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Current Market Outlook


There are a still a couple of flies in the market’s ointment, but the past week or two has seen the market broaden out—the Nasdaq and growth stocks are still leading the way, but the S&P 500 and NYSE Composite have joined them in new high ground, and even the lagging small- and mid-cap indexes have perked up. Market-wise, then, the evidence has improved, so we’re nudging up our Market Monitor to a level 9. Just as important, though, is handling your stocks correctly—right now, many are extended to the upside, though some are just emerging while others look like great buys on any dips. Long story short, you should remain bullish, but honor your stops and continue to pick your spots on the buy side.

This week’s list has another batch of strong growth stocks. Our Top Pick is JD.com (JD), which catapulted to all-time highs a month ago on earnings and has calmly consolidated since.

Stock Name	Price	Buy Range	Loss Limit
Autodesk (ADSK)	229.00	107-112	99-102
Bob Evans Farms (BOBE)	0.00	67-70	62-63.5
Broadcom Limited (AVGO)	266.26	245-255	227-232
Graco Inc (GGG)	0.00	109-113	101-103
JD.com (JD)	39.58	38-40	35-36.5
Lumentum (LITE)	87.00	56-58	51-52.5
Marriott Vacations (VAC)	0.00	116-120	105-108
Marvell Technology Group (MRVL)	36.88	16.8-17.5	15.8-16.2
ServiceNow (NOW)	341.86	102-105.5	95.5-97.5
Weibo (WB)	98.16	73-76	66-68

Many U.S. retailers are struggling, but the best retail stock right now takes advantage of a brick-and-mortar niche that still appeals to consumers.

The potential vaccine and mixed election results pushed the market forward this past week, but the acceleration of the pandemic and near-term uncertainty in Washington pulled it back. It is a time to be a bit cautious. Emerging markets are showing some strength, as our timing indicator turns decidedly positive. Rotation into international stocks may be coming.

Alibaba (BABA) is a good example of the push and pulls. The Chinese e-commerce giant raked in a record-breaking $56 billion in sales in the first 30 minutes of China’s Singles’ Day on Wednesday, much higher than the $38 billion total in the entire 24-hour period last year. In comparison, Amazon booked $10.4 billion during its two-day Prime Day event last month. Yet, Alibaba’s stock was down sharply for the week. Find out why inside, where you can also learn about this week’s new SPAC recommendation.

Current Market Outlook


The divergence continues, with the broad market looking increasingly weak. Even the rally last week couldn’t lift many stocks off their bottoms. So what comes next? Optimists may claim that low interest rates mean there are no attractive alternatives to stocks, but pessimists will note that divergences such as these seldom end well. Thus our market monitor remains unchanged—in slightly positive territory. You can still make money in this market, but more than ever, skillful stock-picking, combined with proper entry timing, is critical. So we urge you to study numerous individual stocks carefully. Try to buy on normal pullbacks. And above all, keep losses small if a stock doesn’t do what you hired it to do. Today’s roster includes some strong breakouts and a handful of set-ups, and our Editor’s Choice is Vantiv (VNTV), which vaulted out to new highs last week on a positive earnings report and is riding a fine trend of long-term growth.

Stock Name	Price	Buy Range	Loss Limit
Zoës Kitchen (ZOES)	0.00	43-45	39-39.5
WisdomTree (WETF)	0.00	24-26	21-22
Vertex Pharmaceuticals (VRTX)	230.36	135-137	121-123
Vantiv (VNTV)	0.00	42-45	39-40
ServiceNow (NOW)	341.86	76-78	72-73
Masco (MAS)	0.00	24.5-26	23-24
ICON plc (ICLR)	0.00	78-80.5	71-72
Equinix, Inc. (EQIX)	547.73	270-280	260-265
Buffalo Wild Wings (BWLD)	0.00	188-193	174-176
Anacor Pharmaceuticals (ANAC)	0.00	144-151	125-130

Thank you for subscribing to the Cabot Undervalued Stocks Advisor. We hope you enjoy reading the November 2022 issue.

While sharp declines in hyper-growth tech stocks to below their pre-pandemic prices may seem like the proverbial “end of days” has arrived, the fall-off is more a return to normal following a period of vast excesses.

It’s been a challenging week for growth investors as the stocks that climbed the fastest are getting hit the hardest, such as our Cloudflare (NET) position, despite still posting strong numbers. On the other hand, Oracle (ORCL), where expectations are more modest, jumped from 89 to 104 this week on earnings that beat expectations.

There is one topic that brings together Wall Street, Hollywood and Silicon Valley – the metaverse. While “metaverse” definitions are varied, the idea of bringing people together in a virtual interactive world is, as they used to say, the talk of the town.

The market has entered a rough patch, especially for tech and stocks that have not been demonstrating relative strength. Explorer stocks are all over the map, with Coupa (COUP) and Cloudflare (NET) showing some weakness, many positions holding steady, and Novonix (NVNXF) up 25% in the last week.

This month we’re jumping into a small software company that provides solutions for a specific small- and mid-sized business (SMB) market.

While the market for SMB software has been tough for the last two years, this company’s revenue growth has accelerated and customers that bailed in 2022 are coming back. In short, best-of-breed software isn’t dead! And this player is about to become profitable too. Enjoy!

This was a good week for Explorer stocks, and as we head into the end of the year, Sea Limited (SE) is so far up 190%, IBM (IBM) is up 48% and Dutch Bros (BROS) was up 62% in November alone.

Tariffs are topic one in Washington and the financial media. Markets don’t know how everything will work out. Mexico is America’s largest trading partner, followed by Canada and then China. America still imports 4 million barrels of crude oil a day from Canada, which is also a key partner on the critical minerals front. More than half of America’s imports of fruits and vegetables come from Mexico. Automakers, which have built factories in Mexico to produce vehicles for the American market, are at risk and their stocks are falling at the wrong time.

But there’s one huge (non-Tesla) exception, which we will add to the Explorer portfolio today.

Why the AT&T/T-Mobile USA deal isn’t good for cell phone customers.

IAC/Interactive Corp. (IACI) is up 40% since it was recommended as a top pick in January.

This year marks the 30th year of the Dick Davis Digests’ publication. In addition, later this week, the Investment Digest will publish its 700th issue. Dick Davis started the Digest in 1981, in the middle of a two-year recession. You can see by the orange arrow on the chart of the...

We wrap up a fruitful year with a December Issue of Cabot Early Opportunities highlighting five names spanning everything from bottled water to social media to bitcoin mining.

I like the diversity of this Issue, which has something for everyone.

*Note: Your next issue of Cabot Options Trader Pro will arrive next Tuesday, May 27 due to the market holiday next Monday, May 26 in observance of Memorial Day.

Sparked by positive trade developments, the stock market raced higher last week as the S&P 500 rallied 5%, the Dow gained 3.4%, and the Nasdaq added 6%.

*Note: Your next issue of Cabot Options Trader will arrive next Tuesday, May 27 due to the market holiday next Monday, May 26 in observance of Memorial Day.

Sparked by positive trade developments, the stock market raced higher last week as the S&P 500 rallied 5%, the Dow gained 3.4%, and the Nasdaq added 6%.

The first quarter of 2025 has been interesting, to say the least. We wrap it up with the March Issue featuring names across the software, security, coffee chain, specialty metals and sports betting markets.

A few familiar faces, and a few new ones, should mean something for everybody. Details inside.

Andy Crowder has been making investors money for over two decades with his unique options trading approach. Now, he joins the Cabot team!

Forever Stocks don’t need to be sold to make money. You can count on them to be viable not only today, but 20 or 30 years from now.

The S&P 600 SmallCap Index is flat over the last week.

The upside move from the extreme oversold conditions that began two weeks ago has faded as the market grapples with tariff uncertainty.

Uncertainty will continue to linger even though Trump clarified part of his tariff plan last night through an executive order imposing permanent tariffs on autos not produced in the U.S.