Earnings season is officially behind us. However, there will still be some opportunities as we enter the earnings doldrums.


Looking back on the previous earnings season, our conservative approach led to a 100% win ratio, though we only made 6 trades. Obviously, this is on the lower side for the number of trades that we typically make. But going back to June, when I started all of my options services here at Cabot, I’ve stated on numerous occasions that I intend on taking a more conservative approach while we continue to endure the ongoing signs of a bear market. Remember, it’s always quality over quantity. That being said, when we see a sense of normalcy return to the market, which could be soon (crossing fingers), that number of trades per earnings season will certainly pick back up.

What started out as another troubling week for the bulls turned encouraging as the indexes rebound nicely on Thursday and Friday. By week’s end the S&P 500 gained 1%, the Dow rose 1.1%, and the Nasdaq rebounded 2%.

What started out as another troubling week for the bulls turned encouraging as the indexes rebound nicely on Thursday and Friday. By week’s end the S&P 500 gained 1%, the Dow rose 1.1%, and the Nasdaq rebounded 2%.

This month we are going with a small industrial company that is showing how consistent focus on operational improvement can pay dividends.

Once thought of as a highly cyclical company with management that tended to drop the ball, execution has improved dramatically. In 2022 revenue was up 14% and EPS was up 41%.

With exposure to megatrends like infrastructure and global electrification, I see more upside ahead.

Enjoy!

In an effort to keep the portfolio as diversified as possible, this week’s pick is a recent earnings winner whose products are used in the aerospace field.

Last week was the worst week of the market’s recent retreat, and it’s fair to say many pieces of evidence are now at or approaching key levels: Most major indexes closed in on their 50-day lines, many individual potential leaders are in a similar boat, and both the broad market and the growth-vs.-defense dynamic are healthy but showing a bit of wear and tear. Ideally, this three-week dip leads to a resumption of the January rally—but the next few days should tell the tale. Right now, given the late-Friday firmness and today’s bounce, we’ll leave our Market Monitor at a level 6, but we’re watching closely.

Despite the market action, we actually think this week’s list has a bit more juice than the prior couple of weeks. Our Top Pick looks like a fresh leader in the chip sector; it’s extended, so try to buy on a shakeout.

Stocks continued to retreat last week, ensuring a down February after a very promising January. Still, the latest pullback has been fairly modest, with the 200-day moving average now acting as a floor instead of a ceiling, as it did for most of 2022. With the market in a state of flux, we’re adding another dividend stock today – a household name that used to be part of the Stock of the Week portfolio before we sold it late last summer. That looks like a mistake, as the stock has risen 11% since, and seems to be gathering more steam of late. It’s a longtime recommendation of Cabot Dividend Investor Chief Analyst Tom Hutchinson.

We locked in an 11.86% return in our DIA March 17, 2023, 355/360 bear call spread last week. The return marks our second winning trade for the March expiration cycle for a total of 22.48%. Our average holding time for both trades was 12 days.

As it stands, we currently have two iron condor positions, and my hope is to add another position, preferably a bear call spread, early this week. If we see even a mild bounce in IWM we should be able to take off our IWM iron condor for another nice return, thereby building upon our current profits for the March expiration cycle. If our IWM trade works out we could see March expiration bring in close to, if not exceeding, 40% on a cumulative basis.

We added four new positions last week, which brings us to five open trades. Our PFE position is due to expire this week and the four (KO, BITO, WFC, GDX) we added last week are due to expire on March 31, 2023.

Our PFE calls are essentially worthless, so I plan on buying them back today or tomorrow and immediately selling more calls against our shares. Otherwise there really isn’t much to do with our existing open positions as we are early in the trades.

We had the good fortune to lock in a gain in Home Depot (HD) early last week. The win marked our sixth this earnings season for a cumulative total of 36.9%. That’s a healthy return for this earnings season, especially when you consider the S&P 500 is basically flat since our first trade in JPM back on January 12, 2023. Hopefully the market offers up a few more opportunities to increase our current totals.

Following another week of hotter-than-expected inflation data and hawkish Fed speak, the leading indexes had their worst week of 2023. The S&P 500 fell 2.75%, the Dow lost 3%, and the Nasdaq declined by another 3.3%.

Following another week of hotter-than-expected inflation data and hawkish Fed speak, the leading indexes had their worst week of 2023. The S&P 500 fell 2.75%, the Dow lost 3%, and the Nasdaq declined by another 3.3%.

As we head into the end of 2021, the market seems poised for a strong end to the year.

This week’s update includes our comments on earnings from Baker Hughes (BKR) and Mattel (MAT) as well as commentary on several stocks.

As we move closer to earnings season for our portfolio holdings (really gets underway the week after next) we see many small-cap growth names (and growth stocks in general) recovering nicely from the drawdowns in late September.

In a person, company, country, or stock, resiliency matters. For example, with disruptions related to the pandemic and supply-chain chaos all around us, some will navigate better than others. U.S. stocks have been rising despite coping with the effects of inflation, a slowing Chinese economy and supply-chain disruptions on the technology industry. Stocks have gained in recent days on strong earnings reports. Labor shortages, higher prices for raw materials and supply-chain issues haven’t substantially impacted profits.

Forget the virus. Forget about the Fed tightening. It’s all about earnings now.

After pulling back in September, the S&P 500 is back to flirting with all-time highs. My favorite strategist, Ryan Detrick, recently shared that the market is typically weak now before starting to run into the “Santa rally.”

A few weeks ago, at the annual Morningstar Investment Conference in Chicago, two investing icons debated the merits of value versus growth. On the value side was Rob Arnott, founder and head of Research Affiliates, with Cathie Wood, founder and head of ARK Investment Management, on the growth side.

It was a rough September in the market. But so far, October is making up for it.

It’s still not a bull market yet, but gold just posted its best week since late August as investors have begun to realize that inflation isn’t going away any time soon.

This week’s update includes our comments on earnings from Walgreens Boots Alliance (WBA) and Wells Fargo & Company (WFC) as well as commentary on several stocks.

The biggest stories this week weren’t all that different from last week, namely supply chains, interest rates/inflation, and Covid. But this week has a decidedly different feel to it, possibly because we’ve added earnings season into the mix and, so far, that’s going pretty well.

As of 10 a.m. ET this morning, the market is solidly green, with a broad advance taking both the Dow (up 386 points) and Nasdaq (up 192 points) nicely higher.

We’re going to step aside from e.l.f Beauty (ELF) today for a very slight loss (roughly 4%). We’ve held the stock for just over a month and it has posted uninspiring performance, especially since reporting on May 26. My original intent was to try to make a relatively quick and modest gain on the stock, but with so many other positions working well there’s little incentive to hold this one.

As I write this, every stock in our portfolio is up today, in what may be the beginning of a new advance for the sector. It’s been more than four months since marijuana stocks’ February peak, so they’ve definitely cooled off, but only time will tell if this is truly the start of a new run. In any case, we’re ready, with the portfolio now 84% invested.

This tech company—a perennial investor favorite—is forecasted to grow its earnings at an annual rate of 21% over the next five years.

Shortly after I sent this week’s Profit Booster idea to execute a covered call on Scientific Games (SGMS), the stock rallied $1, and I missed my buy price. I am going to raise my net price to 72, so that we can get into the trade.

This electric auto maker is forecasted to grow earnings at an annual rate of 44.51% over the next five years.

The market got hit hard on Friday, which sent three of our stocks (FNKO, IGT, RRC) below their strike prices on expiration Friday.

The five largest holdings in this ETF are: Cisco Systems Inc (CSCO, 3.57% of assets), Proofpoint Inc (PFPT, 3.16%), Fortinet Inc (FTNT, 2.93%), NortonLifeLock Inc (NLOK, 2.93%), and Cloudflare Inc (NET, 2.77%).

Following testimony from the Federal Reserve Chairmen on Wednesday there has been wild rotation in the markets, which has impacted some of our positions expiring today.

In the past 30 days, five analysts have raised their EPS analysts for this gold producer. The shares have a current annual dividend yield of 3.15%, paid quarterly.

Gold futures prices were down around 5% on Thursday afternoon, leading a nearly across-the-board rout in most precious and industrial metals. Platinum took the brunt of the selling pressure, falling 8%, while silver was down 7%.

This bank has restored its dividend, and now is paying $0.03 annually. It’s a start! And it is a very positive bet on the future.

This is just a quick message regarding today’s action in Roblox (RBLX)—the stock had been correctly normally in recent days, but last night, it gave its May business update, and the numbers left a lot to be desired, with users actually shrinking from the prior month (though revenues were still up triple digits from the year before).

A few Cabot Options Trader subscribers have asked me about ways to protect gains in their portfolios, so I thought I would write to everyone with a couple of strategies using options to hedge your portfolio.

A subscriber recently asked me if I keep a journal of my trades. Many traders keep journals so they can look back at their trades and evaluate what they did right and what they did wrong.

Want to know how the big institutional investors use options? Here is an example of how one trader spent $132 million on three technology stocks.

Options trading has its own vernacular. To know how to do it, you need to know what every options term means. Here are some of the basics.

Our Cabot Momentum Trader’s market timing system consists of two parts—one based on the action of three select, growth-oriented market indexes, and the other based on the action of the fast-moving stocks Cabot Momentum Trader features.