The bull market remains intact, so I continue to recommend that you be heavily invested in stocks that help achieve your investing goals.

Today’s featured stock is a solid grower whose products help millions of people with diabetes manage their condition in increasingly efficient ways.



As for the current portfolio, most of our stocks look good, and some are hitting new highs, but one has to go and the victim this time is Driven Brands (DRVN).



Details inside.

In the August Issue of Cabot Early Opportunities we (mostly) return to our roots, focusing on technology and MedTech growth stocks, while adding a little flavor with a consumer stock we’ve been keeping an eye on.

Enjoy!

Stocks slipped a bit yesterday after minutes from the Federal Reserve’s last meeting showed officials increasingly in agreement about pulling back on the central bank stimulus. This was prompted by increasing evidence of mounting inflation. Markets are a bit choppy against this backdrop but earnings continue to be relatively strong, such as Sea Limited (SE) posting another superlative quarter yesterday. This week you will see I have divided Explorer stock updates into two categories: “trading” and “buy and hold,” as we turn to clean tech infrastructure for a new recommendation.

The market continued to test new highs last week as the S&P 500 gained 0.71%, the Dow climbed 0.87%, while the Nasdaq broke trend by closing 0.9% lower. That being said, we continue to see thin summer trading led by ongoing sector rotation. Growth waned last week and it was the cyclicals’ time to shine, with the financials leading the way.

Current Market Outlook


Last week was generally one of rotation back out of growth and into the broader market, and today, that trend accelerated, with growth-oriented funds and indexes (like ARKK and IWO) gapping below multi-week support and longer-term moving averages, while many recent leaders tested their 50-day lines. This sets up a key test—if a lot of stocks go down the drain, it’ll clearly be a sign of cut back on growth titles, though if we see a strong bounce from here, it could actually set up some decent pullback/resumption entry points. Meanwhile, we’re seeing an increasing number of setups in the cyclical areas, which are coming to life after two-plus months of rest. Right here, we’re not making any dramatic changes, but be sure to honor your stops. The next few days could be telling.

As for this week’s list, it definitely has more of a turnaround/cyclical feel to it as those stocks find buyers. Our Top Pick is Paylocity (PCTY), a leader in what’s looking like a new group upmove for HRM stocks.

Stock Name	Price	Buy Range	Loss Limit
Avis Budget Group (CAR)	93	91-94	81-82.5
CPRI (CPRI)	58	57-59	52-53
Colfax (CFX)	49	48-49.5	44.5-45.5
Dexcom (DXCM)	506	488-508	445-455
Five Below (FIVE)	228	221-228	200-204
HubSpot (HUBS)	657	630-650	570-580
LTHM (LTHM)	25	23-25	19.5-20.5
Nucor Corporation (NUE)	124	117-122	103-106
Paylocity (PCTY)	251	242-248	214-218
Saia Inc. (SAIA)	247	237-244	217-220

While the market was weak this morning, the bull market remains intact, so I continue to recommend that you be heavily invested in stocks that help achieve your investing goals.

Today’s featured stock is a low-risk dividend payer whose products you have probably bought—and probably never knowing the company’s name. More importantly, Tom Hutchinson says it’s cheap.



As for the current portfolio, most of our stocks look good, so the only changes is an upgrade of Five Below (FIVE) to Buy.

Future Shock

Moral imperatives don’t drive the stock market, but they do drive peoples’ attitudes, which in the long run will move the market. The sixth report of the Intergovernmental Panel on Climate Change came out last week and is a sobering reminder that the world must decarbonize. Global sea level rise is accelerating and is advancing at a higher rate than at any time in the past 3,000 years. There is a growing belief the Amazon rainforest, Arctic ice and Gulf Stream are at tipping points that will worsen the effects of global warming. The most unnerving thought for me reading it: scientists are conservative in public projections like the report.



Stock investing plays its small role in the needed change: by pursuing profits in Greentech we’re putting capital to use supporting publicly traded companies–at the least buying and selling volume help create viable markets for raising additional capital for businesses. For our modest mission this issue, we have one new buy, one intriguing new watch and some ratings and sell-stop shifts in our existing portfolio.



As always, contact me anytime with questions or comments at brendan@cabot.net. Thank you for joining me on the path of climate profits.



All the best,



Brendan Coffey
Chief Analyst, SX Greentech Advisor

The chop factor remains in force in the market, with yet another round of rotation this week out of growth and into the broad market. Even so, we see more good than bad out there, with an increasing number of growth stocks having popped out of multi-month ranges and recent dips mostly looking manageable. We added another new name last week, and we could add more depending on how this rotation plays out, but tonight we’ll stand pat with our stocks and 30% in cash.

In tonight’s issue, we write about one sector that’s showing some signs of perking up, some encouraging sentiment readings and go over all of our stocks and many others we’re keeping a close eye on.

Remain bullish, but keep your eyes open. Our indicators and most of our stocks are still trending up, though we’re seeing some funky action that’s worth monitoring.

The new all time high is a significant milestone. Although the S&P 500 hasn’t hit new highs quite yet it is only just about .01% from the mark. The new high is significant because it negates any possibility that we have been in a bear market since September, when the previous high was established.

When a famous company’s stock falls, there are lessons to be learned that can help you improve your game. Shares of 3M Co. (MMM) fell last week when first-quarter results revealed revenue and profits that did not meet the market’s expectations.

It’s earnings season so most investors are focused on individual stocks. And with the S&P 500 and Nasdaq hitting new all-time highs this week, the big picture is looking pretty good too!

Our EEM Signal slipped below its 20-day moving average this morning and is right on top of its 50-day average. We will remain positive and constructive but lean toward finding some bargains. Most likely, the next two ideas will come from heavyweights India and China.

There are three changes to the portfolio today.

Prepare yourself for more ups and downs in our medtech & biotech stocks if this debate heats up. I’m not planning to step out of the space since I think this will pass and we can still do quite well with these types of stocks.

The overall market remains in good shape, with both of our trend-following indicators—the Cabot Tides (intermediate-term) and Cabot Trend Lines (longer-term)—currently pointing up. We’re still keeping an eye on small-cap indexes, which have still not eclipsed their late February peaks, as well as the Nasdaq, which has found repeated resistance near 8,000. But overall, there’s no question that the trends are up.

The new all time high is a significant milestone. Although the S&P 500 hasn’t hit new highs quite yet it is only just about .01% from the mark. The new high is significant because it negates any possibility that we have been in a bear market since September, when the previous high was established.

We have obviously lived through a very difficult period in the stock market recently, from which most of the portfolio stocks are recovering or have already recovered. Hopefully we will not see another similarly ugly stock market downturn for several years, but there are no guarantees.

Analysts expect this wellness company to grow at a rate of 21.3% this year.

This portfolio stock reported last night with revenue that was up 33.3% to $91.7 billion and beat by $3.4 million and adjusted EPS of $0.03 that beat by $0.04.

Crista has rating changes for three portfolio stocks and reports an earnings miss for a fourth.

This airline is a value and growth play. Analysts expect 21.47% annual growth from the company over the next five years.

This marijuana company is expected to grow by 169% next year.

Three portfolio stocks report earnings.

Marijuana stocks remain under pressure (with a few exceptions), as firms struggle for growth and profitability.

Earnings forecasts are moving up for this bank, with 14 analysts increasing their estimates in the past 30 days.

This portfolio stock recently reported first quarter fiscal 2020 results, and while the stock has been a little volatile since reporting, the punchline is that all appears on track.

Crista updates us on three portfolio stocks.

This stock is the first of Cabot Profit Booster’s stocks to report earnings today after the close. Because of the earnings risk I wanted to update you on where we stand with the position, as well as the downside and upside potential the options market is pricing in for this event.

A merger and a spin-off for this drug company looks attractive.

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.