Today, I simply want to go over the ins and outs of the service so that you can efficiently and effectively take advantage of all the content provided including details on issues, trade alerts, webinars and more.

That being said, expect to start seeing several trade alerts over the next week. I will begin trickling out positions over the five different portfolios over the next few weeks. So have an understanding of what each portfolio is trying to accomplish.

If you dug into any financial news this weekend, you were likely inundated by tons of bearishness that have arisen due to so many uncertainties, but when it comes to the market, it’s best to just keep it simple and focus on the action itself: The intermediate-term trend of the indexes and vast majority of stocks remains down, with only a few special situation names and some commodity-related titles able to buck the trend. We would say that, just in the past week, far fewer stocks joined the indexes at new correction lows, but we need to see such rays of light lead to real, sustained buying pressures to take action on them. We advise remaining defensive.


Not surprisingly, this week’s list doesn’t have many stocks near new high ground, but we are seeing many that reacted well to earnings and have shown some positive volume clues. Our Top Pick is one of them, a new name in the resilient shipping group.

We are officially in the doldrums between earnings seasons. But an opportunity or two can still be found each week. And while the offseason earnings trades oftentimes lack all of the necessities for an actual trade, it’s still worth taking a look at potential trades as we patiently wait for another upcoming earnings season, if only for educational purposes.

The market’s downtrend remains in place, with the trends of the major indexes and growth stocks still solidly down, and just as important, we’re still seeing many blowups among individual names, with retail stocks like Target and Walmart going over the falls this week. Thus, we remain defensive, with north of 80% in cash.
That said, we’re not joining the growing chorus of super-bears out there--there are tons of extremes when it comes to the selling and sentiment that a low could come at any time. We’re not predicting that, but we are spending most of our time hunting for new leaders--and interestingly, we’re seeing a few candidates even after the recent down move, writing about most of them in this issue.

In the May Issue of Cabot Early Opportunities, we spread things around, taking a look at a rising MedTech star, a possible breakout biotech stock, a boring discount retailer, an oil and gas income play and a familiar apparel manufacturer.
Enjoy!

This week, as we continue to keep the portfolio diversified, we are adding a biotech/pharma play that recently reported strong earnings.

While there’s a very possibility of a good market bounce after last week’s washout, the overall picture is still very weak and thus continued defensiveness is still advised.
This week’s recommendation is the world’s largest manufacturer of industrial robots, yet most U.S. investors don’t even know its name. It looks like a great low-risk buy here.


As for the portfolio, we’re selling one stock, a small company in the beleaguered technology sector.


Details inside.

Last week brought some true extremes when looking at sentiment and oversold conditions, telling us some type of bounce was likely. That’s what we saw starting Thursday afternoon, and we’re optimistic we may have hit a workable low—“workable” in this case meaning the market can work higher for more than just a couple of days. That said, we’ll just see how it goes: While there are a few stocks acting well and set up decently, the vast majority of evidence remains negative, so we still favor defense and patience as the market tries to etch a bottom.
Encouragingly, though, this week’s list does have a few names that have shown outsized support during the past couple of weeks, often after earnings, and our Top Pick is one of them as it attempts to round out its launching pad.

A difficult stretch causes us to sell two underperformers this week but we move forward today with a high-quality Japanese company at the heart of an unstoppable trend and a high-quality stock on sale.

As Mike Cintolo, Chief Analyst of Cabot Growth Investor and Cabot Top Ten Trader always says, “you shouldn’t fight the tape.” The markets are battling it out these days, trying to find a bottom. The constant news cycle of Russia-Ukraine, rising rates (up 0.5% last week) and increasing inflation are causing a severe case of market indigestion and volatility.



What’s an investor to do? As I’ve been saying for the past 6 or so months, judicious investing is the key. While most sectors (except Energy and Utilities) and the majority of equities, are down for 2022, there are still pockets of ideas worth investigating, including some defensive moves.



With that being said, I think investors should be keeping some cash on the sidelines, as when this market shows signs of a long-term turn, there will be plentiful bargains to be had.

It might not be too early to bargain hunt very selectively. Companies that are likely to continue to grow earnings and the dividend are likely to recover. There is one such opportunity in the cannabis sector.


The sector has been decimated in this market. The ETFMG Alternative Harvest ETF (MJ), the largest cannabis ETF, has fallen almost 50%, and 70% from the 2021 high. The selloff has taken the most reliable money maker in the sector down with it, despite continuing success and earnings growth.


In this issue, I highlight this reliable and high-growth stock. It pays a better than 5% yield and the payout is likely to grow, as earnings are expected to grow 37% this year.

Today, I’m recommending a company that will benefit from the post-pandemic travel boom.
Other key points:
•145% quarterly revenue growth
•Cheap valuation: 5.7x EBITDA
•Hidden high-growth payments division
•High insider ownership (21% of the company).
All the details are inside this month’s Issue. Enjoy!

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.

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.

Our second recommendation is a sale to rebalance the contributor’s portfolio.

The big question on investors’ minds is if this tech stock retreat is a precursor to something larger or a “normal” correction in the context of a bull market.

This deeply-discounted beverage company’s latest quarterly earnings were more than double the analysts’ estimates.

Growth stocks remain under severe pressure, with more unraveling today.

This Tennessee bank is forecasted to grow at double-digit rates next year.

We all know this market has been overdue for a pullback, if not a larger correction, especially for many tech stocks.

Growth stocks are being taken to the woodshed today, and this comes after some climactic upside action in the indexes and key leaders in recent days/weeks. Moreover, we’re starting to see some growth leaders crack support for the first time during this rally.

This REIT’s price has not recovered from the March market rout, so it looks pretty undervalued.

The environment has been crazy, and today is seeing another huge rotation out of extended growth leaders and into the rest of the market.

Three weeks ago, when the marijuana sector seemed extremely extended to the upside, we sold 25% of each of the positions in our four U.S. multi-state operators

Our second recommendation is a sale of an aerospace/defense company whose shares are not moving.

Our first pick is a home goods retailer whose online sales during this pandemic, have increased 46%.

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.