With the market under pressure because of the war in Ukraine (not to mention lurking inflationary influences), defense continues to be important.
Today the portfolio is selling two stocks and downgrading two to hold.


But there’s always something to buy, and today it’s energy stocks, as I add our third energy stock to the portfolio.


Details inside.

With so much going on in the world the trends are a bit messy. That said, I have noticed an uptick in several of the small-cap MedTech players on my watch list.

These businesses could be poised for a nice recovery in 2022 and 2023 as COVID-19 recedes. And the one that tops my list is posting massive growth as its revolutionary treatment for BPH has just gained full Medicare backing and is rolling out into U.S. hospitals.



With revenue set to grow by multiples in the coming years and the stock trading at an apparent steep discount to peers, we’ll jump in now.



Enjoy!

Despite a Ukraine conflict that’s roiled markets, Explorer stocks had a good week. And while Sea (SE) reported a mixed and disappointing quarter, Ford (F) made a big announcement as it moves into a new era.

Markets had held up pretty well—weathering inflation and interest rate worries—until the last week of February, when Russia’s Putin decided to invade Ukraine. That radical move sent the markets roiling with some pretty hefty drops and increased volatility. But action today was impressive, with the Dow Jones Industrial Average up almost 600 points, the S&P 500 up 80, and the Nasdaq up 219.

Fossil fuel energy market turmoil sparked by Russia has spurred buyers into Greentech, giving our sector its best stance in three months. This issue, we feature two stocks. One is a play on re-shoring, scarcity and even national defense in addition to the boom in renewable energy. The other is a nearly guaranteed way to preserve capital with private-equity-like upside.

Also in this issue, we detail our current portfolio recommendations, the state of Greentech and offer up a fresh ESG Three stocks to consider.

Today, I’m adding Barrick Gold (GOLD). The company engages in the exploration, mine development, production, and sale of gold and copper properties

Welcome to the roller coaster marketplace! As if COVID, rising inflation, and increasing interest rates weren’t enough to spook the markets, Putin’s invasion of Ukraine finished the job. It’s been a rollicking ride, but yesterday’s recovery and today’s momentum up are great signals.

Face it, many sectors have been beaten down since the first of the year, but today, they are all in recovery mode.



Across the board, the economy continues to strengthen, and consumer confidence is holding up well. Retail sales and housing prices continue to climb; housing starts and building permits are strong; and unemployment is healthy.



That means that earnings should continue to rise, and generally, that means that stocks will also.



To take advantage of the bull market in energy, this month, I’m adding an energy company that doesn’t actually produce energy. It’s a royalty and mineral company, making money from leasing its acreage out to producers.



I look forward to hearing from you, so please keep your emails coming.



Happy Investing!

Overall, nothing has changed yet with the major evidence out there, but we continue to think a bottom-building process is playing out in decent fashion so far: Last week, the major indexes sank below their January lows on news of the Russian invasion, but then rallied hugely to close the week all while showing small positive divergences in the broad market (fewer stocks hitting new lows on the Nasdaq, fewer below their 200-day lines, etc.). Moreover, there’s little doubt that sentiment is getting pretty bearish, and believe it or not the intermediate-term trend of growth funds actually isn’t far from a green light. Thus, there are some positives as it attempts to etch a low area to this three-plus-month downturn, so we’re nudging up our Market Monitor, but we need to see the market build on these baby steps before thinking the downtrend may be over.



This week’s list is very heavy on the commodity complex, as that’s clearly where the big money has been flowing. Our Top Pick is a natural gas-heavy play with as good a cash flow story as there is.

With the war in Ukraine taking center stage, it’s very hard to predict what markets will do. But we don’t need to. All we need to do is keep following proven investing systems.
The only change to the portfolio today is the downgrade of Veeco (VECO) to Hold.


As for the new recommendation, it’s probably a household name for folks in the Chicago area, but it’s a new one for me. And it’s a new stock, as well, having just come public in October.


Details inside.

The market plunged today on news of the “official” Russian invasion, but the turnaround was even more impressive, with the buyers pouncing and driving the indexes to solid gains; combined with sour sentiment and an internal positive divergence on the Nasdaq (fewer new lows than at the January lows), and there are a few rays of light. Even so, we need to see more than just that to turn bullish--the main trends of growth stocks, the broad market and the major indexes are all down, so while today was a solid first step, we advise patience while we watch to see if the bulls can really step up.

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the March 2022 issue.



In what could be a low-return market over the coming decade, stocks of relatively boring companies have a better chance to shine. We highlight five companies with grind-it-out growth, low share valuations and often-generous dividends that could produce significant market-beating returns.



We also discuss six appealing stocks we found by trolling through the 13F/D filings of like-minded institutional investors.



Our featured recommendation this month is Goodyear Tire & Rubber Company (GT). An investment in Goodyear is an opportunistic purchase of an average company whose shares have fallen sharply out of favor for what look like short-term reasons.



We note our recent price target increases for Wells Fargo (WFC), Marathon Oil (MRO) and Shell plc (SHEL).

The overall market may have a challenging year as it grapples with inflation and uncertainty about the Fed tightening.
While most companies struggle, energy and financial stocks actually thrive with inflation and rising interest rates. But there are also lesser-known areas that are also benefitting from this current bend in the road.


In this issue, I highlight a company from the shipping sector. The industry had struggled for the last decade. But the current environment is much more hospitable. Shipping rates have soared in the pandemic recovery. And these rates are likely to stay high in one particular area, container shipping.

The economy has fallen into a recession. The official economic statistics are not at our doorsteps yet – two quarters of falling GDP – but it’s fairly obvious that American business has gone into hibernation for at least a few months.

As financial markets begin to thaw, global leaders build consensus on how to address this pandemic, options of potential interim treatments for Covid-19 surface and the framework of economic relief starts to firm up (even though it won’t be enough), the stock market may be showing early signs of stability (a relative term).

Remain defensive. There are certainly indications that a countertrend rally could start at any time, so we’re not anxious to raise more cash, but we’re sticking with the trend, which remains down. In the Model Portfolio, we have no changes tonight—we’re holding four resilient stocks and a cash position of 71%.

Fear of the spread of a new virus has devolved into an economic disaster, at least in the short term.

Well, we’re in the thick of it. New citywide, statewide and national mandates are being pronounced daily, the stock market fell dramatically, my two daughters were sent home from college, three close relatives lost jobs/projects, and one close relative is a basket case over potentially losing his business.

To say that the coronavirus has infected the stock market would be to state the obvious. Less obvious is the answer to the question; what’s the antidote?

Ironically, China’s blue-chip CSI 300 Index hit its highest point this week since February 2018.

Monday’s market downturn was a bit breathtaking. First we had a stock market that was overdue for a pullback. Then the coronavirus hit, harming the Chinese economy, which in turn harms every business that sells products and services in China and manufactures products in China.

Remain cautious. The market has been gyrating wildly this week, holding above its lows from last Friday.

This has been about as ugly a couple of weeks in the market as you will ever see. On a closing basis, the market hit a low on February 28 and was down 12.5% from the February 19 highs. By total points lost, it was the fastest market correction in history.

The only news anybody seems to care about is the coronavirus. While that’s clearly a concern and not something to take lightly, I don’t think it changes the bigger picture trend that stocks are the place to be over the coming years.

This electric car company is expected to grow by triple-digits next year.

The stocks in the marijuana sector have pretty much traded in sync with the broad market since the March bottom, climbing strongly to late-May or early-June peaks and consolidating those gains since, with many stocks pulling back to sensible support levels.

Major gold stocks still look undervalued relative to gold. We feel the post-panic gold stock upswing has room to go higher.

There’s a new DRIP plan for this bank, which has a current annual dividend yield of 2.01%, paid quarterly.

With a portfolio flush with positions and the market having gotten a little choppy lately we’re going to move incrementally more conservative today.

The major indexes are up as we start a holiday-shortened week, with the Dow up 373 points as of 11:15 am and the Nasdaq up 24 points. But it’s a heavy rotational day, with the broad market up but leading growth stocks getting hit.

The pandemic has boosted the shares of this e-commerce payment processor, and analysts expect triple-digit growth from the company next year.

This medical device company makes unique equipment to treat blood clots.

Five analysts have increased their EPS estimates for this health benefits company in the past 30 days.

This morning, this portfolio stock reported results for the fiscal year ending March 31, 2020.

Here’s a mid-year update on this bank that is a good potential takeover target.

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.