After a very strong April and May, the market and most growth stocks have been bobbing and weaving for most of June, with this week’s selling almost a continuation of what we saw a couple of weeks ago. For now, then, we’re staying somewhat close to shore, with a few stocks rated Hold and being selective on the buy side. That said, we’re also overall bullish until proven otherwise, with most of the intermediate-term evidence pointed up, so we’re giving our strong names a chance to build bases and putting money to work as opportunities arise. Tonight we’re making one small new addition, though are still keeping one-third of the portfolio on the sideline.

This remains a “buy weakness” market. Sure, there are plenty of reasons for concern – which is almost always the case. But the positives continue to outweigh the negatives. So, I’m moderately bullish on stocks, particularly the ones that insiders favor.

Let’s start with three negatives.

It’s true that seasonal demand for certain foods and drinks—and the companies that produce them—is typically discounted well in advance by investors. Nonetheless, there’s evidence that interest in this category is picking up appreciably this summer.

My recent screening for turnaround candidates has picked up more than a few food and beverage companies that had fallen out of favor but are now attractive—and even showing signs of accumulation in some cases.

Despite the major indexes trading near the highs, most stocks have struggled.

For most of the rest of the market, the problem is oil. The price per barrel of crude oil skyrocketed to over $110 from under $60 before the war. And prices stayed elevated for more than three months. Oil is involved in everything. And that means inflation. And inflation means high interest rates.

But that’s in the past. The future is likely to be different.
Peace changes the dynamic. Without war, oil prices will fall. Interest rates will come down. That rate hike may be off the table. And stocks held back by inflation and high interest rates should be poised to move higher.

The pessimists have it all wrong. The resilient economy isn’t precarious. The restraints were precarious. When the falling oil prices unleash a stronger economy, it will change things. Let’s get ahead of the curve with stocks that will benefit.

Before we dive into this week’s covered call idea we need to move on from three stock positions coming out of June expiration, as the calls we sold expired worthless.

To execute these trades you need to:

Sell YOU stock

Sell PL stock

Sell VIAV stock

Moving on ...

Last week was a bit of a disjointed, volatile affair, so we’re being a bit more selective when it comes to stock selection and entry points. That said, the intermediate-term picture remains as bright as ever, with the trends for leading indexes, sectors and stocks pointed up and with impressive resilience and mostly-normal action even after many stocks posted massive gains in April and May. We’re leaving our Market Monitor at a level 8, aiming to give our winning stocks some rope and look for fresh buys on dips.

This week’s list is again heavy on growth names, though there are a few newer titles that haven’t appeared before. Our Top Pick is an out-of-the-way AI play that’s seeing humongous new orders and just completed a major acquisition.

Editor’s Note: There will be no issue of Cabot Stock of the Week next Monday. You will receive your next issue on Monday, July 6.

Rotation is in full swing, and that’s making for a healthier, less top-heavy market despite the S&P 500 and Nasdaq trading below their early-June tops. As the air has come out of the AI trade a bit, investors have simply moved money into the many unloved and undervalued sectors – financials, healthcare, utilities, materials. The latter sector is where today’s new portfolio addition comes from. It’s a little-known name Tyler Laundon dubbed his Top Pick in this month’s issue of his Cabot Early Opportunities newsletter. It’s a stock with tremendous upside and momentum.

Details inside.

After more than three months of dictating every move on Wall Street, the Iran war finally headed toward the exits last week — the U.S. and Iran agreed to a framework to end the conflict, reopen the Strait of Hormuz, and lift the U.S. naval blockade, sending oil tumbling back toward the mid-$70s. The other headliner last week was new Fed Chair Kevin Warsh’s first meeting on Wednesday: The Fed held rates steady, but its updated projections flipped hawkish, with the median policymaker now penciling in a rate hike rather than a cut before year-end — a shift that knocked stocks lower midweek before a sharp Thursday rebound.

After more than three months of dictating every move on Wall Street, the Iran war finally headed toward the exits last week — the U.S. and Iran agreed to a framework to end the conflict, reopen the Strait of Hormuz, and lift the U.S. naval blockade, sending oil tumbling back toward the mid-$70s. The other headliner last week was new Fed Chair Kevin Warsh’s first meeting on Wednesday: The Fed held rates steady, but its updated projections flipped hawkish, with the median policymaker now penciling in a rate hike rather than a cut before year-end — a shift that knocked stocks lower midweek before a sharp Thursday rebound.

After more than three months of dictating every move on Wall Street, the Iran war finally headed toward the exits last week — the U.S. and Iran agreed to a framework to end the conflict, reopen the Strait of Hormuz, and lift the U.S. naval blockade, sending oil tumbling back toward the mid-$70s. The other headliner last week was new Fed Chair Kevin Warsh’s first meeting on Wednesday: The Fed held rates steady, but its updated projections flipped hawkish, with the median policymaker now penciling in a rate hike rather than a cut before year-end — a shift that knocked stocks lower midweek before a sharp Thursday rebound.

It was a better week for markets and Explorer stocks. GE Vernova (GEV) came to life this week, up 21%. Coeur Mining (CDE) shares rebounded this week, soaring 13.8% following a recent announcement that it will be added to the S&P MidCap 400 Index.

And new Fed chairman Kevin Warsh signaled yesterday that he is an inflation hawk. Overnight, the Bank of Japan raised interest rates to its highest level since 1995. Officials signaled more hikes ahead to combat too-high inflation.

But our bull market seems to confirm that rising interest rates do not matter much.

The June issue of Cabot Early Opportunities is focused on three companies benefiting from powerful structural growth trends that are still in the early innings.

Whether it’s a newly independent materials company gaining exposure to nuclear and AI demand, a critical power infrastructure provider solving bottlenecks in next-generation computing, or a semiconductor supplier riding a surge in testing complexity, these businesses are seeing improving fundamentals that continue to pull in fresh money.

All the details are in the June issue of Cabot Early Opportunities.

June has been a return to form for stocks in 2026, with value outperforming growth the way it did in the first quarter before the April and May AI-fueled boom. This month, value stocks are up roughly 3% while the S&P 500 is down 2.5% and the Nasdaq is off more than 4%. That mimics the first-quarter outperformance by value stocks, which added 2.5% from January through March while the S&P and Nasdaq tumbled 4.5% and 7%, respectively.

Small caps just passed their Fed test – and continue to hold up well.

The S&P 600 SmallCap Index is up about 2.5% since last Thursday’s close and up 4.2% since last Wednesday’s close (the day of the FOMC meeting). The index is trading at an all-time high this morning.

A sharp selloff in chip stocks rattled markets this week but the AI buildout and AI demand are moving at a breakneck speed and the cost to run AI models seems to be going down.

In short, confusion reigns as AI costs are weighed against potential returns. The backdrop is that stocks of most of the chip companies have had crazy runs so a sharp pullback was inevitable. Taiwan and South Korean stocks have been particularly volatile.

The peace rally is again being overshadowed by more technology ugliness.

The selloff in artificial intelligence that began after Broadcom’s (AVGO) earnings at the beginning of the month is gaining steam early this week. Technology had been red-hot and lifted the market in April and May. Now, it’s spoiling the peace party.

Has there ever been anything as overvalued as SpaceX (SPCX)?

Elon Musk’s rocket and space-based internet company reported $18.7 billion in revenue in 2025. That’s less than half the revenue declining electronics store chain Best Buy (BBY, $41.7 billion) generated last year, less than International Paper Company (IP, $23.6 billion), and barely more than Casey’s General Stores (CASY, $17.6 billion). Those three companies have a combined market cap of roughly $67 billion. As of this writing, SpaceX has a market cap of $2.7 trillion. That’s more than the combined market cap of Walmart (WMT), JPMorgan (JPM) and Visa (V). Together, those three companies generated $847 billion in revenue last year.

Small caps continue to hold up well. The S&P 600 Small Cap Index is up modestly since last Thursday and is trading just below the fresh all-time highs it hit earlier this week. The group’s resilience stands out, especially against a backdrop of narrowing leadership and ongoing rotation beneath the market’s surface.

The main macro development this week was the Fed’s June meeting and Chair Kevin Warsh’s press conference, which confirmed a shift in policy direction.

WHAT TO DO NOW: The market’s bounce has been a good one, and the intermediate-term outlook remains bright. That said, near term, there are still some crosscurrents (rotation into the broad market, Dow outperforming the Nasdaq) that tell us growth stocks could throw us another curveball in the coming week or two. Overall, then, we’re mostly standing pat, but we’re going to add a half-sized stake in Guardant Health (GH) here, leaving us with a still-good-sized cash position of 37% or so. Details below.

Stocks started this week with a huge rally as the Iran ceasefire deal appears to be the real thing.

Of course, it’s been months of supposed peace deals falling apart. It’s hard to believe. I’m sure that fact is holding the market back somewhat. But this one is different for a couple of reasons.

Stocks are starting off this week with a huge rally as the U.S. and Iran have reached a ceasefire deal.

We’ve been here before. These peace deals have fallen apart several times. I’m sure that fact is holding the market back somewhat. But this one is different for a couple of reasons. First, it’s the furthest a peace deal has gotten with both sides agreeing and independent verification from Pakistan. Second, this is what a peace deal would look like at this point if it’s real and lasting.

[Note: The Cabot Turnaround Letter weekly update won’t be published next Friday, June 19, due to the market being closed for the Juneteenth holiday.]

Before we get into the main topic for today’s newsletter update, a quick note on the portfolio is in order. I’m continuing our “spring cleaning” effort that we began last week by trimming a couple more of our holdings, but I’m also adding a new position to take the place of the recent deletions.

After two near-record-setting months, stocks are encountering their first real turbulence since March. It’s no surprise.

While stocks go up an average of 10% a year, they rarely do so in a straight line. And after the S&P 500 rallied nearly 20% in April and May and the Nasdaq shot up nearly 30%, a pullback of some kind – or possibly even a true correction – was to be expected. It seems it’s happening all at once.

Stocks look set to enter the summer near all-time highs, but leadership has narrowed, volatility has ticked up, and there’s been renewed scrutiny on the AI trade and valuation concerns in some of the market’s biggest winners.

At the same time, the macro backdrop remains a mix of resilience and intermittent turbulence. While economic data continues to hold up, energy prices remain elevated due to the ongoing Iran conflict – which has no end in sight – keeping upward pressure on inflation and yields.

Fidelity Contrafund (FCNTX)
from The No-Load Fund Investor

The stock prices of plenty of companies with good products and services, even in growing industries, occasionally get pummeled for transitory reasons and become significantly undervalued as compared to their long-term growth prospects. Managers who buy these stocks during the down times and hold...

This aggressive growth fund looks for companies with high growth rates and good fundamentals.

Turner Midcap Growth Investor (TMGFX)
from MoneyLetter

Turner Midcap Growth’s (TMGFX), manager, Chris McHugh, was a founder of Turner, and has been the lead manager of this fund since its inception in 1996. Turner Investments was founded as a...

Today’s recommendation is a global manufacturer of specialty glasses, ceramics and related materials. The company is gaining momentum, with its shares just recently hitting a 52-week high.


Corning (GLW)
from Heartland Adviser

One of the longest surviving corporations is Corning (GLW), founded in 1851 by Anthony Houghton Sr.

Corning has put a premium on...

This visual computing company is receiving accolades for its $1,000 graphics card, which is flying off of shelves.

NVIDIA (NVDA)
from Nate’s Notes

After spending roughly nine months gradually working its way from $14 to $16, I am very pleased to report that NVIDIA’s stock has finally managed to punch into new multi-year...

This cloud company recently announced a public common stock offering of 3,000,000 shares. The Company expects to use the net proceeds from the offering for working capital and other general corporate purposes.

SciQuest, Inc. (SQI)
from The Oberweis Report

SciQuest, Inc. (SQI) provides leading cloud-based business automation solutions for spend management. By simplifying...

This firearms manufacturer grew its revenues and earnings in the third quarter and just authorized a $30 million stock buyback plan.

Smith & Wesson Holding Corp. (SWHC)
from FXC Newsletter

Smith & Wesson Holding Corp. (SWHC) just posted its third quarter fiscal 2014 financial highlights:

Net sales were $145.9 million, up 7.1% from the...

Increasing demand and higher prices may boost the shares of this aluminum producer.

Century Aluminum Company (CENX)
from Capitalist Times

Rising demand for aluminum from the US automobile industry bodes well for the latest addition to the Wealth Builders Portfolio, Century Aluminum Company (CENX). Century Aluminum specializes in smelting and owns six facilities...

Shares of this vitamin and wellness company have been beaten down, which may provide an opportunity to buy in at a significant discount.

GNC Holdings (GNC)
from Cabot Benjamin Graham Value Investor

GNC Holdings (GNC) is a specialty retailer of health and wellness items. These include vitamin, mineral and herbal supplements, and sports...

This global credit card and travel company pays a small dividend and just sold 50% of its corporate travel unit.

American Express (AXP)
from Richard C. Young’s Intelligence Report

The new American Express (AXP) everyday credit card is aimed at traditional credit card users who have thought of American Express as too expensive...

Sirius XM Holdings Inc. provides satellite radio services in the United States and Canada. The shares were just reiterated as a buy at TheStreet.com.

Sirius XM Holdings Inc. (SIRI)
from The Buyback Letter

Satellite radio giant Sirius XM Holdings Inc. (SIRI) is the world’s largest pay-radio service (a market leader in car radio...

It’s time to sell your shares in this real estate research and marketing firm.

Sell: Trulia.com (TRLA)
from Top Stock Insights, Updated from Issue 749, September 18, 2013

I’m concerned that Trulia.com’s (TRLA) proposed $45 million marketing campaign is going to further hurt earnings in 2014. The market is also less than convinced,...

This Morningstar 5-star rated fund’s largest holdings are in consumer cyclical (25.12%), Industrials (20.02%), Technology (11.55%) and Energy (11.34%).

Hodges Small Cap Fund (HDPSX)
from BIResearch


Hodges Small Cap Fund (HDPSX) is a small-cap focused fund that was in the top 25% of funds for 2013, and for 2012, and 2011, and 2010...

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.