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Last week had a couple of big news items and, not surprisingly, the market was all over the place, with some strong up action, a wild reversal and then some support after the Fed’s talk. All in all, we consider the shows of support modestly encouraging, along with the fact that sentiment has taken a sharp turn lower as the worries of the world come back into focus. But nothing has really changed with the here and now: The intermediate-term trend of the major indexes and most stocks is pointed down, with few names making any progress. That can obviously change, but for now, we’re still patiently waiting for the buyers to retake control. We’ll leave our Market Monitor at a level 5 tonight.


This week’s list is another mixed set of stocks, though we like the fact that we’re seeing a few more positive earnings moves. Our Top Pick is trying to leave behind a multi-month range after its recent earnings surge.

Following a tough 9% dip in the Nasdaq and 6% haircut in the S&P 500, the market rebounded about as well as the bulls could have hoped--though, with that said, we don’t advise cannon-balling back into the pool per se, as the intermediate-term trend is mostly neutral here, interest rates are still a bugaboo and a lot of stocks still have work to do to repair the damage seen in late July and early August. Simply put, we see the past two weeks as a great first few steps for the market trying to emerge from its correction—but now we need to see continued follow through. We’ll bump our Market Monitor back to a level 6.

After a couple of so-so lists, this week’s crop of stocks is broad and includes many that have shown outsized buying volume of late. There are many enticing choices, but our Top Pick is threatening to break free from its recent launching pad and a giant post-IPO base after another great quarterly report.

The intermediate-term trend has turned up for all of the major indexes, the number of stocks hitting new lows is drying up nicely, individual leading stocks are acting well and, while it’s not a torrent, we are seeing some more breakouts and setups as the days go by. It’s not 1999 out there, with wide swaths of the market still repairing the damage from recent months, so we continue to favor a step-by-step approach when it comes to extending your line. We’ll move our Market Monitor up to a level 6 and will continue to raise it should the rally continue to gain steam.

This week’s list has another crop of super-strong charts, and from a variety of industries, too. Our Top Pick isn’t a lightning-fast mover, but it looks like the leader in a group that’s shown exceptional strength off the lows and has a history of trending nicely when conditions are favorable.

While there are new headlines each week that push and pull the overall market and individual sectors, the overall picture mostly remains the same: From a top-down perspective, the buyers continue to show up where they “should” after every pullback, keeping the intermediate-term trend of the major indexes up. Individual stocks remain trickier, and with earnings coming for most, that will probably tell the tale. We have seen a couple more breakouts of late, which is encouraging, but tonight we’ll stick with our level 7 on the Market Monitor and monitor how the gaggle of earnings reports are received in the days ahead.

This week’s list has something for everyone, including recent earnings winners, setups heading into quarterly reports and pullbacks in names that are already in strong uptrends. Our Top Pick rested in the summer and fall and has re-emerged on the upside.

Expensify (EXFY) reported after the bell yesterday and revenue was a touch light (2% miss) while EPS beat expectations on the back of strong margins. Revenue rose 7.8% to $43.5 million (missed by $850K) while adjusted EPS of $0.07 beat by a penny. Management reaffirmed long-term revenue guidance of 25% to 35%.

With the often-tricky September-October period behind us, and all trends positive, I’m happy to continue recommending that you be heavily invested in a diversified group of stocks that meet your investing needs.

Today’s recommendation is not a familiar name—it serves global businesses, not individuals—but it’s part of the solution to one of the globe’s biggest problems these days.



As for selling, something’s got to go, and it’s not an easy choice; most of our stocks look great. But rules are rules, so we’ll say farewell to long-time friend (and solid winner), NextEra Energy (NEE).



Details inside.

Today’s recommendation is a well-known pharmaceutical giant whose stock recently broke out above the high it hit in 2000, 22 years ago! But that’s not why it’s recommended today. Today’s story is all about new drugs and renewed growth.
As for the current portfolio, there are four stocks rated sell!


Details inside.

Current Market Outlook


First, the bad news: the intermediate-term trend of the market remains down, and there remains a wide swath of the broad market that’s in rough shape. But following some panic selling on October 15 and 16, the market’s rebound has been very, very impressive—the major indexes have quickly regained 70%-plus of their recent losses, many stocks found huge-volume support at the lows, and a few (mostly growth) stocks have already leapt to new highs. The market isn’t out of the woods, and even if it was, we’re still smack-dab in the middle of earnings season, so at the very least, volatility is a sure thing. All in all, we’re nudging our Market Monitor up into neutral territory—we still believe in holding some cash and keeping positions small, but we’re also seeing lots of stocks acting well.

This week’s list isn’t all go-go stocks, as it also has some “defensive growth” and some sector-specific winners. Our Top Pick is Celgene (CELG), a big-cap growth stock that, after 10 months of consolidation, is under extreme accumulation.

Stock Name	Price	Buy Range	Loss Limit
Union Pacific (UNP)	0.00	111-114	107-108
O’Reilly Automotive (ORLY)	0.00	166-169	159-160
Lennar (LEN)	61.85	42.5-44	40-40.5
Leggett & Platt, Incorporated (LEG)	49.79	36.5-38	34-35
Illumina Inc. (ILMN)	289.74	182-187	165-171
ICICI Bank (IBN)	0.00	52-54	48-49
Genuine Parts (GPC)	0.00	91-94	89-90
Celgene (CELG)	0.00	98-102	92-94
Alaska Air Group (ALK)	0.00	48-50.5	45-46
Akorn (AKRX)	0.00	41-43	38-39.5

The news media continues to whip investors into a frenzy over the direction of interest rates. Depending on where you look, you can find knowledgeable financial pundits making the case for steady, unchanging interest rates or for the Fed to lower the fed funds rate in July.

Learn about conservative investing strategies that deliver you double-digit income to boost your retirement. Tom Hutchinson’s Dividend Multiplier Strategy will supercharge your income. If you’re attracted to the prospect of generating an extraordinary income stream in today’s tumultuous market—safely—this is the advisory for you.

The bull market rolls on, with Jerome Powell and company only adding fuel to the buyers’ fire by affirming their intention to cut interest rates three more times this year. While the artificial intelligence hype cycle has slowed a bit, other sectors are starting to get noticed. One of them is MedTech. So today, we add a once-great MedTech stock that got slashed in half during the bear market of 2022 but has since climbed all the way back to new highs, thanks in part to a new product just approved by the FDA. It was enough to convince Tyler Laundon to add the stock to his Cabot Early Opportunities portfolio, and today we do the same.

The broad market has gotten jumpy again, but it’s no reason to panic. In today’s issue, we review why dividend stocks are better in downturns, add a conservative-aggressive stock to the Safe Income tier, and have earnings updates on all our stocks (four have already reported; the rest will over the next week.)

Current Market Outlook


As expected, we’re seeing a ton of day-to-day volatility in the market—last week the Nasdaq spiked higher by nearly 300 points in less than three days, only to give it all back since Thursday. But net-net, we really haven’t seen any change in the market’s picture, as the intermediate-term trend is pointed down for most indexes, sectors and individual stocks. The good news is that, as expected, earnings season has revealed a nice crop of potential leaders that are acting resiliently—this week’s list has a bunch of them to consider. But remember that, in a weak market, good-looking stocks can go bad in a hurry, which is why we advise holding a bunch of cash, and if you buy, you should keep positions very small and look to enter on weakness. We’re keeping our Market Monitor at a level 4 in today’s issue.

This week’s list is chock full of earnings winners, which, encouragingly, are generally holding up well despite the market’s latest slide. Our Top Pick is Etsy (ETSY), whose growth is picking up steam and stock is acting great.

Stock Name	Price	Buy Range	Loss Limit
Alteryx (AYX)	132.78	53-56	47.5-49.5
BioTelemetry Inc. (BEAT)	58.58	59.5-62.5	54-56
CyberArk (CYBR)	111.74	73-75	67.5-69.5
Dexcom (DXCM)	421.36	138-142	127-130
Etsy (ETSY)	112.97	49-51	43-45
Genomic Health (GHDX)	64.42	77-80	67-69
Horizon Therapeutics (HZNP)	49.89	20.5-21.5	19-19.5
The Mosaic Company (MOS)	29.22	34-36	31.5-32.5
Twilio (TWLO)	183.39	81-85	73-75
Ulta Beauty (ULTA)	331.95	298-305	278-280

Stocks inched further into record territory this week. And while there’s another big news event to weather this week (the Fed’s Jackson Hole meeting and Jerome Powell press conference), the market has already motored ahead in the face of a bad July jobs report and escalating inflation. The real test is likely to come in September, historically the worst month for stocks as Wall Street returns from its summer vacation and sells off its laggards. So today, we add a bit of safety in the form of a low-beta, high-yield utility courtesy of Cabot Dividend Investor Chief Analyst Tom Hutchinson. But this utility acts more like a growth stock, thanks to AI and data center buildouts.

Details inside.

Our plant-touching Cabot Cannabis Investor portfolio is up 29.2% since June 25. It is still down for the year. But it is performing better than the sector.

I believe it continues to make sense to stay long cannabis stocks, despite the big gains in the past month. Now, with the appointment of Terrance Cole to lead the Drug Enforcement Administration (DEA), cannabis investors are one step closer to learning how serious the Trump administration is about rescheduling cannabis.

Tuesday’s edition of The New York Times had a stock-centric article titled, “The S&P is Nearing a Record. Really.” The subtext, of course, is that stocks have climbed near February all-time highs despite a bevy of geopolitical tensions, potential economic landmines, and widespread investor and consumer pessimism. As I wrote last week, the market has fully recovered from its tariff-fueled cratering of late March and early April, but lingering uncertainties threaten to derail it at any moment … and that was before Israel and Iran started bombing each other.

Wall Street analysts expect stocks to be flat for the rest of the year. That’s according to a new Reuters poll, which surveyed 51 strategists, analysts, brokers and portfolio managers. Among them, the average year-end target for the S&P 500 was 5,900 – roughly in line with the current price, and essentially unmoved since the start of the year.

That’s not exactly exciting news, even if 5,900 would have felt like a win in early April, when the benchmark index dipped below 5,000 after President Trump’s now-infamous “Liberation Day” reciprocal tariff announcement. The rally since then has been impressive, but analysts aren’t confident we’ll get much more movement through the final seven months of the year.

Stocks are back in business!

Yes, a little more than a month after some of the worst investor sentiment readings in years, soaring volatility, and a 19% decline in the S&P 500 – not to mention both the Nasdaq and the Russell 2000 swinging to bear market territory – stocks are suddenly on a roll, recession fears are abating, and, perhaps most importantly, tariff deals have been struck. The 90-day pause on most reciprocal tariffs initiated by President Trump on April 9 – one week after the deeply unpopular “Liberation Day” was announced – triggered one of the biggest one-day rallies in stock market history. Indexes flirted with their early-April lows two weeks later but eventually stabilized, and May has brought a wave of positive tariff news – first, a deal with the United Kingdom, in which key imports like cars were reduced to 10% and steel and aluminum tariffs were eliminated; then, last weekend came a 90-day truce with China. That sent stocks soaring more than 3% on Monday, and they haven’t looked back.

The market has rallied like crazy over the past seven weeks. It’s up over 30% from the low in March. The market is already looking beyond the coronavirus to a strong economic recovery.

But stocks are trading on a rosy scenario that may not come true. While the market is always difficult to predict in the near term, there is at least a good chance of disappointment going forward. The overall market may have gotten ahead of itself and it is prudent to prepare for the possibility of more turbulence ahead.



For those reasons, the Cabot Dividend Investor portfolio is only buying very selectively. While the overall market may be shaky at this point, certain companies are thriving during the pandemic. There are niches where business is actually booming.



In this issue I highlight two stocks that are selling at bargain prices, have businesses barely affected by the pandemic, and stand to thrive in the post-Covid-19 market as well.

Stocks spent the holiday-shortened Thanksgiving week getting well and are again knocking on the door of all-time highs after a sharp pullback through most of November. Value stocks never retreated the way growth titles did, though, and are appearing more in favor by the day. That includes consumer staples, which are still undervalued despite recent momentum. In this month’s Cabot Value Investor issue, we add a once-prominent name from that group that trades at less than half its early-2025 highs – and yet the company never stopped growing. In fact, its sales are accelerating, making it a prime buy-low candidate.

Details inside.