This Friday is the expiration of June options, and for the time being it looks like the Profit Booster portfolio will have yet another spectacular month of returns as IGT, PGNY, RRC are trading well above the strike price of the calls we sold, while FNKO is at the strike, which is also a good situation.

The bull market rolls on (though never in a straight line, of course) and Cabot analysts continue to discover great new investments.

Today’s featured stock is an established company that manufactures a very wide variety of sensors for industry, with the automotive industry being number one. Growth prospects are good, and the stock is a bargain.



As for the current portfolio, Broadcom (AVGO) is upgraded to buy, and we’re taking profits in Barrick Gold (GOLD).

Current Market Outlook


Our thoughts on the overall environment remain the same—growth stocks continue to slowly repair the damage, though most stocks aren’t out of the woods yet (many have moved right into some tough resistance), and there remains lots of selling on strength and rotation on a daily basis (cyclical stocks look iffy), so it’s tough to make much progress. All in all, we’re going to keep our Market Monitor at a level 6—we’re close to raising it, but the lack of upside breakouts and the continued chop keep us in a “trust but verify” mode. There are things to like, but we need to see more.

Interestingly, this week’s list is heavy on growth stocks, though finding buy points is tricky. Our Top Pick is DocuSign (DOCU), which has shown excellent accumulation since earnings, though we favor keeping it small and/or trying to get in on dips.

Stock Name	Price	Buy Range	Loss Limit
Align Technology (ALGN)	606	590-610	550-560
Arista Networks (ANET)	365	349-359	320-325
CareDx (CDNA)	90	87-91	78-80
Cloudflare (NET)	96	90-93	80-82
Continental Resources (CLR)	35	33.5-35	29.5-30.5
DocuSign (DOCU)	257	249-259	221-226
GoPro, Inc. (GPRO)	12	11.8-12.5	10.5-10.9
Lightspeed POS Inc. (LSPD)	76	73.5-76.5	65-67
Signet Jewelers (SIG)	76	72.5-75	63-65
United States Steel Corporation (X)	27	26-27.5	23-24

Here is your June Wall Street’s Best Digest issue 842.

Summer is upon us, and I hope you all are making plans to join us at our August 17-19 virtual Summit, entitled Smarter Investing, Greater Profits. You can register here.



The markets are still very bullish, reflected by our barometer, as well as our Market Views section. Energy, of course, is the biggest gainer so far this year. And style-wise, Value Stocks are leading the charge.



The economy continues to strengthen, with manufacturing improving, housing demand continuing to increase, and job creation rising.



Our Spotlight Stock this month is, indeed, sweet—that is, it’s a candy maker! The company made it through the pandemic, broadening its product lines, and showing how it’s managed to survive and prosper for 127 years. My Feature Article provides a bit more industry information, highlighting the continued growth of the confectionary business around the world.



Next, in our Growth section, you’ll find a variety of ideas, from the marijuana, retail, green, and educational sectors. In Growth & Income, our contributors sent recommendations from the chemical, media, food manufacturing, automobile sales, gun manufacturing, and beverage industries.



Our Value ideas feature businesses in the prison and agribusiness arenas. We offer an insurance stock in our Financial Section and a couple of pharmaceutical and medical equipment picks. In Technology, you’ll find a software company, and online platform business, an e-commerce firm, and a semiconductor company.



Our Resources & Energy section are chock-full of midstream, rare earth, precious metals, and utility businesses. And our Low-Priced Stock this month is a company that makes memory products for the computer industry. We also offer sever income ideas in our Preferred Stocks, Income, REITs, and High Yield segment.



Lastly, our Funds & ETFs section includes dividends and healthcare picks.



Please don’t hesitate to send me your feedback and questions. My new address is nancy@financialfreedomfederation.com.

Markets are a bit subdued with low summertime volatility, though some Explorer recommendations are doing very well in the power sectors of cyber and space. Today we take a look at Brazil, which is struggling with high unemployment, Covid-19 and political instability though we offer a new recommendation in a high-growth sector with a clear uptrend in share price.

Today, we are recommending an energy company that is both a traditional energy company but also a transition play.

The company is up over 250% in the past year, but still looks cheap on forward numbers.



Some additional details:

• Historically, the company has grown revenue at a 26% CAGR yet trades at a cheap valuation.
• Inside ownership is high and insiders have been buying as many shares as possible in the open market.
• Revenue and EBITDA are already at record levels.
• My price target implies 100% upside.

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

It’s time to think about investing on the other side of the pandemic.

When the environment normalizes, investors will find the best opportunities in the same place they did before – technology. Growth in technology exponentially eclipses all other industries. And the pace of growth will accelerate as new and game-changing technologies are on the cusp of transforming the world as 5G continues to roll out.



Sure, the cyclical sectors are coming back. There will also be solid growth in other industries. But nothing will compare to the immense growth in technology. The sector will rule the market for many years to come.



Recent stumbles in the sector create an opportunity for the great normalization ahead. In this issue I highlight two portfolio positions perfectly positioned to benefit in both the long and short term.

With June expiration coming next Friday, June 18, the Cabot Profit Booster portfolio is in great shape as all four of our existing positions are either at the strike price that we sold (RRC) or well above it (FNKO, IGT, PGNY).

This week my attention turns to selling a July call against an emerging oil and natural gas star that just broke out to new highs last week.

The bull market is looking healthier this week, as growth stocks have strengthened after a few months wandering in the wilderness, so I’m happy today to recommend a leader in the hot semiconductor machinery industry.

This addition brings our portfolio to fully invested status, and the good news today is that there’s nothing that needs selling; all our stocks are working!



That, of course, will change, but for now you should enjoy it!



Details inside.

Current Market Outlook


The holiday-shortened week was a relatively quiet one, with most indexes and sectors mostly meandered in tight ranges. After the prior two and a half weeks of constructive action, we consider the lack of selling a positive; to this point, the bears haven’t really come around for many names despite some decent rallies and a few breakouts. But now the real test will begin—if the former leaders that have run right into some tough resistance can hold firm, if recent breakouts can build on their gains and fresh breakouts can emerge, this rally could gain steam ... but if the sellers return, things could go back in the soup within a few days. Right now, we’re still in the trust-but-verify mode of the rally, slowly increasing exposure but also keeping a close eye to see if cracks show up.

This week’s list has a wide array of stocks, including a few cyclical names that are pushing up after a few weeks of consolidation. Our Top Pick is Marathon Oil (MRO), which showed some real power last week as oil stocks came to life.

Stock Name	Price	Buy Range	Loss Limit
Apellis Pharmaceuticals (APLS)	59	54-56.5	48-49.5
Callon Petroleum (CPE)	48	45.5-48	40-41.5
Discover Financial Services (DFS)	124	118-122	108-110
General Motors Company (GM)	63	62-64	56-57
Jabil Inc. (JBL)	58	55.5-57	51-52
Logitech (LOGI)	133	126-130	112-115
Marathon Oil (MRO)	14	13.0-14.0	11.5-12.0
SeaWorld Entertainment Inc. (SEAS)	58	56-58.5	50-51
United Parcel Service (UPS)	213	209-214	193-196
Vale S.A. (VALE)	22	21.5-22.5	19.3-19.8

The MSCI Emerging Market (EM) basket of 25 emerging market countries pulled back 15% in dollar terms, the Japan market was down 12%, and China’s Shanghai Composite index got clobbered, falling 25%. India ended the year down only 4.2% thanks to pro-business economic policies and an infrastructure boom.

Down markets are a fact of life in investing. Don’t fear them. Embrace them. They offer short term angst and long term bliss for those bold enough to take advantage. With today’s update, just one rating change but overall we’re in good shape.

I’m first coming to you in the midst of an awful market. We are unofficially in a bear market (down 20% from the high).

Remain defensive. Stocks are finally mustering a bounce today, though after the market’s meltdown of recent weeks, the intermediate- and longer-term trends remain firmly down.

As we finish 2018, let’s recap some timely investing and economic topics.

One big picture thing worth mentioning: We’ve all seen various data points about just how bad this market is and how it’s “the worst” in this dimension or that. All of this stuff is just saying what we know—the market stinks and is breaking a bunch of undesirable records.

The usual suspects—trade war, Brexit and the Fed—continue to dog the market, and the situation for emerging market stocks has worsened.

U.S. stock markets continue to suffer, wiping out year-to-date gains that had previously culminated in all-time-high prices on the S&P 500, Dow Jones Industrial Average and NASDAQ indexes. If you’re looking for “the bright side” of this dour news, take heart that none of these market indexes have retraced their early-2018 lows.

The Japanese phrase, hara hachi bu, translates into something like “belly 80 percent full,” or “eat until you are eight parts full.”

Following last week’s big decline, the market has shown some resilience, and we continue to see a growing number of stocks showing great resilience. Even so, our Cabot Tides green light from two weeks ago has disappeared and the longer-term Cabot Trend Lines remain down, so we continue to advise a cash-heavy posture as we patiently wait for confirmation the buyers have taken control. We have no changes in the Model Portfolio tonight.

The weakness that was troubling the market before last Wednesday’s unanticipated holiday worsened when markets opened again Thursday, and the major indexes are back at their correction lows. I was optimistic when the market strengthened two weeks ago, for now it’s time to stay defensive. That means selling half of one our holdings. But on a positive note, some sectors are still working well, and I’m moving both our REITs back to Buy.

Three analysts have recently increased their EPS estimates for this e-commerce company.

This portfolio stock shares are down 7% as investors worry about a potential pharmaceutical competitor.

Our second recommendation is profit-taking due to a buyout.

Our first idea is an oil company that is expected to grow more than 13% this year and has a current annual dividend yield of 5.55%, paid quarterly.

Not a lot has changed since last week’s issue—overall, the cannabis sector remains in a correction—but there are a few stocks worthy of an update.

In the past 30 days, 17 analysts have raised their EPS estimates for this medical device company.

This preferred stock is backed by one of the largest banks in the U.S.

The shares of this healthcare information services company were just upgraded by Guggenheim to ‘Buy’ and seven analysts have increased their EPS estimates for the company in the past 30 days.

Small caps have been lagging, and have failed to return to their 2018 highs, for too long. If the asset class can get back in gear, we’ll have more things working in the market for early-stage investors.

Small caps have been lagging, and have failed to return to their 2018 highs, for too long. If the asset class can get back in gear, we’ll have more things working in the market for risk-tolerant investors (that’s us!).

This retail stock reported fiscal 2020 third quarter results (January year end).

This RV manufacturer beat analysts’ earnings estimates by $0.27 last quarter.

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.