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It was a down week for the market as the Dow initially led the indexes lower early in the week, then was followed by the Nasdaq later in the week. Though on a positive note, the market rebounded nicely from its lows on Friday afternoon.

By week’s end the S&P 500 was down marginally, while the Dow and Nasdaq both lost 1%.

The market has been singing a more bullish tune lately and small caps are back in the headlines.

That’s because small caps enjoyed a nice rally after last week’s CPI and PPI data came out and the 10-year yield retreated.

Market observers have seen that the market rally has been broadening beyond just the Magnificent 7 and that small and mid-caps (SMID-caps) have been getting in on the action as well.

When looking for undervalued stocks, you want to companies with good growth prospects too. Here are 10 that fit that bill.

The market has been jumping around lately as it digests the Fed’s announcement last week that it expects to hold interest rates steady until 2020 (and just one hike in that year) and would stop shrinking its balance sheet later in 2019.

After a fairly quiet March, emerging markets came to life this week after the revelation of unexpectedly strong manufacturing growth in China, progress on trade talks and lower interest rates—which always help emerging markets.

This week we have a new recommendation that helps power emerging market consumer spending, a key driver as these markets transition from exports to consumer spending to fuel their growth.

WHAT TO DO NOW: The market has pulled back a bit this week after a big recent run, but most things have taken the selling in stride. Further weakness can’t be ruled out, especially in the near-term but with the market digesting well and our intermediate-term indicators looking good, we have a few moves tonight. First, we’re going to sell our small position in Flutter (FLUT), but we’re also adding half-sized positions in Axon Enterprise (AXON) and ProShares S&P 500 Fund (SSO), the latter of which we’re averaging up in. We’re also placing Take-Two Interactive (TTWO) on Hold. Our cash position will still be around 47% after these moves.

There is a growing mental health crisis going on out there.

But it’s starting to be addressed by a tiny, unknown (so far) company with a virtual care platform that’s beginning to make a difference across the U.S. And it’s doing so while growing both the top and bottom lines.

All the details are inside the April Issue of Cabot Small-Cap Confidential.

This is a big week for financial markets, with the Fed holding interest rates steady, $11 trillion worth of tech companies reporting earnings, a key jobs report, and a tariff deadline with China and India looming. The market pulled back as Chairman Jerome Powell indicated the Fed may not be ready to cut interest rates as expected.

But 7,392 miles from the canyons of Wall Street, an AI global governance plan was released at the World Artificial Intelligence Conference in Shanghai, which called for establishing an international open-source community through which AI models can freely be available. About 800 Chinese and international companies attended the summit.

We’re selling this portfolio stock with a 54% profit since its December 2019 recommendation.

Roger Conrad founded the Utility Forecaster newsletter in 1989. He tracks a more than 250 essential services securities, employing a rigorous five-stage methodology that includes a proprietary safety rating system and a value index that compares prospective total returns with a security’s current price-to-earnings ratio. Subscribers to the Utility Forecaster...

The market remains in fine health, with many of our stocks hitting new highs and a slew of earnings reports providing reassurance that the good times are not over yet.
For today’s recommendation, we have another financial stock to replace the one that was sold profitably last week. It’s a strong sector, with no end to the strength in sight.
As for the current portfolio, overall, our holdings are performing well. But we have one sell, an emerging market stock that’s gone the wrong way and presented us with a small loss. Details in the issue.

Many stocks are rising—either toward former highs, or surpassing recent highs—because the companies are growing profits very well. It’s not “Trump,” nor “irrational exuberance,” nor “a lack of other good investment markets.” It’s simply strong earnings growth.

We’re not ready to declare an end to the market’s correction, despite last week’s encouraging action. After all, a horrendous November (the Nasdaq was down more than 10% for the month before last week’s rally) was bound to lead to some type of bounce; what happens from here will be key. Regardless, there’s no question that many stocks improved their standing, finding big-volume support and, in some cases, shooting to new peaks. These are the names you want at the top of your watch list; the first groups out of the gate usually lead the ensuing bull move. For now, we advise continued prudence – buying just small amounts, keeping some cash on the sideline – but you should also be ready to turn bullish if the market follows-through powerfully in the days ahead. This weeks’ Top Ten contains an eclectic mix of names, some conservative, some high-flying. Our favorite: Turkcell (TKC), the leading wireless service provider in Turkey, which is registering strong bottom-line growth. We love the big-volume upside of late, a sign big investors will support the stock on any pullback.

Stock Name	Price	Buy Range	Loss Limit
ANR (ANR)	0.00	25-28	-
DV (DV)	0.00	50-55	-
FOSL (FOSL)	0.00	40-43	-
ISRG (ISRG)	0.00	310-325	-
OSIP (OSIP)	0.00	42-46	-
SLT (SLT)	0.00	22-25	-
SOHU (SOHU)	0.00	53-60	-
TKC (TKC)	0.00	24-27	-
VRSN (VRSN)	0.00	38-40	-
WFR (WFR)	0.00	73-77	-

The market decline of the past month has turned Cabot’s long-term trend-following indicator negative (after 30 months on the positive side), so it’s time to recognize that the tide is now going out. Defense is now a major part of the game.

Recognizing the risk in today\'s hot market, today’s selection is not a hot stock; it’s a slower grower, a big stock with a heathy and growing dividend that’s technically in the leisure services business.

In today’s note, we discuss developments and institutional ratings upgrades for some of the stocks in the portfolio, including Agnico-Eagle Mines (AEM), Atlassian (TEAM), GE Aerospace (GE), SPDR S&P Retail ETF (XRT) and Starbucks (SBUX).

While only insiders will be attending the Federal Reserve’s annual Jackson Hole symposium, which starts this morning, markets will react to any hints on the Fed’s move to tighten monetary policy and lift interest rates.

The bull market remains alive and well, with major indexes hitting new highs in the last week. However, growth stocks in particular have been hit hard recently—finally spilling into the broad market in the last few trading days—and that requires some selling, so today we’re purging four of our weakest performers from the portfolio. As for new buying, today’s recommended stock is growing by consolidating a fragmented mature industry. It just came public this year, so it’s a name few investors are aware of. The stock was originally recommended by Tyler Laundon in Cabot Early Opportunities.

Details inside.



Lastly, I hope you’ll join me for the 9th Annual Smarter Investing, Greater Profits Online Conference, August 17-19. We have an incredible lineup of experts ready to share their best picks.

In tonight’s issue, we dive into some education, revealing a long-term chart pattern that bodes well (including one stock that’s at the top of our Watch List now). We also give you all our latest thoughts on the market and our recommended stocks, and present the usual crop of new ideas if you have some cash on the sideline.