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First, a scheduling note: With Christmas coming quick, next Monday (December 27) is the second of our two regular weeks off for Top Ten. We’ll be in later that week, but if we don’t talk to you have a great holiday season!

After an encouraging bounce, the sellers immediately came back to the well last week. While we don’t think this is going to morph into 2008, it’s clear that most of the evidence remains negative: The intermediate-term trend of most indexes and stocks is pointed down and the vast majority of former leaders are in shambles. We’ll let others predict (guess) what happens from here, but with most things acting poorly, it’s best to remain cautious, holding plenty of cash, building your watch list and keeping any new buys on the small side.



This week’s list has a variety of names that are resisting the market’s weakness, so if you want to nibble on something, you’ll find it here. Our Top Pick is a unique IoT-related firm whose stock is acting just fine.

Current Market Outlook


If you had told us three weeks ago that growth stocks would bounce decently, a collection of names would show some big-volume upmoves and other names would start to tighten up, we’d have taken it in a heartbeat. As we’ve written in recent days, the action is encouraging, though not decisive yet, and the next week or two will be key—many prior winners have pushed into resistance, while in recent months most good-looking names have quickly found sellers, so if the buying pressures can continue it would be a sign that the market’s character has changed. As it stands now, the evidence has improved, so you can start putting more money to work if you’ve been relatively defensive. But we think going slow and building as you develop profits is the way to go.

This week’s list has many interesting names, including a few more growth-y titles than we’ve seen recently. For our Top Pick, we’ll take another swing at Nvidia (NVDA)—it’s had two failed breakouts this year, but we think the 3rd time could be the charm.

Stock Name	Price	Buy Range	Loss Limit
Adient (ADNT)	53	51-53	45.5-47
Bentley Systems (BSY)	58	54.5-56.5	49.5-50.5
BioCryst Pharmaceuticals (BCRX)	16	14-15.2	12-12.7
CrowdStrike (CRWD)	222	215-224	190-195
Dicks’s Sporting Goods (DKS)	97	93.5-96.5	85-86.5
Ford Motor Co. (F)	15	13.6-14.3	12.2-12.6
NVIDIA Corporation (NVDA)	650	630-655	575-590
Range Resources (RRC)	15	13.7-14.5	12-12.5
Sea Limited (SE)	257	248-260	220-225
Toll Brothers Inc. (TOL)	65	63.5-66	58.5-59.5

Current Market Outlook


After a couple of horrid weeks for growth stocks, we’ve seen a ray of light lately, as many found solid support with some volume beginning to show up in some stocks as they rally, an early sign that big investors are engaged. Thus, we’ll chalk it up as a nice first step, and definitely a change from the recent carnage, but we still need to see more—many indexes are now doing more chopping than rising (the overall intermediate-term trend is basically neutral at this point), and most of the action in recent days has been among stocks that took the biggest hits (and thus still have a ton of overhead to chew through). Don’t get us wrong, we’re intrigued by what we see—it could prove to be the early stages of a change in character for growth stocks after three months in the outhouse—but the bulls still have more to prove before we meaningfully increase our exposure.

This week’s list remains mixed, with lots of turnaround and cyclical situations, but with a few growth-y issues too. Our Top Pick is Analog Devices (ADI), which has come back to life after a three-month rest thanks to great earnings, huge cash flow and a pending acquisition.

Stock Name	Price	Buy Range	Loss Limit
Acuity Brands (AYI)	180	176-181	162-165
Analog Devices (ADI)	163	159-164	145-148
Avery Dennison Corp. (AVY)	219	215-220	197-200
Blackstone Group (BX)	91	86-89	79-81
Children’s Place (PLCE)	95	90-93	80-82
EOG Resources, Inc. (EOG)	80	78-81	70-72
EPAM Systems (EPAM)	485	465-475	425-430
Owens Corning (OC)	105	101-104	92-94
Progyny (PGNY)	59	54.5-57.5	48-50
Roblox Corporation (RBLX)	89	85.5-89.5	73.5-76.5

We can’t say the market is out of the woods, as some major indexes still have work to do (small caps were very weak today) and a couple of bad days could be damaging. But just going with what we see, it’s hard not to be encouraged about last week’s action—after a month of pulling back, no primary indicator flipped to negative, and among individual stocks, the vast majority retreated grudgingly before many took off on the upside in recent days. We’re not going to overreact to a day or two of action, but the fact that our screens are turning up many more high-potential names has us nudging our Market Monitor back up to a level 7—though, as always, we’ll see how it goes during this week’s gauntlet of economic reports.

This week’s list is chock-full of solid growth ideas, with a smattering of cyclical exposure as well. Our Top Pick is a growth name that just broke out from a two-year base after earnings.

Markets have continued to improve, and so have economic statistics. Housing price increases—while slowing somewhat—are still on the rise, with the Case-Shiller Index posting a 7.3% increase in prices for the month.

ADP employment rose to 192,000, higher than the 183,000 expected. Job openings declined just a bit, to 8.5 million from 8.8 million last month. And the unemployment rate edged up from 3.8% to 3.9% in April.

This was a tough week for all of us as growth stocks, particularly tech stocks, were impacted by concerns over higher interest rates and slower economic growth. Events in China with its economic slowdown and European conflict are not helping matters either. This week we head to Chile for a double commodity play on food and electric vehicles.

Explorer stocks had a great week as Centrus (LEU) is up another 10%, Cloudflare (NET) adds 20%, Infineon (IFNNY) reports revenue jumping 33% and Ford (F) reports eye-popping sales results for July. Data and analysts are divided so stay cautiously optimistic and consider today’s new recommendation at the heart of U.S.-China rivalry.

This was a good week for the Explorer portfolio as all our positions advanced, led by NovoCure (NVCR), Sea Limited (SE) and Virgin Galactic (SPCE), which jumped 25% this past week. We now head into the fourth quarter, which may bring some turbulence as the election approaches. We will take what the market gives us but will be on guard. Our emerging markets timer (EEM) is still positive.

Today, we have a new recommendation in emerging markets that we hope will benefit from the biggest shopping day in the world.

With the exception of another nice gain by NovoCure (NVCR), this was a quiet week for the Cabot Explorer portfolio as the Nasdaq continues its march, up almost 35% so far in 2020. Our Emerging Markets timer (EEM) stays positive as some of these markets bounce back against the backdrop of very weak economies. Perhaps the worst is India with its latest quarterly GDP falling 24%. This issue’s new recommendation is a high quality stock in a growth sector with a wonderful high margin, low risk business model.

No question this is a challenging market but Explorer stocks held their ground. Cloudflare (NET) had a good week up five points, and Ford (F) remains my favorite pick on risk/reward basis. This week we move to a surprising trend that will benefit America, the climate, and your portfolio.

As we finish a tough year for stocks we should guard against pessimism since interest rate hikes should slow and level out and lower valuations for growth stocks could ignite a rally. Explorer stocks had little news as we sell one holding and are close to selling MP Materials (MP) as well. This week we go back to a small-cap medical technology stock trading at an attractive price.

It’s a busy and short Christmas week and like many of you, I was doing last-minute shopping and preparing to visit family.

Therefore, this is a brief update and instead of the usual stock-by-stock update, I can summarize as follows.

This is a short week as we begin the second half of 2023 with inflation down, recession fears fading, and the animal spirits of investors alive and well.

In the first half of 2023, market performance was positive and narrow, largely driven by the big tech names, and especially artificial intelligence (AI) related stocks. The Dow was up 3.8%, the S&P 500 gained 15.9%, and the tech-heavy Nasdaq was up 31.7%. We will continue to explore the world for the best value and growth stocks providing both conservative and aggressive ideas. EVs across the supply chain, resources, and emerging markets remain the focus but we have the flexibility to change course as opportunities arise.

U.S. stocks, buoyed by positive earnings, continued their move higher this week with the S&P 500 within striking distance of the 5,000 milestone.

Super Micro Computer (SMCI) shares performed even better, surging another 26% this week alone, and are now up over 100% in 2024. I suggest that you seriously consider taking some partial profits and letting the balance run. Super Micro is a leveraged play on Nvidia (NVDA) and other advanced chips for AI since it sells to the servers and systems that incorporate and support those premium chips in data centers.

While every situation is different, a pretty good rule of thumb for investors is to look for stocks of well-run companies with solid fundamentals in a sector that has been out of favor. Then check that the stock is in an uptrend with clear catalysts that support a further rise in its stock price.

Today, we add a stock that checks all those boxes.

The market was impressive last week. The S&P 500 moved 3.5% higher for the week, accounting for nearly half of the better than 7% YTD return. Hopefully the rally has further to go.

Investors love it that the banking issues have had the benefit of tempering the Fed with no apparent offsetting crisis so far. The expected timeline for the Fed to stop raising rates has moved way up, to one more rate hike from what could have been a hiking cycle that lasted the rest of the year.

Welcome news: The Fed holds interest rates steady in a sign tightening has peaked and that rates cuts may be coming in 2024. Big positive for stocks.

One of the Explorer’s themes is the exciting and potentially profitable sector of medicine and life sciences. A success story is Novo Nordisk (NVO), which is up about 45% this year. The Denmark-based company has been the talk of the pharma and medical world and even Hollywood with stars trying the firm’s diabetes and weight-loss medicines, Ozempic and Wegovy.

Explorer stocks had a good week. MercadoLibre (MELI) shares were up 10.2% in their second week as an Explorer recommendation. Coeur Mining (CDE) shares are a juggernaut, up another 11.8% this week and more than 308% over the last year. TransAlta Corporation (TAC) shares were up 12.8% this week as the focus on energy stocks intensifies. Archer Aviation (ACHR) shares, however, declined 8.7% this week as the market is looking for clear signs the company is on track for FAA certification, so I’m moving this stock to a hold.