We start this month with our Spotlight Stock, a company that operates in the Oil Services area. Beaten down by low oil prices, this company is pulling out all the stops to cut costs and expand into new geographical arenas—efforts that are attracting some very interesting institutional interest in its stock. My Feature article further explores the strategies that the company and its new management team are applying to manage—and expand—the company’s footprint.

Today’s stock is a name you’ll know. The company was born in the early days of the internet and today it’s all grown up—a major player in the world of financial transactions.

Current Market Outlook


Following last week’s selling storm, today’s big rebound was encouraging; three of the five major indexes we track (S&P 500, Nasdaq, NYSE Composite) bounced back above their 50-day lines today, and many leading stocks did the same. Ideally, last week’s decline, which was spurred on by obvious news (North Korea), was a sharp shakeout that cleared the decks and set the stage for a new upmove. But we’ll need to see more evidence before going there. As we stand now, the intermediate-term trend is sideways-to-down, and many stocks have either cracked or are testing support. There’s no need for wholesale selling, but we are knocking our Market Monitor down a notch; you should keep new positions on the small side and honor your stops until we see further evidence that the bulls are back in control.

This week’s list does have a bunch of good growth stories, which is encouraging after the recent selling. We’re going with Vantiv (VNTV) as our Top Pick—it’s not the most volatile stock, but it just blasted out of a long period of lackluster action following a game-changing acquisition.

Stock Name	Price	Buy Range	Loss Limit
Autohome (ATHM)	98.65	57-62	51-56
CBOE Holdings (CBOE)	0.00	93.5-96	88-90
Chegg (CHGG)	74.21	14-15.5	12.5-13.5
Exelixis (EXEL)	27.35	25-27	23-24.5
Planet Fitness (PLNT)	0.00	23.8-24.8	21.8-22.5
Royal Gold, Inc. (RGLD)	129.66	83-86	75-77
Take-Two Interactive (TTWO)	123.32	85-89	79-81
Teledyne (TDY)	0.00	143.5-147	136-138
Trade Desk (TTD)	468.02	51-55	46-48
Vantiv (VNTV)	0.00	67.5-70	62.5-64

Markets sold off slightly on Wednesday, but really got into it on Thursday, with the iShares MSCI ETF falling a full 2%. Despite the blood-letting, the Cabot Emerging Markets Timer is still flashing a green light, indicating that the medium-term trend of the market is still up.

This month I start covering a bank for the first time in many years. The balance sheets of many U.S. banks have strengthened significantly during the past few years, and present low risk buying opportunities. Citizens Financial, based in Rhode Island, stands out from the crowd and is a solid pick for steady performance during the year ahead.

Stocks have continued to zoom higher, and our contributors have found a very nice variety of investments for your consideration this month, beginning with our Spotlight Stock—a company that has been in existence since 1879.

The market remains strong and cohesive and thus I remain bullish. However, numerous indications remind me that the market is overdue to deliver a painful shock to investors, so today I’m leaning back to the conservative side, recommending a dividend-paying stock that has solid long-term prospects and minimal downside risk.

Current Market Outlook


Today was a welcome day for leading growth stocks, with many bouncing nicely after nearly two weeks of sliding steadily (despite the Dow’s advance during that time). Overall, the situation remains mostly bullish, but tricky—the major indexes are in uptrends and many stocks are in good shape, but we’ve also seen quite a few breakdowns among Top Ten stocks during the past couple of weeks, while many stocks moving to new highs have quickly found selling pressure. All told, we’ll leave our Market Monitor in bullish territory because the majority of evidence remains on the positive side of the ledger, but we’ll be watching to see if today’s strength in leading stocks continues or the choppy conditions return.

This week’s Top Ten has a bunch of impressive charts (including some multi-year breakouts) from a variety of industries. Our Top Pick is GrubHub (GRUB), whose story has improved and whose stock has exploded out of a two and a half year consolidation. Try to buy on weakness.

Stock Name	Price	Buy Range	Loss Limit
Aaron’s (AAN)	74.35	44-46	41-42
Ameriprise Financial, Inc. (AMP)	0.00	142-147	131-134
Arista Networks (ANET)	0.00	165-173	152-156
Baidu (BIDU)	0.00	222-229	203-207
Baozun (BZUN)	44.24	30.5-32.5	28-29
GrubHub (GRUB)	140.03	50-53	45-47
Lumber Liquidators Holdings, Inc. (LL)	0.00	33.5-36	29.5-31
Rockwell Collins (COL)	0.00	119-122	108-112
Spirit AeroSystems (SPR)	92.54	69-72	62-65
WTW (WTW)	100.47	39-42	35-36.5

Today’s recommendation is a small company, and there are no analysts following the stock. But it has big clients for which its products are absolutely critical. The stock has been on a wild ride this week. I have a hunch I know why, and we’re going to step in and to try and grab shares at a discount, starting with half a position.

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.

Today we’re reporting on earnings for Applied Materials (AMAT), and adding two stocks to the Cabot Undervalued Stocks Advisor portfolios, Archer Daniels Midland (ADM) and Total SA (TOT).

Marrone Bio (MBII) reported yesterday after the close. The bottom line was a good quarter, with remarkably few surprises. And at this point, “good” is great.

Our Cabot Tides turned positive today, and while the market is still very volatile and divergent, there’s no question the evidence is improving.

The momentum for emerging market stocks in general, and Chinese stocks in particular, has taken a big turn for the worse.

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.