Please ensure Javascript is enabled for purposes of website accessibility
Cabot Prime Plus Logo
Cabot Prime Plus

Weekly Summary October 30, 2020

Cabot Prime Week Ending October 30, 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 market’s turn for the worse during the past three weeks–most breakouts that came in September and October have vanished, as has the intermediate-term green light from the market as a whole. Thus, Mike’s been raising cash, though he continues to build a watch list of resilient names; most likely, this is a continued consolidation of the huge March-August run, but until the buyers step up, he’s playing it safe.

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

Special Bulletin October 30: The weakness in the market and growth stocks is continuing this morning. One of our stocks, Seagen (SGEN), reported a sour quarter and is gapping below support today—the action is abnormal and we advise selling. The Model Portfolio will now be around 46% in cash.

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.

Special Bulletin October 28: Continue to take things on a stock-by-stock basis. We’ve seen a buyers’ strike during the past two weeks, with many stocks and indexes falling under their own weight; our Cabot Tides buy signal has vanished, with the market now nine weeks into a rest after the March-August advance. Moreover, while many stocks are doing OK, some are breaking down. In the Model Portfolio, we’re going to sell Dexcom (DXCM), taking the rest of our profit, and Penn National (PENN), cutting our loss, which will leave us with around 37% in cash.

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.

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 30: What started out as a normal, controlled pullback two weeks ago has morphed into another serious correction in the market, with the major indexes falling sharply this week—as of this morning, all of the major indexes we track are off more than 4% on the week, which has wiped out the nascent intermediate-term green light. At this point, the S&P 500 and Nasdaq are both back about 8% to 9% from their September peaks. All in all, we’re not locked in our storm cellar, but we have grown more cautious as things weaken. We knocked our Market Monitor down a notch recently, and we’re likely to pull down again this week given the action. Mike’s buy ideas today are: Five Below (FIVE), NovoCure (NVCR) and Zendesk (ZEN). He has 15 sells this week from various stocks that tripped or otherwise broke their intermediate-term uptrend.

Weekly Issue October 26: What was a cleaner situation a couple of weeks ago has turned into one with a lot of crosscurrents, and that has caused a buyers’ strike of sorts, with the major indexes and many leaders pulling back of late. It’s not a disaster, but today’s action has put the intermediate term back on the fence; basically, it looks like the market is still in a consolidation phase after the big March-through-August rally. It’s a similar deal with leading stocks, as many have taken on water, though few have cracked. (In fact, we see a lot of good setups out there should buyers step up soon.) All in all, we’re not making any huge moves, but we’ll knock our Market Monitor down a notch and keep a close eye on things. This week’s list is an interesting mix of growth and turnaround situations, including a couple that have their hands in both cookie jars. Mike’s Top Pick is Align Technology (ALGN), which just galloped out of a two-year base after earnings. Aim to buy on weakness.

Cabot Undervalued Stocks Advisor

Special Bulletin October 30: Quanta Services (PWR) reported strong third-quarter results yesterday, with adjusted per share earnings of $1.40, up 23% from a year ago and well ahead of the $1.09 consensus estimate. Bruce views the risk/reward trade-off as unfavorable at this point and are moving the shares to a Sell from Hold, with a 54% profit since the stock was recommended last December.

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.

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 26: The overall investing environment remains positive, though recent weakness in growth stocks in particular means buyers of aggressive stocks should favor low-risk entry points. Obviously, the election next week 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, Nuance Communications (NUAN), is an old friend that is back in the limelight as its voice-recognition software enjoys growing demand thanks to the pandemic. The stock was originally recommended by Tyler Laundon in Cabot Early Opportunities Tim has two portfolio changes today: Bloom Energy (BE) moves to Sell and Quanta Services (PWR) moves to Hold.

Cabot Global Stocks Explorer

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.

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.

Cabot Dividend Investor

Weekly Update October 28: The market may be funky for a while longer as these risks play out. It’s not unexpected under the circumstances, especially for a market that had rallied 60% in a short time. But, hard as it is to believe now, we will get past this election and even the pandemic. Tom has one rating change today: AbbVie (ABBV) moves from Buy to Hold.

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

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.

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.

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

Weekly Issue October 27: The Stock – General Motors (GM) - GM spent a long time in the 30 to 40 area before the crash this year, which yanked it as low as 15 in the panic. The rebound back to 32 was swift, but that was followed by what turned out to be a three-month, up-and-down consolidation. And now we see a change in character, with GM bolting to higher highs on excellent volume. As with most stocks, the upcoming earnings report is a risk. Stop - 31. The Covered Call Trade - Buy General Motors (GM) Stock at 36, Sell to Open December 36 Strike Calls (exp. 12/18/2020) for $2.25, or a Net Price of 33.75 or less.

Cabot Income Advisor

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).

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.

Cabot Turnaround Letter

Weekly Update October 30: Earnings season is in full gear this week, with 13 companies reporting. Bruce reviews Borg Warner (BWA), Credit Suisse (CS), DuPont (DD), General Electric (GE), Kraft Heinz (KHC), Mohawk Industries (MHK), Molson Coors (TAP), Newell Brands (NWL), Nokia (NOK), Royal Dutch Shell (RDS/B), Volkswagen (VWAGY), Western Digital (WDC) and Weyerhaeuser (WY). 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 October 30: JD.com, Inc. (JD) Forecasts & Strategies
Daily Alert October 29: HubSpot, Inc (HUBS) Argus Weekly Staff Report
Daily Alert October 28: Fortinet, Inc. (FTNT) The Buyback Letter
Daily Alert October 27: Datadog, Inc. (DDOG) Cabot Stock of the Week
Daily Alert October 26: First Trust NASDAQ ABA Community Bank Index Fund (QABA) Weiss Ratings

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: One quick question about portfolio allocation. Since we get 4 -5 recommendations per month from Profit Booster, I am wondering how do your customers scale up for a bigger account size and still limit to 5%/ticker (needs 20 ticker trades). I am trying to see how to scale up.

Jacob: In terms of Profit Booster, if you have a big account and are looking to put that money to work, I have ZERO issue with you raising the size of your trades. 5% is a general rule, but you absolutely can raise that number if you feel comfortable with the risk.Though of note, you also have to judge the state of the market. Bull markets push harder. Bear markets, pull in that risk/sizing.

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.

StockCabot Global Stocks ExplorerCabot Growth InvestorCabot Marijuana InvestorCabot Stock of the WeekCabot Undervalued Stock AdvisorCabot Dividend Investor
ABBVHold
AEMBuy
APT.AXBuy 1/2
AREHold
AVGOHold
AZEKBuy
BABAHold
BESell
BGSBuyBuy
BIPBuy 2/3
BMYBuy
BSCL Buy 1/2
CCIHold 1/2
CGCSee Advisory
COLMHoldHold
CRLBFSee Advisory
CURLFSee Advisory
DDOGBuyBuy
DLRBuyBuy
DOWHold
DXCMSell
EPDHold
EQHStrong Buy
FIVEBuy
GMStrong Buy
GRWGSee Advisory
GTBIFSee Advisory
HTHTHold
IIPRSee AdvisoryHold 2/3
JUSHFSee AdvisoryHold 2/3
KLSold
LGIQBuy 1/2
LLYBuyBuy
MKSIHold
MOBuy
MPCHold
NEEHoldHold 1/2
NETHold 1/2
NKLASold
NUANBuy
NVCRBuy
PGX Hold 1/2
PENNSell
PINSBuyBuy
PWRHoldSell
QCOMBuyHold 2/3
REMXBuy 1/2
ROKUBuy 1/2
SEHold 1/2Hold
SGENSell
SOLOBuy 1/2
SPCEBuyBuy
SSOHold
STAGHold 1/2
TAPBuyStrong Buy
TCNNFSee AdvisoryBuy
TMXBuy
TOTHold
TPBSee Advisory
TRSSFSee Advisory
TSLAHold
TSMBuy 1/2Buy
TSNBuy
TWLOBuy
UEICBuy
VSell
VIACBuy
VIPSBuy 1/2
VLOHold 1/2
VOYABuy
VZBuy
WINGSold
XELHold 2/3
ZMHold