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During the July-through-September period, we often saw the major indexes lag (the S&P 500 went nowhere from mid-May through mid-October) while growth leaders surged. Now, though, we’re starting to see the opposite—the broad market’s health has improved, and many groups have come to life, but just about any stock that’s had a huge run in recent months is under pressure. We don’t advise panicking out of all your winners, but set your stops and consider booking partial profits. On the flip side, there are many less well-known names that are acting great, including a bunch that have recently broken out on earnings, and that’s where any new buying should be focused.

This week’s list has a nice collection of those type of names. Our favorite is United Rentals (URI), a company we’ve long liked, and now the stock is getting going after an eight-month rest.

Stock Name	Price	Buy Range	Loss Limit
Whiting Petroleum (WLL)	0.00	65-68	58-59
United Rentals, Inc. (URI)	0.00	63-65	59-60
Nu Skin Enterprises Inc. (NUS)	46.07	110-115	98-100
ServiceNow (NOW)	341.86	54-56	48-50
Northrop Grumman (NOC)	0.00	104-107	96-97
Noble Energy (NBL)	0.00	74-75	69-70
Illumina Inc. (ILMN)	289.74	90-92	84-85
Gentex Corp. (GNTX)	0.00	27.5-29.5	24-26
Five Below (FIVE)	134.58	46.5-49	43-44
Align Technology (ALGN)	316.20	54-56	46-48

Our fearless leaders in Washington are at it again, and the uncertainty surrounding a potential government shutdown has cast a pall over the market during the past two days. Still, it’s as important as ever to make sure you keep your eye on the ball—news and rumors are sure to come fast and furiously in the days ahead, but what counts is the action of the market itself and leading stocks. And right now both look fine! If the evidence changes then we’ll change our advice, but tonight we’re keeping our Market Monitor where it’s been and our advice remains unchanged.

This week’s list has a nice mix of repeat recommendations, as well as stocks that are showing up for the first time in many months or years. Our favorite of the week is Oasis Petroleum (OAS), a stock that just leapt out of a three-year consolidation following a major acquisition.

Stock Name	Price	Buy Range	Loss Limit
Wynn Resorts (WYNN)	121.08	152-157	138-140
Vipshop Holdings (VIPS)	14.25	53-57	44-46
Trina Solar (TSL)	0.00	14-15	11-12
Taser (TASR)	0.00	13.5-14.5	11.5-12
Pinnacle Entertainment (PNK)	0.00	24-25	22-23
Oasis Petroleum (OAS)	12.57	47-49	42-43
Nexstar Media Group (NXST)	105.68	42-43	39-40
Chart Industries (GTLS)	72.05	120-125	113-115
Ciena (CIEN)	44.25	24-25	22-23
Baidu (BIDU)	0.00	144-150	133-135

From a top-down perspective, the intermediate-term trend is up and most dips are met quickly with buying (Friday was a good example of that). But looking at individual stocks, we are seeing more and more iffy action; more groups are acting sloppily after big runs, strength is being sold into, and volatility is on the rise. None of this means you should be running into the storm cellar or that a big drop is a sure thing, but there’s enough worrisome evidence to hold some cash, to keep losers and laggards on tight leashes, and to be discerning in terms of what (and at what price) you buy. We’re knocking our Market Monitor down a peg.

What we like about this week’s list is that it’s mostly stocks that are out of the public’s eye—they haven’t been hot in recent weeks. Our favorite of the week is Canadian Pacific Railway (CP), which just broke free from a multi-month base and is part of the still-strong transportation group.

Stock Name	Price	Buy Range	Loss Limit
Ubiquiti Networks (UBNT)	170.11	39-41.5	35.5-36
Spirit AeroSystems (SPR)	92.54	27-29	25-26
SM Energy (SM)	0.00	85-87	80-81
The Priceline Group Inc. (PCLN)	0.00	1,040-1,070	990-1000
Harman International Industries, Inc. (HAR)	0.00	75-78	68-69.5
Halliburton (HAL)	0.00	52-55	49-50
First Solar (FSLR)	83.74	58-60	49-50
Canadian Pacific Railway (CP)	0.00	140-146	130-131
Chicago Bridge & Iron (CBI)	0.00	75-76.5	69-70
Bitauto Holdings (BITA)	0.00	24-25.5	20-21

Growth stocks remain dead in the water, with the sellers still focusing their efforts on the high valuation names that led the market higher during the past eight months. But now we’re beginning to see the weakness is that niche spread—broader indexes like the S&P 500 are feeling the heat, and while few cyclical-type stocks have broken down, most are starting to look ragged as big investors head toward defensive names. All told, it’s not 2008 all over again, but now is the time to hold plenty of cash, build a watch list and, if you buy, keep position sizes small and make sure you have your stops in place.

This week’s list is heavy with still-resilient cyclical stocks with great projected growth during the next couple of years. Our Top Pick is Devon Energy (DVN), a big company with a solid turnaround story and a stock that’s just getting going after a few down years.

Stock Name	Price	Buy Range	Loss Limit
Williams-Sonoma (WSM)	64.96	62-64	58-59
Ultra Petroleum (UPL)	0.00	26.5-28	25-25.5
Schlumberger (SLB)	0.00	95-97	91-92
RH Inc. (RH)	252.93	68-70	63-64
Southwest Airlines (LUV)	0.00	23-24	21.5-22
GT Advanced Technologies (GTAT)	0.00	15.5-17	14-14.5
Electronic Arts (EA)	0.00	27.5-29	25.5-26.5
Devon Energy (DVN)	0.00	66.5-68.5	62.5-63.5
CARBO Ceramics (CRR)	0.00	130-135	120-121
AerCap (AER)	0.00	38-40	34-35

The market continues to act excellently, and we’re pleased to see more and more growth-oriented stocks flex their muscles, while many defensive sectors take a breather. Of course, part and parcel of that is that we’re seeing a little froth; investor sentiment is getting a bit giddy as some names explode higher. That doesn’t mean a top is imminent—our Market Monitor is solidly in the bullish camp—but it does mean you should be prepared for some news-driven potholes. Overall, you should be holding your best performers and putting more money to work at good entry points, but be sure not to get carried away after a good few months.

This week’s list has an impressive array of stocks that are showing extremely powerful accumulation. Our favorite of the week is SodaStream (SODA), which is very volatile but just broke out on earnings last week on very big volume.

Stock Name	Price	Buy Range	Loss Limit
Uni-Pixel (UNXL)	0.00	33-35	29-30
SodaStream (SODA)	142.91	55-58	52-53
Spirit Airlines (SAVE)	57.03	27-28.5	25.5-26
Oceaneering International (OII)	0.00	70-73	67-68
Ocwen Financial (OCN)	0.00	41-42.5	37.5-38
Meritage Homes (MTH)	102.20	48.5-52	45-46
MercadoLibre, Inc. (MELI)	980.83	110-117	98-100
Fortune Brands Home & Security (FBHS)	81.02	38-40	35-36
Electronic Arts (EA)	0.00	20.5-22	19-20
Ctrip.com International Ltd. (CTRP)	34.94	27-28.5	23-24

The market and most stocks remain in a solid uptrend, though earnings are beginning to have the anticipated push-pull effect on the market, with lots of gaps up and down to start the day. We think increased volatility is nearly a sure bet going forward, especially after such a great rebound. In the short-term, then, make sure you have a plan of how you want to deal with earnings season (we include any upcoming earnings dates of our recommendations in today’s issue), and be prepared for lots of action in both directions. Long-term, though, the path of least resistance remains up, so we favor using normal retreats as buying opportunities.

This week’s list is one of the more growth-oriented that we’ve seen this year; just about every stock has a real, sustainable growth story with solid numbers. Our favorite of the week is Proto Labs (PRLB), which has set up a nice risk-reward entry here after tightening up for a few weeks.

Stock Name	Price	Buy Range	Loss Limit
Zillow (Z)	76.64	67-69	59-60
Vipshop Holdings (VIPS)	14.25	34-36	30-31
Trulia (TRLA)	0.00	35.5-37	31-32
Santarus (SNTS)	0.00	23.5-24.5	20-21
Spirit Airlines (SAVE)	57.03	33-35	30-31
Proto Labs (PRLB)	0.00	63-65	56-58
Nu Skin Enterprises Inc. (NUS)	46.07	78-80	70-71
Nationstar Mortgage (NSM)	0.00	44-46	40.5-41.5
Generac Holdings (GNRC)	86.60	39.5-41	36-37
Ambarella (AMBA)	52.79	17.5-19	16-16.5

The market has followed through on last week’s rebound rally and we’re seeing an increasing number of strong growth stocks with good setups. The big news is that the rally has lifted many of the indexes we follow above their 25- and 50-day moving averages, giving us a green light for new buying. We don’t advise jumping in with both feet—new buy signals do not guarantee a continued advance—but you should be taking a serious inventory of your watch list (and the stocks in this week’s issue) to select a few favorites for buying.
This week’s list includes several bigger names and a few recent IPOs, which indicates good breadth for the rally. Our favorite is SunPower (SPWR), which is making the turnaround in the solar industry look like a sound growth proposition.

Stock Name	Price	Buy Range	Loss Limit
SunPower (SPWR)	12.26	19.5-22	17-18
Splunk (SPLK)	207.67	45-47	41-42
Proto Labs (PRLB)	0.00	63-65	55-56
The Priceline Group Inc. (PCLN)	0.00	810-840	779-780
Illumina Inc. (ILMN)	289.74	72-74	67-68
Ciena (CIEN)	44.25	19-20	17.5-18
Bloomin’ Brands (BLMN)	0.00	24-25	22.5-23
Boeing (BA)	432.22	99-102	94-95
American Axle (AXL)	0.00	17.5-18.5	16-16.5
Actavis (ACT)	0.00	123-127	108-110

In the month since the broad market began to weaken, the losers have been interest-rate sensitive securities; investors clearly fear that rates will rise further. But who are the winners? Interestingly, there is no one strong sector resisting the decline. Rather, numerous strong stocks in a variety of industries are being supported by investors. But more and more, these stocks are failing to hit new highs, so the big picture is one of growing weakness overall, and this is reflected in the less bullish status of our Market Monitor. 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.

Our Editor’s Choice today, Lions Gate Entertainment, is a lower-risk selection with a good long-term growth story, and a timely entry could work out very well.

Stock Name	Price	Buy Range	Loss Limit
Trulia (TRLA)	0.00	42-45	37-38
Sealed Air (SEE)	0.00	29-30	25-26
Questcor Pharmaceuticals (QCOR)	0.00	60-63	56-57
Pandora Media Inc. (P)	0.00	18-20	15-16
LightInTheBox Holding Co., Ltd. (LITB)	0.00	18-20	15-16
Lions Gate Entertainment Corp. (LGF)	0.00	32-33.5	28-29
Ctrip.com International Ltd. (CTRP)	34.94	43-45	39-40
Cornerstone OnDemand (CSOD)	51.01	49-51	45-46
Celldex Therapeutics (CLDX)	0.00	19-20	16-17
Baidu (BIDU)	0.00	130-135	118-120

With most major indexes still within 2% or 3% or their recent peaks, we can’t say the market is a horror show. But the evidence pointing toward a fatigued market continues to pile up, with last week’s waves of distribution (on Monday, Wednesday and Thursday) telling us sellers are gaining strength. We’re not predicting anything, but right now, making lots of money is very difficult; even the strong defensive sectors are choppy, and if you buy a stock at the wrong time, forget about it. Thus, we’re leaving our Market Monitor in neutral territory, and advise you to play things cautiously—keep positions small, keep your laggards on tight leashes and hold some cash.

Just as important, though, you should also keep your eyes open for a resumption of the uptrend. This week’s list has a few potential shooting stars, though there’s also a flavor of safety to some of the names. Our favorite of the week is First Solar (FSLR), which is dancing to its own drummer after a bullish near- and long-term earnings forecast a couple of weeks ago.

Stock Name	Price	Buy Range	Loss Limit
Santarus (SNTS)	0.00	17.5-18.5	15-16
Shutterfly (SFLY)	94.71	42.5-44.5	39-40
ONYX Pharmaceuticals (ONXX)	0.00	95-99	87-88
ServiceNow (NOW)	341.86	36-39	33-34
NetSuite, Inc. (N)	0.00	77-79	73-74
Medicines Company (MDCO)	56.98	33-34	29-30
Cheniere Energy (LNG)	63.82	25-26	22-23
Home Depot (HD)	0.00	73-74.5	70-71
First Solar (FSLR)	83.74	36-37.5	32-34
Actavis (ACT)	0.00	95-97	90-91

Current Market Outlook


The action of the past couple of days indicates that the market’s recent pullback likely isn’t through yet—while the Nasdaq hit new highs last week, no other index did, and that divergence (and negativity surrounding Deutsche Bank) brought out more sellers. In the short-term, then, the trend is mainly neutral, as most indexes haven’t made much progress during the past two months and are gyrating around their 50-day lines. Longer-term, though, we remain optimistic: Growth stocks and indexes are generally outperforming, the broad market is healthy and investor skepticism remains elevated (all good things). We’re going to leave our Market Monitor at level 7, meaning you should hold your strong stocks but also hold some cash on the sideline until the buyers retake control.

This week’s list has a good collection of stocks, mostly on the growth side. Our Top Pick, though, is a special situation—Tech Data (TECD) just announced a transformative acquisition that catapulted the stock to new highs. We think it’s buyable around here.

Stock Name	Price	Buy Range	Loss Limit
Adobe Inc. (ADBE)	315.23	105-108	99-100
CoLucid Pharmaceuticals Inc (CLCD)	0.00	28-30	23-24
Eagle Pharmaceuticals Inc. (EGRX)	0.00	63.5-67	57-58
Etsy (ETSY)	112.97	14-15	12.5-13
Match (MTCH)	0.00	16.5-17.5	15.5-16
Penske Automotive Group (PAG)	0.00	47-49	43-44
Penumbra Inc. (PEN)	173.25	75-77	69-70
TECD (TECD)	0.00	83-86	75-77
Twilio (TWLO)	183.39	62.5-65.5	54-56
ZELTIQ Aesthetics Inc (ZLTQ)	0.00	40-38	35.5-36.5

Current Market Outlook


With the market beginning a long-overdue correction that has the potential to bring high-flying stocks down to earth, one very human temptation is to defer new buying until risk seems to be past. But if you always think that way, you’ll never invest. Instead, we recommend keeping it simple. Recognize that the market’s main trend today is clearly up, and focus on identifying strong stocks with logical entry points. The candidates for today’s Top Ten included many semiconductor stocks, medical technology stocks, basic chemical stocks, financial services stocks and REITs, and you’ll find the best of those, along with other attractive stocks.

Our Top Pick is NetEase (NTES), which gapped up to new highs on its earnings report in mid-February and has since pulled back to support at the low end of its recent range. (Note: Don’t let the high share price dissuade you; simply buy fewer shares.)

Stock Name	Price	Buy Range	Loss Limit
Bluebird Bio (BLUE)	0.00	80-85	73-74.5
Century Aluminum Co. (CENX)	17.24	13.5-15	12-12.5
Conduent (CNDT)	0.00	15-16	13.5-14
Copa Holdings (CPA)	0.00	101-105	96-97
NetEase, Inc. (NTES)	0.00	280-290	260-265
Pacira Biosiences (PCRX)	54.85	48-51	44-45
STMicroelectronics (STM)	30.09	13.5-14.5	12.5-13
Symantec Corporation (SYMC)	0.00	27-29	25-26
TAL Education (TAL)	50.49	85-91	80-81
United Rentals, Inc. (URI)	0.00	125-130	114-115

Current Market Outlook


The market hit a little turbulence early last week on renewed trade worries but bounced back nicely, with the major indexes finishing flat (S&P 500 and Nasdaq) to up (small- and mid-cap) on the week. Short-term, though, we wouldn’t be surprised to see some further ups and downs as the market and many stocks/sectors consolidate their two-month runs; we still favor buying pullbacks rather than breakouts at this time. The good news is that we continue to think current pullbacks and consolidations are leading to some good-looking entry points in a variety of leading stocks. All in all, we remain bullish, though it’s still best to be a bit choosier on the buy side at the moment, while giving some stocks that you own breathing room to consolidate if they’ve enjoyed a good run.

This week’s list has many leaders that are retreating toward support or are otherwise showing solid setups. Our Top Pick is Seattle Genetics (SGEN), which looks like a leader in the biotech field, and the stock is now pulling back for the first time after a big run.

Stock Name	Price	Buy Range	Loss Limit
Amedisys (AMED)	174.06	161-164	146-148
The Walt Disney Company (DIS)	144.76	144-147	136-138
DocuSign (DOCU)	107.98	72-75	64-66
GSX Techedu (GSX)	97.59	18-19	15.5-16
Incyte Corporation (INCY)	76.98	92-95	84-86
Qorvo (QRVO)	129.47	105-109	94-96
Seattle Genetics (SGEN)	150.85	112-115	103-105
Splunk (SPLK)	207.67	145-150	132-135
TransDigm (TDG)	599.41	550-565	515-525
Tesla, Inc. (TSLA)	818.87	333-353	303-308

Current Market Outlook


All eyes are on Janet Yellen this week, who is set to speak Friday morning, and whether she’ll offer hints to the Fed’s next move. As always, we’ll let others slice and dice the comments; we’ll stick with the market’s action itself. And on that front, things look solid—the market’s consolidation of the past few days has been normal thus far, and while a short-term shakeout of some sort wouldn’t surprise us, the odds continue to point toward higher prices down the road. We continue to advise you to remain heavily invested, though be sure to honor your stops for any stocks that break support.

This week’s list includes a nice array of stocks and sectors, including a few recent earnings winners. Our Top Pick is Gigamon (GIMO), a hot stock that’s recently taken a few weeks to catch its breath. Further dips are possible but buying here with a tight stop makes for a good risk-reward opportunity.

Stock Name	Price	Buy Range	Loss Limit
Yelp (YELP)	41.30	35-37	32-33
US Silica Holdings, Inc. (SLCA)	0.00	38.5-40.5	35.5-36.5
Royal Gold, Inc. (RGLD)	129.66	80-83	74-75
Pioneer Natural Resources (PXD)	0.00	177-183	164-166
Insulet (PODD)	175.69	40.5-42.5	37-38
MercadoLibre, Inc. (MELI)	980.83	160-165	149-150
Line Corporation (LN)	0.00	44-46	39.5-40.5
Gigamon (GIMO)	0.00	43.5-46	40-41
Dicks’s Sporting Goods (DKS)	0.00	56-58	50-51
Acuity Brands (AYI)	0.00	273-280	253-256

Current Market Outlook


The market remains extremely strong, as the combination of a new year and reduced anxiety about China trade has encouraged the bulls and calmed the bears. At the same time, a broad correction is increasingly overdue, as numerous stocks have grown increasingly stretched far above their moving averages. Thus, when you do buy, you need to do so with an eye not just to the potential upside but the potential downside as well.

The ideal buy for many of today’s stocks might be on a brief pullback that finds support. Stocks in this issue range from global giants like Morgan Stanley and Match to smaller, faster-growing technology companies like touch-screen expert Synaptics and chipmaker-for-Apple Cirrus Logic. Our Top Pick this week is iQiYi (IQ), a fast-growing Chinese media/technology company that has its tentacles in numerous fields and is succeeding at many of them.

Stock Name	Price	Buy Range	Loss Limit
Cirrus Logic Inc. (CRUS)	0.00	80-83	75-77
iQIYI (IQ)	0.00	22-23.5	20-21
Match (MTCH)	0.00	85-88	80-82
Morgan Stanley (MS)	0.00	55-57	50-52
Novocure (NVCR)	0.00	90-93	80-82
Synaptics (SYNA)	0.00	68-72	60-64
Teladoc, Inc. (TDOC)	127.95	93-97	75-80
Thor Industries (THO)	104.76	75-80	63-66
Toll Brothers Inc. (TOL)	0.00	42-44	38-39
Vertex Pharmaceuticals (VRTX)	230.36	230-235	210-215

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

Most investors, and the general public, seem to regard the transportation industry as somewhat dull. But transportation is a fundamental component of human existence, and companies must constantly strive for relevance, and must now navigate a secular shift in fuel sources. We discuss five transportation companies that are updating their strategic playbooks with hopes of turning around their prospects.



The market has a bias against stocks that trade at low prices, making this a go-to source of contrarian investment ideas. We make our case for five such stocks.

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the March 2022 issue.



In what could be a low-return market over the coming decade, stocks of relatively boring companies have a better chance to shine. We highlight five companies with grind-it-out growth, low share valuations and often-generous dividends that could produce significant market-beating returns.



We also discuss six appealing stocks we found by trolling through the 13F/D filings of like-minded institutional investors.



Our featured recommendation this month is Goodyear Tire & Rubber Company (GT). An investment in Goodyear is an opportunistic purchase of an average company whose shares have fallen sharply out of favor for what look like short-term reasons.



We note our recent price target increases for Wells Fargo (WFC), Marathon Oil (MRO) and Shell plc (SHEL).

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



We comment on the abrupt shift in market sentiment that has boosted the prices of our undervalued stocks relative to expensive hyper-growth stocks. Several of our left-for-dead stocks, like Arcos Dorados (ARCO), which jumped 17% in the past two weeks, have suddenly been rediscovered by the market. Others, like Coca-Cola (KO) and Sensata Technologies (ST), are reaching new all-time highs as investors find that their healthy fundamentals haven’t been fully reflected in their share prices.



This shift may not last, and is only two weeks or so in the making. But it reinforces our view that, to quote Warren Buffett, “in the short run, the market is a voting mechanism, but in the long run it is a weighing mechanism.”



Please feel free to send me your questions and comments. This newsletter is written for you and the best way to get more out of the 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.

We’re in the middle of the summer market malaise. These markets tend to do whatever they were doing when investors went on vacation and stopped paying attention. The rubber usually hits the road when investors sober up and take a fresh look at things after Labor Day.

Sure, the market is historically cranky in September. Current fears about the Delta variant and inflation could gain more traction. The market could even sell off a bit. But I believe the current fears are overblown. Cyclical stocks and others that have been held back by recent concerns should shine again in the booming economy this fall.



In this issue, I highlight a stock with a strongly growing business that should thrive over the next several quarters as well as on the other side of the pandemic recovery. Meanwhile, it sells at a cheap valuation while the market is distracted by other things.

Cyclical or open-up stocks are on fire, and for good reason.

The U.S. economy has far exceeded expectations at every phase of the recovery so far. The vaccines promise to end the remaining lockdowns and restrictions. With the shackles removed, the economy will kick into high gear. Even several normally dour economists are predicting the highest GDP growth in decades this year.



In anticipation, cyclical financial stocks are on fire. The Financial Sector SPDR Fund (XLF) is up 45% just since the vaccine announcement in early November. Yet, many financial stocks are still undervalued ahead of what should be an ideal environment for the sector.



In addition to the bright near-term prospects for financial stocks in general, there is also an incredible growth trend in a particular niche area, alternative investments. These include investments outside of the stock and bond markets. Individuals and institutions desperate to diversify are piling in. And massive growth in this arena is accelerating.



In this issue, I highlight a company I believe to be the very best player in alternative investments. Stock performance has far exceeded its peers and there is every reason to believe the outperformance will continue going forward.

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

For most of the year, we have an intense focus on long-term business fundamentals and underlying valuations. However, as year-end approaches, artificial selling pressure can create large enough short-term bargains that even we find worthwhile. We discuss several sources of selling pressure that can turn others’ losses into your gains, and list six stocks that look most promising.



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.