER). Mike suggests Sells for Datadog (DDOG) and Sea Ltd. (SE)
Weekly Issue November 9: Overall, the evidence has clearly improved so we’re optimistic the next leg up has begun, but at the same time, it’s likely the crosscurrents we’re seeing among individual names and sectors will be with us a while (rotation and re-rotation, etc.). Thus, we’re OK with gradually extending your line, but it’s probably not going to be like April or May when throwing a dart made you money; continue to pick your spots and stocks carefully and give names room to maneuver. This week’s list is growth-heavy after we saw many positive earnings reactions last week; yes, most took on some water today but they remain in uptrends until proven otherwise. Our Top Pick is Zendesk (ZEN), which is early stage and acts like it wants to go higher. Try to buy on weakness.
Cabot Undervalued Stocks Advisor
Weekly Update November 11: Just like that, the stock market emerged from its dark mood of October 30th to surge 8.6% in six trading days, with reinvigorated optimism following the evaporation of the election cloud and news of a very promising Covid vaccine. This week Bruce added a new Buy recommendation for Coca-Cola (KO).
Special Bulletin November 9: We are moving MKS Instruments (MKSI), Voya (VOYA) and TOTAL (TOT) to a Sell.
Monthly Issue November 4: This past week at least modestly illustrated the merits of a value strategy. Two of our three “Strong Buy” stocks, Molson Coors Beverage Company and Equitable Holdings, surged on company-specific news that highlighted their underlying value. Other “non-value” stocks not on our recommended list, like Apple, Amazon, Microsoft and Facebook, provided company-specific news that should have been flattering but instead sent their stocks down between 5% and 9%. For investors that focus on high-growth and momentum-driven stocks, having at least a few value stocks can provide portfolio stability. This added stability can help boost investor resolve to stay the course when markets get sloppy and the macro news looks grim, as it did late last week. Bruce has two portfolio changes today: Columbia Sportswear (COLM) and Marathon Petroleum (MPC) both move from Hold to Buy.
Cabot Stock of the Week
Weekly Issue November 9: The news that Pfizer has a promising Covid vaccine, combined with the weekend news that Biden/Harris won the presidential election, triggered a wave of buying (and selling) on Wall Street this morning, rewarding both large caps and small caps while penalizing (at least temporarily) stocks that had benefited from the COVID shutdown. Coming on top of last week’s strength on the realization that Congress would remain divided, this action is enough to turn our intermediate-term market timing indicator back to the positive side again, and thus I recommend that you be heavily invested in stocks with great growth potential, like this week’s featured stock, NovoCure (NVCR). It was originally recommended by Mike Cintolo in Cabot Top Ten Trader. Tim has one portfolio change today: Columbia Sportswear (COLM) to Buy.
Cabot Global Stocks Explorer
Bi-weekly Issue November 12: Election results seem clear and will have a mixed impact on investor appetites. While still up in the air due to a pair of Georgia run-off elections, it seems likely that the GOP will control the U.S. Senate and thus be able to block any significant tax increases. Today, Carl’s new recommendation, Fortress Value Acquisition Corporation (FVAC), is a special purpose acquisition company (SPAC) that is merging into MP Partners to become MP Materials. The company owns and operates one of the world’s largest integrated rare earth mining and processing facilities in Mountain Pass, CA.. There is one portfolio change today: VanEck Rare Earth/Strategic Metals ETF (REMX) moves from Buy a Half to Sell.
Bi-weekly Update November 5: It appears that we will have a sharply divided government in Washington, which Wall Street initially is taking as a positive. A better way of putting it is that it could have been much worse for investors. From time to time, Carl is going to give you a more extensive update on a recommended stock in the Explorer portfolio. This week, NovoCure (NVCR), which has almost doubled in the last six months, is center stage. There are no portfolio changes today.
Cabot Dividend Investor
Monthly Issue November 11: Some long dormant positions and well as the underperforming stocks are reawakening. The most notable change so far is in the health care stocks, AbbVie (ABBV) and Eli Lilly (LLY). ABBV has soared 22% since late October and LLY is 13% higher in the same time frame. In addition the two energy stocks, Enterprise Product Partners (EPD) and Valero Energy (VLO), may be on the cusp of reversing the hideous performance so far this year. The best performing stocks, Innovative Industrial Properties (IIPR) and Qualcomm (QCOM), are continuing to soar ever higher. Due to the valuation and momentum, Tom believes LLY and ABBV are the most attractive stocks to buy right now. This month’s featured stock is Realty Income (O).
Weekly Update November 4: The market doesn’t care about politics. It only cares about money. We may not be out of the woods yet though. We’ll have to see how ugly this gets. But the market likes what it sees so far. In the not-too-distant future, the focus should move to the virus and a vaccine. Good news on that front should enable the market to really take off. Bad news will probably lead to more of the same. There is a likely robust recovery and bull market ahead regardless of who wins. Don’t forget that.
Cabot Marijuana Investor
Update November 11: With all five states that voted on marijuana proposals last week saying “Yes,” the trend toward nationwide legalization is now clearer than ever—and marijuana investors have been acting accordingly. Buying volume has soared, while selling pressure has been minimal. Tim is recommending no changes at this time.
In our own portfolio, the majority of our stocks now have very strong charts. And even the ones that are lagging (JUSHF in particular) still look very healthy.
Monthly Issue October 28: Remain heavily invested in a diversified group of the stocks recommended here, but keep an eye on the stocks in case trends change. And remember the importance of position sizing; a major reason that our portfolio has outperformed the index this year is that we’ve overweighted the strongest stocks, while underweighting the weakest. The only substantial change in the portfolio today is a downgrade of Innovative Industrial Properties (IIPR) to Hold.
Cabot Early Opportunities
Special Bulletin November 13: Tyler recommends a Sell for Jamf (JAMF).
Special Bulletin November 11: Tyler has given us a quick update on earnings & ratings for SPT, TXG, DDOG.
Special Bulletin November 10: Tyler has given us a quick update on reducing exposure as pandemic trade winds down for: PTON, CHWY, DT, FIVN
Special Bulletin November 9: Tyler has given us quick earnings notes on: BAND, UPWK, NET, SEDG, PTON, CYRX, NVRO, ALTR.
Monthly Issue October 21: Given that we’re entering the busy part of earnings season, the election is just under two weeks away, stimulus is being debated and the pandemic is anything but contained there are a lot of big factors that could drive the market materially higher or lower in the coming month. That doesn’t mean we can’t do any buying. As always, continue to average into the stocks that are most attractive to you and which you think you’ll have the best chance at holding through the inevitable ups and downs. Overall, Tyler would say this is a good time to keep new positions smaller than in the past. Remember, the big money isn’t typically made over a couple days or weeks, but in the sustained uptrends that great stocks enjoy. Our goal is to hitch a ride on those and keep buying on the way up, preferably before they’ve run too far. Today’s Top Pick is Upwork (UPWK), a direct beneficiary of the pandemic-induced rise of freelance work.
Cabot Profit Booster
Weekly Issue November 10: The Stock – Yeti Holdings (YETI) went into a 12-week correction and consolidation, which set up things for the breakout last week after earnings. Today’s action was far from ideal and could be a sign that the stock needs a little time; even so, we think it’s a decent risk/reward around here.Stop — 45. The Covered Call Trade -Buy Yeti Holdings (YETI) Stock at 51.5, Sell to Open December 52.5 Strike Calls (exp. 12/18) for $2, or a Net Price of 49.5 or less.
Cabot Income Advisor
Weekly Update November 11: The market got game-changing news on Monday. Pfizer (PFE) along with German biotech company BioNTech announced highly encouraging results for a COVID-19 vaccine. Final FDA approval could be just weeks away. And large scale distribution could begin before the end of the year. On the other side of this pandemic, there will likely be an absolutely booming economy, low interest rates and a friendly Fed. The previously long overdue recession and bear market is over with.
Monthly Issue October 28: Several portfolio positions on which covered calls were written exceeded the strike price on options expiration and were likely called away. These stocks include IIPR, QCOM, USB, SBUX and BIP. This happens in an up market. You were rewarded for your troubles will a high income return from capital appreciation as well as the call premium and dividends. Tom’s featured stock this month is: B&G Foods, Inc. (BGS).
Cabot Turnaround Letter
Weekly Update November 13: This week only four companies reported earnings: Berkshire Hathaway (BRK.A), Peabody Energy (BTU), Adient (ADNT), and Toshiba (TOSYY). Bruce moved Barrick Gold (GOLD), Peabody Energy (BTU), and Weyerhaeuser (WY) to Sell earlier this week. The podcast will return next Friday, November 20, 2020 as your chief analyst is traveling this week.
Special Bulletin November 9: We are moving Peabody Energy (BTU) to Sell. The company reported a third quarter loss from continuing operations of $(0.66)/share, much better than consensus estimates of a $(0.92)/share loss. We are also moving Weyerhaueser (WY) to Sell. We discussed in our recent earnings note that the company is highly dependent upon the continued surge in lumber prices to support its profits, as nearly all other segments have shown minimal improvements over the past few years.
Special Bulletin November 9: We are moving Barrick Gold (GOLD) to Sell, as we believe the company’s turnaround is well underway, widely-known and increasingly factored into the share price.
Monthly Issue October 28: This month Bruce looks at the oil refining industry. Unlike many technology stocks, this group is the opposite of “priced for perfection.” The industry’s products will remain relevant for a long time, despite investors’ enthusiasm for a shift to electric-powered vehicles. Also, the pandemic will eventually pass and demand for refined products (gasoline, diesel, heating oil and jet fuel) will return, lifting these company’s earnings and stock prices. We acknowledge the tax and regulatory risks but see real value in the higher quality and better-financed refinery companies. Bruce’s feature recommendation is the oil refining company Valero Energy (VLO), offering what he sees as the best risk/reward traits among a group with strong cyclical turnaround potential.
Wall Street’s Best Investments
Daily Alert November 13: The Procter & Gamble Company (PG) (HAS) DRIP Investor
Daily Alert November 12: First Midwest Bancorp, Inc. (FMBIO) Income Securities Investor
Daily Alert November 11: Hasbro, Inc. (HAS) The Prudent Speculator
Daily Alert November 10: International Business Machines Corporation (IBM) Sound Advice
Daily Alert November 9: Masco Corporation (MAS) Directinvesting.com
Monthly Issue October 15: Market volatility has eased a bit this past month, with the Dow Jones Industrial Average gaining almost 1,000 points. The service industry, according to ISM, improved, and the unemployment rate dropped to 7.9% for September. As you’ll see in our Advisor Sentiment Barometer and Market Views, sentiment remains about the same. It seems investors are awaiting the election results before they make any big moves. Nonetheless, our contributors have been very busy selecting ideas that look interesting—no matter how the election turns out. Nancy begins this issue with our Spotlight Stock, Celanese Corporation (CE), a specialty chemical company that is growing its global market share. In Nancy’s Feature article, she explores the catalysts that are driving industry growth, as well as the unique properties that should keep our Spotlight Stock in an industry-leading position.
Ask the Experts
Cabot Growth Investor
Question: Have you ever used or thought of using a stock’s price percentage above the 200 dma as an overbought indicator? What is your favorite oversold indicator?
Mike: We do look at that, but like everything, context is key – many times a stock can get very extended early in its run, have a pullback or two, and then motor even higher – to us, we use it but only after a stock has been running for a few months type of thing. It does have value but I would caution against using it as a single measure of “overbought-ness.” I don’t really use any oversold indicator, but I do sometimes like stochastics if you’re talking about a stock heading up – it basically coincides with a 2-3 week correction toward support. But really I tend to just focus mostly on price/volume
Cabot Top Ten Trader
Question: I brought GH on your advice and sold a half position as you entered and exited the trade pretty quickly. I tend to ease out of a position instead of selling everything at once. The stock has performed well since you sold. It is worth holding on to or sell into strength during this rotation? When you move to cash do you just recommend straight cash funds or going to some kind of short duration bond fund while waiting to redeploy?
Mike: GH – not really on the top of my leader board, but it’s acting well enough. If we owned it, we’d probably hold on, but with a stop in the 105 area (certainly above your cost anyway). I would just say it looks OK, not amazing, but we’ll see how it goes. As for cash – just a money market fund. We’re not looking to get an extra 10 basis points in the portfolio by purchasing some bond fund that could go down anyway! We want the liquidity. But feel free to try out whatever, just realize you’re not getting much even if you take the risk of owning a bond fund short-term.
Quarterly Cabot Analyst Meeting
The recording of the Cabot Prime Members Meeting with the Analysts from October 21, 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.
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 |
|---|---|---|---|---|---|---|
| ABBV | Buy | |||||
| AEM | Buy | |||||
| APT.AX | Buy 1/2 | |||||
| ARE | Hold | |||||
| AVGO | Hold | |||||
| AZEK | Hold | |||||
| BABA | Hold | |||||
| BGS | Buy | Buy | ||||
| BIP | Buy 2/3 | |||||
| BMY | Buy | |||||
| BSCL | Buy 1/2 | |||||
| CCI | Hold 1/2 | |||||
| CGC | See Advisory | |||||
| COLM | Buy | Buy | ||||
| CRLBF | See Advisory | |||||
| CURLF | See Advisory | |||||
| DDOG | Sell | Sold | ||||
| DLR | Hold | Buy | ||||
| DOW | Hold | |||||
| EPD | Hold | |||||
| EQH | Buy | |||||
| FIVE | Buy | |||||
| GM | Buy | Buy | ||||
| GRWG | See Advisory | |||||
| GTBIF | See Advisory | |||||
| HTHT | Hold | |||||
| IIPR | See Advisory | Hold 2/3 | ||||
| JUSHF | See Advisory | Hold 2/3 | ||||
| KO | Buy | |||||
| LGIQ | Buy 1/2 | |||||
| LLY | Buy | Buy | ||||
| MKSI | Sell | |||||
| MO | Buy | |||||
| MPC | Hold | |||||
| NEE | Hold | Hold 1/2 | ||||
| NET | Hold 1/2 | |||||
| NUAN | Buy | |||||
| NVCR | Buy | Buy 1/2 | Buy | |||
| O | Buy | |||||
| PGX | Hold 1/2 | |||||
| PINS | Sell 1/3 | Buy | ||||
| PWR | Sold | |||||
| QCOM | Buy | Hold 2/3 | ||||
| REMX | Sell | |||||
| ROKU | Buy 1/2 | |||||
| SE | Hold 1/2 | Hold | ||||
| SOLO | Buy 1/2 | |||||
| SPCE | Buy | Buy | ||||
| SSO | Buy | |||||
| STAG | Hold 1/2 | |||||
| TAP | Buy | Buy | ||||
| TCNNF | See Advisory | Buy | ||||
| TMX | Buy | |||||
| TOT | Sell | |||||
| TPB | See Advisory | |||||
| TRSSF | See Advisory | |||||
| TSLA | Hold | |||||
| TSM | Buy 1/2 | Buy | ||||
| TSN | Buy | |||||
| TWLO | Hold | |||||
| UEIC | Hold | |||||
| VIAC | Buy | |||||
| VIPS | Buy 1/2 | |||||
| VLO | Hold 1/2 | |||||
| VOYA | Sell | |||||
| VZ | Buy | |||||
| XEL | Hold 2/3 | |||||
| ZM | Hold |