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.

It’s that time of the year when economists and market mavens spill an abundance of ink making year-ahead stock forecasts and boom/bust warnings. As there seems to be an abnormal amount of recession predictions for the year ahead—including a few from some reputable sources—I think we should examine the question: Will the U.S. witness a major economic shock in 2026?

WHAT TO DO NOW: The evidence has improved of late, though we haven’t seen many decisive green lights from our indicators. Still, with so much cash, we’ll dip a couple of toes in tonight and then follow up … if the good vibes continue. Tonight, we’ll add half-sized positions (5% of the account) in Eli Lilly (LLY) and JFrog (FROG), leaving us with a still-big 55% cash hoard. Details below.

The resilient market forges on. After the biggest market dip since April in the middle of last month, the S&P has gained it all back in the last couple of weeks.

Stocks weakened last month as investors worried that tech stock valuations were too high, as the artificial intelligence trade may be overdone. They also worried that the Fed would not cut rates in December. But stocks were rejuvenated after some positive statements by Fed members greatly increased the odds of a December fed funds rate cut.

This is one confusing market. It’s doom and gloom one day and then optimism the next. Investors can’t seem to make up their minds about whether the world is going to Hell in a handbag or it’s time to buy. What’s going on?

Last week was confounding to say the least. Two events promised to address the market’s chief concerns: the sustainability of the AI trade and the state of the economy. Last week’s earnings report from the ultimate AI bellwether Nvidia (NVDA) and the long-awaited jobs numbers could answer both questions. Both the earnings report and the jobs report were everything investors could have hoped for. Stocks tanked anyway.

Due to a short Thanksgiving week, rather than the usual stock-by-stock update, I will briefly highlight some significant moves by Explorer stocks. I’d also like to wish you and your family a great long Thanksgiving weekend.

Regrettably, Universal Technical Institute (UTI) has not worked out for us despite filling a crucial need and posting impressive earnings, as the stock was down sharply this week. I’m moving this to a sell. Coeur Mining (CDE) and International Business Machines (IBM) were both up about 6% this week, while Sea Limited (SE) was down 7%.

A couple of weeks ago we discussed the likelihood that the “all things AI” momentum trade would sooner or later lose luster. I called into question the tenacity of some of 2025’s top-performing tech stocks while also speculating that some of this year’s wayside laggards would launch a return to prominence in the coming months.

WHAT TO DO NOW: The market tried to rebound today after Nvidia’s earnings last night—but big investors stepped up to sell, driving the market and many growth stocks into the red. Our Cabot Tides have now joined the Two-Second Indicator in negative territory, which has us remaining cautious and holding plenty of cash. In the Model Portfolio, we’re going to book partial profits in the ProShares S&P 500 Fund (SSO), selling one-third of our stake and holding the rest. That will leave us with a cash position of 62%. Details below.

A quick housekeeping note: with our offices closed next Thursday and Friday for Thanksgiving, we won’t be publishing the regular Weekly Update next week. I will, of course, send out Special Bulletins if/as needed. I hope you have a happy and healthy Thanksgiving!

On to the market.

Nvidia’s (NVDA) upbeat revenue forecast due to ongoing AI demand should help to tamp down bubble concerns today and possibly stanch the selling that pushed the S&P 500 and Nasdaq below their 50-day moving average lines earlier this week and inflicted the same damage on the S&P 600 SmallCap Index last Thursday.

It was a rough week for investors of all stripes, as the S&P 500 is down 3.5% since we last wrote, while the Nasdaq tumbled more than 4%. Even the usually steadier Dow Jones Industrial pulled back nearly 5%, while value stocks pulled back nearly 2%. All month, growth stocks have been getting battered, with many high flyers getting sold off even after convincing earnings beats. Now, the selling has spread to other corners of the market.

But not all sectors are suffering.

The market rally is sputtering. The near-term direction of stocks is highly uncertain. But we might have a much better idea of where things are going by the end of this week.

This will be an important week for a market that’s been floundering.

The S&P 500 is still in an uptrend that began in April. The index is up 14.5% year to date and within 3% of the high. But stocks are down 2% so far in November as investors fret about technology.

A growing chorus of concern regarding artificial intelligence valuations is dragging on the market. Several analysts believe AI stocks have gotten ahead of themselves. Technology has pulled this market higher all year and for most of the bull market. A pullback in those stocks will likely drag the index lower.

Shares of Argan (AGX) are trading down as of midday after the company missed revenue expectations in Q3 FY26 but beat on EPS. The pullback likely signals that AGX stock will be rangebound for a while – possibly in the 300 - 400 range – not that the run in shares is completely over.

CEO Special Bulletin: Position Updates

Sell a Quarter of Centuri Holdings (CTRI)

We’re going to continue to hold our position in Credo Tech (CRDO), which is now up over 145% (since June), following the company’s strong Q2 FY26 report.

We’re going to take a swing at Natural Grocers (NGVC) today by filling the second half of our position. It’s foolish to think you can time a “bottom” perfectly, but there’s enough evidence here to suggest we can buy the stock at a solid discount now and, hopefully, catch a significant updraft in the weeks and months ahead.

Sell Life360 (LIF)

Natural Grocers (NGVC) delivered a Q4 FY25 report and guidance for next year that “should” be good enough to stabilize the stock and get it moving higher again. That said, we have a half-sized position, and if shares don’t stabilize here (KR and SFM have recently done so), then we’re more likely to exit the position than fill the other half. Next week will be important for NGVC.

WHAT TO DO NOW: Despite the indexes holding up today, lots of growth stocks are again coming under pressure, continuing a wave of late-week distribution. We’re already holding a lot of cash, but today we’re selling one more position—Vertiv (VRT), which had been trying to hold up but the late-week selling pressure has been too much, cracking the stock. We’ll sell our half-sized position and hold the cash, leaving us with around two-thirds on the sideline in the Model Portfolio.

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.