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Given what’s going on in the market, it’s a good time to own high-yield utility stocks, writes Bob Ciura of Sure Dividend.

The markets are currently struggling in troubled waters, but these two safe stocks can thrive in any environment and help buoy your portfolio.

Some of you might have been a bit alarmed at the message attached to last week’s issue that the next issue will be out January 7, 2021. But today we have an update and rest assured, I’ll be following the Explorer portfolio next week and will send an alert if anything unusual happens. I will also have another update and some portfolio changes the following week.

Our financial system lies in shambles, and the dominoes continue to fall, bringing down companies and stocks in one sector after another. Consumer confidence is absolutely terrible. Friends who previously asked about my market opinion simply as a common courtesy now ask because they’re genuinely worried about their own retirement funds ... and about the future of America. And what do I tell them? “This too shall pass.”

TAL International Group (TAL) is one of the world’s largest lessors of intermodal containers and chassis.

There are many changes in today’s issue: we’re adding four new stocks and selling seven stocks.

After visiting San Francisco and touring Alcatraz, Timothy Lutts found a company that specializes in privatized prisons, and seems like a good investment opportunity.

It’s been a fun, interesting and profitable year for readers of Cabot Top Ten Report, and it would be easy to recap the highlights … like Baidu, First Solar, Intuitive Surgical and Research in Motion. But you’re not paying us to look back, you’re paying us to look ahead. So here’s what this week’s stocks tell us we should watch going forward. First is the trend toward solar power; investors in these stocks are looking for major revenue and earnings growth in the years ahead. Second is the strength of commodities; from coal to steel to silicon, basic materials are getting more expensive … and profitable. Third is the continuing strength of well-managed foreign companies. Part of their appeal comes from a weak dollar, but the bigger and more important part comes from the greater growth opportunities in developing countries. You’ll find three stocks in this category in this issue; our Editor’s Choice today is good old Baidu, the Google of China. The stock has been knocking on the ceiling at 400 for two months and we’re confident it will break through eventually.

Stock Name	Price	Buy Range	Loss Limit
BIDU (BIDU)	0.00	360-400	-
BUCY (BUCY)	0.00	93-98	-
ENER (ENER)	0.00	30-33	-
JASO (JASO)	0.00	60-70	-
MA (MA)	0.00	200-220	-
MBT (MBT)	0.00	88-98	-
MELI (MELI)	0.00	70-75	-
MICC (MICC)	0.00	115-122	-
SID (SID)	0.00	85-90	-
WFR (WFR)	0.00	78-86	-

The S&P 500 index is having an orderly pullback, after rising for three weeks. In that light, we’re not likely to see a lot of portfolio action this week. Looking out over the next four weeks or so, these buy-rated portfolio stocks appear best-positioned to rise 5% or more.

A few weeks ago, we were optimistic that by this point the market would be in a full bore, all-out bull stampede. Instead, the market’s advance has turned into a choppy uptrend, especially among individual stocks and sectors, where a solid week or two of rising prices attracts profit-takers. Nevertheless, the good shouldn’t be the enemy of the perfect—most stocks are heading higher, and while volatility is elevated, there are plenty of winners to go around. Just remember to keep your feet on the ground, take a few chips off the table if your stock soars for a few days, and to cut all losses short. This week’s Top Ten contains a few names that are new to us, including one monster earnings winner last week. Our top pick is FMC Technologies (FTI), an oil service stock that is showing great price and volume action of late. It’s not as extended as some of its oil peers, but looks to be a great buy around here, or a little lower.

Stock Name	Price	Buy Range	Loss Limit
GTI (GTI)	0.00	18-22	-
JRCC (JRCC)	0.00	27-30	-
PXD (PXD)	0.00	60-65	-
SOL (SOL)	0.00	17-20	-
CRK (CRK)	0.00	51-55	-
CSIQ (CSIQ)	0.00	30-34	-
EAC (EAC)	0.00	49-52	-
ENER (ENER)	0.00	43-52	-
ERES (ERES)	0.00	14-16	-
FTI (FTI)	0.00	70-74	-

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

Current Market Outlook


In the market, it’s the unexpected that you should pay closest attention to. Two weeks ago, the broad market was heading south and the major indexes broke down after a month of distributive action. But since then, the market has zoomed ahead like a rocket, with all the major indexes back above their 50-day lines and many stocks either hitting new highs or racing toward the top of multi-week launching pads. There are still some things to worry about, and we’ll probably get a truer read on things once the big boys come back from vacation next week. But overall, we’re leaning bullish, encouraged by what we’ve seen during the past two weeks.

This week’s list shows a bunch of stocks that have shown big-volume buying of late, a sure sign institutions are sniffing around. Our Top Pick this week isn’t a stock we think is going to double, but rather, one we feel strongly will head higher. It’s Home Depot (HD), the granddaddy of housing stocks, which just busted free from a 15-month base.

Stock Name	Price	Buy Range	Loss Limit
WPX Energy (WPX)	0.00	23-25	20-21
Sensata Technology (ST)	0.00	47-49	44-45
Regeneron Pharmaceuticals (REGN)	512.96	340-350	319-320
Royal Caribbean Cruises (RCL)	0.00	61-63	57-58
Home Depot (HD)	0.00	88-91	83-84
Keurig Green Mountain (GMCR)	0.00	129-135	119-121
F5 Networks, Inc. (FFIV)	0.00	120-122	113-114
Community Health Systems (CYH)	0.00	50-52	46-47
Canadian Solar (CSIQ)	0.00	34.5-35.5	31-32
Akorn (AKRX)	0.00	37-38.5	34-35

The market continues to perform well, with the market’s leading stocks outperforming the broad market indexes. These are good times, so enjoy them! But remember to guard against complacency; hundreds of earnings reports are about to flood Wall Street, and we’re sure that some leaders will fail, while others will soar. Thus, while the overall bull market shows no sign of ending, the next few weeks will be volatile. This week’s Top Ten contains another well-rounded batch of stocks, with a couple of biotech names highlighting the newfound strength in that sector. Another group that’s quietly improved has been the steel stocks, with Schnitzer Steel (SCHN) leading the way. The stock is in a mild pullback following a powerful breakout in recent weeks. We think it’s buyable around here.

Stock Name	Price	Buy Range	Loss Limit
TKC (TKC)	0.00	19-23	-
ALNY (ALNY)	0.00	30-35	-
AUXL (AUXL)	0.00	21-23	-
CIEN (CIEN)	0.00	44-46	-
FSLR (FSLR)	0.00	125-135	-
HANS (HANS)	0.00	56-60	-
OVTI (OVTI)	0.00	22-24	-
QMAR (QMAR)	0.00	19-22	-
RIMM (RIMM)	0.00	106-114	-
SCHN (SCHN)	0.00	65-70	-

It has been a volatile few weeks for the market, with the Nasdaq under consistent selling pressure and more than 7% off its February high, while the S&P 500 hit new all-time highs last week.

The last two weeks have seen a massive rally into cyclical stocks, and a purge of growth stocks. Massive! Whether this trend will continue is anyone’s guess.

The good news for the Cabot Profit Booster portfolio is we have a relatively diverse portfolio. And as I eyeball our portfolio, I would say we have five cyclical stocks (AZEK, JCI, SONO, GS, APHA) and “only” two growth stocks (DT, AMKR), and the premiums we collected via our covered call sales have partially buffered us from big losses on those stocks that have been hit hard.

The cannabis sector remains in a correction, with both marijuana and CBD stocks trending lower, giving up some of their early-year gains—and perhaps building a bottom here.

In the meantime, more and more peripheral companies are getting in on the action, and we have been increasing our exposure to these in recent weeks while still holding substantial cash.

This week we’re selling one more of the pure-play marijuana companies, raising the portfolio’s cash level to about 27%.

Full details in the issue.

January was the worst month for the market since March of 2020. The S&P 500 was down 5.38% and the technology-heavy Nasdaq fell 10% for the month. But stocks are recovering so far in the first week of February as earnings come to the rescue.

After a wild couple of weeks where technology stocks corrected, down 10% or more from the high, and the S&P 500 fell 10% on an intraday basis, investors nervously await the Fed this afternoon. The chairman will show us the way. He knows everything.