It’s been a challenging year for investors in cannabis stocks, but the good news today is that with the broad market very weak as well, eventually the weakness will turn to strength—and the best of our stocks will soar.

In the meantime, our portfolio is more than a third in cash, waiting patiently for the turn.



Full details in the issue.



Yours for wealth and wisdom.

This week we will be looking to take advantage of the current historic trend that’s taking place in the travel industry as seen through major U.S. airline carrier, United Airlines (UAL).

While there are still plenty of reasons for remaining bullish on the intermediate- and long-term outlook for metals and other commodities, the strengthening U.S. dollar is providing a near-term headwind for metal prices.

The greenback’s latest strength has also performed the valuable service of helping to cool off what was becoming a seriously overheated market condition in several major industrial metals.



However, until the dollar weakens, I’m recommending that participants maintain a mostly defensive stance.

The market was hit hard last week, so all trends are down, and increased caution is advised.
In the portfolio this week, we’re selling four stocks, which will both reduce risk and raise cash.


As for the new recommendation, it’s one of the world’s leading uranium companies, which has a great growth story thanks to growing negative attitudes toward Russian energy and growing positive attitudes toward carbon-free energy.


Details inside.

Under the surface, there does remain some encouraging signs for the overall market, which is a good reason to keep your antennae up for a change in character. But at the end of the day, what counts most is the action of the market and potential leading growth stocks, and on that front, there’s no question the trends are down and the sellers are in control. Thus, we remain cautious, holding 60% of the Model Portfolio in cash, and while we’re not anxious to sell wholesale, we won’t hesitate to sell more if stocks continue to crack.


In tonight’s issue, we review some key measures that show just how severe this selling wave has been in recent months--and why, once it’s over, it should lead to a fresh bull market in growth stocks. We also highlight some new ideas in commodities and elsewhere while we continue to fine tune our watch list.

This issue we examine two unique companies. The first is the only one of its kind making high-value products, including food and fuel, from what others consider waste products. The second is a large clean energy producer that offers a combination of utility-like stability and growth from ESG macro trends in the U.S.

We also tweak our Real Money Portfolio in light of performance and conditions, review the Excelsior portfolio, the Greentech Timer and suggest three additional ESG stocks to consider.

While the majority of Mike Cintolo’s Top Ten Trader is focused on commodity stocks this week, we already have exposure to this group via CLF and MRO. Because of that exposure, I am going to add Box Inc. (BOX) which develops and markets cloud-based content management, collaboration, and file sharing tools for businesses.

We want to take a moment to highlight breadth across the overall markets. Many individual stocks are down well over 50%, while indices have remained more stable. Why? The composition of the S&P 500 is weighted heavily towards mega-cap technology companies. Stocks like Apple, Amazon, and Google remain near all-time highs, bolstered by the overall current flight to quality. Investors remain enticed by buybacks, splits, and fundamental cash flow generation.

Many investors are simply asking themselves: what do I buy right now if anything at all?



Demand for unprofitable assets has fallen off precipitously.

With the market becoming less supportive, I’m dialing back the aggression, so this week’s recommendation is a lower-risk company in the pharmaceutical sector that pays a solid dividend.
As for the current portfolio, our three energy stocks remain very strong, and there are no changes.


Details inside.

The environment remains essentially the same this week, as we have a broad market that continues to struggle, major indexes that are back in intermediate-term downtrends and commodity and defensive stocks about the only two areas that are doing decently. We continue to see secondary signs that are encouraging, including many measures that tell us selling pressures are gradually easing, but as always, we need to see the market and individual stocks prove themselves before changing our stance in any real way. It’s best to remain mostly cautious until the buyers return. Our Market Monitor will remain at a level 5.

See-sawing—that’s what these markets bring to mind. And I think we can expect more of the same, due to three factors:

1. The war in Ukraine2. Rising inflation—up about 8.4% last month3. Increasing interest rates. Economists now expect the Federal Reserve to raise rates by one-half a percent, in both May and June

Explorer recommendations were pretty flat this week but demonstrated some strength as well. JPMorgan led the banks, reporting a first quarter with a net profit of $8 billion on over $32 billion of revenue. Keep your perspective and play defense and offense. Emerging markets offer you both and we will be adding to the portfolio selectively. This week I highlight a defensive healthcare play of the highest quality.

Earnings reports have been mixed and market activity muted this week, but today the four technology giants will report after the market closes. Germany reported that its economy contracted the most on record, shrinking 10.1% in the second quarter.

So far, earnings season hasn’t had that much of an impact on the overall market. I don’t think investors know quite what to make of this quarter. It’s bad. But everyone knows that going in.

It’s been a crazy second quarter. So far, this earnings season is not having a big effect on the overall market. Everybody knows the quarter was bad. But, unlike most quarters, this one doesn’t really portend any future trend.

By far the worst performing sector in recent years has been the energy sector. From its peak in mid-year 2014 when oil prices reached over $100/barrel to its current state of complete disarray, the S&P Energy Sector index has collapsed 63%. For comparison, the broad S&P 500 index has gained 65% and even the often-maligned Materials Sector index has risen by 25%.

Remain bullish, but don’t get too aggressive. Growth stocks and the market are still in uptrends, so we’re sticking with a heavily invested stance, but many leaders have wobbled of late, the number of stocks hitting new highs has dried up a bit and earnings reports are coming up for a ton of names.

After last week’s selloff in tech, this week has been relatively calm, though the action at mid-day today suggests we could see more selling before the closing bell.

Every week there’s bad new and good news. This week there is bad news about tensions with the Chinese and good news regarding a European Union stimulus and energy demand. Every week there’s bad news and good news about the virus. The spread of the virus is increasing but the market always seems to rally on some promising new treatment or vaccine that offsets the worry.

The title of this note might be, “What to expect when you’re expecting … earnings.” As companies in the Cabot Undervalued Stocks Advisor portfolio start reporting earnings this week, let’s look into what is behind the results and estimates.

The standout action this week has been in tech stocks, and it hasn’t been good. With the Nasdaq starting off the week with a big drop and large-/mega-cap leaders like Amazon (AMZN), Microsoft (MSFT) and Netflix (NFLX) moving materially lower as the week progressed it has felt somewhat disheartening to those with heavy tech exposure.

The Cabot Global Stocks Explorer portfolio did well this past week even though markets were a bit choppy, in line with mixed data and expectations about how fast growth will return.

This internet gift company is expected to grow at an annual rate of 20% over the next five years.

I usually wait until the second Wednesday of the month to share my latest micro-cap recommendation with you, but in this case, I couldn’t wait.

Big Data is where a lot of past and future profits are being made.

We are moving Amplify Energy (AMPY) from HOLD to SELL.

In the past 30 days, 13 analysts have increased their EPS estimates for this tech company.

This healthcare company beat earnings estimates last quarter, posting EPS of $0.35 vs. the $0.16 that Wall Street forecasted.

Given the market pullback, a couple names on my watch list are looking particularly interesting. I haven’t completed my analysis yet, but stay tuned—all of these names could ultimately make their way into the Cabot Micro-Cap Insider portfolio.

Our second recommendation is a sale of a previous pick whose shares are not recovering fast enough.

Our first idea today is a food distributor who beat EPS estimates by $0.10 last quarter and has a 6.8% annual dividend yield, paid quarterly.

The idea is to sell a covered call, meaning you already own or you just purchased V on the buy recommendation.

This software company is forecasted to grow at a rate of 13.8% next year.

This biotech is seeing great results from its studies of SER-287 for ulcerative colitis, a condition that affects more than 750,000 North Americans.

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.