Search

With economic data pouring in amid a slew of earnings reports there is a lot going on out there. The resulting stock price movements often drive a combination of heartache and exhilaration, and that has certainly been the case for us over the last two weeks.

This week’s update of Cabot Undervalued Stocks Advisor is focused on portfolio stocks that are being affected by recent news or upcoming earnings reports. Next week’s September issue will include all portfolio stocks, with at least one new portfolio addition.

Welcome to our 2026 TOP PICKS issue! This is one of my favorite issues each year as our Cabot analysts take a deep look at their portfolios and share their top stock ideas for 2026.

You’ll find a well-diversified selection of stocks—growth, value, dividend payers, metals, technology, healthcare, retail, manufacturing, and much more!

I hope you’ll find one or more to your liking!

Rich Howe, Chief Analyst of Cabot Micro-Cap Insider, has been researching micro-cap stocks for over 20 years and right now he sees a prime opportunity to invest.

In this webinar, he discusses historic returns of micro-caps, why now is such a good time to invest in them, and what to look for to pick the stocks that have the highest wealth-building potential

6 Tips for Making Money Trading Options + 2 Hot Trades Now | Jacob Mintz, Chief Analyst of Cabot Options Trader, talked about how you can easily use options in your investing strategy to make more money. PLUS he broke down two hot trades!

Today’s note includes earnings updates on 12 companies, the podcast and the Catalyst Report. We publish the Catalyst Report on the Friday after each monthly issue of the Cabot Turnaround Letter. There were no changes to any of our ratings this week.

Whenever the market acts extraordinarily (either on the upside or downside), investors tend to forget their discipline and act instead on emotion. But the best thing to do is to stick with your plan and keep it simple. In this environment, doing that has allowed us to ride many winners higher as the bull market has strengthened, as well as jump into plenty of names during temporary weakness. Overall, the market’s trend remains strongly up so we’re keeping our Market Monitor in bullish territory. While now likely isn’t a great time to buy a ton of extended stocks, there remain a good number of opportunities as the market continues to rotate into and out of various stocks and sectors.

This week’s list has stocks that are part of many of the recent leading themes—Japan, housing, young software firms, 3D printing and medical. Our favorite of the week is Realogy Holdings (RLGY), an interesting way to play the housing upturn. We’re intrigued with the volume expansion in the stock, as well as the company’s huge earnings estimates going forward.

Stock Name	Price	Buy Range	Loss Limit
The ExOne Company (XONE)	0.00	40-42	34-36
Workday (WDAY)	194.88	65.5-69	62-64
TripAdvisor (TRIP)	55.14	58-60	54-55
Toyota Motor (TM)	0.00	122-127	105-110
Splunk (SPLK)	207.67	43.5-45	41-42
Santarus (SNTS)	0.00	20.5-22	19-20
Realogy Holdings (RLGY)	0.00	52-53.5	46-48
PulteGroup (PHM)	45.93	22-23.5	20-21
Myriad Genetics (MYGN)	0.00	31-34	29-30
DIRECTV (DTV)	0.00	62-64	56-58

Last week’s action was encouraging, from both the major indexes (most of which have pushed back above their 50-day lines) and growth stocks, which are definitely leading the way higher. With rising interest rates still a worry and earnings season coming up, it’s likely that volatility will remain elevated; you shouldn’t throw money at the market willy-nilly. But we’re very encouraged by the straight-up, smoke-up-a-chimney type of action by the market and many stocks since the panic low in late-June. Our Market Monitor remains in the bullish camp.

This week’s list is a bit more diverse than we’ve seen of late, with many quality prospects to consider. Our favorite of the week is Pandora (P), which is a very jumpy stock we were knocked out of a few weeks ago, but its recent, powerful action is intriguing. Try to buy on weakness.

Stock Name	Price	Buy Range	Loss Limit
Thor Industries (THO)	104.76	48-50	41-42
Qihoo 360 (QIHU)	0.00	47-49	41-42
Pandora Media Inc. (P)	0.00	19-20	16-16.5
InvenSense (INVN)	0.00	14.5-15.5	13-14
Guidewire (GWRE)	90.60	42-44	37-38
Chart Industries (GTLS)	72.05	96-98	90-91
Ford Motor Co. (F)	0.00	15.5-16.5	13-14
Electronic Arts (EA)	0.00	22.5-24	21-21.5
DreamWorks (DWA)	0.00	24-25.5	21-22.5
Cree, Inc. (CREE)	67.96	65-68	60-61

It wasn’t surprising to see the market pick up some steam following the resolution to Washington’s latest deadline. But what has been surprising is the sheer strength seen from the broad market and leading stocks. They’re hot! And, as we had hoped, some new leadership is beginning to emerge during earnings season. Of course, investor sentiment is bubbly, earnings season is still ongoing and many stocks are extended, so some potholes are possible. But given the evidence, we’re shifting our Market Monitor back into bullish territory.

This week’s list has a bunch of names that had been taking a breather during the past two to four months, but have now come alive on big volume as the buyers return. Our favorite is Spirit Airlines (SAVE), one of the few airline stocks that has a true, sustainable growth story.

Stock Name	Price	Buy Range	Loss Limit
Tesla, Inc. (TSLA)	818.87	165-175	145-150
Seagate Technology (STX)	0.00	47-50	42.5-44
Stratasys (SSYS)	0.00	105-110	99-100
SunPower (SPWR)	12.26	32-34	26-27
SanDisk Corp. (SNDK)	0.00	67-69	61-62
Spirit Airlines (SAVE)	57.03	40-43	35-36
Google Inc. (GOOG)	0.00	980-1,000	862-882
Finisar (FNSR)	0.00	24.5-26	22-23
Bonanza Creek Energy (BCEI)	0.00	51-54	45-46
Athenahealth (ATHN)	0.00	130-138	116-118

After a very healthy advance from the mid-November lows, we’re starting to see a little distribution creep into the market; the indexes are chopping around a bit, some stocks have gotten hit on earnings and growth stocks in general have been lagging—not poor performance, but not superb, either. Now, with all that said, we can’t say the action is abnormal; earnings season always brings a few hiccups and the market deserves a breather after a big run. But just consider it a heads-up—the long-awaited market pullback could be starting. We’re keeping our Market Monitor in the bullish camp, as the odds are that any weakness will give way to higher prices.
This week’s list reflects where the strength lie in this market—mostly economically sensitive stocks, along with a smattering of earnings winners. Our favorite of the week is Las Vegas Sands (LVS), which just popped on earnings and is showing great strength after a two-year rest period.

Stock Name	Price	Buy Range	Loss Limit
Robert Half (RHI)	78.58	33.5-34.5	-
The Manitowoc Company (MTW)	0.00	17-18	-
Marathon Petroleum Corporation (MPC)	0.00	72.5-75.5	-
Las Vegas Sands Corp. (LVS)	0.00	52-54	-
HollyFrontier Corporation (HFC)	0.00	50-52.5	-
Community Health Systems (CYH)	0.00	35.5-37	-
CommVault (CVLT)	0.00	75-77.5	-
Credit Suisse (CS)	0.00	27.5-29	-
Celgene (CELG)	0.00	95-98	-
Cameron (CAM)	0.00	62-64.5	-

Last week we wrote that usually the first shakeout after a multi-week thrust isn’t the last, and indeed, we’ve seen some follow-on profit-taking among the market’s strongest stocks. There has been a little abnormal action here and there (mostly in biotech, but some elsewhere, too), but so far, the vast majority of stocks are simply pulling back after big-volume moves to new highs. If the selling spreads and the uptrend fails, then we’ll change our advice. But, as usual, we advise going with the weight of the evidence, which today remains bullish. Thus, hold your top performers, and adding a stock or two on dips is still favored.

This week’s list has a diverse flair to it—it’s not all high-flying stocks like we saw during February. But there is still plenty to like, including our Top Pick, Novo Nordisk (NVO), which has a solid growth story and a chart that’s at a fine entry point.

Stock Name	Price	Buy Range	Loss Limit
Under Armour (UA)	0.00	110-115	99-102
Trina Solar (TSL)	0.00	17-18	14-15
SouFun (SFUN)	0.00	88-90	78-80
Qihoo 360 (QIHU)	0.00	112-120	97-100
Novo Nordisk (NVO)	0.00	44.5-46.5	41-42
MasTec, Inc. (MTZ)	66.65	40-42	37-38
Magna International Inc. (MGA)	0.00	94-96.5	88-89
CoStar Group (CSGP)	589.55	200-208	182-185
Athenahealth (ATHN)	0.00	178-182	154-156
Alaska Air Group (ALK)	0.00	87-90	80-81

Last week’s market action provided an awesome opportunity to discover leading stocks; they were the ones that quickly bounced back from the broad market selling and broke out to new highs! It’s not often you get such a clear opportunity to separate the wheat from the chaff, but when you do, it’s worth taking advantage of. Today, all those stocks that broke out are on our favored list, while those that bounced weakly are suspect. And those that did worse? They should be sold—note that our Hold list on page 12 has shrunk a bit. Also arguing for selling is the fact that our Market Monitor remains in neutral territory, mainly because the market’s intermediate-term trend is down. In short, holding some cash and keeping new buys small is advised. Our favorite stock in today’s crop is WebMD (WBMD), which has solid growth prospects and a great technical set-up.

Stock Name	Price	Buy Range	Loss Limit
WebMD Health Corp. (WBMD)	0.00	44-46	39-40
Twitter (TWTR)	40.37	60-65	54-55
Sangamo BioSciences (SGMO)	0.00	16.5-18.5	14-15
Royal Caribbean Cruises (RCL)	0.00	47-50	45-46
Qihoo 360 (QIHU)	0.00	95-98	84-85
Pandora Media Inc. (P)	0.00	33-36	30-31
NPS Pharmaceuticals (NPSP)	0.00	32-35	29-30
Keryx Biopharmaceuticals (KERX)	0.00	14-15.5	12.5-13.5
Facebook, Inc. (FB)	0.00	60-62.5	55-56
Concur Technologies (CNQR)	0.00	113-115	100-102

Current Market Outlook


There’s nothing bad to say about the market’s quick rebound two weeks ago and its ability to hold those gains—at the very least, such action from the big-cap indexes and many leading stocks is a good longer-term sign. But it’s also important to look at all of the evidence, and on that front, things are mixed—broader indexes are still hanging around their 50-day lines (acceptable, but not overly powerful) and the number of names hitting new highs has dried up. That doesn’t necessarily portend doom, but it does describe an environment that’s a bit more hit-and-miss, especially with a ton of earnings reports set to be released. Overall, you should remain bullish, but be a bit discerning on the buy side, looking for names that have shown excellent recent strength and volume.

This week’s list has many stocks that meet that criteria, including a few that have popped after earnings. Our Top Pick is Lumentum (LITE), which recently came out of a very long launching pad and, after a four-week rest, has taken off after earnings.

Stock Name	Price	Buy Range	Loss Limit
AAXN (AAXN)	87.11	83-86	74-76
Bilibili (BILI)	28.71	23.5-25.5	20-21
Bill.com Holdings (BILL)	88.76	54-57	47-49
DocuSign (DOCU)	107.98	82-84	73.5-75
GDS Holdings Limited (GDS)	80.15	57.5-59	52-53
Insmed Inc. (INSM)	30.64	30.5-32.5	27-28
Lumentum (LITE)	87.00	86-89.5	76-78
Nuance Communications, Inc. (NUAN)	25.35	21-22	18.5-19.5
Old Dominion Freight Line Inc. (ODFL)	221.91	212-216	195-197
Scotts Miracle-Gro (SMG)	155.72	119-122	110-112

Current Market Outlook


Following last week’s rolling crash in the market, everyone is wondering what comes next, but instead of predicting (guessing), it’s better to stick with the facts. Here’s where the evidence stands: The intermediate-term trend is clearly down for all major indexes and most (though not all) stocks, and given that this comes after a prolonged advance, some time is likely going to be needed to repair the damage. Short-term, though, we did see some legitimate extremes in a few key measures (900-plus new lows on the NYSE on Friday; just 3% of S&P 500 stocks above their 50-day line; record SPY volume on Friday) that says today’s bounce could go further. All together, it’s best to be in a cautious stance (holding cash, limiting new buying, pruning your worst performers), though you shouldn’t panic out of everything—holding on to your resilient winners is fine, and if you have plenty of cash, a little buying is fine as well.

This week’s list is a good place to start building your watch list (or, if you’re in the buying mood, looking for candidates to nibble on). Our Top Pick is Regeneron Pharmaceuticals (REGN), which has a good overall story and what could be a big catalyst, too. Aim for dips.

Stock Name	Price	Buy Range	Loss Limit
Atlassian (TEAM)	182.16	142-146	131-133
Bill.com Holdings (BILL)	88.76	55-58	47.5-49
Cloudflare (NET)	39.32	20.5-21.5	18-18.5
Datadog (DDOG)	81.52	42.5-44.5	39-40.5
Dexcom (DXCM)	421.36	267-277	239-242
Enphase Energy (ENPH)	46.70	48.5-51.5	42.5-43.5
Regeneron Pharmaceuticals (REGN)	512.96	435-455	390-400
RingCentral (RNG)	238.73	223-231	202-206
Seattle Genetics (SGEN)	150.85	107-111	98-101
Square, Inc. (SQ)	91.04	78-81	71-73

Coronavirus fears re-emerged in a big way over the weekend, causing today’s across-the-board selloff. As we look at the evidence, here’s what we see: The intermediate-term uptrend has been cracked, especially when you look at the broader major indexes, and given that this selling comes after a big run and more than a few yellow flags during the past month, it’s likely we’re in a correction that will take some time to play out. That said, it’s also very unlikely that this is the end of the overall bull market, as the longer-term trends and stance of the indexes and most leading stocks are positive; heck, many stocks look just fine (so far) on their charts. Put it together, and we think it’s time to play a little defense and build up some cash by cutting losers and laggards, though we’re also aiming to hold most of our resilient, profitable performers, giving them a chance to hold up and get going.

Encouragingly, this week’s list has a bunch of decent-looking growth-oriented names to consider. Our Top Pick is Zoom Video Communications (ZM), which has not only a very strong chart but also a growth story that appears to benefit from the spread of the coronavirus.

Stock Name	Price	Buy Range	Loss Limit
Advanced Micro Devices (AMD)	82.24	47-50	43-44.5
Carvana (CVNA)	82.90	102-106	91-94
Domino’s Pizza (DPZ)	339.47	353-365	320-327
Floor & Décor (FND)	68.03	55-57	50-51
HealthEquity, Inc. (HQY)	70.70	80-83	72-74
MercadoLibre, Inc. (MELI)	980.83	660-690	620-640
SiteOne Landscape Supply (SITE)	98.49	108-112	98-100
SolarEdge Technologies Inc. (SEDG)	124.37	132-137	116-119
Zillow (Z)	76.64	57.5-60	52-53.5
Zoom Communications (ZM)	155.83	100-105	86-89

First and foremost, all of us at Cabot wish you a great long holiday weekend; our offices will be closed tomorrow but we’ll be back at it again on Monday.

As for the market, the story remains largely the same--there are some blemishes, but most of the evidence is positive, so we’re sticking with a heavily invested stance, albeit with some moves based on the action of individual stocks. Earlier this week, we trimmed a bit, leaving us with around 14% in cash.



In tonight’s issue, we write about one new liquid leader we’d love to own at the right price, along with all our latest thoughts on our stocks and the market.

Growth stocks have changed character over the past week, with abnormal action and breakdowns appearing. The good news is that a major top doesn’t appear to be in place; the general market is still hanging in there for now, and the long-term trend of most leaders is still up. But, taking things on a stock-by-stock basis, we’ve pared back a bunch and are actually holding more than half the portfolio in cash. That’s probably too high (we’d like to put some to work in fresher leaders), but we’re content to patiently wait for buyers to support the market.

In tonight’s issue, we review all our stocks, dive into the two main factors to your investment returns and go over many fresher names that could help lead the market’s next upmove.

Current Market Outlook


While the day to day volatility remains extreme, the market’s intermediate-term trend has turned up (according to our measures), which argues for a more constructive stance toward stocks. Of course, that doesn’t mean you should dive in headfirst—there remain plenty of headwinds, including the fact that most stocks are still below their 50-day and 200-day moving averages (i.e., plenty of potential selling to chew through on the upside). But there’s no question the evidence has improved, so it’s a good idea to slowly put money to work, and then use the market for feedback; If you develop some solid profits, you can become more aggressive, but if the uptrend decisively cracks (would take a 6% to 7% drop from here), you want to hold off further buying and honor your stops.

This week’s list continues the trend we’ve seen of many high-potential stocks spiking back toward their old highs. Our Top Pick is Okta (OKTA), which has rejoined the leadership ranks after nine-months of correcting and consolidating.

Stock Name	Price	Buy Range	Loss Limit
ACADIA Pharmaceuticals (ACAD)	47.84	48-50.5	42-44
Advanced Micro Devices (AMD)	82.24	53-56	47-49
ASML Holding (ASML)	350.01	285-295	257-263
CrowdStrike (CRWD)	105.02	65-67.5	56-58
Franco-Nevada (FNV)	125.51	122-126	109-111
Immunomedics (IMMU)	34.23	20.5-22	16.5-17.5
Okta, Inc. (OKTA)	148.41	146-152	127-130
Sea Limited (SE)	132.86	51-53	46-47
Shopify (SHOP)	585.00	575-615	510-525
Tradeweb Markets (TW)	51.44	50-52	45-46

The market is in the midst of a short-term consolidation, which usually dishes out some pain and offers tedious action, which is what we’re seeing so far—earlier this week, we cut bait with one stock and have tight leashes on a couple of others. Further near-term shenanigans are possible, even likely, so we’re taking things on a stock-by-stock basis, but we’re also not opposed to putting money to work in resilient leaders—which we’re doing tonight, starting a half-sized position in a name we’ve long thought has the characteristics of a future winner.

Current Market Outlook


After the umpteenth test of their February lows and 200-day moving averages, the major indexes have surged over the past couple of days, with many potential leading stocks going along for the ride. Put together, the action is very encouraging and raises the odds that we’ve seen a tradeable bottom. However, despite the uptick, we haven’t yet gotten a green light from our intermediate-term—a good day or two from here could do the trick, but we don’t anticipate signals. Thus, right here, we’re sticking with our current, cautious stance, though we’re keeping our eyes open for definitive signs that a new intermediate-term uptrend has begun.

This week’s list is chock-full of stocks that look like they want to move higher if this rally is the real McCoy. Our Top Pick is Shake Shack (SHAK), which catapulted higher on earnings last week on its heaviest volume ever. Keep positions small and use a loose leash.

Stock Name	Price	Buy Range	Loss Limit
Box Inc. (BOX)	0.00	23-25	21-22
Ecopetrol (EC)	22.17	20.5-22	18.5-19.5
Interactive Brokers (IBKR)	0.00	74-77	68-70
Realpage (RP)	0.00	57-59.5	53-54
Sarepta Therapeutics (SRPT)	120.93	85-88	76-78
Shake Shack (SHAK)	92.08	54-58	48-50
Shutterfly (SFLY)	94.71	89-93	82-84
Splunk (SPLK)	207.67	106-110	97-100
Valero Energy (VLO)	97.40	109-113	99-101
Zendesk (ZEN)	82.19	51-54	46-48