As earnings season ramps up in the coming week, I wanted to note a couple items.

As earnings season ramps up in the coming week, I wanted to note a couple items.

The current market is giving investors headaches, but it’s not unusual in Greentech to find savvy investors looking past the near-term economic fears and focusing on companies that are tapping into what promises to be terrific growth from de-carbonizing the economy.

This issue, we highlight a small cap stock with amazing engineering savvy at a minor, but essential, feature of electric vehicles. Management expects it can grow revenue about 50% every year through the rest of the decade as automaker customers begin to churn out EVs. It’s in the early stages of growth and is seeing strong fund buying as well as exceptional technicals.



We also highlight three ESG stocks showing the best technicals in the group, as part of our recurring ESG Three, give the current sector outlook indicated by our Greentech Timer, and provide a detailed rundown of the stocks in our current portfolios. We have some ratings changes and refreshed sell-stop recommendations for many of our holdings.



Read through for more details.

In the October Issue of Cabot Early Opportunities, we try to interpret some of the latest commentary from Fed officials and look at the future cadence of expected interest rate hikes.

Then we dive into five stocks that seem poised for gains into the end of the year. On balance, we’re still optimistic the worst is behind us. But it’s not (yet) time to be overly aggressive. We try to balance the risks and possible rewards by managing position sizes and continuing to build up our Watch List.

In the October Issue of Cabot Early Opportunities, we try to interpret some of the latest commentary from Fed officials and look at the future cadence of expected interest rate hikes.

Then we dive into five stocks that seem poised for gains into the end of the year. On balance, we’re still optimistic the worst is behind us. But it’s not (yet) time to be overly aggressive. We try to balance the risks and possible rewards by managing position sizes and continuing to build up our Watch List.

The market has had many ups and downs in recent days, though stepping back, the indexes have been trending lower. Essentially, while there have been some strong days for the indexes, we are in a bear market until proven otherwise.

At the close of the August expiration cycle, back on the 19^th, the SPDR S&P 500 ETF (SPY) was trading for 422.14. Now it’s trading 3.7% lower at 406.60.

For the year the S&P 500 (SPY) is down 14.7%, while the tech-heavy Nasdaq 100 (QQQ) and small-cap Russell 2000 (IWM) indexes are lower by 22.8% and 15.7%, respectively.

Nothing has changed from last month’s issue. I still expect to see bouts of volatility going forward. I would like to say that most of the weakness is behind us, but unfortunately, I don’t have a crystal ball. Although, I will say that barring any real setbacks in inflation data or ongoing geopolitical concerns, I expect the market to hold the 2022 lows and potentially rally, particularly if inflation data subsides.

Last week was another doozy for the bulls, with the major indexes suffering a good-sized decline and many growth stocks taking it on the chin. With the major evidence still pointed down, we continue to advise holding plenty of cash and doing little on the buy side. That said, it’s also important to remain flexible, as there remains plenty of underlying potential positives, including another round of hugely pessimistic sentiment measures and a positive divergence in the broad market. As we’ve written before, if something actually goes right in the world, it’s possible the bulls could make a run at things, but we have to see it for more than a day or two to believe it. Our Market Monitor remains at a level 3.

This week’s list actually has a lot of names that look poised for intermediate-term moves … if the market can get out of its own way. Our Top Pick is an old friend in the medical device space that actually has four months of positive momentum on its chart.

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.

The bull market in our turnaround stocks has pushed more names above their price targets. Many (most) of these companies continue to see their fundamentals improve while their valuations still look attractive enough to keep, so we are raising our price targets on six stocks today.

As promised in yesterday’s Special Bulletin today we’re looking past the big picture stuff to focus on our stocks. With one quick note … we just may have a three-day streak going! Yields have backed off and a lot of stocks from different sectors are clicking. Suffice to say, this is a welcome change for those of us with two feet in the growth stock pool.

In a bit of a reversal, tech stocks gyrated and industrial stocks jumped this past week. In particular, energy and financial stocks led the way as the Dow closed above 32,000 for the first time. Tech company stalwarts rebounded a bit yesterday but have been stung by the sharp pullback.

Although the S&P 500 index has gone sideways in recent weeks, there is a lot going on under the hood.

Each day brings something new. Some days every stock falls, other days they all surge, and some days, like Monday, undervalued stocks in the industrial, consumer and financial sectors jump (the Dow Jones Industrial Average gained 1%) while the Nasdaq slipped 2.4% - an enormous and historically unusual 3.4 percentage point gap, particularly as the indices went in opposite directions. Since February 12th, the Dow Jones Industrial Average has lifted by 1.1% while the Nasdaq has plunged by 10.5%, entering what the media call a correction.

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

The sellers ran wild today, with the Dow losing 346 points, the Nasdaq falling 274 points (2.1%) and the average growth stock we own or watch down nearly 5%. From late January through late February, we began to see a change in character, with a string of wild up-down-up-down action in leading stocks—coming after a big run, that’s a sign the bears have begun to put up a fight. And now, at least when it comes to growth stocks, we’re seeing the result, with a ton of stocks cracking their intermediate-term uptrends and many coming unglued.

The market has gotten a little choppy and interest rates are to blame. At least, that’s what they say. The market indexes fell last week and have been all over the place so far this week.

Vaccines are being rolled out, and the economic recovery will be strong in 2021. Stocks that will benefit from the economic recover should have strong tailwinds. While our entire portfolio should benefit from an improving economy, two stand out to me.

After a rough week, the market is right back in business. Just when stocks appeared on the cusp of a deeper selloff, the S&P 500 started off this week with the best session since June.

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

The big picture for the market is that the uptrend is intact but under the surface we’re continuing to see pockets of turbulence. While the S&P 500 is just 2% off its high from last week and the S&P 600 Small Cap Index hit a fresh all-time high yesterday, the Nasdaq is 6% off its high and trading right on its 50-day line.

The top five holdings in this ETF are: Aphria Inc (APHA.TO, 9.09%), Canopy Growth Corp (WEED.TO, 7.73%), GW Pharmaceuticals PLC ADR (GWPH.L, 7.62%), GrowGeneration Corp (GRWG, 6.90%), and Tilray Inc (TLRY.TO).

Last Friday the ADNT January 36 Call that we sold for $2.15 expired worthless (good situation), leaving us with our stock position, and an approximate profit of 6.5%.

This gold producer just reported that its gold production rose by 32%, year-over-year. The company also raised its dividend.

This is a very speculative biotech that has interesting potential.

We are raising our price target on Mohawk Industries (MHK).

Late yesterday Accolade (ACCD) announced it was diving deeper into the telehealth market by acquiring 2nd.MD, a small start-up based in Houston, TX. The acquisition target provides expert medical consultation services to patients, typically at a critical point in the patients’ lives when a second opinion and/or consultation and provider care options are of utmost importance.

What a market! Despite all the noise out there our portfolio’s performance continues to exceed expectations. Our average gain across 30 positions is hovering between 80% and 85% as I write.

The expiration of our January covered calls is today, and we have one position (UBER) likely to be called away for maximum gains (great scenario) and another (ADNT) that is too close to call and will likely come down to the close (good scenario).

The shares of this large bank were recently upgraded to ‘Buy’ at UBS and Jefferies.

This biotech is forecasted to grow at an annual rate of 35.60% over the next five years.

Moving DuPont (DD) to Sell.

Part of the marijuana sector’s strength, of course, is because the broad market is also trending higher. But a substantial part comes from the growing realization, especially in wake of last week’s election that promised us a uniformly Democratic federal government, that this industry will continue to boom as legal barriers are removed.

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.