Most of our contributors remain bullish for now, and are still finding pockets of opportunities for our subscribers. We begin this issue with our Spotlight Stock, a company that is steeped in a variety of technology channels, including some very disruptive technologies that I discuss further in my Feature.

Note: To accommodate our Thanksgiving week schedule, there will be no issue of Cabot Stock of the Week published next week. The next issue will be published November 28.

As for today, the broad market’s long-term trend remains up, and today my recommendation is an undervalued stock recommended by Azmath Rahiman, chief analyst of Cabot Benjamin Graham Value Investor.

Current Market Outlook


After a straight-up move in recent weeks, the major indexes had a couple of wobbles during the past few days, which has done some damage to certain areas—small-cap indexes are standing right on top of their 50-day lines and many individual stocks and sectors have come back down to earth, even among large-cap stocks. Even so, the vast majority of major indexes and Top Ten stocks are still acting well, with more than a few racing up the charts following positive earnings reactions. We have our eyes open should the weak broad market “infect” leading stocks, but so far, the market’s recent rest looks normal to us. Thus, you should stick with a bullish stance, giving your strong stocks a chance to continue advancing, while looking for entry points as stocks pause.

This week’s list has something for everyone, with some healthcare, some energy (for the first time in a while) and some true growth stocks. Our Top Pick is Planet Fitness (PLNT), a great cookie-cutter story that just surged on earnings. Buying on some weakness is your best bet.

Stock Name	Price	Buy Range	Loss Limit
AbbVie Inc. (ABBV)	93.53	92-95	86-88
Alnylam Pharmaceuticals (ALNY)	143.58	129-134	117-119
Continental Resources (CLR)	66.19	43-45.5	39.5-41.5
Micron Technology, Inc. (MU)	43.31	43-45	39.5-40.5
NVIDIA Corporation (NVDA)	242.42	205-213	188-192
Planet Fitness (PLNT)	0.00	28.5-30.5	26.5-27.5
ProPetro (PUMP)	23.30	15.8-16.8	14.5-15
Red Hat (RHT)	0.00	120-124	111-113
ZTO Express (ZTO)	28.84	16.1-17.2	14.5-15
Zendesk (ZEN)	82.19	33-35	30.5-32

In this issue, I present my overall outlook on the investment climate and the economy. I also add two new stocks to the portfolio and give updates on our existing stocks.

Our contributors remain bullish, but cautious. This month’s Spotlight Stock is a Master Limited Partnership that’s primarily an asset manager, and its holdings are increasingly energy investments. The company is growing at double-digit rates and currently yields 5.35%.

There are a few yellow flags out there, from short-term sentiment measures to a weakening broad market (our Two-Second Indicator is again unhealthy), but the trend of the major indexes is firmly up, and the action of growth stocks has been terrific, including a bunch that have surged on earnings in recent weeks.

Today’s featured stocks include two new additions to the portfolios and a stock that has ostensibly become a takeover target.

Today’s selection is one of the big, fast-growing Chinese companies (you might call it the Google of China), which has just pulled back to offer us a lower-risk entry point.

Current Market Outlook


After a modest rise last week, the market’s story remains the same—the intermediate- and longer-term trends continue to point up, and leading stocks remain in favor, with a ton gapping up on earnings during the past three weeks. It’s not all good news, of course—the broad market has again turned iffy by a few measures, and the environment is a bit giddy right now as investors count their profits. Thus, we won’t rule out a healthy pullback in the major indexes or some rotation among various stocks and sectors. But at day’s end, we always go with the market’s primary evidence (trend, price/volume, etc.), and today that evidence is solidly bullish, so we are, too.

This week’s list is heavy on small- and mid-sized companies, though a variety of sectors are represented. Our Top Pick is Universal Display (OLED), a leading glamour stock that just soared on earnings after about five months of no progress. Try to buy on dips.

Stock Name	Price	Buy Range	Loss Limit
Axcelis Technologies (ACLS)	0.00	31.5-33.5	28.5-30
Conn’s Inc. (CONN)	0.00	29.5-31	26.5-27.5
EPAM Systems (EPAM)	188.24	96-98.5	90-92
Insulet (PODD)	175.69	66-69	60.5-62.5
Neurocrine Biosciences (NBIX)	123.40	70-73	63.5-65.5
Old Dominion Freight Line Inc. (ODFL)	221.91	115-119	106-108
PBF Energy (PBF)	38.93	30-31	27-28
Trex Company (TREX)	117.56	100-105	92-95
TRI Pointe Group Inc. (TPH)	0.00	16.5-17.2	15-15.4
Universal Display (OLED)	187.54	154-160	137-140

Today’s addition to our portfolio is different from the rest in a number of ways. It’s not a pure-play cloud software stock, though it has a software division that generates 26% of revenue. It’s not a pure-play medical device stock, though it has a medical division that generates 33% of revenue. It’s not even based in the U.S.!

It’s the same basic market story as it has been for the last four months. Technology is floundering while other sectors are killing it. But a couple of events occurring this week could potentially change the dynamic.

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.

Lots of earnings reports. Here are this week’s noteworthy pieces of news and price action in the Cabot Undervalued Stocks Advisor portfolios.

Today we’re providing special updates on four stocks that have made significant moves since our last update.

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.