We continue to see more and more setups among growth stocks, but overall, the market remains in a spin cycle, with few stocks letting loose on the upside and incessant rotation among stocks and sectors. With the recent rally running into trouble, we cut bait with DraftKings (DKNG) earlier this week, but are willing to give the rest of our names some rope as we head into earnings season. Get all our latest thoughts on our stocks and our latest watch list in tonight’s issue.

In the April Issue of Cabot Early Opportunities we take a look at the red-hot real estate market and muse on the dramatic and lasting impacts from the Covid-19 pandemic.

We also take hints from the market’s action that it continues to be a time to focus on diversifying new buys across different markets. We take this evidence to heart and add five stocks that offer exposure to everything from resort travel to Afib surgical tools to digital transformation services.



Enjoy!

April was another strong month for the Cabot Profit Booster portfolio as we locked in gains ranging from 3.7% to 7.9% on our six positions. Speaking of earnings, this week’s pick is a recent earnings season winner that busted out to a new high following reporting quarterly results.

Recent crosscurrents in the market have seen changes among sector leadership, and today we have a broad selloff, but overall, the main trend of the market is up and thus I continue to recommend that you be heavily invested.

Today’s recommendation is an attempt to benefit from sector rotation, by targeting a sector that’s still down; if the sector turns up soon, today’s buyers should profit handsomely.



As for our current holdings, two stocks are upgraded to buy today, while two are downgraded to sell as we cut our losses short. The adage that applies: There’s nothing wrong with being wrong; what’s wrong is staying wrong.



Details inside.

Current Market Outlook


Growth stocks are still in mostly good shape, which is the good news. And while we see reasons for continued optimism, it’s also hard to be a raging bull right now. There’s quite a bit of rotation underway, and sentiment is still elevated. On top of that, the number of Nasdaq stocks making new lows is more than we’d like to see, which means cross-currents could become a factor in the near term. Still, the weight of evidence prevents us from being overly cautious; plus there are a fair number of nice-looking setups in individual stocks across several industries. With this in mind, we’re leaving our Market Monitor at level 6 for now.

This week’s list includes a mix of growth and cyclical themes, most of which have a solid story.
Our Top Pick is Nvidia (NVDA), an established semiconductor name with a growing presence in the soaring high-performance computing (HPC) market, and which has just broken out to new highs on strong volume.

Stock Name	Price	Buy Range	Loss Limit
ArcelorMittal (MT)	30	29-30	25.5-26
Brooks Automation, Inc. (BRKS)	98	92-97	80-82
Jabil Inc. (JBL)	54	52.5-55	46-47.5
JetBlue Airways Corporation (JBLU)	20	19-20.5	17.5-18
KBR Inc. (KBR)	40	38.5-39.5	33-34
Levi Strauss & Co. (LEVI)	28	27-28	23.5-24
NVIDIA Corporation (NVDA)	614	595-615	550-555
Snap-On Inc. (SNA)	236	230-235	208-210
Square, Inc. (SQ)	245	240-243	210-212
Vale S.A. (VALE)	19	18.5-19.5	17-17.5

Editor’s Note: For most of its run, Chief Analyst Carl Delfeld has referred to the Cabot Global Stocks Explorer advisory by its short-hand name, “The Explorer.” So we figured we’d join him! We have decided to shorten the name of this publication to simply, “Cabot Explorer.” The product won’t change at all. This merely puts more emphasis on the purpose of this advisory, which is to “explore” for new, often hard-to-find stocks and sectors ready to break out - regardless of market. Enjoy!

Markets seem to be paying more attention to valuations and looking to confirmation from earnings that the economy is moving to growth mode. Stocks are likely to churn a bit for a while after their great uptrend in the last year. We’ll discuss today why SPACs have cooled a bit even as they spread to Asia, and present a new idea to watch which offers huge growth potential but may be a bit pricey.

Here is your April Wall Street’s Best Digest issue 840.

I love spring! You may not know this but I’m a Master Gardener, which means when the Bradford pears, Forsythia, and Redbud trees come into bloom, I am just a happy camper!



And this year, with the end of COVID almost in sight and the economy in recovery mode, I feel very optimistic. And as you can see from our Market Views and our Advisor Sentiment Barometer, our contributors are considerably bullish.



Our Spotlight Stock this month, exemplifies that optimism, as we are recommending one of the nation’s top home builders. Certainly, its shares have been driving upwards, but we feel there is much more room to grow.



In Growth, you’ll find a variety of ideas, from the airline, gaming, automobile, yacht, and online education sectors. In Growth & Income, our advisors offer recommendations from the shipping, restaurant, RV, and engineering industries.



Value stocks are finally finding their moments of sunshine, and here we like an aircraft manufacturer and an aerospace and defense contractor. Financial companies are also rebounding, like these asset manager, insurance, and banking businesses. In Healthcare, our contributors favor a technology and an animal healthcare company that is in the midst of a turnaround.



Our Technology offerings include an e-commerce and a semiconductor company. This month, you’ll also find several ideas in the Resources and Energy section. And in Low-Priced Stocks, we offer a couple more speculative companies, coming from the cannabis and marketing sectors.



In REITs and Preferred Stocks, our contributors find financial and self-storage interesting this month. And lastly, our Funds & ETFs section includes some income, small-cap value, and healthcare ideas.



Don’t forget to register for my monthly webinars, along with Kate Stalter, my partner on the Wall Street’s Best Stocks and Wall Street’s Best ETF newsletters. And we’ve begun sending out invitations for our August 17-19 Summit, entitled Smarter Investing, Greater Profits. You can register here.



Please don’t hesitate to send me your feedback and questions. My new email address is nancy@financialfreedomfederation.com.

Today, we are recommending a call center outsourcing company.

At first blush, it doesn’t sound like a sexy opportunity.



But after you learn the details, it quickly becomes a lot more interesting:

• The call center industry is consolidating, and this company would be a perfect acquisition candidate for a several strategic competitors
• Sophisticated private equity investors own 60% of the company will likely run an auction to sell the company within 13 months
• The stock is incredibly cheap on an absolute basis (3.5x FCF) and relative to peers (3.6x EBITDA vs. peers at 10.0x)

All the details are inside this month’s Issue. Enjoy!

While the direction of the market is highly unpredictable in the short term, it’s a safe bet that this economy will continue to recover after the covid recession. It is also highly likely that interest rates will continue to rise.

Interest rates tend to move higher as the economy emerges from recession and gains traction. It’s already happening. The benchmark 10-year Treasury bond yield has already risen sharply this year. Yet, rates are still well below pre-pandemic levels, and the economy is about to ignite. There will also be trillions in stimulus dollars causing inflationary pressures and upward pressure on rates.



Certain dividend stocks and income paying securities endure despite rising rates. And certain special securities can actually thrive. In this issue, I highlight an investment that loves rising rates. In fact, profits increase directly as a result. The stock pays a stratospheric 8.4% yield and pays dividends every month.



In this issue, I highlight an investment that loves rising rates. In fact, profits increase directly as a result. The stock pays a stratospheric 8.4% yield and pays dividends every month.

This Friday is the expiration of our six April Covered Call positions. I would categorize these six positions as a good, but somewhat mixed bag, as only one trade looks like it will expire for its full profit potential (ANF), while four (TRIP, SUM, AMKR, AZEK) are in good shape but may need attention in the week to come, and one (ZI) which is mostly trading at a breakeven. As is always the case, I will update on where we stand with these expiring positions Thursday afternoon or Friday morning.

Small caps were basically flat over the past week. Since the beginning of May, the S&P 600 Small-Cap Index has made a strong move above prior resistance in the 980 to 990 range. And even with a little dip on Wednesday, the index is sitting right near an all-time high.

There is one change today: from hold to sell at 111.5.

Markets remain volatile, and some stock indexes started to diverge toward the end of last week. The rotation means some stocks are looking stronger than others, but overall the intermediate trend remains up. There are still plenty of yellow flags out there, but the market’s trend remains up, so if you’re underinvested, feel free to do a little buying here.

Remain bullish. Our stance hasn’t changed since last week, as our trend-following indicators are bullish and growth stocks are acting very well in general. Our cash position remains at 20%, though we could do new buying if we see a proper setup.

As early as last summer, I predicted that the S&P 500 would continue rising into early 2018, then experience its overdue correction. I was about a month off on the timing. I was guessing March, but the correction arrived in February. I was right on the size of the downturn, though, almost to the penny. That was a small part technical analysis and a large part luck.

Thursday marked the first day of somewhat significant turbulence in our portfolio in what seems like forever, but indications are that Friday will be back to business as usual, at least for the first part of the day.

Emerging market stocks have had a volatile week, with the iShares EM Fund (EEM) popping above its 25- and 50-day moving averages on Wednesday, but slipping back to the 50-day today.

Two stocks are being sold from the portfolio.

After one strong week in the market, over half the stocks in our portfolio are either at 52-week highs or close to their year-to-date highs. And that’s both good and bad.

Several of our stocks appear capable of beginning a new run-up.

Continue to lean bullish. The market’s rebound today after yesterday’s Italy-induced selloff was very encouraging, and both of our trend-following indicators remain bullish.

There are no rating changes in today’s weekly update.

We’re making some portfolio adjustments today.

The major indexes are tilted to the upside to start the week—however, under the surface, we’re continuing to see increasing selling pressure on most growth stocks.

This building materials company recently announced a new acquisition—Heritage One Door & Carpentry.

This company continues to spin off and acquire other businesses, strengthening its medical and commercial strategy.

As summer morphs into fall and Wall Street returns to full operation, I’m seeing some welcome signs of buying in the cannabis sector. So today we’ll join them, by averaging up in two of our holdings.

The second recommendation is a sale of a previous tech pick.

Our first idea today was just upgraded to ‘Buy’ at Loop Capital.

This contract research company beat analysts’ EPS estimates by $0.18 last quarter and six analysts have recently increased their earnings forecasts for the company.

We’re selling two stocks today.

This regional supermarket also gets a nod from Zacks, scoring an ‘A’ on its VGM (value, growth, momentum score)

One of our portfolio stocks moves from Strong Buy to Hold.

Despite the apparent death of the AMGN/ALXN merger, this stock continues to be a prime candidate for acquisition.

A few Cabot Options Trader subscribers have asked me about ways to protect gains in their portfolios, so I thought I would write to everyone with a couple of strategies using options to hedge your portfolio.

A subscriber recently asked me if I keep a journal of my trades. Many traders keep journals so they can look back at their trades and evaluate what they did right and what they did wrong.

Want to know how the big institutional investors use options? Here is an example of how one trader spent $132 million on three technology stocks.

Options trading has its own vernacular. To know how to do it, you need to know what every options term means. Here are some of the basics.

Our Cabot Momentum 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 Momentum Trader features.