Cabot Prime Week Ending October 23, 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, Tyler Laundon talks about one of the biggest trends out there - the race to bring Covid-19 vaccines and therapies to market. He highlights the bioprocessors as crucial players as the world tries to get 13 billion vaccine doses to market by the end of 2021.
UPCOMING CABOT EVENTS:
Cabot Retirement Club Member Call - October 2020
FREE WEBINAR FOR PRIME MEMBERS ONLY: October 29, 2020 Sign up now.
Software Stocks Today: Buy, Sell, or Hold? with Tyler Laundon
FREE WEBINAR: Thursday, November 19 Sign up now.
Advisory Services
Cabot Growth Investor
Bi-weekly Issue October 22: Near-term, you should watch where you step, but big picture, Mike continues to see just about every signpost pointing higher, so you also want to lean bullish and give your strong, profitable stocks some wiggle room. Since the last issue, we’ve added a half position in Penn National (PENN) and sold our stake in Wingstop (WING), which leaves us with around 26% in cash. There are no other portfolio changes today.
Special Bulletin October 19: The overall evidence remains mostly positive, though after a heady rebound, the indexes and many growth stocks are correcting and consolidating. We’re optimistic, but we’re also taking things on a stock-by-stock basis—tonight, that means selling our position in Wingstop (WING), which has been unable to get off its knees. That will leave us with around 26% in cash.
Bi-weekly Update October 15: The market took a hit today, which wasn’t totally unexpected; overall, the damage was contained, with the Cabot Tides remaining positive and most growth stocks still in good shape. Mike is still leaning bullish, but he’s also taking things on a stock-by-stock basis. In the Model Portfolio, he’s adding a half-sized position (5% of the portfolio) in Penn National Gaming (PENN), which will leave us with around 18% in cash.
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 October 23: The majority of the evidence is still pointed up, and we continue to generally take things on a stock-by-stock basis; there remain many stocks that are acting well, and we’re seeing a decent number of good-looking entry points as things pull in. Overall, then, we continue to lean bullish, but picking your spots and watching your risk (not jumping in right ahead of earnings, etc.) is key. Mike’s buy ideas today are: Brinker Int’l. (EAT), Gap Inc (GPS), NovoCure (NVCR) and Square (SQ). His sells are: iRhythm Technologies (IRTC), Meritage (MTH), Toll Brothers (TOL), Tupperware (TUP) and Wingstop (WING).
Weekly Issue October 19: We like to go with the evidence that’s in front of us at any given time, and if you do that today, you’ll see that most of the key evidence continues to look solid—the intermediate-term trend of the major indexes is tilted higher, while more and more leading stocks are acting constructively; most have pulled back reasonably (so far) after heady runs during the prior three-plus weeks. Of course, we’re not leaving our brains at the door either, as earnings season and the upcoming U.S. elections certainly have the potential to carve out a few potholes, while sentiment has picked back up after the August/September dip. Thus, we remain flexible and think picking buy points is vital, but overall, we remain mostly bullish. This week’s list has a ton of potential pullback buys, though you have to be aware of earnings dates. Mike’s Top Pick is Beyond Meat (BYND), which is enjoying a normal breather and looks to be approaching a good risk-reward entry point.
Cabot Undervalued Stocks Advisor
Weekly Update October 21: The market remains in Limbo-Land this week, as it has for several weeks now. The factors discussed in our previous two letters haven’t changed much, except that the issues (pandemic, election, lack of stimulus) are being felt slightly more acutely. With “nothing going on,” it’s a bit like a winner-take-all playoff game that is tied at about the halfway point, and there is now a long commercial break. There isn’t much to do right now, but a lot could happen soon. It’s a time to check your investment positions, make sure you are not too over-extended or under-extended, look for new opportunities, think about the range of possible outcomes, and be ready to make a move. Bruce has two changes to the portfolio today: Columbia Sportswear (COLM) and Quanta Services (PWR) both move from Buy to Hold.
Monthly Issue October 7: In a directionless market, with many potentially strong catalysts but one that is pricing in a strong earnings recovery that may not happen, what can an investor do? We usually focus on a few steps. First, we keep our overall market exposure within comfortable levels – not too aggressive or too light. We want to have some cash reserves to dampen any downturn and possibly deploy at bargain prices, yet work to avoid being too conservative as the market may resume its upward march. We want to make sure we know what we own and why we own it. If the market gets sporty, we want the conviction to stay the course. And, be on the lookout for new ideas. Investors can get complacent, meaning that some opportunities are bound to emerge. We anticipate finding some appealing bargains in the coming weeks. Bruce has one portfolio change today: Bristol-Myers Squibb (BMY) – Moves from Strong Buy to Hold.
Cabot Stock of the Week
Weekly Issue October 19: The overall investing environment remains quite positive, with both of Cabot’s main trend-following indicators now in positive mode. Obviously, there’s a major event coming up that adds the risk of unexpected outcomes, but everyone knows about that, which means investors have discounted the most likely results. Bottom line: trends are good and continued heavy investment in a diversified portfolio of stocks is recommended. Today’s recommendation, Datadog (DDOG), is a fast-growing company from the selections of Mike Cintolo, who recently added it to his portfolio in Cabot Growth Investor. Tim has one portfolio changes today: Nikola (NKLA) moves from Hold to Sell.
Cabot Global Stocks Explorer
Bi-weekly Update October 22: Stocks trading on U.S. markets faced some resistance as hopes for some sort of stimulus bill fade and as mixed earnings report begin rolling in. A key question is whether the pandemic boom stocks will have the revenue and earnings growth to support their sharp advances. Our Explorer portfolio had another solid week, led by last week’s new recommendation, Logiq (LGIQ), which was up 30% in its first week. There is one portfolio change today: Kirkland Lake Gold (KL) moves from Buy a Half to Sell.
Bi-weekly Issue October 15: Markets hit pause this week as third-quarter earnings begin rolling in, doubt reigns over chance of another stimulus bill, and uncertainty over the outcome of the presidential election just three weeks out is palpable. Overseas, the Stoxx Europe 600 fell 2.2% as local governments and local authorities hurried to impose lockdown restrictions to halt the spread of Covid-19 cases. This week’s new recommendation, LogIQ (LGIQ), is a fintech stock offering an intriguing mix of Southeast Asian, American and European growth. There are no portfolio changes today.
Cabot Dividend Investor
Weekly Update October 21: It’s earnings season. Earnings should be particularly important for the worst performing stocks in the portfolio, Enterprise Product Partners (EPD) and Valero Energy (VLO). The quarters these companies report are likely to be lousy, the stock performance leading up to earnings is telling us that. However, the reports could mark a low point from which the stocks recover. Looking ahead, investors will see much better days as the industry inevitably recovers along with the economy. Tom will be watching those stocks very closely. There are no rating changes today.
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 October 21: Today’s update is mainly to discuss this morning’s sharp drop in Jushi Holdings (JUSHF), which we added to the portfolio last week. The reason for the drop is that the company announced a 10,000 share offering at $3.55 Canadian (roughly $2.65 U.S.) that will raise about $26.5 million U.S. This is not unusual; a lot of marijuana companies are taking advantage of the strong climate to raise money. And the chart is still very healthy. So, if you haven’t bought yet, this is a fine opportunity—remembering my caution that because this is a small stock it is likely to be more volatile than the others.
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.
Special Report: April 29, 2020
U.S. Vertically Integrated Multistate Operators (MSOs)Cabot Early Opportunities
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 October 20: The Stock – Plug Power (PLUG) - PLUG has had a big move in recent months, so it’s not in the first inning of its advance, but the price and volume action continue to tell us the stock is under accumulation. The latest rally off the 50-day line was excellent, with shares zooming as high as 19 on massive volume before pulling in. And that pullback to this point has been completely normal—if anything, it could go on a bit further and still be in good shape. We’re OK starting a position here. Stop — 13.5. The Covered Call Trade - Buy Plug Power (PLUG) Stock at 16.75, Sell to Open November 17 Strike Calls (exp. 11/20/2020) for $1.50, or a Net Price of 15.25 or less.
Update October 19: Our fourth October position, HZNP closed marginally below the strike, leaving us with an option that expired worthless, and our stock holding. This is a totally fine situation. This morning we are going to sell our HZNP stock holding and prepare to move this capital into tomorrow’s covered call idea.
October Expiration October 16: Our covered call ideas for the October expiration cycle are on their way to yielding us another solid month of profits ranging from 7.88% to 17.41%. That being said, should the market sell off, HZNP and MOS are within range of not finishing over our strike price today, which is totally fine.
Cabot Income Advisor
Weekly Update October 21: While the stock market has held its own amidst growing uncertainty and some bad news, it has lost its upward momentum over the past 10 days. There’s the on-again/off-again stimulus plan, the Covid resurgence, and the upcoming election. Tom thinks the market still sees the big prize of a strong recovery and an end to this pandemic ahead. For those reasons it is holding up. But the growing risk makes it difficult to gain traction. He expects a strong bull market on the other side of the election and pandemic, but things could be dicey in the near term. It’s not so much that the market cares who will win the election. It’s that it fears a contested result and uncertainty dragging on.
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
Weekly Update October 23: Earnings season is in full gear this week, with six companies reporting. Bruce reviews Albertsons (ACI), Baker Hughes (BKR), Biogen (BIIB), Freeport-McMoRan (FCX), Mattel (MAT) and Trinity Industries (TRN). All companies retain our Buy ratings. To listen today’s podcast click here.
Special Bulletin October 23: We are raising our price target on shares of Duluth Holdings (DLTH) to 17.50 from 15.
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 23: Bank of Montreal (BMO, BMO.TO) Income Investor
Daily Alert October 22: The Travelers Companies, Inc. (TRV) IQ Trends
Daily Alert October 21: Unum Group (UNM) Sure Retirement Newsletter
Daily Alert October 20: Charles River Laboratories International, Inc. (CRL) Dow Theory Forecasts
Daily Alert October 19: Acme United Corporation (ACU) SmallCap Informer
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: Good morning. I’m hearing a lot of info about opportunities around 5G. Are you looking to bring on any investment portfolio recommendations around that in the near future?
Mike: Thanks for writing. Yes, there are many ways to play 5G. Our favorite is probably via chips and smartphones – QCOM and TSM are two names that are direct beneficiaries. If you want more conservative plays, cell tower names like AMT and CCI are worth considering. But I expect there to be plenty of offshoots that will be investable over time.
Question: Hi Mike, Since our full size recommendation of FIVE on sep-17th stock has moved size ways. Now with 7% down going into earning do you think it is prudent to hold a full size position given the uncertainty or shall we lighten up a little, If any harm in minimizing risk since we are already down 7% and the earning catalyst can go either way? even if it pop-we wills till break even so risk is on the downside given the price we bought at? What do you think?
Mike: Thanks for writing. So, holding through earnings is really a portfolio management decision, and it’s key to stick with something consistent. For us, we keep it simple -- we hold through reports, realizing we’ll get nailed a few times, but over time, feel like we’ll hit more than we miss. Plus we’re trying to play things out over time. That said, there’s nothing wrong with trimming, but I would do it not based on gut feel but on a plan -- maybe you trim a quarter or a third if your profit isn’t at least XYZ%, etc. I don’t think that’s a bad idea if you want to lessen the volatility (up and down) a bit during earnings season. But for our part, we hold through the report all else equal and take what comes. It’s worked over time, but there can be hiccups for sure.
Cabot Marijuana Investor
Question: Tim, Having 6 of your strongest marijuana stocks in my portfolio, what will happen if Trump wins re-election?
Tim: Thanks for asking. I don’t know. Right now the sector is strong, telling me that investors are optimistic about the future, and the action in particular after the VP debate tells me they’re optimistic about Kamala Harris. If Trump is re-elected, they’ll be disappointed in the short term. But in the long-term, trends are very good for the industry and I like being on the right side of long-term tends. Perhaps more important for the sector in the short term is whether New Jersey voters choose to legalize marijuana—because if they do, neighboring states will be pressured to follow.
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 | Buy | |||||
| BABA | Hold | |||||
| BE | Buy | |||||
| BGS | Buy | Buy | ||||
| BIP | Buy 2/3 | |||||
| BMY | Buy | |||||
| BSCL | Buy 1/2 | |||||
| CCI | Hold 1/2 | |||||
| CGC | See Advisory | |||||
| COLM | Hold | Hold | ||||
| CRLBF | See Advisory | |||||
| CURLF | See Advisory | |||||
| DDOG | Buy | Buy | ||||
| DLR | Buy | Buy | ||||
| DOW | Hold | |||||
| DXCM | Hold | |||||
| EPD | Hold | |||||
| EQH | Strong Buy | |||||
| FIVE | Buy | |||||
| GM | Strong Buy | |||||
| GRWG | See Advisory | |||||
| GTBIF | See Advisory | |||||
| GTLS | Sold | |||||
| HTHT | Hold | |||||
| IIPR | See Advisory | Hold 2/3 | ||||
| JUSHF | See Advisory | Hold 2/3 | ||||
| KL | Sell | |||||
| LGIQ | Buy 1/2 | |||||
| LLY | Buy | Buy | ||||
| MKSI | Hold | |||||
| MO | Buy | |||||
| MPC | Hold | |||||
| NEE | Hold | Hold 1/2 | ||||
| NET | Hold 1/2 | |||||
| NKLA | Sell | |||||
| NVCR | Buy | |||||
| PGX | Hold 1/2 | |||||
| PENN | Buy 1/2 | |||||
| PINS | Buy | Buy | ||||
| PWR | Buy | Hold | ||||
| QCOM | Buy | Hold 2/3 | ||||
| REMX | Buy 1/2 | |||||
| ROKU | Buy 1/2 | |||||
| SE | Hold 1/2 | Hold | ||||
| SGEN | Buy | |||||
| SPCE | Buy | Buy | ||||
| SSO | Buy | |||||
| 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 | Buy | |||||
| VIAC | Buy | |||||
| VIPS | Buy 1/2 | |||||
| VLO | Hold 1/2 | |||||
| VOYA | Buy | |||||
| VZ | Buy | |||||
| WING | Sell | |||||
| XEL | Hold 2/3 | |||||
| ZM | Hold |