For turnaround investors, insider stock purchases can provide important clues that a recovery may be ahead. These “insider” trades can indicate that those with the best knowledge of a company believe it will do better in the future. This can be a sign that “outsiders” should consider buying it, too.

In this issue, we dive into seven companies with these appealing traits.

The market remains in fine health, with many of our stocks hitting new highs and a slew of earnings reports providing reassurance that the good times are not over yet.
For today’s recommendation, we have another financial stock to replace the one that was sold profitably last week. It’s a strong sector, with no end to the strength in sight.
As for the current portfolio, overall, our holdings are performing well. But we have one sell, an emerging market stock that’s gone the wrong way and presented us with a small loss. Details in the issue.

Current Market Outlook


The ping pong environment we referenced on this page last Monday continued last week, with growth stocks bouncing back from a ragged prior week, while some of the recently-strong cyclical groups took a breather. We expect more under-the-surface volatility going forward, mostly due to earnings season, which is now moving ahead at a breakneck pace; so far, there have been a few potholes, but many stocks have reacted well to their reports. All in all, we remain mostly bullish, but two pieces of advice: First, don’t forget to book some partial profits when you have them, and second, be sure to keep your feet on the ground and look for advantageous entry points. We’ll keep our Market Monitor where it is as we see how leaders react to earnings.

This week’s list is heavier on emerging market and retail stocks than usual, which could be a clue to future leadership. Our Top Pick is ServiceNow (NOW), a blue chip-ish cloud software firm that decisively broke out of a tight launching pad on earnings next week. Try to buy on dips.

Stock Name	Price	Buy Range	Loss Limit
GDS Holdings Limited (GDS)	80.15	37-39	34-35
Huazhu Group (HTHT)	30.89	41.5-43.5	37.5-39
Ollie’s Bargain Outlet (OLLI)	103.94	93.5-97	85.5-87.5
Pilgrims Pride (PPC)	25.52	25-26.5	22-23
Sea Limited (SE)	132.86	24.5-26	21.5-22.5
ServiceNow (NOW)	341.86	263-273	237-244
Sinclair Broadcasting (SBGI)	54.14	42-44	39-40.5
Ulta Beauty (ULTA)	331.95	345-355	320-325
VeriSign (VRSN)	190.71	191-196	178-181
Workday (WDAY)	194.88	200-206	185-188

The main trend remains up, in both the broad market and the cannabis sector in particular. When these uptrends will end, no one knows, but I guarantee that they will someday.

Long-term, however, I remain very bullish on both the companies and the stocks in the industry and continue to adjust the portfolio’s holdings to optimize growth (with reasonable security.)

When the market picture gets confusing, as it often does, it pays to have some reliable indicators to depend on—rather than the guy on the evening news. So today, after a couple of weeks of market correction that have done serious damage to some leading stocks and led many pundits to ask whether we’ve seen the market top, we turn to our indicators and ask whether the bull market is truly over, and here’s what they say.

There is tremendous growth ahead for technology. There will be incredible opportunities to invest. While you probably don’t associate technology stocks with a dividend newsletter, things are changing. In this issue I identify a technological behemoth that is now a blue chip dividend payer. Its products are so widely used that owning the stock provides a great way to play the technology revolution in general and gain exposure to the explosive growth.

The market remains in good health, and all Cabot’s market timing indicators are positive, telling us the odds are that the market will be higher in the months ahead.
For today’s recommendation, we shift to a somewhat unusual investment, a high-yielding limited partnership that may avoid the cycles of a notoriously cyclical sector, while offering substantial upside potential.
As for the current portfolio, overall, our holdings are performing well. But we have one sell, a stock that has popped higher in recent days on news and is now closing in on resistance. Details in the issue.

Current Market Outlook


From a top-down perspective, nothing has really changed with the key evidence; there remain a couple of divergences (number of new highs, lagging small-cap indexes), but the intermediate-term trends of the major indexes and most leading stocks (and even non-leading stocks) are pointed up. Under the surface, though, we’re seeing some ping pong action—the major indexes have been alternating up and down days for the past couple of weeks, while many sectors are whipping in and out of favor on a weekly basis. (Growth stocks have been alternating good and bad weeks for a month.) What does it mean? It’s fair to say the broad buying pressures have eased up, though to this point, the sellers haven’t done much damage at all. We’re going along with the back-and-forth action, nudging our Market Monitor down a notch—we remain overall bullish, but the current earnings season will have a lot to say about the intermediate-term outlook for the market and leading stocks.

In the meantime, we’re still seeing a good number of setups from a wide variety of stocks and sectors. We have a couple of favorites this week, but for our Top Pick we’ll go with Qualcomm (QCOM), which has shown extreme power after a game-changing deal with Apple last week. We’re OK buying here or (preferably) on dips.

Stock Name	Price	Buy Range	Loss Limit
Ctrip.com International Ltd. (CTRP)	34.94	42.5-44.5	39-40.5
D. R. Horton (DHI)	66.55	43-45.5	39.5-41.5
Fastenal (FAST)	37.08	67.5-69.5	62.5-64
First Solar (FSLR)	83.74	57-59	52.5-54
Five Below (FIVE)	134.58	136-142	124-127
Kansas City Southern (KSU)	176.54	121-124	112-113.5
ManpowerGroup (MAN)	90.84	93.5-95.5	84.5-86
Microchip Technology (MCHP)	79.12	95-97	88-89
QUALCOMM Incorporated (QCOM)	106.36	78-82	69-71
Redfin (RDFN)	40.40	21-22	19-19.5

The results are in for the month of April. It was fabulous. The S&P rose 9.6%, making it the best single month for the market in six years. It hit an all-time high on Friday.

Sure, the war isn’t over. But the market doesn’t really seem to regard it as a war anymore, more like a blockade situation with the possibility of minor skirmishes. While there is still headline risk, investors have moved beyond this war and are focusing on earnings.

Now before you call me crazy concerning today’s newsletter headline, hear me out.

Even though large-cap names have garnered more than a fair share of attention among investors this year, I think a case can be made that companies with big capitalizations have a lot more room to run higher before they can be truly regarded as “overbought” or “played out.”

The market is digesting the push and pull of higher oil prices, a deeply divided Federal Reserve, prospects for a prolonged blockade of the Strait of Hormuz and fading momentum from the AI trade that helped push markets to all‑time highs earlier this month.

Despite the crosscurrents, the overall tone still tilts bullish, supported by investor comfort (for the time being) with the geopolitical tension, resilience in the U.S. economy, and improving visibility into earnings growth over the coming quarters.

Yesterday, four tech giants, Alphabet, Amazon, Meta and Microsoft, representing 22% of the S&P 500’s market value, reported strong quarterly earnings that highlighted the importance of AI.

You might think the above companies and their AI brethren are “asset light” companies but you would be very wrong.

It’s been a glorious April following a miserable March for the market. What happens in May may determine which direction stocks are headed for the rest of the year.

That’s probably overstating things a bit, but May should be crucial for the reasons we discussed last week: namely, the fate of the Iran war, but also the bulk of first-quarter earnings season and the introduction of a new Fed chair.

What war? This market is moving on. We may not be out of the woods yet, but investors are looking beyond the Iran war.

Stocks have already made up all losses from a rough March and then some. The S&P 500 had fallen 7.7% in the month of March by the 30^th. Since then, the index has rallied over 13%. The S&P is now at a higher level than before the war began and is hitting new all-time highs.

The other day I was paid a visit by a roving ISP salesman who was pitching his company’s fledgling internet service over the local monopoly’s. We struck up a conversation and he asked what I did for a living. When I told him, his eyes lit up and he asked, “Got any good stocks you can recommend?”

Without thinking I blurted out, “Anything AI-related. You can’t go wrong.” The advice was only semi-facetious, for there’s undeniably a degree of truth behind it. My instinctive response to that question also prompted me to consider the question: just how long can the broad market continue its “all things AI” run without broader sector participation

Note: I’m out of town this week, so I’ll be a bit briefer on the update today—but I’m still checking my laptop a couple of times a day if you have any questions or comments. I’ll be back at my desk come Monday. Cheers.

WHAT TO DO NOW: Remain optimistic. The market and some leaders have hesitated, but all of our market timing indicators are bullish, and most stocks we own or are watching are working. Last Friday, we bought a half-sized stake in Nebius (NBIS) and added a 3% additional stake in ProShares S&P 500 Fund (SSO); earlier this week, we sold our small remaining position in GE Aerospace (GE); and tonight, we’ll buy a half-sized position (5% of the portfolio ) in Cava (CAVA). We’ll still have 46% in cash or so after these moves.

Despite all the headline noise lately we’re marching deeper into first‑quarter earnings season with the market’s path of least resistance still pointing higher.

Optimism around the extension of the tentative ceasefire in the Middle East has reduced geopolitical anxiety to a seemingly manageable level. The U.S. economy continues to show resilience, and the corporate earnings outlook points toward meaningful growth in the coming quarters and years.

The old saying, “History doesn’t repeat itself, but it rhymes,” is an apt one for the stock market these last two years.

In early 2025, the S&P 500 raced to new all-time highs before peaking in late January/early February, only to get dragged down in March and April by a geopolitical crisis (tariffs/Liberation Day), before rallying in a V-shaped pattern as the severity of the crisis abated.

The market turned on the afterburners. The S&P 500 made up all the March losses and catapulted to a brand new high in a remarkably short time. It’s a market that sure looks like it wants to go higher. But stocks are being held back this week by more war uncertainty.

The current ceasefire with Iran expires on Wenesday night. Talks may not happen, and war talk is growing. The resumption of the war will almost certainly prompt a decline in the market. Aside from that near-term threat, investors are clearly looking past this war. Hopefully, it won’t last much longer.

The market came roaring back to new highs last week after a tough March. But the war isn’t over yet, and there could be more bouncing around in the weeks ahead.

Investors are clearly already looking past this war, as there is a high degree of optimism that hostilities will soon end. There is probably still a big rally or two left in the tank when the war actually ends. Sure, there is still headline risk in the meantime. But the war is clearly fading as the biggest market catalyst and giving way to earnings.

More than 214,000 shares have been purchased by the insiders of this biotech in the past three months. The shares are trading a very price, reflecting the company’s turnaround status.

Now that this drug store chain has ironed out it agreement with Walgreens, analysts are looking for triple-digit growth next year.

This gold royalty company is beginning to catch up to its larger peers, yet still trades at a buyable level.

This Western Canada oil producer is a low-priced stock, so will most likely prove fairly volatile. It has some interesting prospects, and some new catalysts that look promising.

Today four stocks move to Hold and one stock to Sell.

Here are two Top Picks, one each for more conservative or more aggressive investors.

This second top pick is the more aggressive of the two recommendations.

This newly-public company reported $3.8 million in earnings for the September quarter, a 165.2% increase. It is a speculative play in the Bitcoin arena.

The shares of this drug distribution company have recently crossed over their 50-day moving average, a bullish indicator.

One stock moves from Buy to Hold, another moves from Strong Buy to Buy, and a third joins the Growth Portfolio as a Strong Buy.

Here are two Top Picks, both Chinese companies who are growing at double-digit rates.

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 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.