In choosing today’s stock, I leaned toward the growth side, because that’s what’s working best today. Then, to get an element of safety—because somewhere, sometime, a nasty correction is likely to hit the market—I chose a stock with very strong and growing institutional sponsorship, the kind of stock that has the potential to be the last stock standing when this bull market eventually ends.

Current Market Outlook


The broad market suffered some wobbles last week, mostly due to energy stocks taking some outsized hits. And we still want to see most of the major indexes lift out of their post-March 1 trading ranges as the Nasdaq is the only index to have achieved that. Even so, while those are factors to watch, the majority of evidence remains bullish—the long-term trend is up, many Top Ten stocks are performing well and the indexes are all at least a bit above their 50-day moving averages. All in all, then, we’re bullish, though it’s important to keep your feet on the ground by looking for solid entry points and taking some partial profits as your stocks advance.

This week’s list has many great stocks to choose from, most of which have recently reacted well to earnings. For our Top Pick, we’re going with a stock we’ve watched on and off for months that finally appears to be getting going—Zillow (Z) has come alive after a nine-month rest, and the story is as big as ever.

Stock Name	Price	Buy Range	Loss Limit
CoStar Group (CSGP)	589.55	240-250	223-228
MasTec, Inc. (MTZ)	66.65	44.5-47	41-43
Paycom Software (PAYC)	0.00	61-64	56-58
Sanderson Farms (SAFM)	149.54	110-114	102-104
SiteOne Landscape Supply (SITE)	98.49	47-51	43.5-46
Square, Inc. (SQ)	91.04	18.5-20	17-17.5
Summit Materials (SUM)	0.00	26.5-28	25-25.5
Universal Display (OLED)	187.54	107-115	94-97
WellCare Health Plans, Inc. (WCG)	271.83	163-168	152-154
Zillow (Z)	76.64	41.5-44	37-39

Today’s candidate provides digital health solutions to people with chronic health issues. Its biggest market is people with heart conditions, but it is branching out to the diabetes market as well. For a short window of time, I believe we can establish a position while shares are “on sale.”

This month’s Cabot Value Model contains a diversified list of buy recommendations, with a bias toward high quality companies in the Technology and Financial sectors. These and similar companies have propelled the Cabot Value Model to gain more than the Dow Jones Industrial Average, Standard & Poor’s 500 Index and Warren Buffett’s Berkshire Hathaway.

The Cabot Emerging Markets Timer continues to offer a green light, so we’re forging ahead as our stocks enter the heart of earnings season for emerging ADRs. We also welcome back a mega-cap old friend into the portfolio.

Today’s featured stocks include a new addition to the Growth Portfolio. You’ll also find comparisons between our featured stocks and their peers in the integrated oil, asset management and semiconductor industries.

Today’s selection is a little-known small-cap stock with a revolutionary process that may change one of the world’s most noxious industrial processes. Plus, I think the stock is at a good entry point here.

Current Market Outlook


The market produced some very constructive action last week, with the Nasdaq bursting to new highs and most other indexes testing their March peaks. And possibly the best action of all came from leading stocks! In a variety of sectors, we’ve seen many resilient names (including a ton of Top Ten stocks) rip higher, often on earnings. With that said, we can’t conclude that the market is completely out of the woods—until most major indexes clearly lift to new highs, there’s still a chance that the post-March 1 consolidation has further to run. Still, all of the major indexes are back above their 50-day lines, most stocks are acting well and the odds favor the market’s March/April consolidation giving way to further upside. We’ll move our Market Monitor to a level 8, and look for new highs on the indexes in the days ahead.

This week’s list has a ton of strong stocks with great growth stories, including a few that recently gapped up on earnings. It’s hard to pick just one, but we’ll go with PayPal (PYPL) as our Top Pick because the stock decisively lifted out of a long IPO base thanks to a big earnings gap.

Stock Name	Price	Buy Range	Loss Limit
Exact Sciences (EXAS)	116.91	29-31	25-26.5
Graco Inc (GGG)	0.00	104-108	97-99
GrubHub (GRUB)	140.03	41-44	38-39.5
Lending Tree (TREE)	411.51	138-144	126-129
MKS Instruments (MKSI)	109.43	75-78	70-71
National Beverage Corp. (FIZZ)	0.00	85-90	78-80
PayPal (PYPL)	147.00	46-48	43.5-44.5
Tencent Holdings Limited (TCEHY)	0.00	29.5-31	27-28
Wabash National (WNC)	0.00	22-23.5	20-21
Yandex (YNDX)	0.00	25.5-27	23-24

WHAT TO DO NOW: Big picture, the market and most leaders look great, and our market timing indicators are in fine shape. Near-term, though, there’s little doubt things have gotten a bit giddy, with many names and indexes extended to the upside. Tonight, we’re placing Cava (CAVA) on Hold as that stock has been caught up in some group weakness; we’ll hold our 45% cash position for now, but stay tuned, as we’d like to add some new names (or add to existing names) in the near future.

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.

Today we’re going to add two new stocks to the Model Portfolio: Abiomed (ABMD) and Dave & Buster’s (PLAY)

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.