Tesla shares have more than tripled this year as the company delivered a net profit yesterday, marking its fourth consecutive profitable quarter for the first time in its history. Alibaba connected Ant Group announced a mega IPO in Shanghai and Hong Kong.

These two companies dominated the news as investors looked past the upsurge in the pandemic, rising tensions in U.S.-China relations and wrangling in Washington over another shot of stimulus to jump start the economy. Today we highlight a recommendation that was previously in the Explorer portfolio but has moved only modestly from March lows despite a very innovative approach to cancer treatment.

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In anticipation of a booming economy in the months and quarters ahead, the stock market has rallied within a whisker of all time highs. But certain individual stocks and sectors are still languishing despite the index performance. It is among these stocks where great value and high yield can still be found.

In this issue I highlight one of the best banks in the country at a historically low price as the sector struggles. But the bank has remained solidly profitable through the horrible economy in the second quarter, and the stock will benefit as the recovery gains traction. It currently offers a great income opportunity with a high yield and getting high call premiums as the market anticipates better days ahead.

While we’re not normally fans of very low-priced stocks (you usually get what you pay for in the market), today’s recommendation has been around for a while, is liquid and is just beginning what looks like a multi-year growth wave thanks to two big drivers.

Current Market Outlook


Growth stocks suffered another shot across the bow last Monday, and for the next three days, most didn’t bounce much. But last Friday and today’s action was far more encouraging, with leading stocks rebounding nicely and the broad market doing decently, too. Of course, we never put too much emphasis on just a day or two; the market wasn’t hanging by a thread before the latest bounce (the trends of the indexes and leading stocks were up), and today’s action doesn’t necessarily mean it’s up and away from here, either. In fact, with earnings season coming up, we still think focusing on the right stocks and looking for relatively lower-risk entries is your best bet. But until proven otherwise, most of the rubber-meets-the-road evidence remains bullish, so you should, too.

This week’s list has a broad mix of cyclical and growth issues to choose from. For our Top Pick, we’re going a bit speculative—Plug Power (PLUG) is low priced, but very liquid, and the recent pattern (huge-volume rally, controlled pullback) looks very tempting.

Stock Name	Price	Buy Range	Loss Limit
ANGI Homeservices Inc. (ANGI)	14.81	14.5-16	12-12.7
Arconic (ARNC)	17.00	15-16.5	13-13.5
Bloom Energy (BE)	16.22	15-16.5	12.5-13.5
Carrier Global Corporation (CARR)	26.23	24.5-25.5	22-22.5
D. R. Horton (DHI)	66.55	61.5-64	55.5-57
GDS Holdings Limited (GDS)	80.15	78-82	71-73
Plug Power (PLUG)	8.35	8.0-8.7	6.6-7.0
Saia Inc. (SAIA)	129.19	120-125	109-112
Spotify (SPOT)	272.82	278-290	244-249
Vapotherm (VAPO)	48.53	44-47	38-40

The market remains in good health and trending higher, though the rotation out of the leading Nasdaq glamour stocks may have further to go—or may be just a false alarm.



In any case, it’s the stocks YOU own that matter, and if you’ve been choosing from our portfolio, you’ve been doing pretty well!



Today’s recommendation is a well-known and well-run company in the apparel business that should benefit from the trend toward more casual clothing. And according to our Cabot expert, it’s undervalued!



As for the current portfolio, there are two changes, a sell recommendation for Beyond Meat (BYND), which has lost momentum and a move to hold for Big Lots (BIG).



Full details in the issue.

The markets are certainly keeping us on our toes! I really didn’t know what to expect when I began calculating the returns for this Mid-Year Top Picks issue. We’ve had so much volatility; a big disruption in March, as coronavirus took hold; and many sectors that just haven’t bounced back.

So, you can imagine my relief and joy when I totaled up our contributors’ gains for the first six months of the year!



Despite the ongoing devastation of COVID-19, our contributors have broken all of our records, averaging a gain of 16.41%, while the Dow fell 8.6%, the S&P 500 is down 1.2% and only the Nasdaq is in positive territory, with gains of 18.3%.



Even better, our Top 5 picks averaged 221.48%!

The markets are certainly keeping us on our toes! I really didn’t know what to expect when I began calculating the returns for this Mid-Year Top Picks issue. We’ve had so much volatility; a big disruption in March, as coronavirus took hold; and many sectors that just haven’t bounced back.

So, you can imagine my relief and joy when I totaled up our contributors’ gains for the first six months of the year!



Despite the ongoing devastation of COVID-19, our contributors have broken all of our records, averaging a gain of 16.41%, while the Dow fell 8.6%, the S&P 500 is down 1.2% and only the Nasdaq is in positive territory, with gains of 18.3%.



Even better, our Top 5 picks averaged 221.48%!

The Emerging Markets Timer is now fully negative, as the iShares Emerging Markets Fund (EEM) has gapped down to near its November lows. Our only additional move today is to move Pampa Energia (PAM) to a Hold.

This weekly update takes a look at how to handle bond investments when interest rates are rising. Bond prices and interest rates work like a seesaw: when interest rates rise, bond prices fall, and vice versa.

Three Cabot Benjamin Graham Value Investor companies reported quarterly financial results or other noteworthy news during the past week.

Let’s maintain our current course, make incremental adjustments when they seem to make sense, and see how this plays out. I suggest one such incremental move today.

The market continues to act well, and we’re finally starting to see a bit of improvement among growth stocks, which showed solid accumulation last week and have begun to tighten up. That said, cyclical stocks remain strong, so tonight, we’re adding one to the Model Portfolio, giving us seven stocks (out of a possible 10) and a cash position around 30%.

The divergences that I mentioned in our last update disappeared last week, as the major indexes all rose over 3%, notching five consecutive positive days to hit record highs. I have one rating change today: Pembina Pipeline (PBA) moves to Buy thanks to renewed technical strength.

We’ve had nice run-ups in the DJIA and the S&P 500. Please expect a pullback, which would be perfectly normal and healthy too. The Dow could fall 6% to 18,600, and the S&P could fall 3% to 2,190. Unless a disruptive event happens, I would expect a stock market correction to be quite temporary.

The stock market has been having quite the party over the past month. Since November 8, the date of the election, the S&P 500 is up by 4.8%. Small caps have crushed that performance, rising by almost 16% over the same timeframe.

In this Weekly Update, I report on five Cabot Benjamin Graham Value Investor companies that reported quarterly financial results or had other noteworthy news during the past week.

Our two portfolio moves today are to buy a half position in Pampa Energia (PAM) bringing the portfolio to 45% invested and moving Melco Crown (MPEL) to a Hold after a Chinese government move knocked it lower.

We have no rating changes today; I continue to recommend you focus on what’s working, while keeping your personal investing goals in mind. The healthiest stocks in our portfolio today are the financials, Prudential (PRU) and US Bancorp (USB), dividend growth tier holding Carnival (CCL) and safe income tier recommendations Automatic Data Processing (ADP) and UPS (UPS).

11 Cabot Benjamin Graham Value Investor companies reported quarterly financial results or other noteworthy news during the past week. I also include questions from subscribers along with my answers.

Downgrading to a sell.

This sports network company is trading at bargain levels, yet is expected to grow more than 10% this year.

We all saw U.S. stock markets exhibit exuberance on December 3 and then fear on December 4. I anticipate another strong upward move during the remainder of this week.

This old favorite and new punching bag offers turnaround potential for adventurous investors.

Our second recommendation is a sale based on sector downturn.

In the past 30 days, seven analysts have raised their EPS forecasts for our first idea today, a power services company.

Just a quick update on two of our positions and a bit of an educational component by using the strategy of averaging up, rather than averaging down.

This cutting-edge tech company’s earnings estimates were recently increased by 6 analysts who expect the company to grow 39.6% next year.

Here’s an update on five of our stocks in the portfolio.

The dividend is growing for this shipping company, and with the holiday season is full swing, analysts are expecting the company to grow 25.8% this quarter.

The market was relatively quiet today, with the Dow down 28 points and the Nasdaq down 19 as investors looked for news and rumors about the G20 economic summit this weekend.

Analysts expect this technology company to grow 18.8% annually for the next five years.

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.