Surprisingly good earnings reports boosted many stocks in our portfolios in recent weeks, and the same factor has turned the trends of the major indexes favorable; it’s good to be invested.
But we must never grow complacent, and one way I reduce risk in the Cabot Stock of the Week portfolio is by diversifying by both industry group and investment style.
This week’s recommendation, for example, is a growth stock; it was originally recommended by Mike Cintolo in Cabot Top Ten Trader. But it’s in an industry that’s generally regarded as conservative, and where stocks are usually appraised on a value basis. I think you’ll enjoy it.

Current Market Outlook


The market had a relatively quiet week, with the major indexes slipping a fraction of a percent on light volume and most leading stocks marking time after solid advances the prior two weeks. So far, this action is totally acceptable, but the key will be what happens from here—a couple of large, high-volume selloffs would put a serious dent in the rally, but upside follow through in the indexes and many leading growth stocks would go a long way toward confirming that the January-May market correction is over. For now, we advise sticking with a “lean bullish” mentality; we’re OK doing some buying, but also picking your spots and holding some cash as we look for follow through. Our Market Monitor remains unchanged.

This week’s list has a ton of strong stocks in a variety of growth-oriented sectors. Our Top Pick is LPL Financial (LPLA), a mid-sized Bull Market stock that is acting very well and recently crushed earnings expectations.

Stock Name	Price	Buy Range	Loss Limit
51job, Inc. (JOBS)	0.00	99-103	92-94
Baozun (BZUN)	44.24	51-53	46.5-47.5
Carvana (CVNA)	82.90	25.5-27.5	23-24.5
Illumina Inc. (ILMN)	289.74	260-270	244-249
Ligand Pharmaceuticals (LGND)	267.14	181-188	169-172
LPL Financial Holdings (LPLA)	85.22	69-72	63-65
Penn National Gaming (PENN)	45.38	33.5-35	30.5-31.5
SolarEdge Technologies Inc. (SEDG)	124.37	64-67	58-60
Supernus Pharmaceuticals (SUPN)	52.50	53-56	48-49.5
WildHorse Resource (WRD)	0.00	25-27	21.5-22.5

While we have yet to get a buy signal from the Cabot Emerging Markets Timer, our stocks are generally performing very well and we have only a couple of quarterly reports yet to come. In today’s issue, I talk about the trouble with too much news and write up a Chinese financial company that has a powerful head of steam up, with only a Q1 report to worry about.

At last, market volatility has lessened and the Dow Jones Industrial Average is steady, resting at about the same level as it was at last month’s issue.

Economic stats also remain status quo, with a slight improvement in job openings, a small dip in retail sales, and a Consumer Sentiment Index that continues increasing.

That has given rise to a return to a more bullish environment for advisors, as you will see in our Advisor Sentiment Barometer and our Market Views this month.

The past week was one of the most fun in a while! But you can’t rest on your laurels in this business; just when you start to congratulate yourself is when the market comes around to slap you down. Today I’m dialing back the risk a bit with a conservative growth stock that you almost certainly know, and which is at a decent buying point.

Current Market Outlook


After establishing three bottoms in three months—with each bottom higher than the last—the broad market blasted higher last week, pushing our Market Monitor back into the green zone. But we’re not recommending indexes, we’re recommending stocks, and these stocks are not bouncing off bottoms, they’re breaking out to new highs! Furthermore, a lot of these market leaders are new names that are not familiar to investors—which means there is far more potential buying power than selling power in the stocks.

There are many great growth stories in the bunch, with many possibilities of huge long-term gains in revolutionary businesses, and our Top Pick is one of them; it’s Coupa Software (COUP), a small but fast-growing company whose spending-management software addresses a huge potential market.

Stock Name	Price	Buy Range	Loss Limit
AAXN (AAXN)	87.11	51-55	45-48
Coupa Software (COUP)	262.20	51-54	46.5-48.5
Green Dot (GDOT)	85.11	70-72	63-65
Guess (GES)	0.00	23-24.5	20.5-21.5
Petrobras (PBR)	14.78	15-16	13.8-14.8
Pure Storage (PSTG)	25.64	22-23.5	19.5-20
Teladoc, Inc. (TDOC)	127.95	44-49	39-41
Tenet Healthcare (THC)	0.00	30.5-32	28-29.5
Trade Desk (TTD)	468.02	71-76	65-68
Twilio (TWLO)	183.39	50.5-55	46.5-47.5

During the past three-plus months, the market has put in a firm foundation, with numerous tests of long-term support, positive divergences among various breadth measures and three legs down to the correction. And now we’re starting to see buyers take control—today our Cabot Tides flashed a green light, telling us to begin putting money to work.

Market volatility declined somewhat, leaving us at about the same level we were at the time of last month’s issue. The Federal Reserve—while still indicating it will most likely raise rates in June due to creeping inflation—left them alone last week. Coupled with steady economic improvement, including stable employment (the unemployment rate for April dropped to 3.9%) and improving consumer sentiment, the maintaining of the rates helped allay any market jitters that Washington’s continued schoolyard fighting may have caused.

What a difference a month can make! What an April! The S&P rose 9.6% in April, 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 some skirmishes. While there is still headline risk, investors have moved beyond this war and are focusing on earnings. And for good reasons.

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 top three sectors in this 5-star-rated fund are Industrials (22%), Consumer Cyclical (17%), and Financial Services (14%).

Updates on four of our holdings, including one rating change.

Eight analysts have increased their forecasts for this year and next for this Chinese quick-service company.

Chipotle Mexican Grill (CMG) reported outstanding first-quarter results yesterday afternoon, with revenue of $1.07 billion vs. the consensus estimate of $1.05 billion. But it was the huge and unexpected earnings beat that brought lots of attention to the stock.

Wall Street analysts are forecasting a $41/share target price for this biotech—107% higher than the stock is currently trading.

The strength of the past couple of days has turned our Cabot Tides bullish, where it joins the Cabot Trend Lines and Two-Second Indicator. Thus, after a seven-week rest, it appears the market’s major uptrend is resuming and we want to put some new cash to work.

Updates on two of our stocks that reported earnings, plus updates on six other holdings.

This entertainment giant just hit 100 million subscribers. The company beat estimates by $0.03 last quarter and is on target for triple-digit growth this year.

Last week, a shoddy take-down article was written about one of our holdings on Seeking Alpha. It was written by an anonymous author, was poorly constructed and failed to undermine (in my opinion) the most important parts of the long-case for the company.

The broad market finally firmed up last week. After closing below their 50-day lines the previous Friday, the Dow, S&P 500 and Nasdaq all found support early last week, then rebounded strongly at the end of the week. However, while the market is firming, four of our holdings stumbled on earnings last week.

This is a small cap company with double-digit growth rates. It operates in the booming battery sector.

Mattel (MAT) reported a poor first quarter, largely due to continuing overhang from a poor holiday season.

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.