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With August in the rear-view window, it’s time for Wall Street to get back to full-time work. At present, trends continue to look good (but not great). Still, there are plenty of candidates to choose from, and this week’s comes from an emerging market that is not China; I think you’ll like it.

Surprisingly good earnings reports boosted many stocks in our portfolios in recent weeks, and the same factor has turned the trends of the major indexes favorable; it’s good to be invested.
But we must never grow complacent, and one way I reduce risk in the Cabot Stock of the Week portfolio is by diversifying by both industry group and investment style.
This week’s recommendation, for example, is a growth stock; it was originally recommended by Mike Cintolo in Cabot Top Ten Trader. But it’s in an industry that’s generally regarded as conservative, and where stocks are usually appraised on a value basis. I think you’ll enjoy it.

The past couple of weeks have brought a distinct change in the market’s behavior. While the major indexes continue their mild advance, beneath the surface, we’re seeing more and more stocks acting in a healthy manner, including plenty that have gapped up on earnings. That tells us that big investors aren’t waiting patiently to build positions—they’re buying with both hands, driving the market’s leading stocks higher. There will be bumps in the road, of course, but you should be putting money to work in the market’s leading stocks at prudent buy points. This week’s Top Ten contains something for everyone—some commodity, some growth, some big, and some small. Our favorite of the week is Gafisa (GFA), a fast-growing Brazilian homebuilder that shot out of a nice, tight pattern last week. Earnings are due out tonight, but we think you can buy some around here.

Stock Name	Price	Buy Range	Loss Limit
CNQR (CNQR)	0.00	36-38	-
FEED (FEED)	0.00	17-20	-
FST (FST)	0.00	56-60	-
GFA (GFA)	0.00	42-46	-
KSU (KSU)	0.00	42-46	-
MA (MA)	0.00	260-280	-
MMR (MMR)	0.00	24-27	-
PWRD (PWRD)	0.00	29-32	-
WLT (WLT)	0.00	73-83	-
X (X)	0.00	155-165	-

Last week we opined that the headlines filled with bad news about Bear Stearns had the potential to mark a major low in the market’s bear phase. And this week, we’re more optimistic that’s the case – hence the Market Monitor above, which has shifted to neutral. Of course, the market is always a challenge, and last week brought rotation out of many commodity stocks, and into some other groups, such as financials and retail. In our view, the commodity stocks are a mixed bag (some are still fine, others, not so much), but the overall market action is encouraging, so you should be looking to put some—but not all—of your sidelined cash to work. This week’s list contains a mix of growth stocks, turnaround stories and some familiar faces; a few have broken out of good-looking basing patterns over the past few days. Our favorite of the week is Kirby (KEX), a shipping company that has staged an extremely powerful breakout in recent days, thanks to a great earnings report.

Stock Name	Price	Buy Range	Loss Limit
OFG (OFG)	0.00	20 - 22	-
PRGO (PRGO)	0.00	33 - 37	-
TUP (TUP)	0.00	36 - 39	-
URBN (URBN)	0.00	31 - 33	-
XEC (XEC)	0.00	47 - 52	-
CSX (CSX)	0.00	53 - 56	-
HCBK (HCBK)	0.00	16 - 18	-
JOE (JOE)	0.00	39 - 45	-
KEX (KEX)	0.00	52 - 55	-
MA (MA)	0.00	210 - 225	-

With the market in a defined downtrend, the odds are against the bulls; buying a bunch of stocks, even if they have tremendous Top Ten-type relative strength, will usually cost you money. Thus, you should be focusing on building your watch list of resilient stocks with top-notch growth stories; doing that today will prepare you to pounce once the market gives us a green light. This week’s (and last issue’s) Top Ten is a great place to begin building – you’ll find a wide array of stocks here, from different industries with different prospects. Many are familiar names, which we view as a good thing; big investors are still sitting tight with many leaders, giving them a shot at racing ahead once the bulls re-take control. Our favorite of the week is Chicago Bridge & Iron (CBI), partly due to its chart (some recent high-volume buying suggests good support on any weakness) and partly due to the ongoing boom in oil and gas infrastructure.

Stock Name	Price	Buy Range	Loss Limit
AG (AG)	0.00	54-57	-
BIDZ (BIDZ)	0.00	14-17	-
BUCY (BUCY)	0.00	80-84	-
CBI (CBI)	0.00	48-52	-
CNX (CNX)	0.00	52-55	-
FLS (FLS)	0.00	86-93	-
FSLR (FSLR)	0.00	190-210	-
MA (MA)	0.00	175-185	-
STP (STP)	0.00	60-65	-
UTHR (UTHR)	0.00	90-100	-

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 euphoric vaccine rally has driven the market indexes to all time highs. A vaccine likely means the end of the pandemic, sooner rather than later. The removal of the remaining lockdown restrictions should unshackle the economy and bring on a full and robust recovery.

A full recovery will lift those stocks and sectors that depend on the Main Street economy. It will lift cyclical sectors like energy, finance and hospitality that had not participated in the partial recovery. It’s already happening. The losers of the earlier stock market recovery are on fire.



In this issue I highlight one of the best banks in the country. It is a highly desired stock that should be very quick to recover. The stock has strong momentum and is still priced well below the 52-week high. This issue also highlights two covered call opportunities to cash in on the market rally.

The market is still trending higher. But it can’t continue at the recent pace. And a 10% or so correction is possible at any time, especially after such a strong move higher. While the short term is always unpredictable, I’m still bullish over the intermediate and longer term.

With the market looking topsy in the near term, it’s a great time to write covered calls. In this issue, I highlight two call writing opportunities on existing portfolio positions. These calls provide a great way to cash in on a high market without giving away too much upside potential.

What inflation? What supply-chain issues? Headlines be damned. This market is on the cusp of yet another new all-time high.

It’s the post-Labor Day market. Investors tend to start paying attention again after the summer. This refocus prompted one of the worst selloffs this year.

Investors were positive about things in the middle of August before they went on vacation and stopped paying attention. The market rode out the rest of the month in the same form. But investors coming back to real life after the summer realized that there might be more to worry about.

This week, seven companies reported earnings, including Capital One Financial (COF), General Electric (GE), Mattel (MAT), M/I Homes (MHO), Newell Brands (NWL), Polaris (PII) and Xerox Holdings (XRX). Newell reported this morning, so our comments are brief.

The market has been spectacular. Can we expect more of the same in 2026?

The S&P is up a staggering 95% since this bull market began in October of 2022. It’s up 128% this decade, for an average annual return of about 15%, 50% higher than the historical average.

The huge returns have been all technology. Without technology, market returns for the past few years would be rather uninspired. But there is growing investor angst regarding the sustainability of technology valuations and whether all this massive AI investment will deliver tangible payoffs. The sector could have a tougher year in 2026.

Fortunately, there are a lot of stocks that aren’t technology. The rest of the market cares more about interest rates and the economy, and those things are shaping up well. The Fed is in a rate-cutting cycle, inflation is subdued, oil is cheap, and a higher level of economic growth is expected in 2026.

The rally is broadening, and 2026 may be a year for non-technology stocks to shine. Overall earnings are expected to grow 14% next year, with much of the growth over last year coming from other sectors. Many stocks in other industries sell at cheaper valuations than the market, and performance is improving as investors seek to diversify beyond technology.

The bull market has been lopsided toward technology so far. But 2026 is shaping up to be a year for other stocks to catch up. In this issue, I highlight a stock poised to do just that in the year ahead.

The market has been bouncy but slightly higher for the year so far, but it’s a different story under the hood.

Eight of the eleven S&P stock sectors are outperforming the market, and none of them is technology. That’s a stark difference from most of this bull market, where technology and AI drove the market higher while most other sectors underperformed. Now, the rally is broadening.

The market isn’t as expensive as it may seem, as the valuations of many stocks are below that of the overall market and don’t reflect the index returns of the bull market so far. Most of the expensive stocks are in technology, but those stocks are getting cheaper as well.

In this issue, I highlight two of the most promising dividend stocks for 2026. Both stocks have been in the portfolio before and have provided great income and total returns in a short period of time. They also can generate huge call premiums.

Stocks made yet another new high this week.

The S&P 500 has returned 17% this year and is well on its way to another 20%-plus return year, making it three consecutive years of such returns for the first time in nearly 30 years. Sure, the market likes rate cuts, but artificial intelligence is the main force driving the market higher.

Technology stocks, which now comprise more than a third of the S&P index, have driven the market higher for most of this three-year-old bull market. While AI is the primary driver of the market, it isn’t about just technology stocks anymore. The AI catalyst is driving other sectors higher.

AI is transforming the utility sector. The best stocks now offer strong growth in addition to defense. After being stagnant for decades, electricity demand is exploding. AI requires enormous amounts of electricity for the data centers that house the computer components. Electric vehicle proliferation and rapidly growing onshoring of manufacturing are also juicing demand.

In this issue, I highlight one of the best utility stocks on the market. This unprecedented environment is transforming the market’s most defensive sector into one that also offers exciting growth. The combination of defense and growth is unbeatable.

It’s been a wild market so far this year. The S&P 500 has gone from the cusp of a bear market to within 5% of the all-time high in just seven weeks.

Uncertainty remains. A negative development could still roil the market on any day. Negotiations will likely take more twists and turns in the weeks and months ahead. But investors appear, at this point, to believe that the tariff situation won’t blow up. The fear of Armageddon is being removed.

But there’s still the economy. It could gain steam or slow toward recession. We are in a place, at least for a while, where anything can happen. It’s tough to pick a horse amid such varying possibilities. Fortunately, there is a trend to bank on that will thrive regardless of the near-term gyrations of the market or economy.

Artificial intelligence is a massive growth catalyst that will endure and thrive in any environment. Investors temporarily forgot all about it. It’s a generational phenomenon that hasn’t gone away. It just took a break. Now, those stocks are soaring back.

In this issue, I highlight a stock that is likely to benefit in the months and years ahead. It is still well off the high with good momentum and has a huge catalyst for growth in the months and years ahead.

Uncertainty is growing while the market is perched at the all-time high.

The S&P 500 soared by a remarkable 29% in just over three months. At the same time, tariffs are back and there is still a high degree of uncertainty regarding the economy.

Sure, the overall market is high. But what is true for the S&P 500 isn’t necessarily true for many individual stocks. Technology drove the S&P 500 index higher. But much of the rest of the market is well below the all-time highs. Some stocks and sectors are barely positive YTD.

Energy has lagged the market all year. At the same time, the fortunes of certain companies are improving. Natural gas volumes are growing at a strong clip as demand for electricity is skyrocketing from data centers. At the same time, overseas demand is expanding with no end in sight.

In this issue, I highlight an energy company with rapidly growing demand for its services that sells at a cheap price and pays a high yield. We don’t have to chase stock prices into the stratosphere. Let’s invest where it’s still April.

For the past two months, the market has been positive by most top-down indicators, but it’s gotten a lot trickier as time has gone on, with many growth areas cracking intermediate-term support, with repeated bouts of rotation and with upward progress slowing down. The good news is that even after today’s broad selling, the intermediate-term trend remains pointed up and many Top Ten stocks are holding their own, but just going with what we’ve seen, it’s getting tougher to make (and keep) much money. Right here, we’ll keep our Market Monitor at a level 7, but we think holding some cash and taking some profits on the way up remains a good strategy.

Despite the rotation, we did see some earnings winners last week among growth stocks, and this week’s list has a few alongside names from other areas of the market. Our Top Pick is a smaller name that broke out powerfully last month and has a solid story—shares are a bit thinly traded, so start small and aim for dips.