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If you dug into any financial news this weekend, you were likely inundated by tons of bearishness that have arisen due to so many uncertainties, but when it comes to the market, it’s best to just keep it simple and focus on the action itself: The intermediate-term trend of the indexes and vast majority of stocks remains down, with only a few special situation names and some commodity-related titles able to buck the trend. We would say that, just in the past week, far fewer stocks joined the indexes at new correction lows, but we need to see such rays of light lead to real, sustained buying pressures to take action on them. We advise remaining defensive.


Not surprisingly, this week’s list doesn’t have many stocks near new high ground, but we are seeing many that reacted well to earnings and have shown some positive volume clues. Our Top Pick is one of them, a new name in the resilient shipping group.

My recommendation this week is a high-quality Chinese growth stock that has just completed a normal pullback. In fact, while the market was down today, this stock was up!

The market remains in an uptrend, and many of our leading stocks have been hitting new highs, even though the major indexes haven’t—yet. Thus I continue to recommend that you be heavily invested in a diversified portfolio of stocks—growth, value, dividend-paying and more. Someday, it will become appropriate to be more cautious, but that time is not now.
Today’s stock is a young technology stock with great growth prospects as it supplies its customers with the tools needed to secure digital operations of all types and sizes. It’s an aggressive, high-risk investment, but the trend is strongly up.
As for the current portfolio, six of our stocks have hit new highs in recent days, so we’re making great progress. The only changes this week are two downgrades from Buy to Hold. Details inside.

The broad market has now begun a well-needed correction, which is likely to go on at least a little longer, and our job is to adjust our portfolio, on a continuing basis, so that we are always invested in a diversified portfolio of stocks that fit your investment needs.

This week that means selling three stocks. But it also means that there are buying opportunities in some of our stocks.

As for the new recommendation, I’m leaning conservative once again, with a low-risk petroleum infrastructure stock that has great recurring business and is decently valued as well.

Note: Because of the Cabot Investors Summit, which will bring all the Cabot analysts together in Salem late next week, the next issue of Cabot Stock of the Week will come out a day early next week, on Monday.

There’s an old saying that a bull market climbs a wall of worry, and today is a perfect example, with many of our stocks hitting new highs despite the widespread fears of coronavirus. Thus I continue to recommend that you be heavily invested.
However, not all our stocks are strong, and this week three in particular have turned too weak to hold any longer. So out they go.


As for the new recommendation, it’s an insurance company (investment company) that pays a dividend but has great prospects for capital gains. Full details in the issue.

With consumers focused on social distancing and lockdowns to help prevent the spread of the coronavirus, many restaurants have no revenues, while others are generating a little income through delivery and pick-up. Yet, despite this uncertain outlook, the crisis will eventually subside.

In this issue, we highlight six restaurant companies with both the survivability and price discount traits.

First, note that due to next week’s holiday (and the market being closed), your issue will be delivered one day later, on Tuesday, January 19.

Today, the market’s main trend remains up, and thus I continue to recommend that you be heavily invested. However, I also see a lot of potential for corrections from this dizzy height, so I’m selling one stock today (TSM) and downgrading two to hold (NUAN and QCOM).



As for today’s recommendation, it’s a low-risk dividend-paying stock we actually owned for two months last year—and did well with. And I think the portfolio can benefit from it again now.



Full details in the issue.

In recent days, several portfolio companies reported quarterly and/or full-year 2015 results. General Motors (GM), Robert Half (RHI), Royal Caribbean Cruises (RCL) and Vulcan Materials (VMC) all surpassed market earnings per share (EPS) expectations.

The market bounced back in the first few days of last week, but Friday’s negative reversal, combined with today’s downmove, makes it clear that there are still sellers lurking out there. Our thoughts remain unchanged—on a near-term basis, expect more choppiness and hesitation; taking some profits on strength and holding some cash makes sense as we head into earnings season. That said, we can’t conclude the intermediate-term trend has turned down, either for the market or for most stocks; thus, while you should dump your losers and laggards, we recommend holding on to most of your best performers.

This week’s list reflects the recent environment—most of the names are either a bit thinly traded or have the ability to trade outside the market’s influence (housing, precious metals, etc.). Our favorite of the week is Fusion-io (FIO), a relatively new technology firm that is growing rapidly and has been acting very well over the past few months.

Stock Name	Price	Buy Range	Loss Limit
Accenture (ACN)	0.00	68-70	-
Align Technology (ALGN)	316.20	35-38	-
CLGX (CLGX)	0.00	26-27	-
Cosan Limited (CZZ)	0.00	15-16	-
Fusion-io (FIO)	0.00	29-31	-
NetSuite, Inc. (N)	0.00	60-62	-
ONYX Pharmaceuticals (ONXX)	0.00	83-87	-
Qihoo 360 (QIHU)	0.00	21-23	-
Whirlpool (WHR)	0.00	81-84	-
AUY (AUY)	0.00	18-19	-

It’s possible stocks are stretched, at least in the near term, and the just-underway earnings season will put that to the test in the coming weeks. The next big move may be to the downside, so today we’re adding some more portfolio protection in the form of a mega-cap health insurer that pays a modest dividend but has a history of beating the market. It’s the latest recommendation from Cabot Dividend Investor Chief Analyst Tom Hutchinson.

After last week’s Friday update, the market had a pretty ugly close, but the major indexes have had a decent week to this point, with all posting gains in the 1% range (give or take) as of Friday morning.

This stock was one of 2019’s biggest turnaround stories, and while it stalled out in the second half of last year, it’s making waves again thanks to a blowout Q1 report.

One portfolio stock reports good earnings and another moves to Hold.

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