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Tesla remains on course as the leading force in the transition from a fossil fuel automobile environment to one powered by efficient electricity.

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	-

The evidence has gotten a bit worse during the past week, with more misses than hits among leading growth stocks, and with the major indexes sagging a few days in a row. That said, early January is often tricky, with lots of crosscurrents, profit taking, repositioning and so on, so we’re hesitant to change our stance for the moment unless we see a decisive show of strength or weakness. The good news is that we are seeing more proper set-ups from many names that rested during the past six to 10 weeks; if a bunch of them emerge, it would give us some newer, fresher leadership to sink our teeth into.

This week’s list includes a bunch of smaller and less-well-known ideas, which we view as a good thing; most of the “obvious” stocks are either chopping around or suffering through some selling. Our Top Pick this week is YY Inc. (YY), which has had a huge run, but isn’t overly pricey and just surged out of a multi-week tight area. It’s very volatile but the potential is big.

Stock Name	Price	Buy Range	Loss Limit
YY Inc. (YY)	0.00	54-58	49-50
WisdomTree (WETF)	0.00	16-17	14.5-15
Western Digital Corporation (WDC)	0.00	80-83	75-76
Workday (WDAY)	194.88	81.5-85.5	77-78
Spirit AeroSystems (SPR)	92.54	32.5-34	30.5-31
NPS Pharmaceuticals (NPSP)	0.00	30.5-32	26-27
Jazz Pharmaceuticals (JAZZ)	0.00	120-127	112-113
Himax Technologies (HIMX)	0.00	12.5-14	11.5-12
E-House Holdings (EJ)	0.00	13.5-14.5	11-12
Canadian Solar (CSIQ)	0.00	33-35	28-29

The upward trajectory for growth stocks that was smooth sailing in November has turned far bumpier in December.

The huge market rally earlier this week gives us a taste of what lies ahead on the other side of this pandemic. The lockdowns will end and the economy will boom. Many stocks that have not participated in the market recovery will come alive.

While the market indexes have recovered, many stocks and sectors have not. Technology may be booming but energy, travel and hospitality, finance and other industries are still wallowing in bear market oblivion. It is these stocks that came alive this week and they should benefit when the virus fades and the recovery gains full traction.



It’s time to invest for the other side of the pandemic. In this issue, I highlight one of the very best income stocks in the history of the market. While the company has remained profitable, it has experienced a disproportionate selloff. The stock is still cheap but starting to move ahead of the next phase of this recovery.

The market found a little support today, but there’s little doubt that growth stocks remain in a correction and the overall market is coming under pressure. We don’t have a strong opinion on the near-term path, but right now, no real money is being made, so we think less is generally more when it comes to stocks--we’re being patient until this correction finishes up.

That said, there should be some great opportunities on the long side once this correction finishes up, and we spend a lot of space in this issue talking about some indicators we’re watching closely as well as a bunch of names we’re keeping our eye on for potential leaders of the next upmove.

Current Market Outlook


After a quiet-but-good holiday week (except for the energy stocks, which have crashed), the sellers came out of the woodwork today, pulling down many stocks that have enjoyed good runs. Big picture though, while there remain a few yellow flags and divergences (including the small caps, which are again acting poorly), the major trend remains up for the indexes and the vast majority of stocks. Thus, our advice is to remain bullish, and to remain focused on what’s working—for many stocks, this pullback could go further, but the odds favor weakness leading to higher prices in the weeks ahead.

This week’s list has a slightly larger-cap tint to it, but all of the stocks have enjoyed huge-volume buying sometime during the past month. Our Top Pick is D.R. Horton (DHI), the nation’s largest homebuilder that’s participating in a powerful upmove for that group.

Stock Name	Price	Buy Range	Loss Limit
Whirlpool (WHR)	0.00	178-184	162-164
Whole Foods (WFM)	0.00	46-48	43-44.5
SolarWinds (SWI)	0.00	49-51	46-47
NetEase, Inc. (NTES)	0.00	100-103	93-95
KLA Corp. (KLAC)	158.80	66-68	62-63
Incyte Corporation (INCY)	76.98	72-74	65-67
Gentex Corp. (GNTX)	0.00	34-35	31-32
D. R. Horton (DHI)	66.55	24.5-26	22.5-23
Tableau Software (DATA)	126.42	81-85	73-74
Bloomin’ Brands (BLMN)	0.00	21-22	19-20

I look around to see what history is happening in the world now and I see above all the rapid development of China. While here in the U.S. we struggle to regain positive economic growth, this year China’s economy will grow 8% ... maybe more. Which means China is a great place to find growth companies! One of my long-term favorites in the country is Ctrip.com (CTRP), which has the country’s biggest travel-related Web site. The company’s revenues were $99 million in 2006, $160 million in 2007 and $215 million in 2008. Earnings were equally impressive.

The title says it all—overall, the trend remains up for the major indexes and most stocks and sectors, and so our Market Monitor remains in bullish territory. But there’s also no question that the environment is whippy; big moves happen almost daily, and earnings season continues to bring a bunch of big moves in both directions. None of this is bad, per se, but it does mean you have to be more discerning with your buys and make sure your timing is right and your stops aren’t too tight.

This week’s list has yet another impressive crop of stocks with good stories and charts that have shown large recent buying power (usually on earnings). Our favorite is Yelp (YELP), a relatively recent IPO that has a great, sustainable story, rapid sales growth and a stock that just exploded higher on earnings.

Stock Name	Price	Buy Range	Loss Limit
Yelp (YELP)	41.30	29-31.5	26-27
Trulia (TRLA)	0.00	33-35	29.5-30.5
Seagate Technology (STX)	0.00	39.5-41.5	36-37
Parexel Corp. (PRXL)	0.00	42-44	39-40
IntercontinentalExchange, Inc. (ICE)	0.00	165-170	156-158
Hertz Global Holdings, Inc. (HTZ)	0.00	23-24.5	21-22
Hornbeck Offshore (HOS)	0.00	49-50.5	44-45
Guidewire (GWRE)	90.60	39.5-41	35-36
Gilead Sciences (GILD)	75.10	51-54	47-48
EQT Corporation (EQT)	0.00	73-75	67-69

Current Market Outlook


The good news is that the general market has been whacked two or three times during the past couple of weeks, but each time has staged a strong rally, including today’s spirited advance. That said, despite the nice Friday/Monday rebound, the intermediate-term trend is still iffy (most indexes are sitting at or below their 50-day lines and below their highs from last week), so our overall stance hasn’t changed much—you should remain cautious, limiting new buying and holding some cash, though we’re also fine sticking with your strong, profitable names, giving them a chance to resume their uptrends down the road. The game plan from here is simple: If the market fades again, we’ll remain cautious, but should the recent strength continue, we’ll gradually turn more constructive and put money to work.
This week’s list (and the past couple of weeks) are great for getting your ducks in a row should the bulls decisively retake control. Our Top Pick is Appian (APPN), which looks like a new small/mid-cap leader following a massive breakout. Try to buy on dips.

Stock Name	Price	Buy Range	Loss Limit
ACADIA Pharmaceuticals (ACAD)	47.84	28.5-30	25.5-26.5
AngloGold Ashanti (AU)	20.45	19.5-20.5	17-17.5
Appian (APPN)	46.48	55.5-58.5	48-49.5
Dexcom (DXCM)	421.36	160-164	148-150
eHealth (EHTH)	122.74	103-107	91-93
Five9 (FIVN)	78.35	60.5-63	54.5-56
JD.com (JD)	39.58	30-31.5	27-28
KLA Corp. (KLAC)	158.80	135-138	124-126
Q2 Holdings (QTWO)	80.81	87-90	78-80
Universal Display (OLED)	187.54	208-216	182-186

Current Market Outlook


When we did our research over the weekend, we really liked what we saw: Not only are the intermediate- and longer-term trends up for all the major indexes, the big-cap measures are in new high ground and, perhaps more importantly, we see a ton of recent breakouts acting well across a variety of industries. Combined with prior positive studies, we think the bull move has farther to run. That said, there are some minor worries to keep in mind—short-term sentiment measures are very complacent, and many leaders are also extended for the time being, meaning a rest/shakeout is a growing possibility. We think any pullback will offer up a bunch of solid entries, but in the meantime, it’s best to be a bit choosy on the buy side.

This week’s list has a nice collection of names that have either recently shown rare strength or have run for a few weeks and could make for solid pullback buys. Our Top Pick is Jabil (JBL), which is beginning to retreat after a major long-term breakout and advance.

Stock Name	Price	Buy Range	Loss Limit
Advanced Micro Devices (AMD)	82.24	37-39	33.5-35
Arconic (ARNC)	17.00	29.5-30.5	27-28
Boot Barn (BOOT)	43.24	41-43	37-38
Fortinet Inc. (FTNT)	137.53	98-102	89-91
Jabil Inc. (JBL)	41.50	37-38.5	34.5-35
KBR Inc. (KBR)	30.53	29-30	26.5-27
Neurocrine Biosciences (NBIX)	123.40	110-113	100-102
Oshkosh (OSK)	95.04	88-90.5	80.5-81.5
Peloton (PTON)	53.03	27.5-30	23.5-25
Sea Limited (SE)	132.86	35-37	31.5-32.5

Our weekly note usually follows the theme of “what’s on our minds.” The topics range from discussions about individual stocks to the overall market to inflation and other matters. We usually have a lot on our minds, so it’s mostly a matter of picking one.

Each day brings something new. Some days every stock falls, other days they all surge, and some days, like Monday, undervalued stocks in the industrial, consumer and financial sectors jump (the Dow Jones Industrial Average gained 1%) while the Nasdaq slipped 2.4% - an enormous and historically unusual 3.4 percentage point gap, particularly as the indices went in opposite directions. Since February 12th, the Dow Jones Industrial Average has lifted by 1.1% while the Nasdaq has plunged by 10.5%, entering what the media call a correction.

EBITDA, or earnings before interest, taxes, depreciation and amortization, is a straight-forward measure (not a perfect measure, though) of a company’s cash operating profits. But, like seemingly all metrics published by company managements, it is usually adjusted for unusual items that may be non-recurring.

The bull market remains alive and well, and I continue to recommend that you be heavily invested in a diversified portfolio of stocks.

Last week’s recommendation was well-known Coca-Cola (a true value stock) while this week’s is a fast-growing company that’s never made a profit, but is expected to make bundles, someday. You know its name too!



As for our current portfolio, most trends are good, but we do need to sell one stock, just to keep the portfolio at twenty stocks. That’s a process that ensures we always own the best!

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the August 2021 issue.

With the stock market’s remarkable strength over the past five and ten years, most stocks have produced at least reasonable gains, such that even out-of-favor stocks aren’t down-n-out stocks. We look at attractive turnarounds among stocks with flat to negative five-year returns.



SPACs, or special purpose acquisition companies, are all the rage. While the group has rightfully earned the disdain of value investors, there are some post-SPAC companies worth a closer look. We highlight five.



Our featured Buy recommendation, Walgreens Boots Alliance (WBA), is viewed as a broken growth company. While its challenges are clear, its shares now trade at a bargain valuation, yet the company has sturdy finances and a new outsider CEO. This combination, combined with a sustainable (and growing) 4.1% dividend yield that pays investors to wait, makes it an attractive turnaround candidate.



During the month, we moved Macys (M) to a Hold and raised our price target on Duluth Holdings (DLTH) from 17.50 to 20.



Please join us for the our 9th Annual Smarter Investing, Greater Profits Online Conference, held on Tuesday, August 17 through Thursday, August 19. You can see presentations by all of our analysts, which will include updates in their areas of expertise and discussions of their best picks.



Please feel free to send me your questions and comments. This newsletter is written for you. A great way to get more out of your letter is to let me know what you are looking for.



I’m best reachable at Bruce@CabotWealth.com. I’ll do my best to respond as quickly as possible.

Current Market Outlook


The market’s snapback in recent days has been impressive, with the Nasdaq toying with new-high ground, some other indexes popping back above their 50-day lines and many growth stocks acting much better. But not all is bright and sunny—there remain many divergences in the market, and the advance is extremely thin, with just one-third as many stocks hitting new highs today as during the Nasdaq’s initial run at this level in early July. Because the evidence has improved, we’re shifting our Market Monitor toward bullish territory, so you can put some sidelined cash to work, but we advise stepping back into the market slowly.

Regardless of the daily gyrations, we remain encouraged by the many growth stocks showing better action. Our Top Pick this week is LinkedIn (LNKD), a stock that still has resistance to chew through, but has turned the corner after getting cut in half.

Stock Name	Price	Buy Range	Loss Limit
YY Inc. (YY)	0.00	86-88	77-79
Western Refining (WNR)	0.00	43-45	40-41
Tata Motors Limited (TTM)	0.00	43-44.5	40-41
Tesla, Inc. (TSLA)	818.87	250-260	235-240
Medivation (MDVN)	0.00	82-85	77-78
LinkedIn Corporation (LNKD)	0.00	208-218	189-193
Jumei Holdings (JMEI)	0.00	36-38	33-34
Green Plains Energy (GPRE)	0.00	40-42	35.5-36.5
FleetCor Technologies (FLT)	0.00	140-146	132-134
Carter’s (CRI)	0.00	78-81	73-74

Current Market Outlook


Stocks had another punishing week, with all the major indexes off at least 3% and many individual stocks doing much worse than that. Yes, the market remains stretched to the downside, with numerous oversold-type readings and some measures of sentiment that are showing greater caution. But at this point, any bounces have lasted just hours, and the intermediate-term trend remains firmly down (the major indexes are also below all longer-term moving averages), so we advise waiting patiently for the bulls to offer support; our Market Monitor drops to a level 3 in today’s issue. The ray of light is that, as earnings season has progressed, we’re beginning to see some solid reactions, often from names that didn’t do much in the last uptrend. These are names to keep an eye on for potential leadership down the road.

This week’s Top Ten has the first batch of earnings winners and other resilient stocks showing some big-volume accumulation. Our Top Pick is Tractor Supply (TSCO), a steady company that’s found excellent earnings-induced support, even hitting a new high today. If you want in, aim to nibble on weakness.

Stock Name	Price	Buy Range	Loss Limit
ACADIA Pharmaceuticals (ACAD)	47.84	20-21.5	18.3-19.2
Burlington Stores (BURL)	193.95	164-168	151-153
Cadence Design (CDNS)	42.95	43-45	40-41
Jacobs Engineering Group (JEC)	89.83	71-73	67.5-69.5
Mellanox Technologies (MLNX)	92.00	79-81	74-75
MongoDB (MDB)	156.56	72-75	64-67
PayPal (PYPL)	147.00	79-82	74-75
Tesla, Inc. (TSLA)	818.87	325-340	290-298
Tractor Supply Company (TSCO)	122.24	90-93	82-84
Xilinx (XLNX)	134.50	76-79	70-72

Current Market Outlook


The overall action from the major indexes and leading stocks remains about as good as you could hope for considering we’re two months off a major bottom—we’re nudging up our Market Monitor another notch (to 8) in this issue to respect the continued improvement in the overall evidence. That said, after a strong eight-week run, we’re starting to see a bit of greed set in, as well as a bit of rotation, with some left-behind areas (like energy and regional banks) perking up. To be clear, such action is not negative—if anything, it’s probably a good thing—but it could lead to some ups and downs among individual stocks and sectors, especially those that have had good runs. Overall, though, you should continue to put money to work as opportunities arise.
This week’s list is still heavy on growth, though with a couple of new areas popping up, too. Our Top Pick is Chart Industries (GTLS), a little-known name that looks like a great way to play the booming LNG infrastructure area.

Stock Name	Price	Buy Range	Loss Limit
Chart Industries (GTLS)	72.05	83-87	72-75
Chegg (CHGG)	74.21	36-38	33-34
CyberArk (CYBR)	111.74	96-101	85.5-88
Guardant Health (GH)	88.34	47-50	41.5-43.5
Incyte Corporation (INCY)	76.98	81-84	74-76
iRobot (IRBT)	103.17	114-120	101-104
Netflix, Inc. (NFLX)	423.92	340-355	320-330
Okta, Inc. (OKTA)	148.41	81-84.5	72-74
Trade Desk (TTD)	468.02	152-160	135-140
TransDigm (TDG)	599.41	420-435	385-395

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the May 2023 issue.

Capital market conditions have tightened in the past year, making companies that hold excess cash more valuable and less reliant on fickle external financing. Our search for cash-rich companies that have real products and services with proven and enduring demand whose shares are out-of-favor turned up three promising stocks. Several currently recommended Cabot Turnaround Letter names would also make this list.

Our research process involves looking at a large number of possible turnaround ideas. As investing legend Peter Lynch once said, “The person that turns over the most rocks wins the game.” We uncovered six stocks that have both promising turnarounds ahead yet also have discounted share prices.