We are back in earnings season again. This season tells us more about our companies, but it also helps us get a read on sector trends.

Let’s start with a look at takeaways on key sector trends from the quarterly earnings call by executives at Organigram (OGI). This Toronto-based company serving Canada, Israel and Australia may be small, with a market cap of $300 million. But its executives know the space as well as anyone, and they offered the following insights.

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the February 2023 issue.

While many initial public offerings (IPOs) have a quick price “pop” on their debut, most are speculative companies whose share performance is more accurately described as “pop and drop.” Our search for enduring post-IPO companies whose shares trade at attractive prices turned up four promising ideas.

We also take a look at our research process using an approaching opportunity in shares of Fidelity National Information Services (FIS).

Our feature recommendation this month is a European company that investors are avoiding due to its conglomerate structure and potentially large legal liabilities related to a disastrous acquisition several years ago. But shares of Bayer AG (BAYRY) trade at an excessive discount to the likely liabilities, while the core business is stable and resilient. Shareholders are beginning to press for major changes to unlock the company’s value.

Before we dive into this week’s idea, I wanted to clean up our SHLS and ASO positions from last Friday’s January expiration.

This year was always going to be better than last year. And it’s off to a great start. But it is unlikely that stocks muster a sustained rally out of this bear market until there is more clarity on the extent and timing of an economic bottom.

That said, the current market still offers opportunities. Cyclical stocks have rallied and, for the first time in a long time, there is an opportunity to sell a covered call on one of the portfolio’s cyclical stocks. In this issue, I highlight a covered call opportunity in Visa (V) after the stock has rallied.

I also highlight a fantastic income stock that has likely already made its own low even if the market turns south again. It sells at a dirt-cheap valuation with a high and safe dividend and has recently added momentum to the mix.

It was a down-and-up week for the market, with a round of selling hitting the major indexes and many stocks as they approached their December highs, but then a solid-looking snapback on Friday and today. Moreover, most of the nascent positives that we’ve written about are still in place, with the broad market in solid shape and the 2-to-1 Blastoff Indicator still in effect; now we want to see the intermediate-term trend kick into gear and some breakouts occur. We’re encouraged, though we still think going slow makes sense. We’ll leave our Market Monitor at a level 5.


This week’s list is again heavy on the cyclical- and turnaround-type names, and our Top Pick is a commodity name that’s near the top of an eight-month structure.

The market has been resilient through the first few weeks of 2023, giving hope that a much better year lies ahead for investors. Potential potholes abound (earnings season is underway, another Fed rate hike next week, a possible recession looming, etc.), but for now, there’s reason for optimism. With that in mind, we take another big swing today by adding a mid-cap technology stock that was just recommended by Cabot Early Opportunities Chief Analyst Tyler Laundon.

We currently have two open positions and, thankfully, both currently have a high probability of success. My hope is that we can start to look at taking off both trades for profits towards the latter part of the week, but we need a bit of cooperation from Mr. Market.

My goal this week is to start adding positions for the March expiration cycle. As always, I want to add, at minimum, a bear call, bull put and iron condor. If I can get all three off this week, I would be incredibly pleased, but, as always, I’m not going to force it.

The week I will add new trades in both BITO and KO.

We locked in some nice gains on both trades last week which brought our total premium return to 49.75%. My hope is that we are able to add several short-term trades to the mix, in addition to the new trades in BITO and KO.

Last week was a bit of a dud for earnings announcements.


While numerous companies announced earnings, only a few companies met our guideline of having high levels of options liquidity. But that all changes this week.



This week could be the busiest of the earnings season with upwards of seven potential trades. My guess is that we will make anywhere from 3 to 5 trades with most of the trading activity occurring during the latter half of the week.

It was hardly smooth sailing for traders last week, as the indexes got hit hard on Wednesday and Thursday, and then roared back to life on Friday.

It was hardly smooth sailing for traders last week, as the indexes got hit hard on Wednesday and Thursday, and then roared back to life on Friday.

Very impressively, the rally that started late in 2022 continued last week, as the S&P 500 gained 2.7%, the Dow rose 1.8%, and the Nasdaq tacked on another 4.5% of gains.

The concept of “temporary inflation,” which many investors and analysts embraced earlier this summer, has given way to concerns that rising prices will likely persist a lot longer than formerly expected.

We’ve seen a nice little rally as we head into the waning weeks of summer. The S&P 500 has been incredibly strong and even the S&P 600 Index, which hasn’t made any net new progress since March, popped off last week’s low and is back to within 5% of an all-time high.

While only insiders will be attending the Federal Reserve’s annual Jackson Hole symposium, which starts this morning, markets will react to any hints on the Fed’s move to tighten monetary policy and lift interest rates.

The summer malaise is in full swing. The market is doing pretty much exactly what it was doing when investors went on vacation and stopped paying attention.

I’m fairly active on Twitter; it’s probably my favorite site. It’s entertaining and a great way to stay on top of news. And it’s an incredible resource for finding new stock ideas. I can say with confidence that Twitter has made be tens of thousands of dollars. The one problem with Twitter is there is a lot of noise.

The Cabot Undervalued Stocks Advisor is on vacation this week, recharging the batteries for what could be a very interesting September and fourth quarter in the financial markets. As such, this week’s edition will be abbreviated in length, although we include our Cisco earnings commentary in full.

The broad market making new highs this week gives us a bullish framework to work within. For the sectors that comprise most of Greentech, it’s a mixed bag, however.

Today’s note includes earnings updates on Macy’s (M) and the podcast. There were no ratings changes this past week. Also, a few scheduling changes as the CTL is on vacation next week.

Near the close today, the Dow was off 50 points, the Nasdaq was up 23 points, with both finding solid support after a weak open.

Some time ago, there was a television show with the above title that pulled viewers back into the 1970s. It used that earlier era to create a somewhat unique vibe that inadvertently highlighted how much has changed in our world over the decades.

Things are still good in the market. The S&P 500 closed at yet another record high on Monday. That index is now up 19.27% so far in 2021 after managing to return 15.76% in pandemic-stricken 2020.

It’s a funny market out there! The market is pretty close to an all-time high, but many growth and micro-cap names have pulled back substantially. Many value names and cyclical names have pulled back sharply despite strong fundamentals. I continue to scour the micro-cap world and see plenty of opportunity.

This tech company just completed the acquisition of Inphi Corporation, and our contributor says this purchase will turn Marvell into a U.S. semiconductor powerhouse positioned for end-to-end technology leadership in data infrastructure.

Yesterday was a bloodbath for growth stocks as concerns of rising rates and high valuations continue to put pressure on these types of stocks. Earnings season has also been a disaster for many growth stocks as “sell the news” has been the trend. Part of me thinks there is programmatic trading going on here as a negative reaction has just become too consistent. But still, overall, the positive momentum from April has been wiped out here in May for many players.

After yesterday’s bloodbath in growth stocks, today feels pretty good. We may be able to thank a downright terrible April jobs number this morning (266,000 added versus expectation of 1 million), which may have temporarily quelled concerns over rising rates.

This northeastern bank beat analysts’ earnings forecast by $0.10 last quarter. The shares have a current dividend yield of 4.61%, paid quarterly.

This week feels a lot like March. In other words, it’s pretty awful for growth stocks both big and small. The positive momentum from April has seemingly evaporated. There’s no sugar coating it – we’re taking a hit this week. The chatter around higher rates and inflation is getting amplified out there and it’s just a crusher on high valuation/growth stocks.

It’s been a brutal week for growth stocks, and that’s continuing today. As of 11 am, it’s another horrible day for growth stocks—the Dow is up 50 points, but the Nasdaq is down 80 points and the average stock we own or are watching is off more than 2%.

This recent IPO will give you an entrée into cryptocurrencies. But be aware, it is a speculative trade and needs to be limited to a small portion of your portfolio.

The big news in the marijuana industry this week is that the Tilray/Aphria merger is complete, turning these two Canadian firms into the biggest marijuana company in the world—for now.

Cardlytics (CDLX) reported last night that Q1 revenue grew by 17% to $53.2 million (beating by $2 million) and that adjusted EPS came in at -$0.34, a drop from -$0.26 in the year ago quarter (and $0.03 shy of expectations). Overall, the quarter showed continued improvement in the business as revenue, Q1 billings ($76.3 million) and adjusted contribution ($24.3 million) were all either at or slightly ahead of consensus estimates.

In the past month, five analysts have increased their EPS estimates for this royalty company.

The market has been a little iffy over the last five or so sessions. This action, coming on the back of great earnings from mega cap tech stocks last week, but not great reactions, suggests a more conservative stance is appropriate right now for some of our high-growth names.

The market has been a little iffy over the last five or so sessions. This action, coming on the back of great earnings from mega cap tech stocks last week, but not great reactions, suggests a more conservative stance is appropriate right now for some of our high-growth names.

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.