My modus operandi when writing the monthly version of the Cabot Turnaround Letter is to focus solely on a single stock when making a purchase recommendation. And in keeping with that spirit, I’ll be doing the same in this month’s edition of the newsletter. But I will also highlight two additional stocks with what I see as having excellent mid-to-long-term turnaround potential.

The market looks great. But the indexes are teetering around the highs while uncertainty is still swirling around.

Fortunately, some of the highest dividend paying stocks are still reasonably priced ahead of an increasingly promising future. Midstream energy stocks have been flying under the radar while paying some of the highest dividends on the market. These stocks are also well suited for whatever lies ahead.

Midstream energy stocks have provided a high income and a solid return throughout most market cycles. And that makes them ideal for the current unpredictable environment. But that was before. Things are changing for the better. The environment for energy is undergoing a radical transformation that could make these stocks better than ever before.

The growing demand from utilities and exporters will provide an unprecedented runway for growth in the years ahead that historical performance doesn’t reflect. In this issue, I highlight one of the very best midstream energy companies on the market.

Before we dive into this week’s idea, I do want to note that our September IBKR, GLW and RKT covered calls finished in-the-money which means we walked away from those trades with our full profits, and no longer own a stock or option position in these stocks.

It was another solid week for the market, with a bit more leadership emerging on the upside, with some medicals and online outfits joining the AI infrastructure group and a smattering of other names—though we’re still seeing plenty of choppy (selling on strength) action, too. Near term, we do think risk is a bit elevated, partly due to the recent run, partly due to the calendar and partly due to some near-term complacency—that said, when it comes to the intermediate-term (and longer-term) evidence, it remains much more positive than negative, so we’re not making any grand adjustments here. We’ll keep our Market Monitor at a level 7.

This week’s list is another well-rounded one, with some fresher breakouts and setups from a variety of sectors. Our Top Pick is a well-run firm that has lifted off powerfully from a two-month rest period. Try to enter on dips of a few points.

Fed Week has come and gone, and Jerome Powell and company did just what investors expected them to do, nudging stocks further into record territory. How long the market can keep this up, at least in the short term, is anyone’s guess. But we can only go with the evidence in front of us, and right now it’s a good time to buy. So today, we add another big growth name that has emerged as a leader of the recent rally. It’s a stock that has stood out enough to gain approval from both Mike Cintolo and Tyler Laundon.

Details inside.

The stock market rallied nicely into the Federal Reserve meeting, and then tacked on even more gains following it, and by week’s end the S&P 500 had risen 1.2%, the Dow had rallied 1%, and the Nasdaq gained 2.2%.

The stock market rallied nicely into the Federal Reserve meeting, and then tacked on even more gains following it, and by week’s end the S&P 500 had risen 1.2%, the Dow had rallied 1%, and the Nasdaq gained 2.2%.

The story remains mostly the same, with the overall market remaining in great shape, though it is a bit near-term extended, while growth stocks are good-not-great, with a lot of names mostly marking time, and even some AI names doing the same. That said, we have seen a little broadening of leadership of late, which should provide some opportunities down the road. Today we’re adding one new half-sized stake in a name that looks to have changed character today (up a lot, but this comes after a two-month correction), but we’re still going to hold 38% in cash as we look for more titles to get going.

With a big Fed meeting on tap for this afternoon, we’re continuing to maintain a steady pace of adding new positions, selling off some weaker ones, and adding fresh names to our Watch List.

Details on all of the above are included in this September’s Issue. Enjoy!

Ahead of the “big” Federal Reserve event this Wednesday, the leading indexes all advanced last week, as the S&P 500 gained 1.6%, the Dow rallied 1% and the Nasdaq rose by 2%.

For the most part, the story remains the same with the market, as most of the evidence is positive, though not necessarily powerful. The good news is that, for the first time in a while, we’re starting to see a little broadening in leadership: AI-related names remain strong, and now more medical and online names are starting to shape up along with some more cyclical plays. Today, we’ll stick with our current stance—Market Monitor at a level 7—though we could tweak that if we continue to see more names emerge.

This week’s list has something for everyone, from strong Ai-related names to cyclical outfits, and from those in strong uptrends to those with nice setups. Our Top Pick has the look of a potential liquid leader and after seven weeks of choppy action, is starting to break out nicely.

Stocks are already at all-time highs, and now it appears the Fed is (finally) prepared to give them an extra nudge in the form of interest rate cuts this week. When that happens, it’s typically bullish for stocks, even if there are some bumps along the way. So today, we continue to try and capitalize on a growth-friendly market by adding a fast-expanding biotech play to the Stock of the Week portfolio. It’s a new recommendation from Mike Cintolo in his momentum-based Cabot Top Ten Trader newsletter. And it’s been on a tear for the last month.

Details inside.

There were a lot of headlines over the last couple of days about the emerging small-cap rally.

That’s because small caps surged on both Tuesday and Wednesday after a somewhat cool CPI inflation report drove expectations for a 25bps September rate cut to 99%.

On Wednesday, the S&P 600 SmallCap Index jumped 2.0%, trouncing the 0.3% rise in the S&P 500 Index.

Unlike Rodney Dangerfield, cannabis stocks continue to get some respect. They are up 66% since I last suggested them here on July 30, using the AdvisorShares Pure U.S. Cannabis (MSOS) as a guide. In the past month, the sector is up 72%.

The reason: We continue to get high-profile confirmations that the administration of President Donald Trump will reschedule cannabis. This really isn’t news. I’ve been saying this since Trump promised rescheduling in his election campaign a year ago. But mainstream media attention is drawing money into the sector.

The market is still right near the high. But the dog days of summer are setting in.

Stocks are resilient. News regarding tariffs and the economy got better and then got worse. The market is taking it in stride and meandering near the high. Now we are at that time of year when investors focus on squeezing in the last bit of summer fun.

Last week’s release of the latest job market outlook did more than shock the market; it reopened a debate that has been intermittently raging over the last couple of years, namely: will the U.S. dodge an inflationary recession (i.e., stagflation)?

Super Micro Computer (SMCI) stock sank more than 19% yesterday after the troubled AI server maker’s results underperformed Wall Street’s expectations.

Super Micro reported adjusted earnings per share of $0.41 for its 2025 fiscal fourth quarter, less than the $0.44 expected by Wall Street analysts, according to Bloomberg consensus estimates. Its quarterly revenue of $5.76 billion was below the $6 billion expected, while its roughly $551 million gross profit for the period fell a little short of the estimated $601 million.

The resilient summer market got a cold slap in the face last week. There was a big recovery on Monday. But the market still looks wobblier than it did a week ago.

One day’s headlines seemed to undo the positive market narrative.

Stocks are recovering so far this week after a big selloff on Friday.

The sweet summer market that had consistently set new highs got a cold slap in the face last week. But trading so far this week indicates it might not be a game-changer.

The market was looking good a week ago. The huge trade deal with Europe alleviated much uncertainty about tariffs. Second-quarter GDP came in at a much stronger-than-expected 3%. Tariff uncertainty was fading away, and the economy was stronger than expected. But then news of a much worse-than-expected job number for July, along with significant downward revisions for the prior two months, combined with increasing tariff threats to China, India, and Canada and shattered the positive narrative.

With the current earnings season more than halfway complete for S&P 500 companies, a clearer picture of the overall corporate health backdrop is beginning to emerge.

WHAT TO DO NOW: Remain bullish, but continue to keep some of your powder dry. The market remains in a solid uptrend, but more indexes and stocks have been stalling out. To be fair, we are seeing some growth names finally kick into gear, but we still think it’s best to ease off the accelerator a bit as we see how earnings season goes. In the Model Portfolio, we sold Uber (UBER) and bought a half-sized stake in Oracle (ORCL) on a special bulletin Tuesday; tonight we’ll make one small move, adding another 3% position to Rubrik (RBRK), which appears to be emerging from its slumber. We’ll still hold around 30% cash after these moves.

The big macro news this week is that the U.S. economy is doing well and there’s no really clear reason for the Fed to cut interest rates. Trade deals continue to be announced, and the U.S. should be bringing in a good deal more money due to tariffs than it has in the recent past.

Real GDP was just announced to have risen 3%, thanks to capex on hardware and software to build out data centers. Results from Microsoft (MSFT) and Meta (META) confirmed this trend.

A surprisingly productive July comes to a close with the market near all-time highs and volatility at a relative low. I’ve written in recent weeks about the reasons that could change in August and September – the highest stock valuations since the February high, lingering tariff uncertainty and its potential impact on a heretofore resilient economy, frothy warning signs like new meme stocks and soaring bitcoin prices, and the usual selling that occurs right after Labor Day. But for now, stocks are doing just fine, and that includes value stocks, which have risen more than 6% year to date.

The market yawned off great news over the weekend but managed to make a new high nonetheless.

Investors don’t seem to care about tariffs anymore, and the market continues to forge slowly higher regardless of the news. Tariff concern is so last April.

ThredUp (TDUP), Sportradar (SRAD) and Alamos Gold (AGI) Report

WHAT TO DO NOW: The market has finally seen some selling this week, with two downside reversals and then today’s big drop on tariff and economic fears. Our Cabot Tides are now on the fence as the broad indexes have sagged, though with 30% cash already on the sideline, we’re taking things on a stock-by-stock basis. Today that means pulling the plug on Snowflake (SNOW), which is cracking support today. This will raise our cash level to 39%—some of which we might redeploy into a stronger name when the indexes find support. Details below.

Enovix (ENVX) reported Q2 results after the closing bell yesterday. Results were generally in line with the pre-announced results (from early July), with $7.5 million in revenue and an EBITDA loss of $20.1 million ($1.3 million less than the pre-announced amount).

Carpenter Technology (CRS) & Microsoft (MSFT)

WHAT TO DO NOW: The market remains in good shape, and we remain overall bullish, though we’re not flooring the accelerator given that earnings season is revving up. Today’s bulletin concerns Uber (UBER), which is cracking some support today on another round of autonomous news from others—we’re going to cut bait. On the buy side, we’re starting a half-sized stake in Oracle (ORCL), which quacks like a liquid leader.

Sell a Half Position in Paramount Global (PARA)

GE Vernova (GEV) Powers Higher

Enovix Warrant (ENVXW) Follow Up. Exercise Enovix Warrants (ENVXW)

We added a half position in Freshworks (FRSH) back in March and another half in May.

Sell Palomar (PLMR)

A BDC, or Business Development Company, is an investment that gives ordinary investors a way to participate in the rarified world of venture capital.

These are the six fundamental characteristics that correlated most highly with profits in a 10-year study of stocks bought for the Model Portfolio of the Cabot Growth Investor.

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If professional investment companies are not making their decisions based on the price of the stock, neither should you.

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I created Cabot Dividend Investor’s three-tiered portfolio to address the needs of the widest possible variety of investors with some combination of these goals. But this variety means that you need to figure out how to mix and match my recommendations to best fit your goals.

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Today, we take a look back at every sale made from the Cabot Dividend Investor portfolio from inception in February 2014 to the end of April 2015 to see how our sold stocks have fared.

Diversification is usually one of the first risk management principles investors learn. It’s simple enough to understand. At its most basic, diversification is simply an extrapolation of the old advice not to put all your eggs in one basket. And it’s good advice.