Let’s start with some remarkable statistics.

Nvidia’s (NVDA) fourth-quarter revenue reported yesterday was $68 billion, up 73% from the same period last year. It now makes more revenue in a single quarter than most chip competitors generate in an entire year. Nvidia’s profit for the last 12 months was $120 billion. Just three years ago, Nvidia’s profit was $4.4 billion.

It is estimated that more than one-third of the value of the stock market is represented by companies based in the San Francisco Bay/Silicon Valley area.

We continue to get solid signals from the White House that cannabis rescheduling is on track. That’ll be a significant catalyst for cannabis stocks. The only question is the timing. That remains uncertain and probably unknowable. Cannabis stocks remain a buy on weakness ahead of this catalyst.

The background here is that last December, President Donald Trump signed an executive order directing the Justice Department to move cannabis to Schedule III from Schedule I under the Controlled Substances Act.

The bull market has broadened out beyond technology in a big way. While the S&P 500 is about even for the year so far, most market sectors are beating the index, and by a lot. In fact, six of the eleven sectors have a better than 8% YTD return, not even two months into the year.

The new market dynamic is having a profound impact on the portfolio. Several stocks that had been dead weight in the portfolio have soared in recent months to 52-week highs. The new market has turned previously underperforming stocks into strong income generators.

It has been a strong run for several portfolio stocks. But a largely successful earnings season is almost over. That means there will be no obvious catalyst to continue driving stocks higher, at least for now. The situation makes it a better time to capitalize on recent price surges instead of adding more positions and hoping for more.

Under the current circumstances, the biggest market opportunity right now is income. In this issue, I highlight three more high-priced covered calls on stocks that have had strong rallies.

In researching potential candidates for this month’s edition of the newsletter, I narrowed down my final list of top choices to the usual 10 stocks. What caught my attention when reviewing the list, however, was how many of them were in the healthcare sector—in particular, the therapeutic arena.

I was gratified by this discovery since I feel that a.) medical stocks are underrepresented in the portfolio, and b.) the sector is at once defensive in nature (always a good thing in my estimation) yet also poised to benefit from ongoing sector rotation.

Before we dive into this week’s covered call idea, I need to address two items.

First, we are going to sell our RKT stock as the February call that we sold expired worthless, leaving us with our stock position.

It remains about as mixed an environment as we can remember, which does mean the risk of some sort of convulsion (a correction, a re-rotation into laggards, etc.) is elevated. That said, as opposed to the on-again, off-again action from certain areas in January, we have seen the winners persist of late, so that’s where we’re focusing—while also holding some cash and raising stops along the way given what’s going on. For the moment, we’ll stick with a level 6 on the Market Monitor, but again, we’re OK taking swings at strong stocks.

This week’s list is very heavy on the cyclical side of things, with many names perking up and out of long ranges. Our Top Pick has a solid growth profile and has emerged on the upside after a six-month choppy phase.

Tariffs rejected. Big shortfall in GDP growth. Possible emerging conflict with Iran. There were enough headlines last week – and really, Friday alone! – to make your head spin. And yet … stocks were mostly calm, with no sudden movements in either direction. As always, the stock charts matter more than the headlines, at least when it comes to investing.

So, let’s stay the course, which this week means adding a well-known stock that continues to thrive in the midst of the ongoing travel resurgence. It was Mike Cintolo’s Top Pick in his Cabot Top Ten Trader momentum-trading advisory last week.

Details inside.

Despite early-week angst over continued AI disruption fears, markets steadied into the weekend as tech found fresh legs and headline risk eased after a key Supreme Court ruling altered the U.S. tariff landscape. The rebound in mega-cap names helped sentiment improve off midweek lows, though small caps lagged. For the week, the S&P 500 rallied 1.1%, the Dow advanced 0.3%, and the Nasdaq led with a gain of 1.5%, while the Russell 2000 was essentially flat.

Despite early-week angst over continued AI disruption fears, markets steadied into the weekend as tech found fresh legs and headline risk eased after a key Supreme Court ruling altered the U.S. tariff landscape. The rebound in mega-cap names helped sentiment improve off midweek lows, though small caps lagged. For the week, the S&P 500 rallied 1.1%, the Dow advanced 0.3%, and the Nasdaq led with a gain of 1.5%, while the Russell 2000 was essentially flat.

It’s not 1999 out there, but the Model Portfolio has been doing OK despite the choppy, challenging, crosscurrent-filled market of late, partially thanks to an interesting dynamic—while the top-down evidence really hasn’t changed much in recent weeks (if anything, it’s probably worsened a bit, especially when it comes to growth funds and our Aggression Index), we are definitely seeing more individual stocks perk up, both within AI and in cyclical areas.

We do have two or three moves we’re close to making—while we’re not eager to be heavily invested given the evidence, we have a lot of cash and are likely to put some to work soon. But, tonight, we’ll stand pat and see if opportunities arise in the next few days—while also seeing if the Nasdaq’s test of its recent low holds. Bottom line, stand pat here, but we’ll be in touch with any changes in the days ahead.

With the market’s rotation into energy, industrial and other “unloved” stocks continuing well into 2026, we’re leaning deeper into the trends.

This month’s issue focuses on yet another specialty industrial player, an under-the-radar biofuel story, and an energy name with exposure to strong, international markets.

As always, the goal is to stay aligned with what’s working.

Enjoy!

Despite a small bounce Friday on softer inflation data that eased some knee-jerk selling, markets finished on their back foot as renewed investor anxiety around artificial-intelligence disruption rippled through tech and cyclical stocks. Growth names lagged, pressure widened beyond software to financials and real estate, and defensive sectors outperformed amid falling Treasury yields that weren’t enough to stem the slide. By week’s end, the S&P 500 had fallen 1.4%, the Dow Jones had lost 1.2%, and the Nasdaq Composite had tumbled 2.1%.

WHAT TO DO NOW: It’s not 2008 out there, but the market environment remains very challenging, especially for growth, where most indexes, funds and stocks are struggling. That said, we have started to see some growth names emerge on the upside, and our watch list is growing—if we can see more than a day or two of strength, we’d like to put some money to work. But until then, we’re content to stay close to shore and patiently wait for growth stocks to get moving. In the Model Portfolio, we’re placing Axsome Therapeutics (AXSM) on Hold tonight; our cash position is still just above 50%.

It’s been an interesting week here in Rhode Island, where most people are finally dug out from the roughly three feet of snow that fell across the state Sunday night and into Monday.

Growing up in Vermont, major snowstorms were certainly disruptive. But more often than not, it was all about how we would get to the ski resort without going off the road.

Hello from sunny Florida!

I am on vacation with my family this week, taking a much-needed break from the harsh, snowy Vermont winter (and narrowly making it down here ahead of the latest blizzard to dump another foot or two of snow on the Northeast). But with so much going on in the market – tariffs rejected! GDP growth slowing! AI panic! – I wanted to provide an update on everything that’s going on with our stocks.

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%).

Low oil prices have discounted the stock price of this oil giant.

Exxon-Mobil (XOM)
from The Heartland Adviser

At the beginning of the year I chose Exxon Mobil (XOM) as my top stock pick.

The company was my choice in January because Exxon is a Value Line A++ company whose value fell due to...

With both assets and loans growing at double-digit rates, this bank may be growing closer to a takeover.

Avid Bank Holdings (AVBH)
from Hughes Investment Management

Avid Bank Holdings (AVBH) continues to grow strongly, in the fast-paced high tech market. The bank still has almost zero charge offs for bad loans. The management...

This small cap company saw its revenues rise 35%, to a record $13.8 million, last quarter, due to expanded contracts, as well as a nice dose of new recurring revenue.

Auxilio (AUXO)
from The Quiet Investor

I continue to espouse Auxilio (AUXO), despite the sideways movement of the stock price over the past...

Declining oil prices affected recent earnings, but this company just received a glowing endorsement as a “bargain” in Barron’s.


Precision Castparts’ (PCP)
from Hendershot Investments

For fiscal 2015, Precision Castparts’ (PCP) sales increased 5% to $10 billion with net income declining 14% to $1.5 billion and EPS falling 10% on fewer shares outstanding...

The shares of this animal health and retailer are on the rise, but technical analysis indicates they have further to go.

Zoetis Inc. (ZTS)
from Shortex Market Letter

Zoetis Inc. (ZTS)
52 wk high: 49.55 52wk low: 30.50
Mkt cap: $24.44B EPS: 1.18 P/E: 41.43
Div/Yld: 0.33 (0.70%)

Ascending pattern since mid Dec ’14 (42-44), to...

Ross Stores (ROST 51)
from Shortex Market Letter

Please note: Shares split 2:1 on June 12, 2015

Ross Stores (ROST)
52 wk high: 54.48 52wk low: 30.92
Mkt cap: $20.28B EPS: 4.64 P/E: 21.14
Div/Yld: 0.94 (1.00%)

Operator of 1,242 Ross Dress and 157 dd’s DISCOUNTS stores. In correction/retraction mode since...

The top five holdings of this five-star-rated fund (by Morningstar) are Eli Lilly and Company (LLY, 3.85% of assets); Amgen Inc. (AMGN, 2.92%); Carnival Corporation (CCL, 2.81%); Roche Hldg AG (RHHVF, 2.80%) and Charles Schwab Corporation (SCHW, 2.35%).

PRIMECAP Odyssey Stock (POSKX)
from Dow Theory Forecasts

We’re always looking for standout funds to...

This technology company walloped earnings estimates; analysts have been revising next year’s earnings upward for the past couple of months; and Zack’s has given the stock a Value Score of ‘A’ and a Zacks Rank #2 (Buy).

Tech Data Corp. (TECD)
from Weiss Stock Ratings Heat Maps

Tech Data Corp. (TECD) shares recently...

This funds largest sector holdings include: Technology (23.79% of assets), Healthcare (19.25%), and Financials (19.05%).

Contrafund (FCNTX)
from Fidelity Monitor & Insight


Contrafund (FCNTX) has $78 billion in retail shares and another $33 billion in K shares.

The fund’s most recent 5-year performance has seen Contra trail its benchmark by 0.50% on average. Top...

This oil company was lauded by Michael Liss, portfolio manager for the American Century Value Fund (TWVLX), for its “strong balance sheet and revamped portfolio”, saying “the company’s smart moves during the downturn have set it up for a fantastic run to the upside.” Imperial Capital just initiated coverage with...

This hi-tech company’s shares are being driven higher, and Zack’s Investment Research rates it a “strong buy”. Our second recommendation is a sale of a financial business, based on weakened technical criteria.

Buy: NeoPhotonics Corporation (NPTN)
from The Oberweis Report

NeoPhotonics Corporation (NPTN) develops, manufactures and sells optoelectronic products that transmit, receive and...

Sell: Consumer Portfolio Services, Inc. (CPSS)
from The Oberweis Report
Updated from Investment Digest 726, September 5, 2012

Consumer Portfolio Services, Inc. (CPSS) is being deleted due to weak relative strength and to make room for new ideas.

Jim Oberweis, CFA, The Oberweis Report, www.oberweisreport.com, 800-323-6166, June 2015...

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.