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Here’s an update on the stock which rating has been upped to BUY.

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From a top-down perspective, it’s been a very encouraging week for the market: Not only are the major indexes sitting on solid gains coming into Friday morning, but many are testing key levels on the upside—the Nasdaq is toying with its 40-week line/200-day moving average, while small- and mid-cap measures are right at their December highs.

Investors remain in a buying mood, as last week’s lower-than-expected Consumer Price Index (CPI) number added fuel to the recent rally. With inflation still high and a recession likely upon us, another correction may be in the offing. But for now, it’s time to buy. This week, we add a dirt-cheap mid-cap stock from new Stock of the Week contributor Clif Droke, Chief Analyst of our Cabot SX Gold & Metals Advisor. It’s from an industry that never goes out of fashion and is gaining steam from the shifting automotive landscape.

Details inside.

In January’s Issue of Cabot Early Opportunities we take a trip down memory lane to January 2020, and try to take some of our own advice that seems even more timely now.

We also dig into five stocks that cover a wide variety of end market exposures. We unpack a small stock that represents a play on infrastructure and clean energy, two rising stars in MedTech, a consumer name that just won’t quit and even a beaten down growth stock that should recover as people get back out there later in 2021.



As always, there should be something for everyone!

It’s not a blastoff-type of environment, but the evidence has steadily improved during the past three weeks, first due to the action of leading growth stocks, and now, our Cabot Tides have returned to bullish territory. Thus, we continue to follow the evidence, slowly putting money to work and rotating into stronger situations. Last week, we averaged up in two of our recent buys, and tonight, we’re adding a full position in a fresh leader.

Elsewhere in tonight’s issue, we write about the ups and downs of recent IPOs, as well as one sector that is beginning to reemerge and has many stocks that fit our stock picking criteria.

The overall market remains mixed, with most of the market doing just OK but growth stocks acting very well, especially this week, which has brought with it a ton of powerful gaps. Divergent environments lend themselves to rotation and potholes, so we don’t think it’s a time to floor the accelerator, but we are adding one more name to the Model Portfolio tonight, leaving us with around 36% in cash.

Elsewhere in tonight’s letter, we write about the importance of being patient soon after you buy a stock, as well as some very encouraging action from our old Two-Second Indicator. We also review some enticing names and give a full view of all our stocks.

We started to see the market shake and bake a bit last week, which isn’t unusual considering the heady run the indexes and dozens of growth stocks have had since the late-June low. Exactly what happens next is anyone’s guess; our feeling is simply that the next month will probably be more difficult than the last month, so you should expect a few potholes or sudden selloffs. But with the main trend still pointed up, we think higher prices are likely in the weeks and months ahead. Thus, while plunging into a bunch of stocks right now probably isn’t the best idea, we do think you should work to remain (or work toward becoming) heavily invested.

This week’s list has some old friends and a couple of new faces. There’s lots of strength to choose from, but our favorite is Michael Kors (KORS) a fashion house with ambitious growth plans.

Stock Name	Price	Buy Range	Loss Limit
Under Armour (UA)	0.00	69.5-71.5	64-65
Ocwen Financial (OCN)	0.00	49.5-52	45.5-46.5
LKQ Corp. (LKQ)	0.00	28.5-30.5	25-27
Michael Kors Holdings Limited (KORS)	73.22	69-72	63.5-64.5
Jazz Pharmaceuticals (JAZZ)	0.00	77-80	74-75
Harman International Industries, Inc. (HAR)	0.00	66-69	59-60
Facebook, Inc. (FB)	0.00	37.5-39.5	32-33
Cubist Pharmaceuticals (CBST)	0.00	59-62	52-54
Baidu (BIDU)	0.00	130-136	118-120
Activision Blizzard, Inc. (ATVI)	0.00	17-18	15.5-16

Ever since the market suffered a wave of nasty distribution two weeks ago, it’s been tough to make much money; strength has attracted sellers, interest rate-sensitive groups have been crushed, the broad market has weakened and, today, growth stocks were battered. Now, the long-term trend is still up, and many stocks remain in uptrends, but the market has changed character. Thus, we’re moving our Market Monitor into neutral territory—maybe this retreat will find support soon, and if it does, we’ll be happy to quickly switch back to an aggressive stance. But for now, we believe it’s best to play things a little cautiously and hold some cash.

This week’s list does have a good crop of candidates if you want to nibble on weakness, including a few bigger-cap issues that have great stories. Our favorite is one of those bigger names—Boeing (BA), which, despite its image as a slow-moving behemoth, has a history of sustained moves when the aerospace industry turns up, as it has today.

Stock Name	Price	Buy Range	Loss Limit
Valeant Pharmaceuticals (VRX)	0.00	86-89	78-80
SunPower (SPWR)	12.26	17-19	14.5-15
Sohu.com (SOHU)	0.00	61-64	52-54
SodaStream (SODA)	142.91	65-67	55-57
Ocwen Financial (OCN)	0.00	41-43.5	36-37
Jazz Pharmaceuticals (JAZZ)	0.00	65-67.5	59-60
Illumina Inc. (ILMN)	289.74	68-71	63-64
Chart Industries (GTLS)	72.05	94-97	84-95
General Motors Company (GM)	0.00	33-34	31-32
Boeing (BA)	432.22	97-100	90-91

Quick Note: Due to the Christmas holiday, you will receive the next Cabot Turnaround Letter issue a week early, on Wednesday, December 18, 2024.

In today’s note, we discuss a number of positive developments and bullish outlooks for several of our portfolio positions, including American Airlines (AAL), SLB Ltd. (SLB), the SPDR S&P Retail ETF (XRT) and Super Hi International Holding (HDL).

Within the span of the weekend, Yevgeny Prigozhin, head of mercenary army Wagner Group, launched a highly publicized and well-armed takeover attempt against Russia’s Vladimir Putin-headed government, then melted away into the murkiness that is the Kansas-sized Republic of Belarus.

The market is weathering rising uncertainty as every major group of companies in the index, from banks to commodities, has climbed since the low point in April, with a small number of the usual mega-cap tech stocks leading the charge.


The World Bank announced it would lift its longstanding ban on funding nuclear power projects. The tide of sentiment is turning along with nuclear power stocks. The ban has been in place since 2013, but the last time the bank funded a nuclear power project was 1959.