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It’s not perfect, but the market has been putting one foot in front of the other in recent weeks, with more stocks acting well, more breakouts and the indexes refusing to pull in much. As always, we’re really just taking our cues from the trend of the market (intermediate-term trend up; long-term trend still down but getting close to flipping) and the action of leading stocks (better and better, but still not a bunch of new highs). We’re nudging our Market Monitor up to a level 6, though we’d still favor going slow overall and, ideally, entering on weakness.


This week’s list is another solid batch of stocks with excellent charts, including many that have really stormed ahead on big volume. Our Top Pick looked like it was done for a couple of months ago, but has stormed back to new highs thanks in part to a great post-earnings reaction.

Most of the overall evidence out there is the same as it has been for weeks, but there is one factor that is very encouraging for the bulls: Earnings season, which continues to produce a good-sized batch of gaps higher in growthy names, with another round of winners this past week; as things stand now, there should be plenty of leadership for the market to ride ... if big investors finally click the buy button. We’re far from flooring the accelerator, but we’ll nudge up our Market Monitor to a level 7.

As an example of what we just wrote, seven of this week’s Top Ten gapped on earnings last week, and while some still need a little work, all should have good potential if the market kicks into gear. Our Top Pick has reemerged after a long base-building effort last year and as some industry worries fade into the background.

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.

Last week we sold four stocks from the portfolio, clearing away the weakest stocks and giving us some breathing room (and cash), so this week there is no need for more selling But I do have two downgrades to hold (CSCO and SE).

As for today’s recommendation, it’s a household name whose stock is temporarily on sale—and you get a nice dividend too.



Details inside.

Today we are jumping into a small-cap biotech company that has a drug delivery platform that could completely revolutionize how injectable drugs are delivered.

The short version is that millions of people that require injections could, if all goes well, just take a pill instead.



While the risks are meaningful with any biotech, so too is the potential. Early data shows this platform works, and already there are programs being designed to deliver treatments for osteoporosis, Type-2 diabetes and arthritis.



It’s all inside this month’s Issue.

The broad market remains in fine health, with the major indexes trending higher and sentiment measures still bullish. Thus I continue to recommend that you be heavily invested in a diversified portfolio of stocks that fit your investment needs.

Last week’s recommendation was an undervalued cyclical business, and this week we swing back to a fast-growing cloud software stock with strong momentum and big upward potential.

Some weak economic numbers and political uncertainty about Hong Kong roiled markets a bit but emerging and international stocks rebounded a bit today. China stocks are getting some scrutiny in Washington amidst U.S.-China rivalry. Nevertheless, our new recommendation today is from the Middle Kingdom and is centered on a high growth theme that has a lot of momentum behind it.

An article demonstrates how soccer goalies actually stop more penalty kicks when they stay in the center of the net, but despite these results, the goalies almost always dive right or left. Why? Because not to act is to appear helpless, as if they don’t know what to do. And so it is in the stock market, for many people, both amateurs and experts. They’re always looking to do something ... but sometimes the best course of action is inaction.

It’s an extremely pivotal week for stocks, as the midterm elections and latest round of inflation data could go a long way toward determining how markets will finish out this difficult year. In the meantime, we’re adding the rare growth stock that has held up well amidst all the ups and downs of late, which should bode well for the coming months. It’s a retail favorite of Cabot Growth Investor Chief Analyst Mike Cintolo – and thus may look familiar to some of you.

Details inside.

During the past couple of weeks the market has shown some improvement—first, the big shakeout in the indexes on June 1 (following a disappointing jobs report) was quickly reversed, then the market and potential leaders consolidated amidst a rash of worrisome news, and now we’re seeing real buying appear—some stocks have already pushed to new high ground! That said, now’s a good time to keep your feet on the ground; by our measures the market remains in an intermediate-term downtrend, though that could change if the bulls continue making progress this week. Thus, while some small new buying here is fine, you shouldn’t put on your bullish hat until we see confirmation that the trend has turned up.

Whether you buy a little here or not, you should be sure to have your watch list in tip-top shape should an uptrend emerge. This week’s list has many great candidates, and our favorite of the week is Cerner (CERN), a leader in the IT healthcare segment, which features a couple of great-acting stocks. CERN lifted to new highs today on big volume.

Stock Name	Price	Buy Range	Loss Limit
Akorn (AKRX)	0.00	13.5-14.5	-
American Eagle (AEO)	0.00	18-20	-
AUXL (AUXL)	0.00	21-23	-
Biogen (BIIB)	0.00	136-140	-
Cerner Corporation (CERN)	0.00	83-86	-
Edwards Lifesciences (EW)	228.06	93-97	-
Equinix, Inc. (EQIX)	547.73	170-175	-
Skyworks Solutions (SWKS)	0.00	26-27.5	-
TripAdvisor (TRIP)	55.14	42.5-45	-
VeriSign (VRSN)	190.71	40-42	-

The market has pulled back after a huge run-up, which is normal action and likely not a product of renewed Fed fears that didn’t exist a week ago. These types of pullbacks in bull markets, like the new one we’ve just entered, are buying opportunities. And so today, we add a high-profile growth stock that is already up more than 80% year to date but may be just scratching the surface of its artificial intelligence potential, which could open up new revenue streams. It’s a new recommendation from Tyler Laundon in Cabot Early Opportunities.

I’ve been receiving questions recently that essentially ask, “Why did this stock go up when the company reported bad news?” and “Why did this other stock go down when the company reported good news?”

Explorer stocks put in a solid performance this week as Federal Reserve Chairman Jerome Powell was on Capitol Hill for two days of testimony. His remarks were parsed as if he were an oracle, but the takeaway seems that we are moving towards a rate cut dependent on labor markets cooling off a bit more.

I really don’t like paying too much attention to macro issues like interest rates and would rather focus on new ideas that most investors are not following closely. Right now, in a market so dependent on a small number of leading stocks, you can reduce your portfolio’s overall risk profile by adding some stocks in countries and sectors where expectations and downside risk are low.

In this Month’s Issue of Cabot Early Opportunities I discuss one simple way to measure how much a given stock will move relative to the market. I also feature five stocks, from quite small to larger than we normally go. All have something different going for them. We are tilted toward software names this month, though I round things out with another solar name and an emerging biotech opportunity.

Welcome to the inaugural issue of Cabot Income Advisor. It is my pleasure to share investment ideas that can provide you with a high income in today’s low interest rate world.
In this issue I highlight three stocks that are great buying opportunities right now for income investors. The stocks are chosen for their high yields, ability to generate attractive call premiums and the likelihood of capital appreciation over time.


While the market indexes have rebounded strongly from the March lows, many individual industries and stocks are still dirt cheap and high yielding, In fact, this is the best market in over a decade in which to find high yields in quality stocks.


Of course, the market is still dangerous and many high yielding stocks are in a precarious financial condition. Many will have to cut the dividend and the price will likely fall. While quality high yields are out there, stocks must be chosen wisely.


These three stocks are a great way to lock in high income and start to build your high income portfolio. Now is the time to embark on your journey to higher income and a more rewarding financial future. I look forward to being your trusted partner.