Cabot Prime Week Ending November 6, 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 talks about the market’s stunning turn up this week, which, while not decisively turning the intermediate-term trend up, is very encouraging, especially coming on the heels of what looks like a normal 10-week consolidation. He’s not diving in head first but Mike does think doing some buying makes sense, and the next week or two will probably tell us whether this is the start of a new, sustained upmove.
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 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.
Bi-weekly Update October 29: Be cautious. Growth stocks have been under pressure since early/mid-October, and our Cabot Tides buy signal has fallen by the wayside. It’s not a disaster out there, of course, but we continue to focus mostly on individual stocks, pruning those that crack while holding those that are pulling back normally. We sold Dexcom (DXCM) and Penn National (PENN) and are sitting with a cash position of 37%. Mike has no new changes tonight.
Other Stocks of Interest October 8: Follow ups to stocks featured June 4, 2020 (issue 1447) to October 8, 2020 (issue 1456). 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 6: Put it all together, and this week has the potential to be a decisive one, but we still need to verify that going forward. In terms of what to do, yes, we think you can extend your line, but do so in a step-by-step process—if this really is a kickoff, then it will last months, not days, so some buying now followed by more buying if you develop profits makes sense. We’re likely to move our Market Monitor back up a notch or two to reflect the evidence this week. Mike’s buy ideas today are: Exact Sciences (EXAS), Freshpet (FRPT), Roku (ROKU) and Zendesk (ZEN). After a wave of sells in recent weeks, Mike has none today.
Weekly Issue November 2: Near-term, stocks are back in the soup, and while the headlines will be coming fast and furiously this week (earnings and the election), the onus is on the buyers to step up. Until that happens, we advise a cautious stance—holding a good chunk of cash makes sense, while keeping new positions on the small side and honoring your stops and loss limits. We’re pulling down our Market Monitor another notch to a level 5. Meanwhile, it’s easiest to spot strength in a down market, so the next couple of weeks should be telling. This week’s list has a broad array of stocks and sectors on it, and Mike’s Top Pick is Pinduoduo (PDD), one of many resilient Chinese names that’s actually picking up steam while the market sags.
Cabot Undervalued Stocks Advisor
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.
Weekly Update October 28: While the market action has been somewhat exciting this week (though in the wrong direction), it was fairly dull for Cabot Undervalued Stocks Advisor recommended stocks in terms of news. This news drought will fade as five companies report later this week, with six more the following week. In a market that is nervous about the pandemic, next week’s elections and the ongoing lack of a stimulus package, investors will look to this company-specific information to price the shares. Bruce has no changes to the portfolio today.
Cabot Stock of the Week
Weekly Issue November 2: With the election tomorrow, the biggest cause of uncertainty will soon be behind us, leaving investors able to focus once again on what’s important—growth and valuation. In the meantime, it’s worth noting that the market’s technical strength deteriorated last week, turning our intermediate-term timing indicator negative once again. For that reason, among others, we have a couple of sell recommendations today. As for today’s recommendation, General Motors (GM), it’s one of America’s most well-known companies, and selling for a bargain price as management steers the big old beast into what could be an exciting future. Here are today’s portfolio changes: Datadog (DDOG) and Quanta Services (PWR) both move to Sell and Digital Realty Trust (DLR) moves to Hold.
Cabot Global Stocks Explorer
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.
Bi-weekly Issue October 29: Markets are choppy, which is normal considering uncertainty is high and we’re less than a week from the presidential election. Today, Carl looks at what history can teach us about politics and markets and why it might be a bit different this time. Today’s new idea, ElectraMeccanica (SOLO), is an electric vehicle play from Canada that is under the radar of even the trends of most avid supporters. There is one portfolio change today: Visa (V) moves from Buy to Sell.
Cabot Dividend Investor
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.
Monthly Issue October 14: Certain portfolio positions are breaking out and we’ll let them ride. Most notably, IIPR and QCOM have soared to brand new all-time highs over the past three weeks and could continue to run higher for a while. Additionally, CCI and ARE, as well as DLR, have all started to move higher after a long sideways period. They might continue to move in the near term. While several positions are perking up, there’s a couple that haven’t been working and still aren’t working, namely EPD and VLO. The choppy market hated these stocks just as much as the good market, and there are no signs of life. However, both companies will report third-quarter earnings in the weeks ahead, and Tom is hoping the reports will act as a catalyst for improved performance in the months ahead. Today’s featured stocks are: AbbVie Inc. (ABBV) and Eli Lilly and Company (LLY).
Cabot Marijuana Investor
Update November 4: Yesterday, voters in all five states where it was on the ballot—Arizona, Mississippi, Montana, New Jersey and South Dakota—said they were in favor of legalization, and in every case, the majority vote was clearly positive, not even close. Thus Tim is optimistic that marijuana stocks have farther to run in this phase, hitting an eventual big peak (perhaps) when legal sales in New Jersey (the big prize last night) truly begin. The broad market, however, is still a big question mark. Even after the strength of yesterday and today, the intermediate trend is effectively neutral, which means there’s a good chance the broad market may turn down right around the corner. But until that happens, he’s happy staying heavily invested in our current portfolio—and holding our 17% cash position. As of today, our portfolio is up 33.4% YTD, while the Marijuana Index is down 4.6%,
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 October 30: We added Kinsale Capital in September and have been up around 10% at the most since. However, in the short term there may be a lack of incentive for new money to flow in and as a recent addition with no gain and no loss this is a natural one for us to step aside from now. Kinsale goes on Tyler’s watch list for potential inclusion in the future. SELL. He also gives earnings updates on: Pinterest (PINS), Five9 (FIVN), Bandwidth (BAND), Dynatrace (DT) and Livongo (LVGO).
Special Bulletin October 27: In last week’s Issue of Cabot Early Opportunities, Tyler suggested that we’d kick DraftKings (DKNG) to the curb if it couldn’t find firm footing around 41. He’s stepping aside here and putting the stock back on our watch list. He’s not opposed to buying it back when it looks better. He’s buying another half of both Jamf Holding (JAMF) and Vital Farms (VITL). And, Varonis (VRNS) remains at Buy after a great Q3 report.
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
Update November 3: Adjust Existing Marvell Technology (MRVL) Position - As Jacob noted in this morning’s Covered Call email our Marvell Technology (MRVL) position broke his mental stop last week. However, the trigger for the stock decline is an interesting situation.
Weekly Issue November 3: The Stock – Pinterest (PINS) - PINS gapped up on Q2 earnings in August, then went dead for a few weeks just south of its old highs, putting the finishing touches on a yearlong post-IPO consolidation. The breakout came in September, and the stock has acted well since then, including last week’s big-volume gain after Q3 earnings. PINS definitely looks like a fresh leader that should head higher over time.Stop - 45. The Covered Call Trade - Buy Pinterest (PINS) Stock at 59, Sell to Open December 60 Strike Calls (exp. 12/18/2020) for $4.50, or a Net Price of 54.5 or less.
Cabot Income Advisor
Weekly Update November 4: In the absence of one-party rule, it is unlikely that anything draconian gets done. Neither president can really screw things up too badly. Healthcare stocks are on fire. The indexes are up more than 5%. ABBV is almost 10% higher on the day. It’s because the risk of game-changing legislation is now off the table. Technology stocks are also rallying on a much lower chance of antitrust legislation. That’s the way the market is seeing things anyway. We might not be out of the woods yet, depending on how ugly things get or how long the battle drags on. But we’ll get through this at some point in the not-too-distant future. Then the market can focus on the virus and a vaccine.
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 6: This week, ten companies reported, with Berkshire Hathaway (BRK.B) reporting tomorrow (Saturday): Barrick Gold (GOLD), Conduent (CNDT), Gannett (GCI), GCP Applied Technologies (GCP), General Motors (GM), Jeld-Wen Holdings (JELD), LaFargeHolcim (HCMLY), Meredith Corporation (MDP), Mosaic (MOS), and ViacomCBS (VIAC). Bruce has no rating changes this week. To listen today’s podcast and view the latest Catalyst Report click here.
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 6: Terminix Global Holdings, Inc. (TMX) Cabot Undervalued Stocks Advisor
Daily Alert November 5: InfraCap MLP ETF (AMZA) The Dividend Hunter
Daily Alert November 4: Short: Acuity Brands, Inc. (AYI) Shortex Market Letter
Daily Alert November 4: Quest Diagnostics Incorporated (DGX) Shortex Market Letter
Daily Alert November 3: Sell: ManTech International Corporation (MANT) Upside
Daily Alert November 3: MYR Group Inc. (MYRG) Upside
Daily Alert November 2: Stanley Black & Decker, Inc. (SWK) Dividend Advisor
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 Profit Booster
Question: I have 3500 shares of PEIX Is there a way for me to protect from more downside but I don’t want to sell the stock.
Jacob: The best way to protect yourself from stock declines is to buy Put options.However, when you buy a put, you have to Pay a premium, which is opposite of Collecting a premium with covered calls. Essentially you are paying for an insurance policy. One way to do this is to buy the January 5 puts. If you were to buy 1 of those puts it would cost you $95. To protect 3,500 shares you would have to buy 35, or a total outlay of $3,325 (not cheap). However, if PEIX were to drop well below 5 you would be happy you owned those puts. Super tough call on buying those puts as the insurance would eat into your profits in that stock.
Cabot Top Ten Trader
Question: As a subscriber to CTT and Profit Booster, I owned both IPHI and MRVL when the acquisition was announced last week. I also have covered call options against MRVL based on the Profit Booster recommendation. So my main question is whether it is better to hold IPHI through the acquisition or is it generally better financially to close the IPHI position as soon as possible? Or said another way, is there some advantage on waiting to the closing of the acquisition? Should this decision be based on my expectations on MRVL (stop loss was just hit on CTT and almost on PB). I was kind of waiting for the election volatility to die down before making any decisions about market direction and evaluate the most recent sell signals. Any other thoughts or recommendations based on this complex situation?
Mike: All I can say is how I usually handle things – we tend not to look a gift horse in the mouth so we would have sold IPHI on the buyout announcement, either right away or within a day or two. And MRVL broke down on the news, so we would have sold that, too. I hear you on the covered call, so I’ll let Jacob handle that aspect of it. But we’d at least be paring back on both given the action and news. But that’s simply how I have handled things over time.
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 | Hold | |||||
| AEM | Buy | |||||
| APT.AX | Buy 1/2 | |||||
| ARE | Hold | |||||
| AVGO | Hold | |||||
| AZEK | Hold | |||||
| BABA | Hold | |||||
| BE | Sold | |||||
| BGS | Buy | Buy | ||||
| BIP | Buy 2/3 | |||||
| BMY | Buy | |||||
| BSCL | Buy 1/2 | |||||
| CCI | Hold 1/2 | |||||
| CGC | See Advisory | |||||
| COLM | Hold | Buy | ||||
| CRLBF | See Advisory | |||||
| CURLF | See Advisory | |||||
| DDOG | Buy | Sell | ||||
| DLR | Hold | Buy | ||||
| DOW | Hold | |||||
| DXCM | Sold | |||||
| EPD | Hold | |||||
| EQH | Strong Buy | |||||
| FIVE | Buy | |||||
| GM | Buy | Strong Buy | ||||
| GRWG | See Advisory | |||||
| GTBIF | See Advisory | |||||
| HTHT | Hold | |||||
| IIPR | See Advisory | Hold 2/3 | ||||
| JUSHF | See Advisory | Hold 2/3 | ||||
| LGIQ | Buy 1/2 | |||||
| LLY | Buy | Buy | ||||
| MKSI | Hold | |||||
| MO | Buy | |||||
| MPC | Buy | |||||
| NEE | Hold | Hold 1/2 | ||||
| NET | Hold 1/2 | |||||
| NUAN | Buy | |||||
| NVCR | Buy | |||||
| PGX | Hold 1/2 | |||||
| PENN | Sold | |||||
| PINS | Buy | Buy | ||||
| PWR | Sell | Sold | ||||
| QCOM | Buy | Hold 2/3 | ||||
| REMX | Buy 1/2 | |||||
| ROKU | Buy 1/2 | |||||
| SE | Hold 1/2 | Hold | ||||
| SGEN | Sold | |||||
| SOLO | Buy 1/2 | |||||
| SPCE | Buy | Buy | ||||
| SSO | Hold | |||||
| STAG | Hold 1/2 | |||||
| TAP | Buy | Strong Buy | ||||
| TCNNF | See Advisory | Buy | ||||
| TMX | Buy | |||||
| TOT | Hold | |||||
| TPB | See Advisory | |||||
| TRSSF | See Advisory | |||||
| TSLA | Hold | |||||
| TSM | Buy 1/2 | Buy | ||||
| TSN | Buy | |||||
| TWLO | Buy | |||||
| UEIC | Buy | |||||
| V | Sold | |||||
| VIAC | Buy | |||||
| VIPS | Buy 1/2 | |||||
| VLO | Hold 1/2 | |||||
| VOYA | Buy | |||||
| VZ | Buy | |||||
| XEL | Hold 2/3 | |||||
| ZM | Hold |