This week we are adding a covered call in yet another earnings season winner that has emerged amidst the rubble of the retail sector.

The market remains quite weak, and thus ripe for a major rally at any time. But until we see real strength, continued caution is advised.
And today’s recommendation fits the bill, as it has a solid dividend and the prospect of real growth as the global energy industry adjusts to a world without Russian oil.


As for the portfolio, we’re selling one laggard, which is suffering as consumers cut back on discretionary spending.

During the past couple of weeks, the market has put together a handful of solid baby steps; in fact, the rally has been enough to put the intermediate trend on watch—a bit more strength from here could produce a green light. That’s all to the good, but (a) we still have to see the signal actually occur, and (b) even if it comes, there’s still plenty of overhead to chew through given the damage seen over the past few months. That’s not to throw cold water on the rally attempt—we’re nudging up our Market Monitor to a level 3 tonight, but right now, it’s best to remain defensive and to go slow on the buy side.



This week’s list is again heavy on commodity-related stocks and special situations, along with some recent earnings winners sprinkled in. Our Top Pick is a medical firm that lifted above long-time resistance following a clean FDA approval.

Inflation may be easing somewhat but interest rates will continue to move upward, presenting a headwind for markets. Investors are acting on bargains but in restrained ways until an uptrend develops. The Explorer’s Fanuc (FANUY) is up 10% in the last two weeks and Chilean real asset play SQM is up about 25% in the last five weeks. Today, we add another new overseas play, this time from London.

It’s been a tough year for investors in cannabis stocks, and in the broad market as well, as all major indexes are in downtrends.

Yet prospects for the cannabis industry remain bright, as state-by-state legalization trends continue.



But until trends turn up, there’s no urgency to buy, so our portfolio sits roughly half in cash, waiting for the upturn.



Full details in the issue.



Yours for wealth and wisdom.

It’s too soon to buy new stocks aggressively. But there is a safer place in the meantime to generate a high yield without much downside in the near term.
In this issue, I highlight a stock from the energy sector, the only market sector having a good year. Yet, the stock is not overvalued or overpriced. It provides a high yield without much downside if the market decline continues. And the price is likely to trend higher over the rest of the year.

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



While the stock market has surged since its pandemic low, shares of many companies have sold off sharply and now trade below their March 23, 2020 level. We touch on several different types of situations behind these sell-offs and highlight five stocks backed by reasonably healthy companies yet trade at attractive valuations. We also mention one additional stock that has significant potential but not under the current value-destroying management.



We delve into the investment management industry and highlight four stocks of companies that look appealing but are not generally on investors’ radar screens. Our featured recommendation this month is investment firm Janus Henderson Group (JHG). The company produces strong free cash flow, has a fortress balance sheet, offers an attractive 5.7% dividend yield and is under pressure from activist investor Trian Partners to improve its results.



We note our recent ratings change of Altria Group (MO) from Buy to a Sell.

Titanium, an under-covered market on Wall Street, has the unlikely distinction of now being one of the top-performing metals.

This metal, along with lithium and steelmaking coal, grabbed the top spots in terms of overall performance and has provided us with a solid performance in an otherwise soft metals broad market.



Elsewhere, steel should strengthen while gold and silver both have a good chance to turn around in the coming weeks.



I continue to recommend that we maintain a mostly defensive stance.

Despite some optimism early last week, the sellers obliterated that hope Wednesday through Friday, as the indexes fell sharply, pushing the S&P 500 into an official bear market (down 20% from its highs).

Welcome to Cabot Options Institute’s Income Trader!

In today’s issue, we aren’t going to do any heavy lifting. No market commentary, just an overview of Income Trader and what to expect going forward. We will have plenty of time to get into the nitty-gritty. Today, I simply want to go over the ins and outs of the service so that you can efficiently and effectively take advantage of all the content provided including details on issues, trade alerts, webinars and more.

Today, I simply want to go over the ins and outs of the service so that you can efficiently and effectively take advantage of all the content provided including details on issues, trade alerts, webinars and more.

That being said, expect to start seeing several trade alerts over the next week. I will begin trickling out positions over the five different portfolios over the next few weeks. So have an understanding of what each portfolio is trying to accomplish.

The market remains quite weak, and thus ripe for a major rally at any time. But until we see real strength, continued caution is advised.


In the meantime, you may want to nibble on today’s innovative consumer footwear stock, especially if you’re a customer.


As for the portfolio, we’re selling two stocks, cutting losses short so they don’t grow larger.


Note: next week’s issue will be published on Tuesday, due to the Memorial Day holiday.

The horrible second quarter is behind us and a rapidly recovering economy with a very accommodative Fed lies ahead. There are a lot of reasons for the rally and unless investors get scared straight the rally seems destined to continue.

The market has resumed its uptrend and the S&P 500 is now back to within 3% of the all-time high.

U.S large-cap markets are more expensive than international developed and emerging markets.

Our portfolio has been largely treading water for a few weeks. That’s not surprising given that we’ve been waiting for earnings season to start (it finally has!) and that there’s this persistent sense that bad news for the economy resulting from the coronavirus equal more stimulus and accommodative fiscal policy equals support for equity markets and, in some ways, good news for certain tech and MedTech companies.

Earnings reports have been mixed and market activity muted this week, but today the four technology giants will report after the market closes. Germany reported that its economy contracted the most on record, shrinking 10.1% in the second quarter.

So far, earnings season hasn’t had that much of an impact on the overall market. I don’t think investors know quite what to make of this quarter. It’s bad. But everyone knows that going in.

It’s been a crazy second quarter. So far, this earnings season is not having a big effect on the overall market. Everybody knows the quarter was bad. But, unlike most quarters, this one doesn’t really portend any future trend.

By far the worst performing sector in recent years has been the energy sector. From its peak in mid-year 2014 when oil prices reached over $100/barrel to its current state of complete disarray, the S&P Energy Sector index has collapsed 63%. For comparison, the broad S&P 500 index has gained 65% and even the often-maligned Materials Sector index has risen by 25%.

Remain bullish, but don’t get too aggressive. Growth stocks and the market are still in uptrends, so we’re sticking with a heavily invested stance, but many leaders have wobbled of late, the number of stocks hitting new highs has dried up a bit and earnings reports are coming up for a ton of names.

After last week’s selloff in tech, this week has been relatively calm, though the action at mid-day today suggests we could see more selling before the closing bell.

This bank beat analysts’ earnings estimates by $0.09 last quarter.

Six analysts have increased their earnings estimates for this ore and nickel producer in the past 30 days.

This consumer products company walloped Wall Street’s earnings estimates, posting EPS of $.059, compared to the $0.23 forecast.

Every so often one of our stocks is the target of a short report that tries to make the case that a company is garbage, a fraud, and/or wildly overvalued.

Earnings estimates are rising, and analysts expect this fuel aggregator to grow by more than 60% next year.

In the past 30 days, 13 analysts have increased their EPS estimates for this auto reseller, and are predicting 37.10% next year.

Fundamentally, the only recent news regarding the marijuana industry is that the U.S. House of Representatives will vote on the MORE Act, which would deschedule marijuana and thereby legalize it federally, the week of September 21. Passage is likely. Getting through the Senate is not.

Our first idea today is a mutual fund with top five holdings.

Our second recommendation is a sale to rebalance the contributor’s portfolio.

The big question on investors’ minds is if this tech stock retreat is a precursor to something larger or a “normal” correction in the context of a bull market.

This deeply-discounted beverage company’s latest quarterly earnings were more than double the analysts’ estimates.

Growth stocks remain under severe pressure, with more unraveling today.

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.