Today, I’m recommending a company that provides the “picks and shovels” to the massive Alzheimer’s market.
Other key points:

•High insider ownership (30% of the company).•45%+ revenue growth this year.•Secular winner trading at P/E of 33x.

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

The market situation is changing. Amidst persistent high inflation and concerns about future economic and earnings growth, investors are adjusting. Energy is up nearly 40% YTD as that sector benefits from inflation. Utilities and Consumer Staples are also thriving as investors focus on value, defense, and income in the market uncertainty.
Many stocks in the CDI portfolio have performed well and are likely to continue doing so. But because of the high prices they are rated a HOLD. However, there are two standout positions. In this month’s issue, I highlight two stocks that have what it takes in this market. They both benefit in the current environment, sell at reasonable valuations, and pay sky-high yields.


The market situation is changing for the worse overall. But there are still great opportunities if you know where to look.

In this month’s issue, we focus on the smaller, and lesser known ETFs featured in the undiscovered portfolio.

While asset allocation is a tried-and-true method for longer-term investing, you can boost your return with ETF trading. That’s what the undiscovered portfolio is designed to do.



With market volatility remaining, this portfolio gives you an opportunity to capture excess returns from asset classes outperforming the broader market.

With commodities and energy stocks still holding up, though, today I’m adding an American company engaged in hydrocarbon exploration: Marathon Oil (MRO).

The ongoing war between Russia and Ukraine—and the consequent sanctions and production cuts—has forced producers across several areas of the metals sector to make desperate bids to secure much-needed supplies.

This dynamic is expected to keep metal prices elevated across the board in the coming weeks and months. As noted here previously, there are other fundamental factors behind the bull market in the major industrial metals, but this is diminished by the Russia factor.



In the portfolio, we just added a new position in a silver miner that is showing a surprising amount of relative strength given the current silver market backdrop, as well as a major player in the titanium dioxide market.

There were a lot of positives that built up for the market during February and early March, but that multi-week stretch of improving evidence has certainly run into a wall—the market has taken it on the chin during the past couple of weeks, with the major indexes giving up a big chunk of their gains (the brief intermediate-term trend all-clear is gone), and more worrisome to us, nearly every stock that has run into resistance has at least stalled out, if not come unglued. We don’t believe all of the good vibes built up are out the window; this recent action could easily be part of a longer bottoming process for the market. But we never advise ignoring the evidence in front of us, so we’re pulling our Market Monitor down to a level 5.



This week’s list is heavy on some cyclicals but also some dependable growth outfits. Our Top Pick looks to be one of those, a medical firm with a few good-selling drugs on the market and sold earnings growth projections.

Today’s recommendation is a well-known pharmaceutical giant whose stock recently broke out above the high it hit in 2000, 22 years ago! But that’s not why it’s recommended today. Today’s story is all about new drugs and renewed growth.
As for the current portfolio, there are four stocks rated sell!


Details inside.

The market’s evidence improved under the surface for much of February and early March, with the strong rally last month only adding to the good vibes. A pullback wasn’t unexpected, but so far, the way things have retreated hasn’t been encouraging, with a lot of potential leaders taking it on the chin and our nascent Cabot Tides buy signal back on the fence.


To be fair, the decline hasn’t cracked the uptrend in the market or most stocks, and a couple of good days would do wonders. But with few stocks really making headway, we advise going slow, adhering to your stops and holding a good chunk of cash.


Earlier this week, we sold one of our recent buys, and while we have no new sells tonight, we are placing a couple more names on Hold and have relatively tight stops in place in case the selling continues.

Inflation is hot and the Fed just began raising rates. It is expected to hike ten more times by the end of next year.

While yield curve inversion and recession risk is out there, many banks are flush with cash. And consumers are in great shape. As rates go steadily higher, bank stocks are poised to significantly grow earnings.



The most aggressive way to play this is with a bank that’s leveraged to short-term rates. That’s the strategy we’ll take today with a pure-play digital currency bank.



Enjoy!

Greentech remains near-term bullish, an encouraging sign as most subsectors are holding on to gains. Our featured stock is an innovative energy storage venture that has exceptionally encouraging performance since going public in February. It’s not all clear skies however – we tweak some of our holdings this issue to acknowledge specifics with companies.

The first quarter was kind to our stocks, as they rose, on average, +8.8%, while the broad market fell. We comment on the sources of the gains and any recent news on our recommended stocks.

Today, I’m adding Cleveland, Ohio-based company Cleveland Cliffs (CLF), the largest flat-rolled steel producer in North America.

The market is also having a stronger reaction to good news than to bad news. The indexes soared yesterday on news of potential Fed asset purchases, like quantitative easing, to support the economy and the market. Today the market is loving news of positive trial results for a coronavirus vaccine.

The market rally has stalled. The S&P 500 and the Dow are still lower than they were at the beginning of June. But in the face of a lot of bad news, the market isn’t going lower, it just stopped going higher. All three indexes are establishing or holding key technical levels.

Earnings season is upon us again. This quarterly ritual, when all public companies report their most recent results, is when investors can see hard facts about revenues, profits and balance sheets, as well as hear softer commentary from management about their explanations, outlook and plans.

Growth stocks remain very strong, and our market timing indicators remain positive, so you should remain mostly bullish. Of course, you should also keep your feet on the ground, as there’s little doubt things are fairly frothy here so some potholes could occur at any time.

The big-picture story out there continues to be the battle between bad news (rising infections, high unemployment, too many crumbling businesses) and good news (progress toward vaccines, therapeutics, etc.; accommodative policies from the Fed; improving fundamentals for some businesses arising from the pandemic). Then there’s all the uncertainty around the upcoming election that further confounds the mind.

After a lightning quick 46% move from the bottom, the rally has stopped. The S&P 500 has sort of been bouncing around sideways since the post-bottom high a month ago.

Stocks produced one of their strongest quarters in living memory, with the S&P 500 returning 20.5% in the period ending June 30. The index has nearly fully regained its previously-lost value, declining only 6% for the first half of the year. Investors frequently ask how the S&P 500 can be down only modestly given the Depression-like broad economic statistics.

As we move into the third quarter, analysts at Goldman Sachs write that their baseline forecast is for the S&P 500 to gain 5% in the second half of the year. In their “vaccine upside” scenario, stocks rise by 14% from here; in the “virus downside” scenario, they drop 30%.

The S&P 500 soared 46% from the March bottom in about 11 weeks, the fastest such rise in history. It couldn’t keep that up forever and it was bound to falter eventually.

The S&P 500 was up 20% in the second quarter. It was the best quarter for the market in decades. That’s what the headlines say. But they are a little misleading. The market hit a recent high on June 8th and has since pulled back a little and moved sideways.

You should remain bullish and flexible. Most of the evidence remains positive, including the trends of the major indexes and action of leading growth stocks.

The big news affecting the market this week is the upward trend in coronavirus cases in some states and the resulting concern that an economic rebound will be curbed sooner than hoped.

There are five top holdings in this closed-end fund.

With 32 stocks in our portfolio and a market that’s going through all manner of gyrations right now, it’s time to part ways with a few of our underperforming positions.

This medical equipment company walloped earnings estimates last quarter, posting EPS of $0.75 vs. the $0.38 that Wall Street had expected.

The market’s continued weakness has tipped our Cabot Tides to the negative side of the fence for the first time since April.

Back on August 13, when the broad market was strong and marijuana stocks were even stronger, I took partial profits in our four strongest stocks (which were also our four largest positions) because they looked very extended to the upside.

This consumer electronics company is forecasted to grow at an annual rate of 15% over the next five years.

When we got into this stock we fully expected a lot of twists and turns. We didn’t expect the current drama.

This financial company is expected to grow by 11.9% in the next year.

On Friday, the September 78 call that we sold expired worthless.

In the past 30 days, 40 analysts have raised their price targets for this big-box retailer.

There are five holdings in this biotech fund.

Tomorrow is the expiration of five of our September covered call trades. It was another great month for the Cabot Profit Booster portfolio!

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.