Cabot Prime Week Ending October 2, 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)
Note: We had some recording issues with this week’s video—audio and visual did not sync correctly. We apologize for the inconvenience.
In this week’s stock market video, Mike Cintolo discusses the market’s improving position, even given the uncertainty that was raised on Friday--the intermediate-term trend remains iffy, which does argue for some caution, but the action of leading stocks has been extremely encouraging in recent weeks, even when the indexes struggle. Mike’s been doing a little buying of late, and shares with you some of many names on his watch list.
UPCOMING CABOT EVENTS:
Turnaround Investing with Bruce Kaser
FREE WEBINAR: Thursday, October 22 Sign up now.
Cabot Prime Member Call – October 2020
FREE WEBINAR FOR PRIME MEMBERS ONLY: Wednesday, October 21 Sign up now.
Cabot Retirement Club Member Call - October 2020
FREE WEBINAR FOR PRIME MEMBERS ONLY: October 29, 2020 Sign up now.
Advisory Services
Cabot Growth Investor
Bi-weekly Update October 1: Do a little more buying. The overall market has snapped back nicely in recent days, and while our Cabot Tides have yet to turn bullish (they’re on the fence here), there’s been plenty of encouraging action among individual stocks. We’re still of the mind to be cautious overall—this correction could easily persist a few more weeks—but we are going to put a little money to work tonight, filling out our positions in both Pinterest (PINS) and Seattle Genetics (SGEN). Our cash position will still be around 33%, giving us cushion should the sellers reappear.
Bi-weekly Issue September 24: In tonight’s issue, Mike goes over all our positions (including the new buys, which we think are battling for pole position for the market’s next advance) and talks about one simple chart tool that can help you spot other potential leaders going forward, too. Since the last issue, we’ve sold Spotify (SPOT) and taken partial profits in ProShares Ultra S&P Fund (SSO), but we added stakes in Five Below (FIVE), Pinterest (PINS) and Seattle Genetics (SGEN). All in, that leaves us with a cash position of around 44%.
Other Stocks of Interest September 10: Follow ups to stocks featured May 7, 2020 (issue 1445) to September 10, 2020 (issue 1454). 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 October 2: Coming into today, there were many growing positive pieces of evidence out there. For the major indexes, they had quickly recouped about half of their September declines in just a few days—the intermediate-term trend hadn’t yet turned up, but the bounce certainly wasn’t anemic. Mike’s suggested buys today are: Alibaba (BABA) and Guardant Health (GH). We have no recommended sells today—of course, that can always change come Monday, but after pruning quite a bit from the list over the past few weeks, we’re sticking with what we have right now.
Weekly Issue September 28:Mike has begun to see support show up in the market, partially in the indexes but more so among leading (and potential leading) stocks; we’re seeing many show resilience and a bunch begin to set up in legitimate launching pads. That doesn’t mean these stocks are guaranteed to get going, but it’s a first step to keep an eye on going forward. This week’s list contains a group of names that’s attracting money, including a few that have popped on news. Mike’s Top Pick is CrowdStrike (CRWD), which is one of the few growth-oriented stocks that’s actually been slowly pushing higher in recent weeks as the market has come in.
Cabot Undervalued Stocks Advisor
Weekly Update September 30: With all of our stocks now having price targets assigned to them, we thought we’d share with you some of our process behind how we set those price targets. In setting the targets, we typically use the formula: valuation multiple x earning power = price target. When determining the multiple, we look at the company’s valuation history and how that compares to its fundamentals, including revenue and profit levels and growth, changes in its business and capital mix, and other metrics including its leadership and culture. Bruce has no changes to the portfolio today.
Monthly Issue September 2: With this issue, Bruce is setting price targets for many of our stocks. In subsequent issues, he will provide targets for the remaining stocks as well as for each newly recommended stock. Price targets help us stay the course when our stocks weaken on noise, and help provide a tangible exit point. The assumptions behind the price targets provide a roadmap to gauge the company’s recovery process. Bruce has two portfolio changes today: Molson Coors Beverage Company (TAP) moves from Buy to Strong Buy and Voya (VOYA) moves from Strong Buy to Buy.
Cabot Stock of the Week
Weekly Issue September 28: This morning brought some broad buying to the market, though not enough to reverse the negative signal by our intermediate-term trend-following indicator last week. And that means that raising cash—by selling your weakest growth stocks—is still a good idea. Tonight’s low-risk recommendation, Digital Realty Trust (DLR), is from Tom Hutchinson’s Cabot Dividend Investor. It’s a company that has a great combination of real estate and technology, Here are today’s portfolio changes: Big Lots (BIG), Global X Cybersecurity ETF and RingCentral (RNG) all move to Sell and Nikola (NKLA) moves to Hold.
Cabot Global Stocks Explorer
Bi-weekly Issue October 1: We enter the fourth quarter of 2020 today with a long-term game plan, not a 2-minute drill. The Explorer portfolio had a good week, with all positions advancing, though some more than others. Carl is comfortable with a cash position of 25%, though he will need to sell a couple of the weaker performers in our portfolio in the coming weeks to make room for new ideas in emerging markets. He gives us an update on Kraken Robotics (KRKNF), (PNG.V in Canada) and Luckin Coffee (LKNCY) and his new stock recommendation is Vipshop Holdings (VIPS), a stock that he hopes will benefit from the biggest shopping day in the world. There are no portfolio changes today.
Bi-weekly Update September 24: After taking some profits from your winners and weeding out a few poor performers, you likely have some cash available to put to work. If you have a little bit of patience, you could do worse than exploring emerging markets. These countries contain about 80% of the world’s population and almost 60% of GDP, more than double their share from two decades ago. Take, for example, the WisdomTree Emerging Markets High Dividend Fund (DEM). This is the sort of ETF that you could tuck into your portfolio and forget about. Meanwhile, Carl will be putting forth some specific emerging market stocks in the coming weeks for our Explorer portfolio. Carl has one portfolio change today: Global X Cybersecurity ETF (BUG) moves from hold to sell.
Cabot Dividend Investor
Weekly Update September 30: The market seems to be handling things well so far. The near-correction isn’t much of a comeuppance after rising 60% in five months. It still looks like a market that wants to go higher when it isn’t be pelted with negative headlines. As of now, it looks like it will be a choppy market in the months ahead. It doesn’t appear that a major downmove is in the cards unless an unexpected negative event of significant scale occurs. That’s not so bad. There could also be powerful upside when we move past the election and the virus. Tom has no rating changes today.
Monthly Issue September 9: In this uncertain environment, Tom found a rare stock. It is a company that benefits from the undeniable trend toward technological proliferation. It has solid earnings growth and stock performance. But it provides these benefits with remarkably low volatility. Digital Realty Trust (DLR) is off the high after a rare pullback and selling at a cheap price. Historically, it has less than a quarter of the volatility of the overall market. It’s a great forward-looking investment for this uncertain environment. He has no other portfolio changes.
Cabot Marijuana Investor
Monthly Issue September 30: Over the past seven weeks, our portfolio has shifted from fully invested to 49% cash—and because of that we’ve lost less than the Marijuana Index; in fact we still have a decent gain YTD. Hopefully, you’ve done similarly. And now we’ll raise just a little more cash by selling our final stake in Aphria (APHA). Other changes: Innovative Industrial Properties (IIPR) is upgraded to Buy, and Turning Point Brands (TPB) is downgraded to Hold.
Update September 23: Tim will sell half of both Aphria (APHA) and Canopy (CGC), because money is clearly still coming out of Canadian marijuana stocks; peer Aurora (ACB) released a terrible report yesterday and is down big today. He will also sell one-third of the positions in Curaleaf (CURLF), Green Thumb (GTBIF) and Trulieve (TCNNF). The first two stocks are holding at support, but we are overweighted, and Trulieve has seen some heavy selling in the past week and has no support level in sight.After these sales, the portfolio will be roughly 49% in cash.
Special Report: April 29, 2020
U.S. Vertically Integrated Multistate Operators (MSOs)Cabot Early Opportunities
Special Bulletin September 24: With 32 stocks in our portfolio and a market that’s going through all manner of gyrations right now, it’s time to part ways with a few of our underperforming positions. Sell OneWater Marine (ONEW), Liberty Media Formula One (FWONK) and SelectQuote (SLQT), Sell Half Schrodinger (SDGR) and Keep Holding Nikola (NKLA).
Monthly Issue September 16: Tyler’s advice today is to continue to average into the stocks that are most attractive to you and which you think you’ll have the best chance of holding onto through the inevitable corrections. The September selloff may or may not be over. The market is trying to look forward into the first half of 2021 at a time when vaccines could hit the market. There is lot of uncertainty surrounding what could happen, and how evolving business and consumer trends will shift. And that’s going to continue to work through the market in hard-to-predict ways. Our game plan will continue to be to find companies that can excel now, in 2021, and beyond. Since we often don’t know exactly how things will play out it’s important to always average in. Today’s Top Pick is Kinsale Capital (KNSL), the only publicly traded property and casualty (P&C) insurer focused exclusively on the excess and surplus (E&S) lines market in the U.S.
Cabot Profit Booster
Weekly Issue September 29: The Stock – Owens & Minor (OMI) We took a swing at OMI back in July after it catapulted to new highs on earnings, but were knocked out a few days later on a big shakeout. Still, we’ve kept our eye on it, and while the stock meandered for many weeks after that, last week’s bumped guidance caused another big-volume eruption. Stop - 17. The Covered Call Trade: Buy Owens & Minor (OMI) Stock at 22.25, Sell to Open November 22.5 Strike Calls (exp. 11/20) for $2.50, or a Net Price of 19.75 or less.
Cabot Income Advisor
Weekly Update September 30: The environment for writing calls has deteriorated of late as the market uptrend has been interrupted. A market moving higher increases investors’ willingness to speculate on higher stock prices, and call premiums rise. A choppy market reduces demand and call premiums.
Special Bulletin September 29: Sell V Nov 20 200 call at $10.00 or higher, Expiration date: November 20 Strike price: $200, Call price: $10 or higher
Monthly Issue September 23: There has been a lot of activity in the portfolio this past week. Four positions, including AABV, IIPR, QCOM and USB, had covered calls written on them with an options expiration date of last Friday, September 18. Three of those positions exceeded the strike price and were called away (IIPR, QCOM, and USB). There are currently only two positions with outstanding calls. The recent downward-trending market has reduced the level of call premiums and it isn’t an ideal point in time to write more. But things can change quickly. Tom’s featured stock is: Visa (V).
Special Report:
Off the Radar Cash GeneratorsSpecial Report:
The Covered Call Income MachineCabot Turnaround Letter
Special Bulletin October 2: We are moving Amplify Energy (AMPY) from HOLD to SELL. In our letter on Sept 8, we decided to retain our HOLD rating on Amplify Energy, while acknowledging that their clock, and our patience, were wearing rather thin. We had also described how Amplify was essentially a call option on oil prices, with a limited remaining time window until that option expired.
Weekly Update October 2: With this note, we combine our regular Friday afternoon Members-Only Podcast with any earnings updates. By combining these, you will receive the same research, perspective and analysis as always yet in one easy-to-read email. As today is the first Friday after the monthly Cabot Turnaround Letter is published, we are also including the Catalyst Report. We hope you find the combined format more convenient. Please let me know what you think and how this works for you.
Monthly Issue September 2020: Energy Service Companies: With a small cadre of mega-cap technology stocks driving the stock markets to record levels, we are, as contrarian investors, looking for industries that are extremely out of favor yet remain fully relevant in the economy. One such industry is energy service. These companies provide all the services, drilling rigs and related equipment and supplies that oil and gas producers need to find, drill for and produce their hydrocarbons. In essence, they provide the picks and shovels. Producers long-ago outsourced these functions to the specialists.
Wall Street’s Best Investments
Daily Alert October 2: MongoDB, Inc. (MDB) Pivotal Point
Daily Alert October 1: BioTelemetry, Inc. (BEAT) Investor Advisory Service
Daily Alert September 30: Sell: Swire Pacific Limited (SWRAY) Cabot Global Stocks Explorer
Daily Alert September 30: B&G Foods, Inc. (BGS) Cabot Dividend Investor
Daily Alert September 29: SAP SE (SAP) Drip Investor
Daily Alert September 28: Seres Therapeutics, Inc. (MCRB) Canaccord Genuity Research
Monthly Issue September 17: The markets have been a bit choppy of late, with the Dow Jones Industrial Average rising to 29,000 at the beginning of the month, then retreating and rising again. It looks like Fall may be a little volatile. As you’ll see in our Advisor Sentiment Barometer and Market Views, sentiment remains bullish, with a hint of caution. Nancy begins our issue this month with her Spotlight Stock, Realty Income Corporation (O), a REIT with above average yield, and a Dividend Aristocrat. In her Feature article, she further explores the REIT industry and explains why it’s almost always a good time to hold a REIT or two in your portfolio.
Ask the Experts
Cabot Growth Investor
Question: Hope all is well. And thank you for your insights. As NET was a part of our portfolio and after it broke down w/recent weakness, we moved off that listing… During later 2/3rds Sept seems to have gained strength now above the 25/50 day line… BTW, I still own a small position. If or when you re-evaluate a former position, what do you tend to look at to make a re-buy decision? Same as a new listing, like the business story, strength in RS, higher highs, higher lows, ect. Is NET playing today where you would continue to Watch or potentially rebuy a minor position.
Mike: Yep, I’m keeping an eye on it, and it’s bounced much better than most growth stocks. As for re-buying, we could, but we compare it to all the other names out there that we don’t own. Right now, it’s a potential buy, but wouldn’t say it’s at the very top of our watch list – but if I still owned some I’d definitely hold on. If it tightened up a bit, maybe it would provide a better entry, but at this point I’d almost like to see it ramp higher and then play the first pullback.
Question: I really like what you are doing and helping us all out. But I have to say as a technical trader (which you are) how can you sell CRM right now? That chart is exactly what I want to trade-long term up tread, with break out, and then pause (on sale) without breaking the gap. Thanks for your great work there at Cabot.
Mike: Thanks for writing, and the kind words. The answer is simple – it tripped our stop/loss limit, which was in there because we “bought” after the gap before the correction. I agree the stock isn’t broken and actually closed three weeks tight (usually a decent sign) lately. So it’s not something we’re bearish on – but from a trade perspective, it tripped us out, so we had to go with that.
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.
| 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 | |||||
| APHA | Sell | |||||
| APT.AX | Buy 1/2 | |||||
| ARE | Hold | |||||
| AVGO | Hold | |||||
| AZEK | Hold | |||||
| BABA | Hold | |||||
| BE | Buy | |||||
| BGS | Buy | Buy | ||||
| BIG | Sell | |||||
| BIP | Buy 2/3 | |||||
| BMY | Strong Buy | |||||
| BSCL | Buy 1/2 | |||||
| BUG | Sold | Sell | ||||
| CCI | Hold 1/2 | |||||
| CGC | See Advisory | |||||
| COLM | Hold | Buy | ||||
| CRLBF | See Advisory | |||||
| CURLF | See Advisory | |||||
| DLR | Buy | Buy | ||||
| DOW | Hold | |||||
| DXCM | Hold | |||||
| EPD | Hold | |||||
| EQH | Strong Buy | |||||
| FIVE | Buy | |||||
| GM | Strong Buy | |||||
| GRWG | See Advisory | |||||
| GTBIF | See Advisory | |||||
| GTLS | Buy | |||||
| HTHT | Hold | |||||
| IIPR | Buy | Hold 2/3 | ||||
| KL | Buy 1/2 | |||||
| LGIH | Sold | |||||
| LLY | Buy | Buy | ||||
| MKSI | Hold | |||||
| MO | Buy | |||||
| MPC | Hold | |||||
| NEE | Hold | Hold 1/2 | ||||
| NET | Hold 1/2 | |||||
| NKLA | Hold | |||||
| NVCR | Buy | |||||
| PGX | Hold 1/2 | |||||
| PINS | Buy another 1/2 | |||||
| PWR | Buy | |||||
| QCOM | Hold | Hold 2/3 | ||||
| REMX | Buy 1/2 | |||||
| RNG | Sell | |||||
| ROKU | Buy 1/2 | |||||
| SE | Hold 1/2 | Hold | ||||
| SGEN | Buy another 1/2 | |||||
| SPCE | Buy | Buy | ||||
| SSO | Hold | |||||
| STAG | Hold 1/2 | |||||
| TAP | Buy | Strong Buy | ||||
| TCNNF | See Advisory | Hold | ||||
| TOT | Hold | |||||
| TPB | Hold | |||||
| TSLA | Hold | |||||
| TSM | Buy 1/2 | Buy | ||||
| TSN | Buy | |||||
| TWLO | Hold | |||||
| UEIC | Buy | |||||
| V | Buy | |||||
| VIAC | Buy | |||||
| VIPS | Buy 1/2 | |||||
| VLO | Hold 1/2 | |||||
| VOYA | Buy | |||||
| VZ | Buy | |||||
| WING | Hold | |||||
| XEL | Hold 2/3 | |||||
| ZM | Hold |