Cabot Prime Week Ending September 11, 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 tenuous position — it’s not February or March (longer-term, the picture is still bright), but the onus remains on the buyers to step in and show that the recent abnormal action was a shakeout. The good news is that, if the market can hold up, he’s seeing a growing number of setups that could prove to be fresh growth leaders, but for now, he advises patience as we wait to see if the bulls are still active.
UPCOMING CABOT EVENTS:
A Historic Opportunity in Micro-Cap Stocks + 3 Micro-Caps to Buy Now, By Rich Howe, Chief Analyst of Cabot Micro-Cap Insider
FREE WEBINAR: September 17, 2020 Sign up now.
Cabot Retirement Club Member Call - September 2020
FREE WEBINAR FOR PRIME MEMBERS ONLY: September 24, 2020 Sign up now.
Advisory Services
Cabot Growth Investor
Bi-weekly Issue September 10: In tonight’s issue, Mike reviews all our stocks, dives into the two main factors to your investment returns and goes over many fresher names that could help lead the market’s next upmove. There are no additional changes as the Model Portfolio remains in very good shape for the year (handily outpacing the major indexes) and the evidence for growth stocks is iffy at best. Since the last issue, we’ve sold four stocks and are sitting on 55% cash—we’ll be on the horn if we have any changes (buy or sell) in the days ahead.
Bi-weekly Update September 3: The overall market remains in an uptrend, but we’re seeing more and more unusual action among individual growth names, and thus are making moves mostly on a stock-by-stock basis. After a little buying last week, we trimmed our position in DocuSign yesterday, and on a special bulletin this morning, we sold all our shares in both Chegg (CHGG) and Cloudflare (NET). That leaves us with around 43% in cash, which is a bit more than we’d prefer, but Mike will hold onto it until he sees signs that buyers are stepping in.
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 September 11: To this point, we haven’t seen any longer-term abnormal selling in the indexes or leaders (indicative of a more major top), and many areas and stocks are acting just fine. Granted, not many are really making much upward progress, but plenty are acting normally. In other words, we don’t advise you to be in your storm cellar or to necessarily anticipate a huge correction going forward. Just take it day to day and see how it plays out—right now, the skies look threatening, so you should be staying relatively close to shore. Mike’s suggested buys today are: Agnico Eagle (AEM), Berry Plastics (BERY), Meritage (MTH) and Quanta Services (PWR). There is one suggested sell today: Azek Co. (AZEK), which tripped our stop after a share offering.
Weekly Issue September 8: With decisive weakness in most leaders following huge runs (and some climactic upside activity during the past two weeks), paring back makes sense, and from here, the onus is on the bulls to step up. Mike is knocking our Market Monitor down to a level 5. This week’s list contains a bunch of names that have either avoided any major selling or have pulled back normally to support. Mike’s Top Pick is Penn National Gaming (PENN), which looks like one of a couple of leaders in the “new” gaming boom.
Cabot Undervalued Stocks Advisor
Weekly Update September 9: Bruce writes that timing the markets is remarkably difficult. We’ve found our efforts in this regard to be largely unproductive, with our time better spent on finding attractive individual stocks. With individual stocks, however, we do have a timing tool. We use valuation, and more specifically, price targets, to gauge when to get into and out of stocks that have the fundamental traits we like. He 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 8: The long-awaited market correction has arrived, but whether it will be brief or long, shallow or deep, remains to be seen. The one thing Tim is sure of is that it won’t be like the previous one! As for today’s recommendation, Azek Company (AZEK), it’s a small company thriving in the homebuilding sector, dominant in its own sub-sector. Here are today’s portfolio changes: Chegg (CHGG) moves to Sell, Global X Cybersecurity ETF (BUG) and Zoom Video (ZM) move to Hold.
Cabot Global Stocks Explorer
Bi-weekly Update September 10: Markets were abuzz this week with talk of a “tech meltdown,” with Tesla (TSLA) getting hit rather hard on Tuesday, falling more than 20% before bouncing back 10% yesterday. The next couple of months are sure to be impacted by what is shaping up to be a turbulent election. The Explorer portfolio after today’s changes has a 25% cash position, which Carl would like to keep, and perhaps increase a bit. He has two portfolio changes today: Cloudflare (NET) from Buy to Sell a Half/Hold a Half and Swire Pacific (SWRAY) from Buy to Hold.
Bi-weekly Issue September 3: With the exception of another nice gain by NovoCure (NVCR), this was a quiet week for the Cabot Explorer portfolio as the Nasdaq continues its march, up almost 35% so far in 2020. Our Emerging Markets timer (EEM) stays positive as some of these markets bounce back against the backdrop of very weak economies. This issue’s new recommendation, Visa (V), is a high quality stock in a growth sector with a wonderful high margin, low risk business model.Carl has no portfolio changes today.
Cabot Dividend Investor
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.
Weekly Update September 2: Labor Day is right around the corner, next Monday. That marks the unofficial end of summer. Labor Day marks the start of a new year of sorts and a rebirth of seriousness in the collective psyche. The other side of Labor Day is a new ballgame, when investors shake off the apathy of summer and refocus with intensity. That’s the landscape. We will see how the refocused investor copes after Labor Day. Tom will surely be in touch. In the meantime, enjoy the positive momentum and the rising portfolio returns. Tom has no rating changes today.
Cabot Marijuana Investor
Update September 9: Fundamentally, the only recent news regarding the marijuana industry is that the U.S. House of Representatives will vote on the MORE Act, which would deschedule marijuana and thereby legalize it federally, the week of September 21. Passage is likely. Getting through the Senate is not. Now that the correction is in force, we can look at those charts again, and see which ones are resisting the downward pressure best—or even advancing. That’s where the money is going, so that’s where we’ll go too—though Tim doesn’t think there’s any reason to hurry. But there’s often room for tweaking, and today the tweaking consists of selling our entire remaining position in Cronos Group (CRON), which we’ve held since November 2017.
Monthly Issue August 26: Our long-term strategy remains unchanged. Own the leaders. Sell the losers. And remember that someday, when marijuana is declared legal across the U.S., the institutions will come running. Technically, Cabot’s major market-timing indicators remain bullish, so overall, Tim is bullish. But two weeks ago, he sold 25% of each of our U.S. operators because the stocks had grown so overbought over the past few months—and all four of those stocks are lower today. In short, buying power in the sector has dried up in recent weeks, even as investor sentiment has heated up, and that’s a dangerous combination. So short-term, he is turning a little more cautious today, not by selling anything but simply by downgrading more stocks to hold. Ideally, this soft patch will pass and buyers will return, but for now, the tide is going out slowly so be careful where you dive.
Special Report: April 29, 2020
U.S. Vertically Integrated Multistate Operators (MSOs)Cabot Early Opportunities
Special Bulletin September 11: Every so often one of our stocks is the target of a short report that tries to make the case that a company is garbage, a fraud, and/or wildly overvalued. The target right now is Nikola (NKLA), which fits the bill of a high-profile stock. It just released great news regarding its new partnership with GM. The author is Hindenburg. The allegations are extensive, but basically assert that the company is a fraud.
Special Bulletin September 8: The last few days have dented some of our stocks so we’re moving incrementally more conservative and taking a few stocks from buy to hold based on their recent performance. Tyler will monitor these stocks closely this week to determine if further action is required. Bill.com (BILL), Bloom Energy (BE), Cloudflare (NET) and Schrodinger (SDGR) move from BUY to HOLD. This morning Nikola and General Motors (GM) announced that GM will build Nikola’s Badger truck. NKLA is up more than 45%. It remains at Buy a Half.
Monthly Issue August 26: Tyler’s advice today is to take it slow and average in to new positions. Growth stocks have experienced a huge rally off the March lows and we’re seeing signs that many may have topped out, at least in the near-term. Software stock valuations are near record highs and there is likely to be a shift in expectations regarding work-from-home plays if and when vaccines start to get approved. And then there’s the upcoming election. Still, he thinks we’re in a bull market and a new economic cycle brought on by the pandemic, and that accommodative fiscal policy and more stimulus will help markets move higher over the coming 12 months. Today’s Top Pick is, AZEK (AZEK), one of the first companies to introduce a premium quality (and premium priced) engineered polymer (plastic) building material that was a viable candidate to replace wooden trim.
Cabot Profit Booster
Weekly Issue September 9: The Stock – Penn National Gaming (PENN) PENN was crushed in March, recovered in full by June, and then chopped sideways for nearly two months. When we last wrote it up, the firm was just about to report results, and investors were pleased—PENN broke out in early August and enjoyed a nice-looking move on elevated volume. It’s since begun to catch its breath, but there’s been no abnormal action, with volume drying up and the stock hovering near its 25-day line. Further weakness is possible, but we still think the next major move is up. Stop — 44. The Covered Call Trade: Buy Penn National Gaming (PENN) Stock at 56, Sell to Open October 60 Strike Calls (exp.10/16/2020) for $4, or a Net Price of 52 or less.
Cabot Income Advisor
Weekly Update September 9: Regardless of what happens in the near term, Tom is still bullish on the market over the next year. The economy is already surpassing expectations and will likely continue to do so in the future. Meanwhile, money has no place else to go but stocks to fetch a decent return. The timing of last week’s calls on SBUX and BIP looks perfect. We got the highest possible call premiums at the market high just before the selloff. If you acted on the recommendations in last week’s update, you probably got call premiums that were much higher than the targeted price.
Monthly Issue August 26: Tom did not suggest calls to write on the two recommendations in this issue. The stock prices moved yesterday and knocked the call premiums out of my targeted range. But he is looking to write calls on these positions very soon. Please be on the lookout for a “special alert” in your email in the next few days, or next week. His featured stocks are: Valero Energy Corp. (VLO) and Starbucks Corp (SBUX)
Special Report:
Off the Radar Cash GeneratorsSpecial Report:
The Covered Call Income MachineWall Street’s Best Investments
Daily Alert September 11: World Fuel Services Corporation (INT) The Prudent Speculator
Daily Alert September 10: Carvana Co. (CVNA) The Chartist
Daily Alert September 9: Sell: Fidelity OTC Portfolio (FOCPX) Fidelity Monitor & Insight
Daily Alert September 9: Fidelity Leveraged Company Stock Fund (FLVCX) Fidelity Monitor & Insight
Daily Alert September 8: Molson Coors Brewing Company (TAP) Cabot Stock of the Week
Monthly Issue August 27: Nancy begins our issue this month with a deep dive into a banking company that doesn’t look at all like a traditional bank. Green Dot Corporation (GDOT) is all digital, all the time, and is rapidly expanding its product offerings. In her Feature article, she further explores the digital banking world and how it is growing, and not just for the Gen Z population. Also included is a Top Picks Healthcare update that didn’t make its way into last month’s Top Picks issue.
Ask the Experts
Cabot Growth Investor
Question: Mike, I know growth stocks are your area of expertise, but with many experts predicting inflation, traditionally a precious metal ETF would be a hedge, no? I owned a lot of VGPMX (when it used to be a precious metal ETF) and it made (then lost) me a lot of money during Pres Obama’s administration. I still own a little VGPMX, but it has beer morphed into something they call “Global Capital Cycles Fund” which has a 52 week range of $8.49 to $8.73. Clearly not a precious metals fund anymore. So, is it too late to buy some kind of gold ETF as a hedge? Stocks rise too with inflation don’t they, so maybe just following your instructions should at least keep me even with inflation, right? Let’s hope the dip is over & the market has turned the corner.
Mike: I don’t think it’s too late to own gold per se, though as you say, it’s not my area of focus. That said, I’m not an expert on which ETF is better -- I just look at two, GDX and GDXJ (junior minors). Both look like good risk-reward bets here near the 50-day line after month-long rests. There might be others but you’re probably talking about similar performance among all gold funds as the group is very homogenous.
Question: Hi Mike - Do you suggest to put in hard stops or mental stops? I’ve heard that market makers can drive the price down to scoop the stop loss shares and drive it back up again. Is it true?
Mike: Thanks for writing. So, honestly, either is fine – one is a bit longer-term (mental), the other shorter-term but avoids slippage (in the market). Both have their advantages/disadvantages, but the key is to pick one and stick with it. With Top Ten we generally do in the market stops so if it nicks it, we’re out.
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 | |||||
| APHA | See Advisory | |||||
| ARE | Hold | |||||
| AVGO | Hold | |||||
| AZEK | Buy | |||||
| BABA | Hold | |||||
| BE | Buy | |||||
| BGS | Hold | Buy | ||||
| BIG | Buy | |||||
| BIP | Buy 2/3 | |||||
| BMY | Strong Buy | |||||
| BSCL | Buy 1/2 | |||||
| BUG | Hold 1/2 | Hold | ||||
| CCI | Hold 1/2 | |||||
| CGC | See Advisory | |||||
| CHGG | Sold | Sell | ||||
| COLM | Hold | Buy | ||||
| CRLBF | See Advisory | |||||
| CRON | Sell | |||||
| CURLF | See Advisory | |||||
| DLR | Buy | |||||
| DOCU | Sold | |||||
| DOW | Hold | |||||
| DXCM | Hold | |||||
| EPD | Hold | |||||
| EQH | Strong Buy | |||||
| GFL | Sold | |||||
| GM | Strong Buy | |||||
| GRWG | See Advisory | |||||
| GTBIF | See Advisory | |||||
| GTLS | Buy | |||||
| HTHT | Hold | |||||
| IIPR | See Advisory | Hold 2/3 | ||||
| KL | Buy 1/2 | |||||
| LGIH | Buy | |||||
| LLY | Buy | Buy | ||||
| MKSI | Hold | |||||
| MO | Buy | |||||
| MPC | Hold | |||||
| NEE | Hold | Hold 1/2 | ||||
| NET | Sell 1/2 | Sold | ||||
| NVCR | Buy | |||||
| OKTA | Sold | |||||
| PGX | Hold 1/2 | |||||
| PWR | Buy | |||||
| QCOM | Hold | Hold 2/3 | ||||
| REMX | Buy 1/2 | |||||
| RNG | Hold | |||||
| ROKU | Buy 1/2 | |||||
| SE | Hold 1/2 | Hold | ||||
| SPCE | Buy | Buy | ||||
| SPOT | Buy 1/2 | |||||
| SSO | Buy | |||||
| STAG | Hold 1/2 | |||||
| SWRAY | Hold | |||||
| TAP | Buy | Strong Buy | ||||
| TCNNF | See Advisory | Hold | ||||
| TOT | Hold | |||||
| TPB | See Advisory | |||||
| TSLA | Hold | |||||
| TSM | Buy 1/2 | Buy | ||||
| TSN | Buy | |||||
| TWLO | Hold | |||||
| UEIC | Buy | |||||
| V | Buy | |||||
| VIAC | Buy | |||||
| VLO | Hold 1/2 | |||||
| VOYA | Buy | |||||
| VZ | Buy | |||||
| WING | Hold | |||||
| XEL | Hold 2/3 | |||||
| ZM | Hold | |||||
| ZS | Hold |