Your Spring issue of Cabot’s 10 Best Marijuana Stocks is ready, with updates on the 10 stocks we’ve been following and two new stocks I’ve added to the mix.

And it’s a great time to take a fresh look at all of them, as the market’s recent correction has brought most of them down to what look like good buying areas. Yes, the correction is deep, but it was overdue, and long term, I remain very optimistic about the sector.

Do you feel like you’ve been on a roller-coaster lately? Well, you’ll probably need to hold on tighter to your seats this year, as it looks like market volatility is here to stay. After several multi-hundred point swings in the past month, and surging past the 26,000 mark, the Dow Jones Industrial Average’s net loss since our last newsletter was some 745 points. And while the overall market sentiment remains bullish, the bears have gained some steam—for longer-term prognostications.

After a two-week correction that prompted us to axe some stocks from the portfolio and reduce our exposure to others, markets have staged an abrupt about-face and staged a four-day rally. It’s not enough to turn our shorter-term indicators positive, but it’s a welcome relief. If the rally continues—which would be unusual given the history of similar corrections—we will change our tactics accordingly.

Today’s bargain is a little-known stock in the fast-growing industry of marijuana farming, production and distribution, which recently was selling at a discount of more than 50% from its recent high. It’s rebounded a bit since then, but is trading calmly, and I think this is a decent entry point.

Current Market Outlook


After a 10-day, 11% plunge for the major indexes, the market has stabilized for the time being. When looking at the evidence, we see that the longer-term trend is still up, but there’s no doubt the intermediate-term trend is down, the broad market is unhealthy and many stocks have cracked. A bounce could easily get underway at any time, but until the intermediate-term trend turns up (indexes back above their 50-day lines and some stocks acting better), you should play some defense by holding cash, cutting back on new buying and, if you own some broken stocks, using any market rebound to pare back. On the flip side, we still advise holding your resilient stocks—if they’ve held up so far, they have a good chance of doing well whenever the correction finishes up.

What’s interesting is that, despite the market carnage, we saw a ton of positive earnings surprises last week—which is a good way to spot potential leaders down the road. Our Top Pick is Grubhub (GRUB), which has the look of an emerging blue chip.

Stock Name	Price	Buy Range	Loss Limit
Array Biopharma (ARRY)	46.35	16-17	14-14.5
BeiGene (BGNE)	170.20	116-124	103-107
Century Aluminum Co. (CENX)	17.24	20.5-22	18.5-19.5
Fortinet Inc. (FTNT)	137.53	45.5-47	43-44
GrubHub (GRUB)	140.03	81-86	72-75
New Relic (NEWR)	103.70	61-63	56-58
Snap Inc. (SNAP)	16.68	17-19	15-15.5
Twitter (TWTR)	40.37	29.5-32	26.5-28
W.W. Grainger, Inc. (GWW)	311.99	253-270	225-230
Wayfair (W)	167.03	88-92	81-83

In the last two weeks we’ve seen unusual volatility in the stock market coupled with rising interest rates. However, the fundamentals remain strong and our long-term view is positive.

Emerging market stocks corrected sharply along with U.S. stocks today, dropping back to December levels and closing decisively below the MSCI EM ETF’s 25- and 50-day moving averages. We didn’t really need that kind of technical signal to tell us that all growth stocks were falling off the end of the dock, but it’s good to get a formal notice.

This week’s recommendation is a special situation—a transport stock that, thanks mostly to a game changing acquisition, is poised for major earnings growth. And the stock is holding up well after a recent earnings pop.

The market correction finally arrived swiftly in recent days. If you set aside cash with which to buy low, it’s okay to begin deploying some of that cash. In today’s issue we have one new addition to the Buy Low Opportunities Portfolio.

Current Market Outlook


After a big run last year and a moonshot during January, the sellers have finally come out of the woodwork, pushing the major indexes (and many leading stocks) sharply lower during the past six trading sessions, including a mini-crash today (the Dow was down 1,500 points at one point!). Looking at the evidence, the bull market (longer-term trend) is still intact, but the intermediate-term trend has turned negative and many leading stocks have come unglued. In the near-term, we certainly wouldn’t be shocked to see a snap back, but following a major extreme in price and sentiment two weeks ago and this abnormal selling, stocks probably need some time to wear out the weak hands and digest their recent gains. We’re moving our Market Monitor down to neutral to respect the change in the evidence—we don’t advise selling wholesale here, but you should honor your stops and loss limits, and on the buy side, be very choosy and keep new positions small until the market finds support.

This week’s list is a potpourri of stocks and sectors, most of which have recently reacted well to earnings. Our Top Pick is Pure Storage (PSTG), a fast-growing outfit that emerged from a base on big volume last month.

Stock Name	Price	Buy Range	Loss Limit
Autohome (ATHM)	98.65	73-77	67-69
BofI Holding (BOFI)	42.93	33-35	30-31.5
Harris Corp. (HRS)	198.60	145-150	137-139
Knight-Swift Transportation Holdings Inc. (KNX)	40.61	46-48.5	42.5-44
LPL Financial Holdings (LPLA)	85.22	59-62	56-57.5
MercadoLibre, Inc. (MELI)	980.83	340-360	310-320
Meritor (MTOR)	21.46	27-28.5	25-25.5
MyoKardia (MYOK)	108.56	47-51	42-44
Pure Storage (PSTG)	25.64	18.5-19.5	17-17.5
Shutterfly (SFLY)	94.71	68-72	59-63

For value-focused investors, this year’s prologue has been a welcome change from the turmoil experienced in early 2025.

In just the past few weeks, some of last year’s most ignored or underappreciated laggards have posted outsized gains, with rallies that have made even momentum-driven tech stock traders envious. Even more remarkable is the fact that much of that strength has been concentrated in ultra-defensive areas of the market like consumer staples, utilities and healthcare.

The market rotation continues to be the main story out there this week, though rumblings of a potential strike on Iran, an update from the January FOMC meeting, and a slew of earnings reports and economic data releases have been giving investors plenty to think about.

In terms of the rotation, the equal‑weight S&P 500 ETF (RSP) is up 5.5% so far this year, illustrating that leadership is broadening beyond the narrow group of mega‑cap stocks that drove much of last year’s performance.

Year to date, the S&P 600 SmallCap Index is up 8.3% and the S&P 400 Mid‑Cap Index is up 7.9%. Both are comfortably outperforming the S&P 500, which is up just 0.1%, and the Nasdaq, which is down 2.1%.

Happy Chinese New Year! The year of the horse is upon us.

China is expecting an incredible 9.5 billion trips to be made during the 40-day Lunar New Year travel period. Chinese automakers are also on the move as the country’s numerous brands sold nearly 200,000 vehicles in Britain last year, doubling their market share to almost 10%.

As U.S. investors have shifted from risk-on to risk-off mode in recent months, a clear disparity between the “haves” and the “have-nots” has materialized.

Let’s start with the “have-nots.” Financials have fared the worst so far this year (-4.7%), followed by technology (-3.1%), communication services and consumer discretionary (-2.8% each). The downturn in the two tech-related sectors in particular is a stark departure from recent years, when technology led the charge of the current bull market.

Cyclical stocks are soaring and technology is floundering in the transformed market.

The bull market is turned upside down. For most of the first three years, technology, and particularly AI stocks, soared while most other stocks did very little. Now, previously meandering stocks are killing it while technology sinks.

Strong fourth-quarter earnings are confirming what the market was already doing.

Current estimates based on earnings reported so far are for 13.2% overall S&P earnings growth for the quarter. It’s a solid quarter and the fifth straight quarter of double-digit earnings growth. In terms of sector performance, cyclical companies are killing it, and technology is floundering, just like before earnings.

Like many coffee aficionados, I have something of a love/hate relationship with Starbucks (SBUX). My main gripe is that the company’s food and beverage offerings have always been pricey compared to the fare served in most fast-food restaurants and run-of-the-mill coffee houses.

The outperformance of small caps continues.

Through Tuesday’s close, the S&P 600 is up 10% year to date versus just 1.6% for the S&P 500.

All but three small-cap sectors are outperforming their large-cap counterpart. The strongest small-cap sectors are materials (+20%), energy (+23%), industrials (+17%), and tech (+11.4%).

Let’s talk about the power of staying invested.

Sure, when the market turns south – and I’m not even sure last week’s mini-dip qualifies – it makes sense to pare back on your weakest stocks and put a larger portion of your portfolio in cash. But taking your ball and going home – selling out of all of your stocks when times are tough – is not a winning strategy. Here’s why.

NOTE: We’re sending this a day early as I’m soon to embark on a trip with the kiddos over the next week. I will be working a good amount from the road, though, and will have updates if need be. Also, next week’s issue will be published as scheduled.

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WHAT TO DO NOW: The market remains very mixed, with growth measures still generally pointed sideways to down, while the broad market remains in solid shape. What’s interesting, though, is that we’re seeing more growth stocks kick into gear, along with some huge buying action in a few “cyclical growth” names. Tonight we’re making one move—adding a half-sized stake in Macom Tech (MTSI)—but are keeping our eyes open for a broader character change among growth stocks. Our cash position will be around 53%.

Today could be a big day for cannabis stocks.

The reason: We may get an important update on the rescheduling timeline.

Cannabis investors will be watching closely today to see whether Attorney General Pam Bondi offers a rescheduling update when she appears before the House Judiciary Committee. Upbeat comments could spark a sharp cannabis sector rally. The hearing starts at 10 a.m. EST.

I’m excited to share a couple of enhancements to Cabot Early Opportunities —improvements designed to sharpen our focus and better help you stay on top of the stocks we own.

Energy stocks are in the news right now, partly because some of them have begun their price rebounds from recent pullbacks, and partly due to a focus on oil prices during the current Middle East conflict. Here’s a quick assessment and comparison of our four energy stocks.

With oil and natural gas producers adding active rigs, the demand for sand is growing. And that’s where this producer of monocrystalline sand comes in.

Eight analysts have raised their 2017 earnings forecast for our first idea—an international hotel company.

Our position in this stock, a play on Prime Minister Shinzo Abe’s efforts to drive inflation in Japan’s economy, never really lived up to expectations.

Our first idea is a fund that seeks investment results that correspond to two times (2x) the daily performance of the S&P 500. Our second recommendation is a sale of a previous idea.

This stock broke down badly last week when financial stocks fell apart.

Our first stock idea is rated ‘Buy’ by Zacks, based on rising earnings estimates and value.

This stock was dropped to Sell, largely because the stock seemed pricey.

We downgraded this stock to Sell.

General Motors (GM) is trading nearly 4% lower today after March auto sales data fell short of estimates.

This resources company beat analysts’ estimates by $0.11 last quarter and five analysts have increased their forecasts for this year.

Three analysts have raised their 2018 earnings forecast for this animal health company. Wall Street expects double-digit growth for the next five years.

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.