Today’s recommendation is a little-known but mature industrial company with great growth prospects. Chart risk is small, as the stock has been basing for months, but there is some liquidity risk—this is more thinly traded than any of the current stocks in the portfolio. So if you buy, buy carefully.

Current Market Outlook


The market’s story has remained the same since the new year began—the major indexes and most leading stocks are in firm uptrends, with many longer-term indicators and studies pointing to higher prices in the months ahead. That said, most stocks are extended to the upside (and, now, earnings season is getting underway), so be sure to keep your feet on the ground and look for good entry points. Right now, we’re mostly looking for pullback entries; if the market does relax, the odds are good that there will be opportunities in stocks that have recently gotten going. All in all, we remain bullish and heavily invested.

This week’s list again contains a wide mix of stocks (big, small, growth, commodity, turnarounds, etc.), which isn’t surprising given the market’s broad advance. Our Top Pick is ASML Holding (ASML), which was one of the first chip stocks to re-emerge following a great earnings report.

Stock Name	Price	Buy Range	Loss Limit
ASML Holding (ASML)	350.01	197-203	184-187
Canada Goose Holdings (GOOS)	46.21	30.5-32.5	27.5-28.5
Continental Resources (CLR)	66.19	53-56	49-50.5
Corcept Therapeutics (CORT)	16.06	22.5-24	20-210
Global Blood Therapeutics (GBT)	0.00	51-55	44-46
Kohl’s (KSS)	70.62	60.5-64.5	55.5-57.5
Lowe’s Companies (LOW)	98.15	99-103	91.5-94
ON Semiconductor (ON)	24.07	23.5-25	21.5-22.5
Teck Resources Limited (TECK)	26.07	27.5-29.5	24.5-26.
Wynn Resorts (WYNN)	121.08	184-192	168-172

While the broad market returns were fantastic in 2017, there was no stopping our contributors, whose Top 5 Picks gained an average of 72.83%! And in today’s 2018 Top Picks issue, you’ll find a great selection of investments, distributed among almost every sector and investing style.

The market continues to zoom higher amid a vacuum of selling pressure. In the short-term, though, we’re not seeing a lot of stocks at great entry points and earnings season is coming up, both of which could lead to some pullback or retrenchment, at least on a stock-by-stock basis. But longer-term, there are many positives that tell us the odds strongly favor higher prices down the road.

The market has been hot as a pistol in recent days, and today, after a hot open, stocks rolled over and finished down. Odds are that this downward movement could turn into a real correction. But it’s important not to predict; it’s much more profitable to simply observe the trends and invest in sync with them. Today’s recommendation is a hot little medical stock with a great service.

Current Market Outlook


Stocks had another great week, with the major indexes and most leading stocks levitating higher amidst a vacuum of selling pressure. There’s no question things are a bit bubbly here, with most things trading miles above support and moving averages, and as investor sentiment shifts toward greed. Still, more important to us are the intermediate-term trend (clearly up) and the fact that momentum like we’re seeing generally leads to higher prices down the road. Thus, overall, you should remain bullish, but (a) we still favor being choosy on the buy side, looking for pullbacks and shakeouts in stocks that have shown excellent strength and persistency, and (b) having a plan as we enter earnings season, including looking for new leadership that emerges.

This week’s list has something for everyone, from hot growth stocks to news-driven moves to some turnaround situations. Our Top Pick is Red Rock Resorts (RRR), which is part of the strong gaming group and has began to take a breather after a persistent advance.

Stock Name	Price	Buy Range	Loss Limit
Abercrombie & Fitch (ANF)	15.37	18-19	16-16.8
Arch Coal (ARCH)	82.27	92-95	85.5-87.5
Express Scripts Holding Company (ESRX)	79.25	76.5-79.5	70-72
Heron Therapeutics (HRTX)	35.25	19.5-21	17.5-18.5
Matador Resources Company (MTDR)	27.89	30.5-32	28-29
Nucor Corporation (NUE)	66.20	66-69	61.5-63
Red Rock Resorts (RRR)	34.70	32.5-34	30-31
Stifel Financial (SF)	56.32	63-66	58-59.5
Universal Display (OLED)	187.54	188-198	167-175
Wingstop (WING)	121.52	42.5-44	39.5-40.5

2017 was a great year for investing in stocks. In this issue, I briefly review my recommendations and market performance in the past year. I also introduce a new stock in the retail space, move one stock to Hold and another stock to Sell.

The year began with five straight days of advances for emerging market stocks, which was pleasant. And the little rap on the knuckles from the market on Tuesday and Wednesday brought us back to reality without doing much damage. So the bottom line is that our stock universe is still in an uptrend and the prospects for 2018 looks just fine.

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.

Lots of earnings reports. Here are this week’s noteworthy pieces of news and price action in the Cabot Undervalued Stocks Advisor portfolios.

Today we’re providing special updates on four stocks that have made significant moves since our last update.

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.