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The market has begun 2019 with a bang, and it well could go on longer—though prediction is a fool’s game. It’s far better to simply follow proven systems of investing, whether growth or value or hybrid, and continually work to maintain a portfolio of high-potential stocks.
This week’s recommendation, for example, is a solid grower, nothing fancy. But the stock withstood the selling of December and is now at an attractive entry point, primed to break out to new highs in the weeks or months ahead.

I’m really trying to avoid buying high—so today’s selection is an undervalued stock that recently had a great correction and is now working its way back up.

The broad market remains (ahem) challenging, but there are still broad pockets of strength, and if you care to mine them (we have mining on our minds, for obvious reasons), and you watch your stocks carefully, you can still make money in this market. Coal, oil and fertilizer remain strong, but we’re now seeing more action in stocks of supporting industries, like the companies that help the drillers, or the companies that sell and service the tractors that roam the fields. This extension of strength into supporting industries is normal; we well remember when layers of technology stocks went through the process in the 80s and 90s. So don’t fear it and don’t fight it; embrace it and prosper. Our Editor’s Choice in this issue is one of these stocks, Titan Machinery. Making its first appearance in Cabot Top Ten Report, and hopefully not its last, it boasts good management, a great industry rolling in cash, and excellent expansion opportunities. Plus, it’s a young stock, and the buyers are in total control.

Stock Name	Price	Buy Range	Loss Limit
AGU (AGU)	0.00	96-102	-
AUXL (AUXL)	0.00	33-36	-
BUCY (BUCY)	0.00	69-73	-
CPX (CPX)	0.00	29-31	-
CRM (CRM)	0.00	69-74	-
GDP (GDP)	0.00	52-57	-
MOS (MOS)	0.00	143-150	-
ROST (ROST)	0.00	31-36	-
STLD (STLD)	0.00	36-40	-
TITN (TITN)	0.00	30-32	-

Our emerging market signal stays in positive territory. With our new global mandate in place, we move beyond emerging markets to a European quality play on technology. We also explore what the new Fortune Global 500 rankings can tell us about the changing landscape of investment opportunities.

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the September 30th issue.

This month we look at stocks that might benefit from the (eventual) arrival of a post-Covid world. Currently, the news seems uninspiring – new cases are accelerating in some regions that may foreshadow a return of economically-crippling lockdowns, and hopes are dimming for a vaccine in the near future.



Many stocks have surged already in anticipation of this yearned-for world, but many remain moribund. Some laggards are likely to be zombies – still alive but burdened with overwhelming debt loads. We avoided these, and instead found several that should prosper with the return of a fully-opened economy and also have more resilient capital structures to help them endure while we all wait.



We also looked at publicly-traded chicken processors and found that the sky is not actually falling, even if the shares seem to imply an atmospheric tumbling. Near-term wholesale chicken prices have become meaningfully but temporarily depressed, in our view. We highlight three stocks and discuss their risk/return nuances, along with a fourth intriguing commodity food company.



Our feature recommendation, Western Digital (WDC), trades at a depressed valuation but has major strategic changes underway.



The letter also includes a summary of our recent sale of Gilead Sciences (GILD) as well as the full roster of our current recommendations.



Please feel free to send me your questions and comments. This newsletter is written for you and 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.



Thanks!

The market finally bounced following last Tuesday’s big-volume support day, which has allowed many beaten-down growth stocks to get off their knees. It’s also allowed many energy stocks to show their muscle—many have lifted to new highs after multi-month launching pads! Overall, we’re keeping our Market Monitor neutral, as there’s no evidence yet that a sustainable bottom has been reached. But we’re OK with a little buying in the energy sector (as well as some other strong commodity stocks), because if the current rally gains momentum, many of these names could prove to be leaders of the upmove.
This week’s list did pick up on a few growth stocks that are beginning to separate from the pack, but half the stocks are commodity-related. Our favorite of the week is GasLog (GLOG), a shipper of liquefied natural gas that sports both rapid and predictable growth.

Stock Name	Price	Buy Range	Loss Limit
Weatherford International plc (WFT)	0.00	17-18	16-16.5
Vipshop Holdings (VIPS)	14.25	140-148	128-130
Taiwan Semiconductor (TSM)	78.41	19.5-20.5	18.5-19
SanDisk Corp. (SNDK)	0.00	80-82	76-77
Rice Energy (RICE)	0.00	28-29.5	25.5-26
Garmin (GRMN)	97.45	55-57	52-53
Gulfport Energy (GPOR)	0.00	71-73	66.5-67.5
GasLog (GLOG)	21.39	25.5-27	23.5-24
Finisar (FNSR)	0.00	26-27	24-24
Allegheny Technologies (ATI)	27.78	38.5-40	35-36

This remains a split tape, with many defensive and some commodity stocks testing new-high ground, while most of the market is chopping around, and growth stocks are still lagging. That said, we have seen a few rays of light lately—the mid-cap indexes are back above their 50-day lines, many growth stocks have held support for many weeks, and we’re seeing a few more potential leaders emerge on earnings or other good news. We’re sticking with our neutral Market Monitor until we see more bullish action among a variety of stocks and sectors, but the next week or two will be interesting.

This week’s list is still relatively heavy on commodity names, but our Top Pick is a growth stock that just completed a game-changing acquisition. Avago Technologies (AVGO) has great projected earnings growth, but the company reports earnings on May 29 so keep new positions small.

Stock Name	Price	Buy Range	Loss Limit
Zillow (Z)	76.64	95-100	88-90
Nabors Industries (NBR)	0.00	25-26.5	23-24
Lazard (LAZ)	0.00	47-49	45-46
Diamondback Energy (FANG)	0.00	72-74	66-67
Extra Space Storage (EXR)	0.00	49-51	46-47
Constellium (CSTM)	0.00	29-31	27-27.5
Carrizo Oil & Gas (CRZO)	24.03	53.5-55.5	50-50.5
Broadcom Limited (AVGO)	266.26	66-69	61-62
Athlon Energy (ATHL)	0.00	39-41	36-37
AerCap (AER)	0.00	45.5-47.5	41.5-42

The big news today is that last week’s market weakness turned our intermediate-term market-timing indicator negative. But no one indicator is perfect, and at Cabot, we use another indicator to measure the market’s long-term trend—and that indicator is still positive. Thus it’s a standoff, which means our Market Monitor is positioned at dead neutral. Short-term, we tend to think the market is ripe for more of a pullback, simply because it’s had such a great, long advance. But long-term, we remain optimistic that once the correction is complete, the main uptrend can continue, and this thinking, in part, is because there are so few investment alternatives! In any event, our goal is to continue presenting you with stock that are most prone to short-term strength, and this issue brings a nice mix of old and new. Read them all, choose your favorite story, and work to find a good entry point. Our favorite this week is Twitter (TWTR), which has a huge fundamental story and a decent technical setup.

Stock Name	Price	Buy Range	Loss Limit
Valeant Pharmaceuticals (VRX)	0.00	125-131	123-124
VeriSign (VRSN)	190.71	58.5-60.5	56-57
Vipshop Holdings (VIPS)	14.25	91-95	80-82
Twitter (TWTR)	40.37	56-62	52-53
Insulet (PODD)	175.69	41-43	39-40
Pandora Media Inc. (P)	0.00	31-33	29-29.5
Medivation (MDVN)	0.00	70-75	69-70
The Hain Celestial Group, Inc. (HAIN)	0.00	91-93	83-85
Gilead Sciences (GILD)	75.10	76-79	73-74
CalAmp (CAMP)	0.00	27-29	24-25

Cannabis legalization is spreading but cannabis stocks are trading near all-time lows, which leaves these four industry leaders poised for a rebound.

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



The market seems to be ignoring small- cap stocks. We highlight four high-quality small- cap companies with beaten down share prices. And, amidst the rubble of initial public offerings, we found three worthwhile companies whose shares trade below their IPO price. We also briefly comment on the market’s recent sell-down, and provide an update on the performance of our group of recommended stocks, which have held their value so far this year.



Our featured recommendation this month is Polaris (PII), the leading North American manufacturer of powersports equipment including off-road vehicles, snowmobiles, motorcycles and boats. Investors are overly -discounting near-term issues, leaving the shares significantly undervalued.



We note our recent price target increase for Baker Hughes Company (BKR), from 26 to 31.

Inflation is dead.

OK, it’s not “dead.” But at 2.9% in July, as reported Wednesday morning, it has now (narrowly) reentered the Federal Reserve’s magical 2% realm for the first time in nearly three and a half years – since March 2021. For all the inflation angst during those past three and a half years, the market has fared pretty well overall – the S&P 500 is up 30% since the first CPI print north of 3% was reported in mid-May of 2021. On a per-year basis, that only slightly trails the average annual return in the large-cap index of 9.9% since its inception in 1928.

This is the 13^th bull market in the S&P 500 since 1950. If it ended today, it would tie for the shortest – just over 21 months – with the last bull market, the post-Covid-crash rally that began in March 2020 and tidily peaked at the end of 2021. The average bull market, according to statistics from Ryan Detrick of Carson Investment Research, lasts 65 months.

Does that mean this one can’t up and fizzle right now, taken down by a “carry trade” in Japanese equities, one bad U.S. jobs report, and a whole lot of political (presidential election) and social (war in the Middle East possibly spreading) uncertainty? Of course not. We know a bull market can last only 21 months because we just saw it happen.

The success of headliners Walmart and Target in the last week has helped drive consumer staples stocks as a group up nearly 5% in August. No other S&P 500 sector has performed better this month. And yet, consumer staples are “only” up 14% year to date, trailing the gains in the S&P 500 (17.3%).

Thus, the sector as a whole is still undervalued. That spells opportunity.

After a nine-month-long and very deep correction, during which the Global Cannabis Index fell 54% and many stocks fell farther, there was strong buying in the sector on Friday and Monday, signaling that the correction in the sector is likely over.

Warner Bros. shareholders have enjoyed double-digit gains in December following buyout offers from Netflix and Paramount. Here’s how to play it.

Chloe Lutts recommends Ecana Corp. (ECA) and Cheniere Energy Partners LP (CQP).

Cabot’s market timing disciplines give clear signals for when to trust the bull and how to get out of the way of the bear.

The earlier people retire, the sooner their cognitive functions begin to decline.

There has been a flurry of reverse stock splits of late. Are they good for investors? Traditionally no. But there are exceptions.

There’s no doubt things are looking a little better out there as many software, MedTech and other growth stocks retested their March lows late last week then turned north. The timing of that short-term reversal, coinciding with the end of the first quarter, most definitely has me feeling better about the state of things right now.