This week is the expiration of eight of our positions. Expect to hear from me on how we will manage these trades Thursday afternoon or Friday morning.

Big picture, the factors that have been in place for the past few weeks are still hanging around, but we’re also starting to see more names give it a go on the upside—after a rough start to earnings season, more and more are starting to react well and push through some resistance, with others that did get hit snapping back impressively. (Indeed, today’s list is as growth-y as we’ve seen it in a while.) Is it enough to change our stance? No, as we’re leaving our Market Monitor at a level 4, but we’re keeping our antennae up in case the buying pressures spread and more real leaders emerge.

This week’s list has a bunch of strong names with solid numbers and stories, from a variety of industries, too. Our Top Pick is toyed with new highs a couple of times in recent months and now looks to have decisively broken through.

It’s tough to make money in a sideways market like this one. But soon enough, a breakout is coming – history tells us that this bear market (18 months old in the Nasdaq) is on borrowed time. When it does, it will happen fast, and that’s when the real money is made – at the onset of a new bull market. To be prepared for its eventual arrival, we maintain a full 20-stock portfolio. And today, we add a familiar growth stock that got pummeled last year but is on the fast track to recovery in 2023. It’s a new recommendation from Mike Cintolo in his Cabot Top Ten Trader advisory.

Details inside.

After the recent pullback, the All-Weather portfolio is now up 9.88%, with the Vanguard Total Stock Market ETF (VTI) doing the heavy lifting, up 25.36% since it was introduced to the portfolio back on 6/15/22.

I will be rolling all of our LEAPS positions to the 2025 expiration cycle this week. So, be prepared to make a few trades this week as we increase the duration of our LEAPS while simultaneously continuing to sell more call premium.

Mega-cap tech again outperformed last week, while the banks continued to look suspect/horrible, and the action under the surface is flashing warning signs.

Mega-cap tech again outperformed last week, while the banks continued to look suspect/horrible, and the action under the surface is flashing warning signs.

As we head towards the end of the May expiration cycle we have two positions, BITO and WFC, that need to be rolled. Both positions have little to no premium left. As a result, I want to buy back our short premium positions, lock in profits and immediately sell more premium in both positions. Be on the lookout for a trade alert Monday or Tuesday.

I’m going to keep it short this week as we enter a busy end to the expiration cycle. We locked in an 11.1% profit in our DIA bear call spread last week to add to our 6.8% gain the week prior. Our total cumulative return stands at 135.63% (an all-time high) with a win ratio of 87.5% (28/32 winning trades) since we started Quant Trader just under one year ago … numbers we are proud of and hope you are as well.

Our focus this week will be on Home Depot (HD), Target (TGT) and Walmart (WMT).

We’ve gotten back on track the past few weeks with another small winning trade, a one-day, 4.2% gain in Disney (DIS). In total we’ve placed six trades this earnings season, with a cumulative loss of -11.9%. With a few more weeks left on the earnings calendar, we have three to four more opportunities to bring our returns back to breakeven for this cycle or possibly into positive territory.

The markets traded sideways through most of April. But since then, the choppiness has returned—along with worries about the uncertainty regarding the debt ceiling, the expiration of the immigration-limiting legislation, and ongoing debate about the possibility of a recession.

Yet, economically speaking, the trends are still healthy. Manufacturing has held up, employment continues to rise, and job openings are still underutilized (as you can tell if you’ve been in a restaurant lately!).

Energy stocks have been by far the best-performing market sector over the last couple of years. They went from worst to first in dramatic fashion. And the good times may be just beginning.

The industry has had very low capital spending and expansion in recent years. Crude oil inventories have fallen below the five-year average and are likely headed far lower. OPEC has pledged dramatic production cuts to push prices higher. There is also a high degree of geopolitical risk. In fact, Goldman Sachs analysts are forecasting oil prices to get back to $95 per barrel before the end of this year.

The fundamentals are in place for prices to average a lot higher than they are now over the next few years. And that will lift stock prices. Stocks are also cheap, have among the best dividend yields on the market, and tend to perform well during times of inflation.

This issue highlights one of the highest-growth energy companies on the market. It has the ability to grow production by double digits for many years to come and at very low cost.

Today, I’m recommending a “buy when there’s blood in the streets” type of stock:

Key points:

• The company owns valuable real estate in Manhattan and Brooklyn.
• The underlying asset value implies 7x upside to the stock’s current price.
• Insiders have been buying aggressively over the past year.

All the details are inside this month’s Issue. Enjoy!

This week we review earnings from one of our companies and provide updates on others. Our podcast covers these topics and some thoughts on why waving off rising interest rates because they are “fully discounted” may not be a good idea.

The rise in interest rates and the Russia-Ukraine situation are roiling markets and the Fed will soon begin reducing its $9 trillion holdings of Treasury bonds, putting a dent in liquidity that was propping up markets. This is impacting stocks, especially the tech-heavy Nasdaq market.
Agricultural and food markets are also volatile since almost one-quarter of the world’s grain comes from Russia and Ukraine. Across Ukraine’s farm belt, silos are stuck with 15 million tons of corn from the autumn harvest – most of which should have been hitting world markets by now. Impacted by supply-chain bottlenecks and surging freight rates, the $120 billion global grains trade is bracing for upheavals and severe shortages, not to mention political instability.

The big market rebound has petered. And ugliness might be resuming.

The waning of war panic and relief about the Fed’s March 0.25% rate hike have given way to new concerns. There may be a new round of economic fallout from the war as Europe proposes additional sanctions on Russia. There are also growing concerns about economic growth going forward because of inflation and a more aggressive Fed.

The sharp recovery from the recent bottom has leveled off, at least for now. From here, the prognosis looks murky at best.
New concerns have arisen. There is worry that Europe will impose additional sanctions on Russia, which may include natural gas. That would certainly increase the negative economic fallout from the war. Also, there is increasing concern about slowing economic growth later this year and next.

For more than a year, gold remained stuck in a holding pattern while other metals roared higher in response to global manufacturing demand and supply shortages. All the while, the global economic and geopolitical situation was becoming increasingly tenuous, prompting us to repeatedly wonder when a flight to the safety of gold would transpire.

As market conditions continue to shift, with large-cap U.S. stocks resuming an uptrend in the past two weeks, we are once again making some changes within the tactical Undiscovered Portfolio.

The Update includes comments on earnings from recommended companies, other updates and the Catalyst Report, a powerful tool that anyone can use for finding attractive turnaround stocks. In the April monthly edition we highlight three companies with new CEOs, and summarize our deep-dive into the cannabis industry including six companies whose shares look appealing for long-term investors. We also discuss a spin-off which is our feature recommendation.

Stocks had their second straight bad day today to close out the quarter. At day’s end, the Dow had sunk 550 points, the Nasdaq dropped 222 points and many growth stocks got hit hard.

There’s been a lot of talk lately about a potential yield curve inversion (happened briefly on Tuesday), so I did some work earlier in the week to see what the data says about small- and large-cap stock performance around inversions.

What a rally off the bottom! After flirting with a severe correction and possibly a bear market, stocks have soared over the past two weeks. The S&P 500 is now down less than 3% YTD. What happened?

Panic waned and investors realized that the economy is still strong, interest rates are still low, and money has no place else to go but stocks to fetch a decent return. The initial panic from the Russia/Ukraine war subsided. Then the Fed hiked rates by a measly 0.25% and pleased short-sighted investors.

After adding IEA to the portfolio after last week’s ratings change, we’re fully invested in our Real Money Portfolio. It’s designed to be 12 holdings of equal initial size. We’re up 4% on the total portfolio we hold now, based on market prices entering today (higher if we tally dividends and trust value of the portfolio’s two SPACs). That puts us in a good spot if Greentech remains on the upswing, since being fully invested in the early stages in a bull move allows us to capture more of the upside. There is resistance ahead, with charts suggesting a move 5% higher and then 12% above current levels will bring in sellers. However, the general stance remains bullish, with our benchmark Wilderhill Clean Energy Index above its uptrending 20-day and 40-day moving averages and little pushback by bears since a high-volume, strong price move earlier this month.

After going through our portfolio this past weekend, I’ve decided to make a couple of quick changes. Part of my thinking with these two sells is that we have a new crop of ideas coming in next week’s issue and we can carve out some spots (and free up capital) for fresh ideas, while taking a little risk off the table while the market is strong.

This finance company beat analysts’ earnings estimates by $.07 last quarter. The company has a current dividend yield of 5.26%, paid quarterly, plus a habit of paying special dividends.

Avalara (AVLR) reported Q3 results yesterday that surpassed expectations with revenue up 42% to $181.2 million (versus $170.3 million consensus). Adjusted EPS of -$0.03 beat by $0.04. Several recent acquisitions contributed meaningful growth in the quarter ($16.2 million in revenue) which, if taken out, means the organic revenue growth rate was closer to 29%.

Earnings Roundup includes ALTR, BILL, NET, HUBS, MRVI, TIXT, GFL.

This aerospace company beat earnings estimates by $0.20 last quarter. The shares have a current annual dividend yield of 2.24%, paid quarterly.

Revolve (RVLV) announced Q3 revenue of $244.1 million, up 62% and ahead of the $228.6 million (+60%) analysts had expected. By segment, REVOLVE grew by 56% (to $204.2 million) while FORWARD grew 95% (to $39.9 million).

Sprout Social (SPT) reported Q3 results yesterday that beat expectations. Revenue was up 46% to $49.1 million versus expected growth of 42%. Adjusted EPS was -$0.03 versus $0.01 expected. Customer count grew 20% to 30,705, customers spending over $10K in ARR grew 57% to 4,380, and customers spending over $50K grew 98% to 478.

Sprout Social (SPT) reported Q3 results yesterday that beat expectations. Revenue was up 46% to $49.1 million versus expected growth of 42%.

For its most recent quarter, this REIT posted FFO of $1.85 per share, beating analysts’ estimates of $1.71 per share. The company also surpassed revenue forecasts, reporting $412.49 million for the quarter. The shares have a current annual dividend yield of 2.53%, paid quarterly.

This auto and truck dealer reported third-quarter 2021 adjusted earnings of $4.47 per share, up 54% from last year and beating analysts’ earnings estimates of $3.54.

ZoomInfo (ZI) reported Q3 results yesterday that surpassed expectations. Revenue was up 60% to $197.6 million (54% organic growth). Growth with enterprise customers continues to shine as ZoomInfo now has over 1,250 customers (74% customer growth) with over $100K in annual contract value (ACV) and total ACV growth of 85% from these customers (ZoomInfo has over 25,000 total customers).

This tech company beat analysts’ earnings projections by $0.20 last quarter. The shares have a current dividend yield of 2.21%, paid quarterly.

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 Top Ten 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 Top Ten features.