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Thanks for this selection as it’ll pay for your service for years.
T. Baltimore, Boca Raton, Florida

Top notch advisory service, great research and educational tools. AND, the staff are available to subscribers by e-mail for individual questions/support in a timely/prompt fashion.
S. Goodman, Spokane, Washington

Goodyear Tire & Rubber (GT) is no stranger to veteran subscribers of the Cabot Turnaround Letter. The stock was initially recommended in 2022 and was a long-time holding in the portfolio. I made the decision to sell the stock when I took over as chief analyst last summer, which at the time seemed like a good idea.

Indeed, the stock had been underperforming for quite some time, and management had just warned of “weaker underlying trends in the industry” for the second half of 2024, augmented by lower tire volume and higher costs. The stock dropped 16% to a new 52-week low at that time (early August) and was threatening to break a benchmark “support” level in its long-term chart, while the firm’s debt remained disturbingly high.

Current Market Outlook


The breakdown of the Greek debt negotiations hit the markets this morning before some support appeared (partially on news that Greek talks were back on). Our main advice right now: Keep your eyes on the action of the market, not on the headlines. So far, the major indexes remain in a sideways range, while a few stocks are still in choppy uptrends. Thus, despite the news, not much has changed, and so we’re keeping our Market Monitor in neutral territory and sticking with the game plan of holding some cash and being choosy on the buy side, while honoring stops and booking partial profits on the way up.

This week’s list has some names that haven’t appeared in months (if ever) as some new leadership attempts to firm up. Our Top Pick, though, is a familiar name—Gilead Sciences (GILD) is cheap, flush with cash and just emerging after a long rest.

Stock Name	Price	Buy Range	Loss Limit
Charles Schwab (SCHW)	0.00	32-33	30-30.5
Signature Bank (SBNY)	0.00	140-145	133-135
Netflix, Inc. (NFLX)	423.92	635-660	570-580
Men’s Wearhouse (MW)	0.00	60-62	56-57
Mobileye N.V. (MBLY)	0.00	47.5-50.5	44.5-45
JD.com (JD)	39.58	35.5-37.5	33.5-34
The IMAX Corporation (IMAX)	0.00	41-43	37-38
Illumina Inc. (ILMN)	289.74	209-216	198-199
Gilead Sciences (GILD)	75.10	115-119	106-107
FireEye (FEYE)	0.00	50-52.5	45-46

It’s election week, and it will be the elephant in the room for investors until a winner is declared. Will that be before the market opens on Wednesday, as in 2016? Will it take until this weekend, like it did in 2020? Or could this toss-up election drag out even longer, a la Bush/Gore in 2000? Either of the two former scenarios probably wouldn’t impact the market much. The latter would, at least for a time. So let’s all hope for a quick result. Sprinkle in the latest round of Fed cuts later in the week, plus more than a handful of earnings reports for Stock of the Week stocks, and it’s an incredibly pivotal week for the market.

With so much up in the air, today we add a relatively “safe” large-cap stock with a decent yield, low beta and impressive earnings growth. It’s been a staple of Tom Hutchinson’s Cabot Dividend Investor portfolio for quite some time.

Details inside.

Current Market Outlook


The market found some buying support after this morning’s gap lower, as some investors believe the Fed might stay on hold for longer considering job growth has slowed. That was good to see, but, daily wiggles aside, the intermediate-term trend remains sideways, which means staying selective, holding some cash and honoring your stops is paramount. There are still plenty of stocks working and a few set-up nicely, and that’s where your focus should be.

This week’s Top Ten presents a bunch of current winners; all have held up well during the market’s recent selloff. Our Top Pick is Carmax (KMX), which popped out of a nice, flat base on earnings last week.

Stock Name	Price	Buy Range	Loss Limit
58.com (WUBA)	0.00	49-51	45-46
United Therapeutics (UTHR)	0.00	170-175	160-162
Medivation (MDVN)	0.00	125-130	116-117
CarMax (KMX)	0.00	72-75	67-68
Horizon Therapeutics (HZNP)	49.89	24.5-26	21-22
Humana Inc. (HUM)	0.00	175-179	158-162
Diamondback Energy (FANG)	0.00	75-78	67-69
E*Trade Financial (ETFC)	0.00	26.5-28	24-25
D. R. Horton (DHI)	66.55	27.5-28.5	25.5-26
Cirrus Logic Inc. (CRUS)	0.00	31.5-33.5	29.5-30

The world of major pharmaceutical stocks can be split into two camps: winners and laggards. Eli Lilly (LLY) is a clear winner, with its successful roll-outs of new treatments led by the immense promise of weight-control drugs like Mounjaro and Zepbound. Lilly’s shares have surged 545% (up 5.5x) in the past five years and are increasingly mentioned as a replacement for Tesla in the “Magnificent Seven.” The shares trade at 47x estimated 2024 EBITDA.

Current Market Outlook


First, the good news: By last week’s end, the major indexes had extended their bounce, with many recouping about 45% or more of their December 29-January 20 meltdowns. And this bounce probably has further to run, especially as earnings season has helped a few stocks show excellent strength. All of that said, the onus remains on the bulls to prove this bounce can morph into a sustained rally—the intermediate- and longer-term trends are still pointed down for all indexes and the vast majority of stocks, and to this point, most of the “action” has been in defensive and interest rate-sensitive sectors (utilities, REITs, tobacco, etc.). That can always change, and we hope it does, but right now it’s best to remain defensive and allow the market to prove itself on the upside.

This week’s list contains some turnaround situations, but we’re encouraged to see some real growth stocks as well. And the Top Pick this week is the flag-bearer for all growth stocks—Facebook (FB) is well owned, but remains one of the best stories around, and last week’s earnings report revealed accelerating growth.

Stock Name	Price	Buy Range	Loss Limit
TAL Education (XRS)	0.00	45-47	41-42
Under Armour (UA)	0.00	80-83	74-76
T-Mobile US (TMUS)	0.00	38-40	35-36
SolarEdge Technologies Inc. (SEDG)	124.37	27-29	24-24.5
Facebook, Inc. (FB)	0.00	110-115	102-103
Diamondback Energy (FANG)	0.00	70-74	63-64
Dollar Tree (DLTR)	0.00	78-81	72-73
Cirrus Logic Inc. (CRUS)	0.00	33-35	30-30.5
Align Technology (ALGN)	316.20	64-67	61-61.5
Barrick Gold (ABX)	0.00	9.5-10	8-8.5

Current Market Outlook


We always strive to go with the evidence the market has presented. Right now, just about all of it is bullish: The intermediate- and longer term trends are up, the broad market is in terrific health (new highs are expanding while new lows are minuscule), we’ve seen some rare, powerful blastoff indicators flash (which almost always portend solid gains in the months ahead), leading stocks are perking up and many investors remain on the sideline. Obviously, a pullback could occur at any time, and earnings season is sure to create some potholes among individual stocks.

But overall, the path of least resistance is up, so we’re pushing our Market Monitor further into bullish territory. This week’s batch of stocks includes many that report earnings within a few days, which makes buying a bit tricky. For our Top Pick, we think a small position in Masco (MAS) can work—it’s shown great power, has buoyant earnings estimates and is part of the newly-strong housing group.

Stock Name	Price	Buy Range	Loss Limit
Zendesk (ZEN)	82.19	27-28.5	25-26
Tahoe Resources (TAHO)	0.00	15-16	13-13.5
Dave & Buster’s (PLAY)	57.01	46-48	42-43
Nucor Corporation (NUE)	66.20	55-56.5	50-51
Match (MTCH)	0.00	15.5-16.5	14-14.5
Mobileye N.V. (MBLY)	0.00	46-48	41-42
Masco (MAS)	0.00	33-34	31-31.5
EBIX Inc. (EBIX)	0.00	51-53	48-49
ServiceNow (NOW)	341.86	19.5-20.5	17.5-18
CBM (CBM)	0.00	54-56	48-49

Current Market Outlook


The market has turned mostly neutral, with the intermediate-term trend slightly negative, the longer-term trend slightly positive, and individual stocks a mixed bag. In the big picture, the pullback in the major indexes during the past month is reasonable given the February-April gains, and we’re encouraged by both the broad market’s resilience (few stocks or sectors are in disarray) and the dearth of bullish sentiment. Even so, it’s best to go with the market’s action first and foremost, and right now, it’s a mixed bag. Thus, we’re knocking our Market Monitor down another notch and will keep an open mind—a big-volume selloff from here would raise the odds of a deeper correction, but a surge back above the 50-day lines for the major indexes would likely signal the resumption of the post-February advance. Stay tuned.

This week’s list again has a solid growth feel to it, including a few stocks that recently reacted well to earnings. Our Top Pick is Fidelity Information Services (FIS), a steady fundamental performer that gapped up on earnings three weeks ago and has held firm since.

Stock Name	Price	Buy Range	Loss Limit
Weibo (WB)	98.16	22-23	20-21
Ultimate Software (ULTI)	0.00	193-199	183-185
TransUnion (TRU)	83.09	30-31	28-28.5
Tallgrass Energy Partners (TEP)	0.00	46-49	42.5-44
NetEase, Inc. (NTES)	0.00	158-163	145-147
Fidelity National Information Services (FIS)	0.00	70-73	65-66
Emergent BioSolutions, Inc. (EBS)	0.00	41-43	38-39
Salesforce.com (CRM)	0.00	79-82	74-75
Becton Dickinson (BDX)	0.00	162-166	157-158
Applied Materials (AMAT)	0.00	21.5-22.5	20-20.5

In the first week of 2019, a better overall stock market, weaker U.S. dollar, bargain hunting, and hopeful signs of a temporary truce in the U.S.-China trade war have all helped push our Emerging Markets Timer back into a bullish mode.

As with our prior signals, we’re not advising you to jump in with both feet since there is still a fair amount of uncertainty out there and the iShares EM Fund (EEM) needs to demonstrate staying power and work through some resistance. Still, we are extending our line a bit with our two new buys in today’s issue.

Discover the value of international diversification and the profit potential of investing in fast-growing countries.

Corporate America is weathering trade uncertainty remarkably well. The S&P 500 index has recovered more than 20% since bottoming out in April but is up only 6% this year.

You may have noticed that the stagflation scenario (inflation and slow growth) is a theme being promoted by the financial media with comparisons to the 1970s. But even if this becomes a reality, stocks are still your best option to protect and grow your wealth. In the 1970s, large-cap value outperformed growth stocks and long-term Treasury bonds. Dividend-paying stocks also outperformed. Our strategy will remain the same regardless of the pundits, value, quality, and momentum.

As I mentioned here last week, every July the Dick Davis Digests publish updates on our contributors’ Top Picks for the year (which were first recommended in January). As promised, today I’m highlighting some of those picks that have performed best over the last six months. The first half of 2011...

Bitcoins are not issued or regulated by any central authority. The currency system works as an online peer-to-peer network.

Do you believe in experts? I do, although I think you have to choose them very carefully and take their advice with a grain (or a whole shaker-full) of salt. I like the idea that someone who is familiar with the history, dynamics or people of a country, market or conflict stands a better chance of giving good analysis and advice than some random guy on the street. Like most people, if I’m sick, I go looking for a doctor, not the next jogger who comes by. You’d think everyone would believe in experts. Most of us do research before we make an important decision, so why wouldn’t we listen to someone who’s been doing research for months or years?

I’ve been receiving questions recently that essentially ask, “Why did this stock go up when the company reported bad news?” and “Why did this other stock go down when the company reported good news?”

Here’s how I handle my personal stock portfolio when I’m expecting a market correction. When I sell a stock, I put part of the capital in the money market fund, and I reinvest part of the capital into an attractive stock opportunity.

The market has pulled back after a huge run-up, which is normal action and likely not a product of renewed Fed fears that didn’t exist a week ago. These types of pullbacks in bull markets, like the new one we’ve just entered, are buying opportunities. And so today, we add a high-profile growth stock that is already up more than 80% year to date but may be just scratching the surface of its artificial intelligence potential, which could open up new revenue streams. It’s a new recommendation from Tyler Laundon in Cabot Early Opportunities.