This month we’re adding a high-growth biotech name that has just begun to commercialize a unique compound for fighting aggressive cancers and other diseases including, potentially, COVID-19.

The company just began booking revenue from its first cancer treatment. That launch significantly de-risks the stock and raises the potential for future approval of the same compound for other indications.



The stock has retreated lately because prescription sales were curbed during the COVID-19 outbreak. This should be a temporary dip as there are many potential stock-moving catalysts coming this year. We’re hoping to sneak in and buy the dip on this high-potential name.



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

Three of today’s featured companies seem most obviously ready to begin or continue run-ups in the coming days Yesterday’s earnings report made it clear that a fourth’s dividend is safe, with a current yield of 8.4%. Plus, energy stocks are acting well recently.

The stock is strong today thanks to a solid quarterly report last week; earnings came in at $0.15 per share, beating analyst estimates by a penny (the third time in the last four quarter it’s topped expectations) and up 36% over last year. Revenues were $97.3 million, though results there were mixed; the consumer segment saw revenues plunge 24% from a year ago (partly due to the virus), but communications/computing was up 8% (including far faster growth in 5G-related products) and the industrial and auto markets saw sales leap 14%.

Current Market Outlook


After a nice five-week recovery rally that saw the S&P 500 recoup 63% of its crash (the Nasdaq got 72% back), some sort of retreat wasn’t uncalled for, and that began last week. How this pullback unfolds will be key: If the intermediate-term uptrend cracks (would likely take another 3% down in some indexes) and many leaders do the same, it will be a sign to back off and/or tighten stops, but to this point, the retreat has been normal for both the major indexes and individual stocks. Thus, we’re obviously watching closely, but we have no change in our stance right here, thinking the path of least resistance remains generally up, but potholes and news-driven moves (especially on earnings) are likely given the recent run-up and the overhead resistance from February. It’s fine to do some buying, but don’t go wild until the buyers really flex their muscles. We’re keeping our Market Monitor at a level 6.

This week’s list has a bunch of intriguing stories, though a few have earnings coming up soon. Our Top Pick is Bandwidth (BAND), a lesser-known outfit whose offering is key to many fast-growing companies.

Stock Name	Price	Buy Range	Loss Limit
Bandwidth Inc. (BAND)	129.19	90-94	78-80
Bill.com Holdings (BILL)	88.76	52.5-55.5	46-48
Coupa Software (COUP)	262.20	172-178	153-156
Datadog (DDOG)	81.52	43-45	38-39.5
Dexcom (DXCM)	421.36	335-350	293-303
DraftKings Inc. (DKNG)	38.26	19.5-21.5	16-17.5
Halozyme Therapeutics (HALO)	24.82	22.5-24	19-20
Lattice Semi (LSCC)	23.92	20-21.5	18-19
Seattle Genetics (SGEN)	150.85	145-155	125-130
West Pharmaceutical (WST)	210.25	182-189	165-168

The market has pulled back a bit in recent days, but not enough to change our stance. By our measurements, the market’s intermediate-term trend remains up, while the long-term trend is still working to turn up.

More important, however, is how the stocks in our portfolio are acting, and the answer is “pretty good!” In fact, we’ll continue to hold them all today.



As for today’s recommendation, it’s a very well-known U.S. meat company that reported earnings just this morning—and the dip that followed that report now makes the stock an even better bargain!



Full details in the issue.

Like most consumer industries, residential housing construction is declining sharply in the wake of the Covid-19 shutdown. The industry’s recovery, which was accelerating at the beginning of the year, is now reversing rapidly.

In this issue, we review five homebuilders whose valuations appear to overly discount the industry’s recovery prospects.

The market rebound continues as the Nasdaq 100 (QQQ) is now in positive territory for 2020 and the S&P 500 is up 32% from its March 23 lows. The Fed continues to insist it will accommodate any liquidity concerns and is now even investing in corporate debt. Japan’s central bank is going so far as to purchase Japan equity ETFs. Today, we follow up last week’s focus on big tech and big data with a cybersecurity theme and two new investment ideas.

Since the market bottomed five weeks ago, the charts have been impressive, not only for the broad market but for the marijuana sector as well, which has finally shaken loose from its bear market’s two-year grip.

Of course, some companies didn’t survive the hard times, but those that did are battle-hardened, so now, more than ever, it’s easier to identify the future winners of the industry—and the stocks that can bring you big profits in the years ahead.



So today I’m doing a bit of buying for the Cabot Marijuana Investor portfolio, adding four stocks (three of which we’ve owned before).



Additionally, you’ll find a Special Report with this issue, profiling all the publicly traded, vertically integrated multistate operators (MSOs) in the U.S. The report can be found in the Special Reports section of the website.



Full details in the issue.

Welcome to Cabot Micro-Cap Insider!

This inaugural issue is a little different than future editions.



In this issue, I’ve profiled my initial five recommendations. In future issues, I will profile one new idea in depth, and provide updates on all open recommendations.



Because I’m including five new ideas today, the write-ups are more concise than you can expect going forward.



Before you read this issue, I recommend that you read my Cabot Micro-Cap Insider Guide. It will help you get the most out of your Cabot Micro-Cap Insider membership, and make your investing decisions easier and more profitable. It will also explain much of the shorthand we use in Cabot Micro-Cap Insider, and explain our ratings.



If you have any questions about any of my recommendations, I encourage you to reach out to me directly at rich@cabotwealth.com.



Now let’s get into the stocks that you should start buying today.

This stock was one of 2019’s biggest turnaround stories, and while it stalled out in the second half of last year, it’s making waves again thanks to a blowout Q1 report.

The reality is, there are so many undervalued stocks right now that I have to fight the urge to add another dozen to the Cabot Undervalued Stocks Advisor portfolios.

Fourteen Cabot Benjamin Graham Value Investor companies reported quarterly financial results or other noteworthy news.

Remain cautious! The sellers continue to have the upper hand with the major indexes and most stocks. You should be holding plenty of cash (and some resilient stocks) while waiting for the bulls to retake control.

We’re letting go of Equifax (EFX) today, booking a nice profit, and reducing our exposure to Home Depot (HD) by half. We also sold Amgen (AMGN) on Monday, after health care industry stocks suffered a major selloff. Drug companies and distributors are anticipating even more pressure to rein in drug prices next year.

Market volatility has picked up. Stocks are popping and dropping all over the place. In other words, welcome to the thick of earnings season.

Seventeen Cabot Benjamin Graham Value Investor companies reported quarterly financial results or other noteworthy news. I also include questions from subscribers along with my answers.

The Emerging Markets Timer is right on the fence, as the MSCI Emerging Markets Fund (EEM) is just a hair below its 50-day moving average, but still well within its recent trading range. Earnings season has claimed its first victim among our holdings, but the portfolio remains in good health. Tonight we’re selling Line Corp. (LN) and moving Tata Motors (TTM) to a Hold.

We saw very strong earnings reports last week from E*Trade (ETFC) and Goldman Sachs (GS). Yesterday, Scottrade Financial Services agreed to be acquired by TD Ameritrade (AMTD). This week;s Update discusses how that scenario might affect E*Trade (ETFC).

Thirteen Cabot Benjamin Graham Value Investor companies reported quarterly financial results or other noteworthy news. Included in my summaries are three new sell recommendations: BJ’s Restaurants (BJRI), W.W. Grainger (GWW) and iShares Minimum Volatility USA ETF (USMV).

Not much has changed with the market during the past week, so we’re sticking with our stance—the Model Portfolio has 40% in cash and holding six resilient stocks. We continue to believe the next major market move is up, but in the near-term, you should take your cues from the market and individual stocks. We have no changes tonight.

Two of our stocks—Reynolds American (RAI) and U.S. Bancorp (USB)—reported earnings this morning (details are below). So far, earnings season is off to a good start, with the big banks and Netflix (NFLX) beating estimates in recent days.

This Chinese e-commerce company is expected to grow at an annual rate of 29.8% over the next five years.

This Top Pick bank has just extended its share repurchase program to 642,785 shares.

In the past 30 days, six analysts have raised their EPS estimates for this beauty retailer.

The market was brutalized again today, with another avalanche of selling after yesterday’s disappointing Fed rate hike and press conference. One of our positions fell through support and it’s time to sell. This leaves use with two positions and 84% in cash in the model portfolio.

As you noticed, yesterday’s issue of Cabot Dividend Investor was jointly edited by Chloe Lutts Jensen, for whom it was the final issue, and Tom Hutchinson, for whom it was the first.

This Indian solar power company saw its revenues rise by 22% in its second quarter.

As we approach the end of the year, and the entire investing world seems to be worrying about interest rates and tariffs, the question in my mind is whether now is a good time to buy some more marijuana stocks.

This optical and photonics maker beat analysts’ estimates by $0.29 last quarter and five analysts have recently raised their EPS forecasts for the company.

We’ve held on to quarter-sized stakes in a few positions in the event that the market firms up and turns north. That hasn’t happened, so it’s time to step completely aside from two stocks in the portfolio.

Our second recommendation is a sale of an underperforming stock.

Our first idea is a B2B company that is a leader in several industries.

Our second recommendation is some very nice-profit-taking on a previous pick.

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.