The market roller coaster continued this past month, with inflation worries and rising interest rates leading the charge.

I believe this volatility will continue at least until the first quarter of next year. Consequently, I’m moving the portfolio in a more conservative direction at the moment.



Having said that, however, economic indicators continue to be positive. Motor vehicle sales are still strong, with 13.5 million units sold last month, better than expected. The ADP employment report also exceeded forecasts, with 208,000 new jobs coming online. And the unemployment rate fell to 3.5% from 3.7% the prior month.

A tough week for markets as concerns over recession, persistent inflation, and geopolitical tensions grow. Explorer stocks were not spared as they all pulled back with exception of Oracle (ORCL) and micro-cap Kraken Robotics (KRKNF). New restrictions on chip-related sales to China hit semiconductor stocks. An almost $8 billion deal by Brookfield Renewable Partners and uranium producer Cameco to buy nuclear services firm Westinghouse is the latest sign of revival in nuclear power after years of decline. The matchup would create something of a Western nuclear powerhouse, pairing a key nuclear power service provider with the largest publicly traded uranium company and one of the world’s biggest owners of wind and solar projects.

This week we sell two positions and go to Japan for a conservative, high quality play on an overlooked but critical part of the electric vehicle revolution.

Today, I’m recommending a real estate company that is 86% owned by insiders.
Key points:

• Stock is trading at 100% discount to fair value.•Company has 87% of its market cap in cash.•Majority shareholders will likely attempt to buy out minority shareholders at a premium shortly.

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

In an otherwise miserable year of nonstop inflation, recession, the Fed, and a bear market, an opportunity is emerging for opportunistic investors. Attractive rates on conservative fixed-rate investments have reemerged. There is a chance to lock in rates not seen since the decade before last.

In this issue, I highlight an investment grade rated fixed income security that currently yields nearly 6%, and the income offers tax advantages to boot.

A very promising start to the trading week, which saw the indexes surge higher by 5%, was somewhat washed away by last Friday’s post Jobs Report sell-off. And while the steep declines Friday were worrisome, big picture the S&P 500 still managed to gain 1.5% on the week, the Dow rallied 2%, and the Nasdaq added 0.7%.

Gold and silver have been under pressure from a strong dollar and higher interest rates, but there are signs that the metals’ dollar-related woes may be in the process of changing for the better. The global de-dollarization trend is a case in point, as we’ll discuss here.

Elsewhere, steel and copper are both trying to establish bottoms and are getting some help from a resurgent auto industry.


In the trading portfolio, no new positions are recommended for now as the broad financial market remains unsettled (with increased spillover risk into the metals).

A very promising start to the trading week, which saw the indexes surge higher by 5%, was somewhat washed away by Friday’s post Jobs Report sell-off. And while the steep declines Friday were worrisome, big picture the S&P 500 still managed to gain 1.5% on the week, the Dow rallied 2%, and the Nasdaq added 0.7%.

A very promising start to the trading week, which saw the indexes surge higher by 5%, was somewhat washed away by Friday’s post Jobs Report sell-off. And while the steep declines Friday were worrisome, big picture the S&P 500 still managed to gain 1.5% on the week, the Dow rallied 2%, and the Nasdaq added 0.7%.

It’s going to be a fairly busy week for trading.

We have four positions that are due to expire at the October 21, 2022 expiration cycle, three of which have little to no premium. As a result, I intend to buy back our calls in GDX, BITO, and KO on Monday or Tuesday. I’ll plan on doing the same in our PFE calls that are due to expire October 28.

My hope is to add several more positions to the Income Wheel portfolio this week as opportunities are plentiful.

Earnings season is finally upon us.

This week offers up a few potential trading opportunities, particularly in the big banks. JPMorgan (JPM), Morgan Stanley (MS), Citigroup (C), Wells Fargo (WFC) and US Bank (USB) are the big announcements on the docket and the companies I will be focusing on.



I also want to remind everyone that we will have a subscriber-exclusive webinar every Friday during earnings season, so make sure to sign-up when you get an opportunity.

Stocks continue to slide, prompting us to add some more safety to the Stock of the Week portfolio in the form of a gold mining stock recommended by Sector Xpress Gold & Metals Advisor analyst Clif Droke this week. It’s one of the few gold miners that’s actually growing revenues, and is in fact the only stock Clif is currently recommending. It also may benefit from ongoing global efforts at “de-dollarization.”


Details below.

There were a few positives last week, including some intriguing early-week strength, with some very powerful breadth, and, even with the slide of the past couple of sessions, far fewer stocks were hitting new lows compared to a couple of weeks ago. Given how everyone is leaning bearish, there’s plenty of upside potential if the market can catch a spark, but the jobs report-induced selling reinforces the pattern of selling on each and every rally. Long story short: While our eyes are open, nothing has changed with the major evidence. We’ll stick with a level 3 on our Market Monitor.


This week’s list is heavier on energy and medical areas, though our Top Pick is a name that should benefit from higher rates. As usual, though, we think aiming for dips is the right move.

It’s been another mostly constructive week as many of our stocks inch higher and the economic picture continues to improve.

This is an incredible market that just keeps creeping higher. The promise of a booming recovery with trillions in stimulus ahead continues to pull stocks to new all-time highs.

Continue to go slow but have your shopping list ready. Growth stocks are gradually improving their standing, with more popping toward their highs, many holding their gains and a few finding some good-volume buying.

EBITDA, or earnings before interest, taxes, depreciation and amortization, is a straight-forward measure (not a perfect measure, though) of a company’s cash operating profits. But, like seemingly all metrics published by company managements, it is usually adjusted for unusual items that may be non-recurring.

Today’s note includes earnings updates and the podcast.

There’s no doubt things are looking a little better out there as many software, MedTech and other growth stocks retested their March lows late last week then turned north. The timing of that short-term reversal, coinciding with the end of the first quarter, most definitely has me feeling better about the state of things right now.

Nearly 95% of companies in the S&P 500 are now trading above their 200-day moving average, according to Dow Jones Market Data, the highest percentage since May 2013. As if we didn’t have enough to worry about, as of late February, investors had borrowed a record $814 billion against their portfolios. That was up 49% from one year earlier, the fastest annual increase since 2007, during the frothy period before the 2008 financial crisis. Before that, the last time investor borrowing had grown so rapidly was during the dot-com bubble in 1999.

How about this market? Even with the technology sector still in a funk and the huge energy sector rally abating, the S&P 500 just made a new all-time high anyway.

Yesterday’s market drivers are taking a back seat while previously jilted and ignored stocks are taking the baton.

After a volatile March, the market has found its footing. Month to date, the S&P 500 is up 2.8%, and is back to an all-time high. Our open recommendations are up 81% on average from when they were initially profiled. In total (including closed recommendations), our picks are up 71% since being initially profiled. While there are definitely pockets of froth in the market, I continue to find many attractive opportunities, and I’m looking forward to profiling my latest idea next week.

Today’s note includes earnings updates, ratings changes, the podcast and the Catalyst Report.

Growth stocks had a great day yesterday for the first time in a while—while the Dow lost 85 points, the Nasdaq lifted 201 points (1.5%).

Our first recommendation is a security tech company that is expected to grow earnings by 152.4% this year. Our second is some nice partial profit-taking of a previous idea.

This food company just announced its new Accelerate growth strategy, which will focus on five categories that, together, account for 45% of its revenues: cereal, pet food, ice cream, snack bars and Mexican food. The shares have a current annual yield of 3.57%, paid quarterly.

We are raising our price target on ViacomCBS (VIAC) from 54 to 65 and moving to HOLD.

Coverage of the shares of this electric vehicle maker were just initiated at Morgan Stanley with an ‘Overweight’ rating.

Earnings for this navigation/information company are expected on February 17, with estimates of $1.39 EPS on revenues of $1.18 billion. The shares have a current dividend yield of 1.93%, paid quarterly.

This bank is joining the digital asset (think Bitcoin) business rapidly, boosting its attractiveness to investors.

** Because of President’s Day, our offices will be closed next Monday, February 15 — so your next Cabot Profit Booster issue will be published Wednesday, February 17.

Datadog (DDOG) reported Q4 results yesterday afternoon that surpassed expectations but were light in terms of 2021 EPS guidance. Revenue was up 56% to $178 million (beating by $14 million) while adjusted EPS of $0.06 beat by $0.04. Revenue guidance for 2021 of $825 million to $835 million is above consensus of $803 million but adjusted EPS guidance of $0.10 to $0.14 was below consensus of $0.19.

Since reporting earnings earlier this week shares of Avalara (AVLR) have retreated modestly, despite a solid quarter. As I’ve flipped through dozens of charts over the last two days I’ve been struck by the diverging performance of earnings winners.

As marijuana legalization spreads, this grower should reap the benefits.

Zedge (ZDGE) has appreciated a lot faster than I had anticipated. It is up over 100% since we profiled the name last month and is trading above my fair value estimate of $9.80.

Avalara (AVLR) reported results after the close yesterday that handily beat expectations on virtually all metrics. Q4 revenue was up 35% to $144.8 million (beating by $11.4 million) while adjusted EPS of $0.09 beat by $0.15. Billings of $167 million were up 38%. Adjusted gross margin increased from 71% to 74% and free cash flow increased from $14.2 million to $28.6 million.

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.