Today we’re jumping into an emerging precision oncology company that is on the cusp of a major Phase 3 data release for a potential best-in-class treatment for rare eye cancers.

The company also has a stacked pipeline of other potential assets and has teamed up with some of the best in the business as it looks to transition from a clinical-stage company to a full-on commercial success.

Suffice it to say, the risks are somewhat higher with a stock like this, given that FDA approval, or denial, will have a major short-term impact on share price performance.

All the details are inside the December Issue of Cabot Small-Cap Confidential.

Stocks spent the holiday-shortened Thanksgiving week getting well and are again knocking on the door of all-time highs after a sharp pullback through most of November. Value stocks never retreated the way growth titles did, though, and are appearing more in favor by the day. That includes consumer staples, which are still undervalued despite recent momentum. In this month’s Cabot Value Investor issue, we add a once-prominent name from that group that trades at less than half its early-2025 highs – and yet the company never stopped growing. In fact, its sales are accelerating, making it a prime buy-low candidate.

Details inside.

In China, the competition in its EV market is particularly brutal with over 100 companies in the game. Some of those automakers are also working on flying cars to take safety and speed to another level. This is where we go today for a new Explorer recommendation.

Details inside.

Nothing like a little holiday cheer to brighten a grumpy market’s spirits! Salvaging what had theretofore been a miserable November, last week’s Thanksgiving-shortened week brought four straight trading days of buying, nudging the indexes right back to within bad-breath distance of their late-October highs. Is it a sign of things to come in December? Perhaps. If so, now is a good time to pounce on a more speculative biotech play that’s been in favor all year. It’s a name recommended by Tyler Laundon in the November issue of his Cabot Early Opportunities newsletter. Today, we add it to the Stock of the Week portfolio.

Details inside.

After a holiday-shortened but very productive week for the market, here’s what’s happening with all our positions.

After a holiday-shortened but very productive week for the market, here’s what’s happening with all our positions.

Since the effective federal hemp-derived THC ban was approved in the latest budget deal, cannabis investors have taken the change as a sign the Trump administration is no longer serious about rescheduling.

This is probably wrong. Cannabis sector CEOs closer to the rescheduling process than most investors think the sector-changing reform is still on track.

The broad market and growth stocks started to have issues in late September and by early November everything went over the falls, cracking the intermediate-term trend of most indexes and stocks. Encouragingly, though, the market has rebounded this week as we march toward the Thanksgiving holiday--it’s good to see, but especially for growth measures, there’s still more proving to do. Of course, with a lot of cash, we’re willing to buy, and if we see strength continue into early next week (past the holiday period) we could start putting money back to work. For now, though, we think it’s best to be patient and see if the market (and, more important) growth stocks can tell us the selling storm is definitively over.

Note: Due to the Thanksgiving holiday, the Cabot Turnaround Letter weekly update won’t be published on Friday. Instead, the next update and the Catalyst Report will be sent out on December 5.

Given the obvious risks of the current macroeconomic environment (inflation, geopolitical volatility, etc.), it’s my contention that sector selectivity has never been more important. That is, when evaluating stocks for potential purchase, it’s imperative that we consider the potential impact the macro climate might have on said investment going forward.

I’m bullish for 2026. But I’m not confident about the next few weeks.

Last week’s much-anticipated earnings report from AI bellwether Nvidia (NVDA) and the overdue September jobs report were expected to provide answers to the recent angst. Both reports were great. Stocks plunged anyway. That’s a bearish sign.

The market is always unpredictable in the near term. But it seems the greater likelihood over the next several weeks is choppy at best, with a good chance of further downside. But things can change between now and the December issue, and new stocks could be highlighted in weekly updates or via trade alert.

In this issue, I highlight a covered call on a stock that has been flying high over the past month. It has enough momentum to make the call premium huge. It’s a good time to secure a high income on a stock that may have peaked in a market that looks dicey over the rest of the year.

Before we dive into this week’s covered call idea, we do need to clean up our CENX position from the November expiration cycle, as the call we sold expired worthless, leaving us with our stock, which we will sell for a net virtual breakeven. Here are the details:

The evidence has continued to worsen on balance, which has us remaining in a cautious stance. That said, we’re also flexible given some longer-term positives and a couple of near-term secondary readings that popped up last week, which have typically occurred near market low points. Given that the indexes aren’t horror shows, we’re still open to the action this month being a shorter-term shakeout —but with so many things having rolled over, the onus is on the market to prove itself on the upside. Right now, we favor staying close to shore; we’ll stick with our Market Monitor at a level 4.

This week’s list has something for everyone, with AI, fresh medical names, recent earnings winners and some turnarounds, too. Our Top Pick is a steadier name that’s strong partly due to the AI wave; the stock just gapped on earnings and delivered a solid outlook that should keep buyers interested. Aim to enter on weakness.

Stocks are recovering so far this week after a big selloff on Friday.

The sweet summer market that had consistently set new highs got a cold slap in the face last week. But trading so far this week indicates it might not be a game-changer.

The market was looking good a week ago. The huge trade deal with Europe alleviated much uncertainty about tariffs. Second-quarter GDP came in at a much stronger-than-expected 3%. Tariff uncertainty was fading away, and the economy was stronger than expected. But then news of a much worse-than-expected job number for July, along with significant downward revisions for the prior two months, combined with increasing tariff threats to China, India, and Canada and shattered the positive narrative.

With the current earnings season more than halfway complete for S&P 500 companies, a clearer picture of the overall corporate health backdrop is beginning to emerge.

WHAT TO DO NOW: Remain bullish, but continue to keep some of your powder dry. The market remains in a solid uptrend, but more indexes and stocks have been stalling out. To be fair, we are seeing some growth names finally kick into gear, but we still think it’s best to ease off the accelerator a bit as we see how earnings season goes. In the Model Portfolio, we sold Uber (UBER) and bought a half-sized stake in Oracle (ORCL) on a special bulletin Tuesday; tonight we’ll make one small move, adding another 3% position to Rubrik (RBRK), which appears to be emerging from its slumber. We’ll still hold around 30% cash after these moves.

The big macro news this week is that the U.S. economy is doing well and there’s no really clear reason for the Fed to cut interest rates. Trade deals continue to be announced, and the U.S. should be bringing in a good deal more money due to tariffs than it has in the recent past.

Real GDP was just announced to have risen 3%, thanks to capex on hardware and software to build out data centers. Results from Microsoft (MSFT) and Meta (META) confirmed this trend.

A surprisingly productive July comes to a close with the market near all-time highs and volatility at a relative low. I’ve written in recent weeks about the reasons that could change in August and September – the highest stock valuations since the February high, lingering tariff uncertainty and its potential impact on a heretofore resilient economy, frothy warning signs like new meme stocks and soaring bitcoin prices, and the usual selling that occurs right after Labor Day. But for now, stocks are doing just fine, and that includes value stocks, which have risen more than 6% year to date.

The market yawned off great news over the weekend but managed to make a new high nonetheless.

Investors don’t seem to care about tariffs anymore, and the market continues to forge slowly higher regardless of the news. Tariff concern is so last April.

It’s another new high! The market continues to forge slowly higher.

There was positive tariff news over the weekend. President Trump and European Commission President Ursula von der Leyen agreed to the framework of a trade deal that includes a 15% tariff on European imports and an agreement by the EU to buy $750 billion worth of U.S. energy over three years. Although the deal so far is considered highly advantageous to the U.S., it’s only a broad outline with many details to be worked out.

The proposed merger between Union Pacific (UNP) and Norfolk Southern (NSC) throws into sharp relief an accelerating—some would say disturbing—trend of mega-consolidation across a number of key industries.

The S&P 500 closed at a fresh record high yesterday, while the S&P 600 SmallCap Index closed at its highest level since February 21.

While there is plenty for the worriers to worry about in the short term – next Wednesday’s Fed meeting, next Thursday’s PCE price index (the Fed’s preferred inflation data), tariffs and Liberation Day 2.0 next Friday – the market seems to be saying, “Don’t sweat it, this will all work out.”

This was a good week for Explorer stocks with Agnico Eagle Mines (AEM) up 6.2%, Alibaba (BABA) up 5.9%, Banco Santander (SAN) shares rising 6.2%, and BYD (BYDDY) shares surging 8.1% this week.

It was a painful process with America’s most valuable ally, but a trade/investment deal was finally reached with Japan, which buoyed markets. Frameworks for deals with the Philippines and Indonesia were also agreed to, sending the S&P 500 to a new high. The market seems mostly concerned with China. The reason is that annual S&P 500 revenue from China is $1.2 trillion, roughly four times the U.S. trade deficit with China.

GameStop (GME) became a household name to investors long after it was a household name to young gamers who liked to play Call of Duty, Grand Theft Auto and EA Sports video games. In January 2021, the struggling and widely shorted stock experienced an almost unprecedented resurgence thanks to a Reddit message board-fueled short squeeze orchestrated by someone named Keith Gill, under his more public alias Roaring Kitty.

The renewed tariff uncertainty is affecting the market. Stocks are going up slower now.

It looks like a market that wants to go higher. The tariff stuff is just holding it back for now, but just barely. The S&P 500 still made a new high on Monday. And earnings season is starting to heat up. Later this week and next week, several big tech companies report. Good news could ignite a market rally despite anything going on in the world besides artificial intelligence.

WHAT TO DO NOW: The market is nosing generally higher of late, however, the action remains very hit or miss among individual stocks, with some emerging and others getting hit. Today’s bulletin regards Shift4 (FOUR), which is cracking today after a mundane Q4 report and a big announced acquisition—we took partial profits a couple of months ago and are going to take the rest of our gain off the table today.

Shares of Perpetua Resources (PPTA) are having a tough day today following the release of a Financial Update. This Financial Update is part of the process for formalizing its loan application with the U.S. Export-Import Bank (EXIM), which indicated potential financing of up to $1.8 billion in the Stibnite gold project via a Letter of Interest in April 2024.

Reddit (RDDT) and Cellebrite (CLBT)

WHAT TO DO NOW: The market remains resilient, but range bound, so we continue to go slow, with lots of hit-or-miss action out there. Happily, most of the Model Portfolio stocks are acting normally, though ahead of tonight’s update we’re going to make one small change—we’re going to sell one-third of what we have left in AppLovin (APP), which is up big again today after earnings, though it’s fading during the day. We’ll take some more profits off the table and hold the rest.

Sell OneStream (OS)

Astera Labs (ALAB) Delivers

Sell Fidelity National Information Services (FIS)

Sell Amer Sports (AS) for Modest Gain

Shares of Peloton (PTON) are up double digits this morning after the company delivered a better-than-expected Q2 fiscal 2025 report before this morning’s opening bell. This is a turnaround story so take the numbers in that context. Management is working to curb costs and lay the groundwork for a return to growth, not trying to grow right now.

Sell Fortrea Holdings (FTRE); Buy Pan American Silver (PAAS)

A Tale of Two Earnings Reports: Atlassian (TEAM) and Vestis (VSTS)

Sell AST SpaceMobile (ASTS)

An updated portfolio for Cabot Options Institute – Earnings Trader.

An updated portfolio for Cabot Options Institute – Earnings Trader.

An updated portfolio for Cabot Options Institute – Earnings Trader.

Transaction Date	Poor Man’s Covered Calls	Original Price	Current Price	LEAPS Price	LEAPS Price	LEAPS Price	Premium Sold	Closing Price	Total Premium	Total Return	Position Delta
	SPDR Gold Shares ETF (GLD)	$172.46	$166.79	(open)	(current)	(closed)			(current)	($5.67)
6/3/2022	LEAPS January 19, 2024 145 call			$37.00	$30.20					($6.80)	80
6/3/2022	July 15, 2022 181 call						$1.00	$0.12		$0.88
6/30/2022	August 19, 2022 175 call						$1.91	$0.21		$1.70
7/28/2022	September 16, 2022 169 call						$1.90	$0.07		$1.83
9/1/2022	October 21, 2022 165 call						$1.45	$0.03		$1.42
10/14/2022	November 18, 2022 159 call						$1.48	$4.45		($2.97)
11/10/2022	December 16, 2022 169 call						$1.40	$1.02		$0.38
12/13/2022	January 20, 2023 172 call						$1.96		$1.12	$1.96	-27
	Totals						$11.10			$35.40	53
Transaction Date	Poor Man’s Covered Calls	Original Price	Current Price	LEAPS Price	LEAPS Price	LEAPS Price	Premium Sold	Closing Price	Total Premium	Total Return	Position Delta
	Invesco DB Commodity Index Tracking Fund (DBC)	$30.45	$24.16	(open)	(current)	(closed)			(current)	($6.29)
6/8/2022	LEAPS January 19, 2024 22 call			$10.50	$4.00					($6.50)	70
6/8/2022	July 15, 2022 32 call						$0.55	$0.05		$0.50
6/30/2022	August 19, 2022 29 call						$0.50	$0.05		$0.45
7/28/2022	September 16, 2022 27 call						$0.55	$0.10		$0.45
9/7/2022	October 21, 2022 26 call						$0.50	$0.00		$0.50
10/25/2022	December 16, 2022 27 call						$0.45	$0.05		$0.40
12/13/2022	January 20, 2023 25 call						$0.45		$0.35	$0.45	-33
	Totals						$3.00			$6.75	37
Transaction Date	Poor Man’s Covered Calls	Original Price	Current Price	LEAPS Price	LEAPS Price	LEAPS Price	Premium Sold	Closing Price	Total Premium	Total Return	Position Delta
	iShares Trust 7-10 Year Treasury Bond ETF (IEF)	$101.93	$98.61	(open)	(current)	(closed)
6/8/2022	LEAPS January 19, 2024 85 call			$19.00	$16.25					($2.75)	81
6/8/2022	July 15, 2022 103 call						$0.70	$0.19		$0.51
7/14/2022	August 19, 2022 105 call						$0.58	$0.12		$0.46
8/11/2022	October 21, 2022 105 call						$1.20	$0.04		$1.16
9/22/2022	October 21, 2022 98.5 call						$0.55	$0.05		$0.50
10/12/2022	November 25, 2022 97 call						$0.92	$0.18		$0.74
11/17/2022	December 16, 2022 98 call						$0.50	$0.86		($0.36)
12/13/2022	January 20, 2023 100 call						$0.88		$0.74	$0.88	-35
	Totals						$5.33			$20.14	46
Transaction Date	Poor Man’s Covered Calls	Original Price	Current Price	LEAPS Price	LEAPS Price	LEAPS Price	Premium Sold	Closing Price	Total Premium	Total Return	Position Delta
	Vanguard Total Stock Market ETF (VTI)	$189.65	$192.69	(open)	(current)	(closed)
6/15/2022	LEAPS January 19, 2024 145 call			$54.50	$56.60					$2.10	85
6/15/2022	July 15, 2022 198 call						$2.50	$0.03		$2.47
7/14/2022	August 19, 2022 193 call						$3.20	$11.00		($7.80)
7/28/2022	September 16, 2022 210 call						$2.95	$0.30		$2.65
9/1/2022	October 21, 2022 205 call						$3.00	$0.55		$2.45
9/22/2022	October 21, 2022 197 call						$2.10	$0.15		$1.95
10/12/2022	November 18, 2022 190 call						$3.10	$7.45		($4.35)
11/10/2022	December 16, 2022 205 call						$2.65	$0.05		$2.60
12/15/2022	January 20, 2023 200 call						$3.10		$1.85	$3.10	-28
	Totals						$19.50			$59.67	57
Transaction Date	Poor Man’s Covered Calls	Original Price	Current Price	LEAPS Price	LEAPS Price	LEAPS Price	Premium Sold	Closing Price	Total Premium	Total Return	Position Delta
	iShares 20+ Year Treasury Bond ETF (TLT)	$110.56	$107.11	(open)	(current)	(closed)
6/13/2022	LEAPS January 19, 2024 85 call			$29.10	$25.70					($3.40)	80
6/13/2022	July 15, 2022 114 call						$1.65	$2.58		($0.93)
6/30/2022	August 19, 2022 119 call						$1.95	$0.23		$1.72
8/11/2022	September 16, 2022 119 call						$1.16	$0.10		$1.06
9/1/2022	October 21, 2022 115 call						$1.42	$0.23		$1.19
9/22/2022	October 21, 2022 110.5 call						$0.73	$0.03		$0.70
10/12/2022	November 25, 2022 104.5 call						$1.66	$0.10		$1.56
11/10/2022	December 16, 2022 100 call						$1.46	$2.90		($1.44)
11/22/2022	December 16, 2022 103.5 call						$1.30	$3.15		($1.85)
12/2/2022	January 20, 2023 109 call						$1.82		$2.02	$1.82	-41
	Totals						$13.15			$29.53	39

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.