Issues
Last Friday all three of our November covered calls expired for full profits.
This is a short week, with my last update just a few days ago, but our Explorer portfolio is doing well. In the last few days, Sea (SE), NovoCure (NVCR) and Alibaba (BABA) are each up 10 points and ElectraMeccanica (SOLO) has increased 20%. As the clouds lift with the flurry of positive vaccine announcements and election uncertainty gone, markets will go into December with more confidence but with lingering doubts about the strength of the economy. Our new recommendation is a leader in critical cancer diagnostics highlighting the benefits of a sharp focus on one market.
Current Market OutlookFirst off, a heads up: Our offices will be closed Thursday and Friday, and next week is one of the two scheduled weeks that we take a break from Top Ten all year. We’re likely to send a brief update this Wednesday with updated stops, but after that, your next update will come Friday, December 4. Have a great long weekend!
As for the market, there remain a couple of flies in the ointment (the Nasdaq still hasn’t reached a new high; sentiment is a bit bubbly), but it’s fair to say the recent action has been constructive, with leading stocks avoiding another bout of selling so far and more individual names perking up. You should still go slow, but we’re increasingly optimistic.
This week’s list has a wide variety of names (big, small, growth, cyclical) that are all finding strength, another good sign for the market. Our Top Pick is Halozyme (HALO), which acts powerfully and has terrific metrics. Try to buy on dips.
| Stock Name | Price | ||
|---|---|---|---|
| Alcoa (AA) | 19.82 | ||
| Bilibili (BILI) | 63.31 | ||
| Celsius Holdings (CELH) | 33.73 | ||
| Halozyme Therapeutics (HALO) | 40.00 | ||
| Huazhu Group (HTHT) | 51.33 | ||
| II-VI Incorporated (IIVI) | 66.45 | ||
| Inspire Medical Systems (INSP) | 183.30 | ||
| Moderna (MRNA) | 100.92 | ||
| Omnicell (OMCL) | 106.80 | ||
| Sonos (SONO) | 21.41 |
The bull market remains alive and well, and I continue to recommend that you be heavily invested in a diversified portfolio of stocks.
Last week’s recommendation was well-known Coca-Cola (a true value stock) while this week’s is a fast-growing company that’s never made a profit, but is expected to make bundles, someday. You know its name too!
As for our current portfolio, most trends are good, but we do need to sell one stock, just to keep the portfolio at twenty stocks. That’s a process that ensures we always own the best!
Last week’s recommendation was well-known Coca-Cola (a true value stock) while this week’s is a fast-growing company that’s never made a profit, but is expected to make bundles, someday. You know its name too!
As for our current portfolio, most trends are good, but we do need to sell one stock, just to keep the portfolio at twenty stocks. That’s a process that ensures we always own the best!
There remain a ton of crosscurrents and news-driven action out there, but after a vicious rotation a week and a half ago, growth stocks have firmed up and the overall market is in good shape. Thus, we’re starting to put some money to work, averaging up in one of our stocks and starting a half-sized position in another. And if the good vibes continue, it shouldn’t take us long to get heavily invested.
In tonight’s issue, we review all of our stocks, talk about a couple of rare, blastoff-type measures that flashed that bode well for the major indexes and highlight a couple of smaller names in one growth sector that have great stories, numbers and charts.
In tonight’s issue, we review all of our stocks, talk about a couple of rare, blastoff-type measures that flashed that bode well for the major indexes and highlight a couple of smaller names in one growth sector that have great stories, numbers and charts.
Our issue this month, is focused primarily on growth companies, although we certainly offer plenty of dividend opportunities. We begin with our Spotlight Stock, a provider of technology, primarily to the U.S. Defense Department. This company is right on the cutting-edge of advanced technologies—the future of defense. In my Feature article, I discuss the coming technologies and CACI’s potential to harness and profit from them.
October was a surprisingly good month for the markets, until the very end, when investors took a rest. But since the election, they’ve come in off the sidelines and the markets are now close to all-time highs. Investors love the idea of a divided Congress.
As well, the unemployment picture continues to improve, although with the coronavirus causing more widespread shutdowns, we may see a temporary rise—at least until the vaccinations begin distribution. And that certainly looks promising, with both Pfizer and Moderna sharing terrific stats this past week.
Housing continues to be a mixed report. Inventories continue to decline, down 38.3% in October, and prices rose 12.2%. Mortgage rates are at a 5-year low. Once the pandemic eases, I expect the number of listed houses to rebound and sales to rise precipitously, at least until inventory is normalized.
Our issue this month, is focused primarily on growth companies, although we certainly offer plenty of dividend opportunities. We begin with our Spotlight Stock, a provider of technology, primarily to the U.S. Defense Department. This company is right on the cutting-edge of advanced technologies—the future of defense. In my Feature article, I discuss the coming technologies and CACI’s potential to harness and profit from them.
Moving on, our Growth stocks include companies from the payments, construction, and virtual healthcare arenas. In Growth & Income, we offer ideas in the equipment, tools, building products, toys, consumer goods, e-tail, and media sectors.
Our Financial picks are both from the insurance industry, and our Healthcare offerings include a contract research organization, a testing business, and biopharma. In Technology, you’ll find ideas from the cloud, cybersecurity, CRM, e-commerce, hardware, and streaming industries.
We have one Low-Priced Stock—a hybrid trading or emerging biotech, and a couple of banking ideas, as well as a company that serves the marijuana industry, in Preferred Stocks & REITs.
Our contributors still like High Yield, and here, we add companies from the insurance, banking, pest control, hardware, and communication sectors. And this month, we also feature a Short-Sale opportunity.
Lastly, our Funds & ETFs focus on growth, banking, energy MLP’s, and marijuana.
I wish you and your families a healthy and happy Thanksgiving, and look forward to hearing from you. Please don’t hesitate to email me with your feedback and questions.My address is nancy@financialfreedomfederation.com.
As well, the unemployment picture continues to improve, although with the coronavirus causing more widespread shutdowns, we may see a temporary rise—at least until the vaccinations begin distribution. And that certainly looks promising, with both Pfizer and Moderna sharing terrific stats this past week.
Housing continues to be a mixed report. Inventories continue to decline, down 38.3% in October, and prices rose 12.2%. Mortgage rates are at a 5-year low. Once the pandemic eases, I expect the number of listed houses to rebound and sales to rise precipitously, at least until inventory is normalized.
Our issue this month, is focused primarily on growth companies, although we certainly offer plenty of dividend opportunities. We begin with our Spotlight Stock, a provider of technology, primarily to the U.S. Defense Department. This company is right on the cutting-edge of advanced technologies—the future of defense. In my Feature article, I discuss the coming technologies and CACI’s potential to harness and profit from them.
Moving on, our Growth stocks include companies from the payments, construction, and virtual healthcare arenas. In Growth & Income, we offer ideas in the equipment, tools, building products, toys, consumer goods, e-tail, and media sectors.
Our Financial picks are both from the insurance industry, and our Healthcare offerings include a contract research organization, a testing business, and biopharma. In Technology, you’ll find ideas from the cloud, cybersecurity, CRM, e-commerce, hardware, and streaming industries.
We have one Low-Priced Stock—a hybrid trading or emerging biotech, and a couple of banking ideas, as well as a company that serves the marijuana industry, in Preferred Stocks & REITs.
Our contributors still like High Yield, and here, we add companies from the insurance, banking, pest control, hardware, and communication sectors. And this month, we also feature a Short-Sale opportunity.
Lastly, our Funds & ETFs focus on growth, banking, energy MLP’s, and marijuana.
I wish you and your families a healthy and happy Thanksgiving, and look forward to hearing from you. Please don’t hesitate to email me with your feedback and questions.My address is nancy@financialfreedomfederation.com.
In November’s Issue of Cabot Early Opportunities we discuss the supposed rotation from growth stocks into value stocks and the underlying reasons, which we think could drive erratic market action in the coming weeks. Despite the somewhat conflicting trends out there, we serve up a menu of compelling opportunities spanning Medtech, manufacturing, software and even health and beauty products, which we can all use a little of these days!
This Friday is the expiration of November options, and I’m happy to report that our three covered call positions expiring this week are in great shape. As is always the case, on Thursday afternoon or Friday morning, I will send a detailed breakdown of those positions expiring Friday breaking down our profits, and if we need to make any adjustments. Be on the on the lookout for that email.
Current Market OutlookIf you look at the weekly charts, the trends of the major indexes and most stocks are pointed up—i.e., this is still a bull market, and the trends and other factors (such as the unusual strength seen two weeks ago) portend higher prices down the road. That said, there’s no question the environment remains extremely news-driven (mostly with vaccine news, but also economic reports and government policy outlooks), with plenty of crosscurrents depending on the day. Encouragingly, today’s vaccine news didn’t dent the growth leaders like it did a week ago, which is a step in the right direction. Net-net, we remain optimistic, but the details remain vital; getting decent entry points and position sizing correctly (not too big so you can handle the swings) is key, as is focusing on stocks (cyclical or growth) that have shown good-volume support of late.
This week’s list has something for everyone, including stocks with fresh growth stories as well as some stodgy, cyclical names. Our Top Pick is Lam Research (LRCX), which looks like a leader in the resilient chip equipment sectors.
| Stock Name | Price | ||
|---|---|---|---|
| Albemarle Corporation (ALB) | 128.90 | ||
| Canopy Growth (CGC) | 24.77 | ||
| Lam Research (LRCX) | 439.40 | ||
| Marvell Technology Group (MRVL) | 43.29 | ||
| Norfolk Southern (NSC) | 247.09 | ||
| ShockWave Medical, Inc. (SWAV) | 94.95 | ||
| Snap Inc. (SNAP) | 39.08 | ||
| STAAR Surgical (STAA) | 79.31 | ||
| The Timken Company (TKR) | 73.04 | ||
| Upwork (UPWK) | 33.08 |
Updates
The iShares EM Fund has been jumpy, but is still well above its 50-day moving averages, keeping our Buy signal in place, if a little bruised.
The stock market has begun to recover from last week’s war of words-induced selloff, and I’m moving one stock back to Buy today. However, it’s not time for the all-clear yet; last week’s selloff was preceded by significant deterioration under the surface of the market, so we’ll need to see more proof that the bulls are back before jumping back in the water.
We’ve seen before how Trump’s shoot-from-the-hip approach to foreign policy has marked a significant departure from that of his predecessors. But clearly this latest exchange is different. Understandably, the market reacted negatively to the very mention of military conflict with North Korea.
U.S. stock market indexes tumbled yesterday, August 10, in reaction to the escalating rhetoric between President Donald Trump and North Korean Premier Kim Jong-un. I expect the war on words to continue for a while longer, which will keep investors on edge. The stock market could face further deterioration until President Trump and Premier Kim cool off.
Tonight, we’ll continue to stand pat in the Model Portfolio (though we are placing one stock on Hold) with eight stocks and a cash position near 20%.
The market continues to lean bullish, with warning signs. While the Dow has been hitting all-time highs, the S&P has gone nowhere for two weeks and the Nasdaq has actually lost ground. Investors seem to be deserting “risk-on” assets, leading to underperformance in the Russell 2000 (IWM) and high-growth sectors including Semiconductors (SMH) and Biotechs (XBI).
Twenty-three of our portfolio companies reported June quarter results. Among those companies, 14 reported EPS that exceeded analysts’ consensus estimates; seven of which exceeded all analysts’ estimates.
Summaries of the latest news for 12 companies. One stock, which has advanced 29.6% in the past 26 months, is now a Sell because the company is being acquired.
The iShares EM Fund has been trading sideways since July 19, but is holding well above its rising moving averages, so our Buy signal is in good shape. We have one portfolio move tonight.
I’m making three portfolio moves today. I’m putting one stock on Hold due to an earnings miss and taking half our profits in another stock off the table, as the stock has stalled out. We’re also selling one stock, as planned, due to significant technical erosion in the chart.
Despite the pullback yesterday (specifically in tech stocks) the market appears to be in bull mode. Small caps have been toying with breaking out of their 2017 trading range, but haven’t made a convincing move just yet. Keep an eye on the 870 level on the S&P 600 Small Cap Index.
Alerts
This health management company beat analysts’ estimates by $.07 last quarter, and Wall Street expects the company to grow at an annual rate of 15.07% over the next five years.
This stock reported great first-quarter results.
This scientific instrument manufacturer is growing at double-digit rates.
This insurance company beat analysts’ estimates by $.10 last quarter.
Traders can maintain a long position in my favorite market-tracking ETF.
This is a low-cost biomedical stock that has its hands in several potentially lucrative medications.
Today’s update is brief, but it does include a couple of important observations about the behavior of cannabis stocks in recent weeks, as well as updates on all the portfolio stocks.
One stock begins a run-up and moves from Buy to Strong Buy and two others continue to rise.
This fund moves twice the movement of the S&P 500, and pays a small dividend (0.61%).
In the past 30 days, two analysts have increased their EPS estimates for our first idea today, an HVAC company.
This global hotelier beat analysts’ earnings estimates by ten cents last quarter, and eight analysts have increased their forecasts for the company in the past 30 days.
Portfolios
Strategy
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.