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Issues
The major indexes continue to act very well; today’s pop higher is par for the course. That said, the hot growth stocks of the past few weeks are starting to take a breather; there hasn’t been much abnormal selling, but new buying is being focused on some other groups. Moreover, investor sentiment has, by our measures, become elevated, which raises risk. Altogether, we’re leaving our Market Monitor where it has been. Continue to keep your feet on the ground and try to do your buying on weakness, or in stocks that are recently emerging from multi-week pauses.

This week’s list has a bunch of newer names to Top Ten, or at least stocks that haven’t appeared in a couple of months or longer. Our favorite is Five Below (FIVE), a small but exciting growth company whose stock just popped out of a long consolidation.
Stock NamePriceBuy RangeLoss Limit
Swift Transportation (SWFT) 0.0019-2018-18.5
Qihoo 360 (QIHU) 0.0079-8468-69
Ocwen Financial (OCN) 0.0054-5649-50
Melco Crown (MPEL) 0.0029-30.525-26
Cheniere Energy (LNG) 63.8230-3225-27
Gulfport Energy (GPOR) 0.0060-6353-55
Five Below (FIVE) 134.5845-4841-42
Dril-Quip (DRQ) 0.00107-111101-103
Concur Technologies (CNQR) 0.00105-11088-90
ACADIA Pharmaceuticals (ACAD) 47.8422-2319-20

If you’re invested in leading growth stocks, you’re probably doing very well; many of them have been shooting ahead, and on big volume to boot! That said, the broad market still isn’t acting right, and the longer that goes on, the greater the chance of some potholes in the days or weeks ahead. We’re not anticipating anything drastic, and we think holding your strong, profitable stocks is your best move. But we’ll continue to keep our Market Monitor just shy of bullish territory—holding some cash and picking your spots is important, especially with so many stocks extended to the upside.

This week’s list has many newer names (to us), which could reflect the start of a rotation into some previously stagnant groups. Our favorite of the week is Energen (EGN), one many good-looking energy stocks out there; we think it’s a solid buy here or on any weakness.
Stock NamePriceBuy RangeLoss Limit
YY Inc. (YY) 0.0044-4638-39
Pinnacle Entertainment (PNK) 0.0022-2419-20
Nu Skin Enterprises Inc. (NUS) 46.0786-9076-78
Micron Technology, Inc. (MU) 43.3114.5-15.513-13.5
Lear Corp. (LEA) 0.0069-7166-67
Halliburton (HAL) 0.0048.5-5145.5-46
Evercore Partners (EVR) 0.0047.5-4944.5-45
Energen (EGN) 77.0467-7062-63
Infoblox Inc. (BLOX) 0.0039-4133-35
Aegerion Pharmaceuticals (AEGR) 0.0090-9484-85

The market has shifted into a news-driven environment; today the indexes popped higher as it appears any strike on Syria will be delayed, or possibly abandoned. But with many economic reports coming up that could affect interest rates (including the jobs report on Friday) and with Congress debating Syria, expect more gyrations ahead. Overall, our outlook is the same as the past two weeks—with many growth stocks acting well, you should hold your top performers and look to do a little buying on weakness. But with the indexes chopping around, you should also hold some cash and wait for a real green light before getting too aggressive.

This week’s list includes a few secondary-type names; there aren’t as many liquid leaders as has been the case in past weeks. But there are plenty with big potential. Our favorite is Hain Celestial (HAIN), a direct play on the organic food movement, whose stock just emerged from a year-long rest.
Stock NamePriceBuy RangeLoss Limit
Zillow (Z) 76.6492-9778-80
Web.com (WWWW) 0.0027-28.525-25.5
Sina Corp. (SINA) 0.0076-8068-69
Nationstar Mortgage (NSM) 0.0048-5145-46
Laredo Petroleum (LPI) 0.0024-25.522.5-23
Jazz Pharmaceuticals (JAZZ) 0.0085-8779-80
Incyte Corporation (INCY) 76.9833-34.529-30
HD Supply Holdings, Inc. (HDS) 0.0022-23.520.5-21
The Hain Celestial Group, Inc. (HAIN) 0.0078-80.573-74
Chesapeake Energy Corporation (CHK) 0.0025-2623.5-24

The broad market has bounced in recent days, which is good to see; we’re even seeing a much-overdue relief rally in the interest rate-sensitive sectors. But the real action remains among growth stocks; the vast majority of our recent recommendations are acting well, including a bunch that have pushed to new highs! We still don’t think the market is 100% in the clear; we’ll leave the Market Monitor where it is (just shy of bullish), so holding some cash and keeping your feet on the ground makes sense. But the action among leaders is encouraging.

This week’s list has a nice variety of names to choose from, but for our favorite, we’re going with an institutional growth stock leader—Netflix (NFLX) has come out of the public’s eye of late, but shares have surged to new highs as the firm’s business continues to rebound. Try to buy on weakness.
Stock NamePriceBuy RangeLoss Limit
Yandex (YNDX) 0.0033-34.530-30.5
Yelp (YELP) 41.3048-5242-43
Stratasys (SSYS) 0.00103-10892-94
Polaris Industries (PII) 0.00110-115104-105
Oshkosh (OSK) 95.0445-4741-42
Netflix, Inc. (NFLX) 423.92275-285245-250
Melco Crown (MPEL) 0.0026-2724-24.5
Magna International Inc. (MGA) 0.0078-8173-74
Keurig Green Mountain (GMCR) 0.0083-8878-79
Cabot Oil & Gas (COG) 0.0037.5-3936-36.5

In the month since the broad market began to weaken, the losers have been interest-rate sensitive securities; investors clearly fear that rates will rise further. But who are the winners? Interestingly, there is no one strong sector resisting the decline. Rather, numerous strong stocks in a variety of industries are being supported by investors. But more and more, these stocks are failing to hit new highs, so the big picture is one of growing weakness overall, and this is reflected in the less bullish status of our Market Monitor. You can still make money in this market, but more than ever, skillful stock-picking, combined with proper entry timing, is critical. So we urge you to study numerous individual stocks carefully. Try to buy on normal pullbacks. And above all, keep losses small if a stock doesn’t do what you hired it to do.

Our Editor’s Choice today, Lions Gate Entertainment, is a lower-risk selection with a good long-term growth story, and a timely entry could work out very well.

Stock NamePriceBuy RangeLoss Limit
Trulia (TRLA) 0.0042-4537-38
Sealed Air (SEE) 0.0029-3025-26
Questcor Pharmaceuticals (QCOR) 0.0060-6356-57
Pandora Media Inc. (P) 0.0018-2015-16
LightInTheBox Holding Co., Ltd. (LITB) 0.0018-2015-16
Lions Gate Entertainment Corp. (LGF) 0.0032-33.528-29
Ctrip.com International Ltd. (CTRP) 34.9443-4539-40
Cornerstone OnDemand (CSOD) 51.0149-5145-46
Celldex Therapeutics (CLDX) 0.0019-2016-17
Baidu (BIDU) 0.00130-135118-120

We started to see the market shake and bake a bit last week, which isn’t unusual considering the heady run the indexes and dozens of growth stocks have had since the late-June low. Exactly what happens next is anyone’s guess; our feeling is simply that the next month will probably be more difficult than the last month, so you should expect a few potholes or sudden selloffs. But with the main trend still pointed up, we think higher prices are likely in the weeks and months ahead. Thus, while plunging into a bunch of stocks right now probably isn’t the best idea, we do think you should work to remain (or work toward becoming) heavily invested.

This week’s list has some old friends and a couple of new faces. There’s lots of strength to choose from, but our favorite is Michael Kors (KORS) a fashion house with ambitious growth plans.
Stock NamePriceBuy RangeLoss Limit
Under Armour (UA) 0.0069.5-71.564-65
Ocwen Financial (OCN) 0.0049.5-5245.5-46.5
LKQ Corp. (LKQ) 0.0028.5-30.525-27
Michael Kors Holdings Limited (KORS) 73.2269-7263.5-64.5
Jazz Pharmaceuticals (JAZZ) 0.0077-8074-75
Harman International Industries, Inc. (HAR) 0.0066-6959-60
Facebook, Inc. (FB) 0.0037.5-39.532-33
Cubist Pharmaceuticals (CBST) 0.0059-6252-54
Baidu (BIDU) 0.00130-136118-120
Activision Blizzard, Inc. (ATVI) 0.0017-1815.5-16

We haven’t seen this many growth stocks acting well at one time since at least late 2010, and probably more like 2007, which is very encouraging. That said, we are seeing some froth begin to appear—many investors are giddy with their recent gains, and a few smaller-cap, speculative names have gone vertical. Thus, be sure to keep your feet on the ground, and don’t be afraid to book some partial profits here or there. But, in general, the buyers are clearly in control, and the main trends of the market are up, so you should work to get (or remain) heavily invested.
This week’s list has a few of the aforementioned zoomers, but most of the stocks have very solid fundamentals and aren’t far from solid entry points. There are many we like, but our favorite is Concur Technologies (CNQR), one of the many younger Cloud-based software firms that are thriving.

Stock NamePriceBuy RangeLoss Limit
Pioneer Natural Resources (PXD) 0.00172-177159-162
LinkedIn Corporation (LNKD) 0.00228-236205-208
Chart Industries (GTLS) 72.05110-115101-103
Gilead Sciences (GILD) 75.1059-6154-55.5
Canadian Solar (CSIQ) 0.0014-1511-12
Concur Technologies (CNQR) 0.0097-10088-90
Con-way (CNW) 0.0043-4541-42
Ciena (CIEN) 44.2522-2320-20.5
Athenahealth (ATHN) 0.00107-11293-95
Aegerion Pharmaceuticals (AEGR) 0.0089-9178-80

In most cases, the market acts in a way that surprises the majority, but during the past couple of weeks, stocks have actually behaved as we expected—the major indexes have calmed down to digest their huge post-June 24 run, while volatility among individual stocks has increased as earnings season produces all sorts of big moves up and down. Overall, the bulls remain in control, and while you have to watch your step during earnings season, we’re seeing some new leadership emerge, which is a good sign.

This week’s list includes a few recent earnings winners; powerful gaps up on a firm’s quarterly report usually lead to higher prices. Our favorite of the week is Facebook (FB), which had a coming out party last week after blowing away expectations. It’s extended, but we think you can start small here and look to build a position should the stock advance.
Stock NamePriceBuy RangeLoss Limit
Yandex (YNDX) 0.0030-31.527-28
TripAdvisor (TRIP) 55.1470-7362-64
Pharmacyclics (PCYC) 0.00100-10492-93
ManpowerGroup (MAN) 90.8464.5-6660-61
Illumina Inc. (ILMN) 289.7479-8272-73
Finisar (FNSR) 0.0018-18.515.5-16.5
Facebook, Inc. (FB) 0.0033.5-35.530-31
E*Trade Financial (ETFC) 0.0013.5-14.512.5-13
Dana Holding (DAN) 0.0020.5-21.518.5-19.5
Celgene (CELG) 0.00139-143127-129

The market and most stocks remain in a solid uptrend, though earnings are beginning to have the anticipated push-pull effect on the market, with lots of gaps up and down to start the day. We think increased volatility is nearly a sure bet going forward, especially after such a great rebound. In the short-term, then, make sure you have a plan of how you want to deal with earnings season (we include any upcoming earnings dates of our recommendations in today’s issue), and be prepared for lots of action in both directions. Long-term, though, the path of least resistance remains up, so we favor using normal retreats as buying opportunities.

This week’s list is one of the more growth-oriented that we’ve seen this year; just about every stock has a real, sustainable growth story with solid numbers. Our favorite of the week is Proto Labs (PRLB), which has set up a nice risk-reward entry here after tightening up for a few weeks.
Stock NamePriceBuy RangeLoss Limit
Zillow (Z) 76.6467-6959-60
Vipshop Holdings (VIPS) 14.2534-3630-31
Trulia (TRLA) 0.0035.5-3731-32
Santarus (SNTS) 0.0023.5-24.520-21
Spirit Airlines (SAVE) 57.0333-3530-31
Proto Labs (PRLB) 0.0063-6556-58
Nu Skin Enterprises Inc. (NUS) 46.0778-8070-71
Nationstar Mortgage (NSM) 0.0044-4640.5-41.5
Generac Holdings (GNRC) 86.6039.5-4136-37
Ambarella (AMBA) 52.7917.5-1916-16.5

What a difference a few weeks make! In late June the market was on its knees as fears of Fed tapering took hold. Today, though, those fears have given way to optimism, with all major indexes and hundreds of stocks surging to new highs. Yes, earnings season is getting underway, which always adds risk to the equation; we’re sure we’ll see a few potholes in the weeks ahead as some firms miss estimates. But the evidence has turned clearly bullish, and the path of least resistance is up. Thus, you should be working to get heavily invested in some of the strongest stocks in the market.

This week’s list has many familiar faces, as well as a broad representation among sectors. Our favorite of the week is Santarus (SNTS), which has enjoyed a huge run in recent months, but sales and earnings growth are huge, and the stock has exploded higher on big volume. Pullbacks are possible, but higher prices are likely over time.

Stock NamePriceBuy RangeLoss Limit
YY Inc. (YY) 0.0033-3528-29
Yelp (YELP) 41.3036-3832-33
The ExOne Company (XONE) 0.0060-6253-54
Tesla, Inc. (TSLA) 818.87120-130100-108
Santarus (SNTS) 0.0024-2520-21
Nexstar Media Group (NXST) 105.6837-3930-31
Krispy Kreme Doughnuts (KKD) 0.0019-2016-17
Delphi Automotive (DLPH) 0.0052-5450-51
Conn’s Inc. (CONN) 0.0055-57.549-50
Bloomin’ Brands (BLMN) 0.0024.5-25.522.5-23

Last week’s action was encouraging, from both the major indexes (most of which have pushed back above their 50-day lines) and growth stocks, which are definitely leading the way higher. With rising interest rates still a worry and earnings season coming up, it’s likely that volatility will remain elevated; you shouldn’t throw money at the market willy-nilly. But we’re very encouraged by the straight-up, smoke-up-a-chimney type of action by the market and many stocks since the panic low in late-June. Our Market Monitor remains in the bullish camp.

This week’s list is a bit more diverse than we’ve seen of late, with many quality prospects to consider. Our favorite of the week is Pandora (P), which is a very jumpy stock we were knocked out of a few weeks ago, but its recent, powerful action is intriguing. Try to buy on weakness.
Stock NamePriceBuy RangeLoss Limit
Thor Industries (THO) 104.7648-5041-42
Qihoo 360 (QIHU) 0.0047-4941-42
Pandora Media Inc. (P) 0.0019-2016-16.5
InvenSense (INVN) 0.0014.5-15.513-14
Guidewire (GWRE) 90.6042-4437-38
Chart Industries (GTLS) 72.0596-9890-91
Ford Motor Co. (F) 0.0015.5-16.513-14
Electronic Arts (EA) 0.0022.5-2421-21.5
DreamWorks (DWA) 0.0024-25.521-22.5
Cree, Inc. (CREE) 67.9665-6860-61

The market has followed through on last week’s rebound rally and we’re seeing an increasing number of strong growth stocks with good setups. The big news is that the rally has lifted many of the indexes we follow above their 25- and 50-day moving averages, giving us a green light for new buying. We don’t advise jumping in with both feet—new buy signals do not guarantee a continued advance—but you should be taking a serious inventory of your watch list (and the stocks in this week’s issue) to select a few favorites for buying.
This week’s list includes several bigger names and a few recent IPOs, which indicates good breadth for the rally. Our favorite is SunPower (SPWR), which is making the turnaround in the solar industry look like a sound growth proposition.


Stock NamePriceBuy RangeLoss Limit
SunPower (SPWR) 12.2619.5-2217-18
Splunk (SPLK) 207.6745-4741-42
Proto Labs (PRLB) 0.0063-6555-56
The Priceline Group Inc. (PCLN) 0.00810-840779-780
Illumina Inc. (ILMN) 289.7472-7467-68
Ciena (CIEN) 44.2519-2017.5-18
Bloomin’ Brands (BLMN) 0.0024-2522.5-23
Boeing (BA) 432.2299-10294-95
American Axle (AXL) 0.0017.5-18.516-16.5
Actavis (ACT) 0.00123-127108-110

Updates
It’s not often that we discuss currencies in the Cabot Turnaround Letter, but given the persistent relative strength of the U.S. dollar right now, I think it’s imperative that we address it—mainly because of how it will likely impact our portfolio holdings going forward.

The top haven asset for the first half of 2026 wasn’t gold, U.S. Treasury bonds or the Japanese yen.
After spending much of the year leading the market higher, small caps have finally run into a little turbulence. Through midday today, the S&P 600 Index is down 1.8% from last Thursday’s close, roughly in line with the S&P 500’s 1.9% decline.

That said, it’s important to keep the recent pullback in perspective. Small caps remain the market’s clear leader in 2026, with the S&P 600 up 20.2% year to date versus an 8.1% gain for the S&P 500.
While flashier, more star-studded teams like Lionel Messi’s Argentina, Kylian Mbappe’s France and Erling Haaland’s Norway garnered most of the headlines at the just-completed World Cup, Spain was the best team. There was nothing flashy about Spain: no mega-stars, not a ton of goals, no relentless attack. Instead, they dominated the tournament with precision passing, immaculate ball control and near-impenetrable (just one goal allowed all tournament!) defense.
High-flying AI-related stocks are facing a high bar of performance. Even what normally would be considered staggering growth is met with a yawn. The backdrop of the Middle East conflict and almost $100 oil is not helpful.

The Philadelphia Semiconductor Index (SOX) has outperformed the S&P 500 by 57% this year, even after a sharp correction. This is basically a macro trade, and there are few industries as cyclical, or as capital-intensive, as semiconductor manufacturing.
The market rolls sideways amidst a slew of conflicting forces.

The S&P 500 has bounced around and is at the same level it was in the middle of May. The primary culprit is technology. That sector has been in a funk. The S&P 500 is hard-pressed to generate any lasting traction while this massive sector, accounting for over 40% of the index, flounders.
The market has gone sideways since May. It seems to be deciding what to do.

It’s encouraging that the resumption of hostilities with Iran has not sent the market lower. It’s also positive that oil prices aren’t rising back to the $100 level earlier in the war, although prices have risen. It’s also another earnings season and analysts expect a big one.
With war being one of the most dominant themes of the last four years, it stands to reason that investors should position their portfolios to account for this conspicuous (and unwelcome) trend.

And lest one be tempted to think that the warfare theme will diminish anytime soon, last week’s article by NPR deflates that illusion: It revealed that global military conflicts are at their highest level since WWII.
Price targets are standard practice on Wall Street. But sometimes, they can act as an artificial ceiling.

For example, say Truist sets a price target on an up-and-coming growth stock that’s 25% higher than its current share price. For a growth stock, a 25% return isn’t much. But then again, the stock could be a total flop, which is the natural boom-or-bust tradeoff growth investors must endure in trading off increased risk for massive upside. So, a price target on a growth stock seems almost like an unnecessary cap on a stock that has the potential to go through the roof.
WHAT TO DO NOW: Continue to trim your sails. In the Model Portfolio, we’ve been getting closer and closer to shore as growth funds and indexes are under pressure and AI stocks cascade lower. Tonight we’re going to further trim Marvell (MRVL) given its ugly action, selling a third of what we have left. That will leave the portfolio with a big 58% cash position. We could put some of that to work if growth names find support, but we want to see key growth measures firm up before buying.
After a brief pause last week, small caps are once again leading the pack.

Through Wednesday’s close, the S&P 600 Small Cap Index is up roughly 21% year to date, compared to gains of about 15% for the S&P 400 MidCap Index, 17% for the Nasdaq and 11% for the S&P 500.
Its earnings season again! That’s a good thing. Earnings just might save the day in an otherwise confusing and uncertain market.

The market is causing whiplash. The Iran peace deal changed things. Stocks held back by high oil prices, and the resulting higher inflation and interest rates, reignited as oil prices came back down after the peace deal. But hostilities with Iran have resumed.
The peace deal may be on hold again. But stocks are hanging in there so far.

The ceasefire with Iran is over and hostilities have resumed. That sounds like a bigger bummer than it’s been in the market so far. Falling oil prices enabled previously beleaguered stocks to soar higher again as the prognosis for inflation and interest rates simultaneously improved. But that rally is over if oil prices spike higher again.
Alerts
This contributor has two global ideas today—a more speculative country ETF and an international pharma company, still selling at a reasonable valuation.

WisdomTree India Earnings Fund (EPI)
from Positive Patterns

I think WisdomTree Trust - WisdomTree India Earnings Fund (EPI) has good upside potential over the next 5 years and maybe longer, although...
This money center bank beat estimates by eleven cents, posting earnings of $1.51 per share for last quarter. Six analysts have increased their estimates in the past 30 days.

Citigroup (C)

from AlphaProfit Sector Investors’ Newsletter


Citigroup (C) beat analysts’ second quarter EPS forecast by 12% to help our May recommendation exit with...
Despite an earnings miss, the shares of this railroad car equipment manufacturer gained momentum, yet remain undervalued. TheStreet.com rates the company a buy, based on “robust revenue growth, reasonable debt, notable return on equity, attractive valuation levels and impressive record of earnings per share growth.”

Greenbrier Companies, Inc. (GBX)
from The Lancz...
This automotive supplier beat earnings estimates by four cents in the last quarter and analysts have increased the company’s estimates six times in the past 30 days.

American Axle & Manufacturing Holdings Inc. (AXL)
from Ford Equity Research Report

Axle & Manufacturing Holdings (AXL) is a supplier to the automotive industry. The company...
The fundamentals of both of these media companies—the parent and the new spinoff look attractive, based on discounted valuation.

Graham Holdings (GHC) and Cable One (CABO)
from Ian Wyatt’s Million Dollar Portfolio

One of my favorite media stocks is Graham Holdings (GHC). You’re probably more familiar with the company by its former name—The...
This medical instrument company handily beat earnings estimates for the last quarter, and analysts have increased their forecasts four times in the past 30 days.

Vascular Solutions (VASC)
from The Periscope Report

Vascular Solutions (VASC) clobbered estimates, exactly as we predicted and the company also raised its guidance for the 2nd quarter in...
Shares of this wood products company were just upgraded to “Buy” at DA Davidson.

Boise Cascade Company (BCC)
from Weiss Million Dollar Ratings Portfolio

I’m going to take advantage of the current weakness we’ve seen in the industrial sector by recommending we buy shares of Boise Cascade Company (BCC–Rated B). BCC is a...
Hedge fund Caspian Capital increased its holdings in this shipping company by 288% during the first quarter, and by another 205% during the second quarter. The stock is now the fund’s top holding, at some 14.89 million shares. Analysts have increased their EPS estimates five times in the past 30...
Sell: MetLife (MET)
from The Turnaround Letter
Updated from Investment Digest 736, February 6, 2013


MetLife (MET) stock has per formed well over the last couple of years as it has come out of Wall Street’s doghouse. We are concerned going forward that the company will face increasing regulatory and other headwinds, and...
This healthcare provider is in an acquisitive mode, and operating in a fragmented, but quickly-expanding marketplace.

iKang Healthcare Group (KANG)
from The Oberweis Report

Headquartered in Beijing, China, iKang Healthcare Group (KANG) is the largest private provider of medical checkups in China. In China, the market for annual physicals is still in its...
This connectivity company beat estimates by a penny last quarter, posting EPS of $0.06 per share. Analysts have increased the company’s earnings estimates four times in the past 30 days.

CEVA (CEVA)
from Canaccord Genuity Research

We’ve increased our price target on CEVA (CEVA) to $26.00 from $25.00 and as the company reported...
This cloud-based health analytics company looks attractive, especially in light of shrinking health care dollars and its discounted valuation.

Castlight Health (CSLT)
from Top Stocks under $10

Castlight Health (CSLT) has a game-changing app that allows company employees to choose health services based on cost and quality. We held this stock once before...
Portfolios
Strategy
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.