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This month’s selection is a small company in the health care space given the strength in this group of stocks. The company has a very specific focus on products to treat peripheral nerve injuries, and it’s growing revenue north of 50% annually.

Most of the stocks in our portfolio that are holding up well (and in many cases moving higher) are either rated buy or hold, and those that aren’t have already been sold, or are rated hold, and being watched extremely closely.

If you have any exposure at all to small-cap cloud-based software stocks, you’re likely singing in the shower these days. It has been hard to miss with this class of stocks. In our portfolio, our small business cloud software stocks are driving overall portfolio returns with weekly gains of 5% to 10% not uncommon.

Explorer stocks had another good week as markets adapt to the Russia-Ukraine conflict’s impact on commodity markets. Oil prices pulled back a bit following plans to release reserves. This week we look back in history at a global giant in agriculture and food that is backing our new-age recommendation hailing from Montana.

In general, you should work to hold your best-performing stocks as long as they continue to perform well, while getting rid of your worst performers, continually upgrading your portfolio so that it is always composed of healthy stocks with good prospects for advancement. In practice, this means you should watch their charts, and that, of course, is where it can get complicated.

Current Market Outlook


If you haven’t stuck with a proven system in 2015, chances are you’ve been chopped to pieces by the market’s never-ending ups and downs. Today was another headline-driven selloff (Chinese stocks are seeing renewed weakness), but it doesn’t change the market’s condition—the intermediate-term trend is still sideways, with some stocks acting fine and others looking like it’s 2008. The plan remains the same—be selective on the buy side, honor all stops and hold some cash, but also give your most resilient stocks a chance to hold up and resume their advances. If leading stocks decisively break down, then we’ll change our tune, but so far focusing on the strongest stocks has been fruitful.

This week’s list features a few recent earnings winners, as well as a few that are set up well heading into their earnings reports. Our Top Pick is Valeant Pharmaceuticals (VRX), a big-cap growth stock that remains in a firm uptrend following a better-than-expected report.

Stock Name	Price	Buy Range	Loss Limit
Valeant Pharmaceuticals (VRX)	0.00	248-256	230-232
Netflix, Inc. (NFLX)	423.92	101-106	93-94.5
Infinera (INFN)	0.00	22.5-23.5	20-21
IACI (IACI)	0.00	78.5-81	75-76
GoPro, Inc. (GPRO)	0.00	59-62	54-55
Criteo (CRTO)	0.00	51-53	48-49
Chipotle Mexican Grill (CMG)	773.32	705-720	660-665
Cempra (CEMP)	0.00	42-44	37-38
China Biologic Products (CBPO)	0.00	112-117	105-106
Amazon.com (AMZN)	2.00	515-530	470-475

“Baker Bros. Advisors, the hedge fund I wrote about in a recent issue, is obligated to make a filing to the U.S. Securities and Exchange Commission every quarter to detail its stock holdings. A recent filing showed a huge block of shares in Incyte Corp. (INCY). As of...

High-up U.S. politicians are attacking Chinese stocks listed on U.S. exchanges. Does it make Chinese ADRs a buying opportunity, or ripe for the guillotine?

History shows that dividend income is an important part of your total return when investing in common stocks.

Harvard’s endowment is massive (and profitable) with exposure to a wide range of assets. So how do we invest like Harvard University?

Kaspi.kz (KSPI) and Netflix (NFLX)

Welcome to the Inaugural Issue of Cabot Money Club Stock of The Month

Each month, in this advisory, we will be spotlighting a new recommendation from one of our Cabot experts. We will include an interview with the analyst and bring you his or her latest thoughts on the stock we pick as well as a summary of the analyst’s expertise and experience.

We will also include a brief market update, and a longer piece highlighting the macro industry—the pros and the cons—in which our stock pick resides.

And as is usual with our Cabot advisories, we will maintain a portfolio of our stock picks, to give you a one-shot picture of our holdings.

Welcome!

Today’s recommendation is a small company, and there are no analysts following the stock. But it has big clients for which its products are absolutely critical. The stock has been on a wild ride this week. I have a hunch I know why, and we’re going to step in and to try and grab shares at a discount, starting with half a position.

The end of the year is a time for friends, family, holidays, and celebrations of all stripes. It’s also (unfortunately) a time to do some year-end clean up of your portfolio, harvest some tax losses, and get started on planning for 2024. So, to give you a head start before you have to meet your accountant, this month we’re exploring tax credits, including some you may have never heard of, and the most important numbers you need to know when planning for the year ahead. Plus, we’ll highlight some tax-efficient investments to save you money next year.

When to Start Taking Social Security

Still Plenty of Hot IPOs

Think Credit Cards to Get Income

Learning How to Make Money in Education Stocks

These Beer Stocks are Anything But Flat

Timing Isn’t Everything

Hot Market Sectors for Investors

Expert Tips for Buying Low When the Market is Off

Investing for the Future: Think Global

Invest Like a Hedge Fund

REIT Investing for Retirement

Everything You’ve Wanted to Know About Ex-Dividend Dates

While our focus is on long-term business fundamentals and underlying valuations, even we can be tempted to briefly set this aside for shorter-term bargains. And this time of year these bargains can appear, driven by artificial selling pressure.

In this issue, we look at six stocks that are promising candidates for a bounce.

The market continues to look good as stocks are grinding higher with a few normal-looking down days mixed in (like yesterday) to keep investors honest. Average in, spread out your buys across different stocks, and take note of the current trading range and where support, and overhead resistance, appear to be. Action is starting to pick up in our portfolio, with a few companies having reported this week and a number on tap for next week too.

There remain a few hundred leading stocks that are in great shape – they’ve reacted well to earnings, are in powerful sectors and find buying support just a couple of weeks after beginning normal corrections. However, there are also plenty of stocks that are languishing, or have been taken out and shot during earnings season, leaving investors scratching their heads. The bottom line is that stock selection is very important in this environment, as the leaders are putting on outstanding displays … but there are still plenty of potholes. Thus, holding a little cash as earnings season continues isn’t a bad idea; this week’s Top Ten, for instance, contains a couple of big earnings winners that look ripe for buying. Our favorite of the week is Nasdaq Stock Market (NDAQ), a pure “Bull Market stock” that’s going to benefit from both the strong equity markets and consolidation in the industry. Look to buy on a pullback of a couple of points.

Stock Name	Price	Buy Range	Loss Limit
CNX (CNX)	0.00	54-58	-
CYBS (CYBS)	0.00	15 1/4 - 16	-
DECK (DECK)	0.00	125-135	-
DV (DV)	0.00	50-55	-
IBN (IBN)	0.00	60-64	-
NDAQ (NDAQ)	0.00	40-45	-
NUVA (NUVA)	0.00	37-42	-
SGR (SGR)	0.00	70-74	-
STLD (STLD)	0.00	49-53	-
STP (STP)	0.00	52-56	-

[Note: Due to the Christmas holiday, there will be no Cabot Turnaround Letter weekly update next Friday. The next monthly issue of the newsletter will be published on December 31.]

The Fed has reversed a long-standing balance sheet tightening phase with its recent decision to expand its balance sheet—a move that has largely fallen under the news radar.