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During the past three-plus months, the market has put in a firm foundation, with numerous tests of long-term support, positive divergences among various breadth measures and three legs down to the correction. And now we’re starting to see buyers take control—today our Cabot Tides flashed a green light, telling us to begin putting money to work.

The market continued to inch its way higher in the two weeks since I last wrote. The Stock of the Week portfolio isn’t inching – it’s soaring. Multiple positions in our portfolio were up double-digit percentages in the last couple weeks, with several others hitting new 52-week or all-time highs. As always, it’s a testament to the elite stock-picking ability of our superb analysts. And today, we add another stock, a familiar name that has regained momentum enough to warrant inclusion in last week’s Cabot Top Ten Trader advisory.

Details inside.

Lost in the frenzy surrounding all things AI are companies that fall under the “boring but important” category. This includes producers of everyday things we often take for granted but which are nonetheless crucial for the smooth functioning of countless segments of the economy. To be fair, these otherwise “boring” industries quite often provide investors with outsized opportunities for profit due to their under-the-radar nature.

It has been an exhausting search to find an advisory service as good as Cabot Small-Cap Confidential. The proof is in the pudding.
J. Cramer, Topeka, Kansas

I’m moving another five stocks from Strong Buy to Hold. It’s a normal seasonal pattern in the market that any stock that’s trading at its low point for the year during the fourth quarter will then remain low through the very last days of 2018 due to tax-loss selling. And unfortunately, the stock market has decided to present us with another correction, so most stocks are down in recent weeks.

Bruce Kaser, chief analyst of Cabot Undervalued Stocks Advisor and Cabot Turnaround Letter speaks about:
* Why bother with contrarian stocks when momentum stocks are working right now?
* How we find worthwhile contrarian stocks
* 2 contrarian stocks that we like

“Prudential Financial, Inc. (PRU 66.60 NYSE – yield 2.40%), a financial services leader with approximately $1.06 trillion of assets under management as of December 31, 2012, has operations in the U.S., Asia, Europe and Latin America. Prudential offers investment management, group insurance and other financial services in the U.S., and...

Current Market Outlook


Last week was a great one for the major indexes and leading stocks, with many surging higher on big volume to notch new highs, a good sign that big investors are putting money to work in growth stocks. That said, it’s not all peaches and cream out there—hundreds of stocks are actually hitting new 52-week lows (mostly energy and interest rate-sensitive stocks, but others, too), and to this point, only the Nasdaq has reached new high ground; the intermediate-term trend for most indexes remains neutral. Reflecting the terrific action of Top Ten stocks, we’ll nudge our Market Monitor up a notch; if you see a good set-up, go ahead and take it. But we’re still advising holding some cash on the sideline and being selective on the buy side.

This week’s list has a hodgepodge of stocks, many of which haven’t been featured here for a long time. For our Top Pick, we’ll stick with the big-cap growth stock theme that’s working well—Celgene (CELG) just popped out of a four-month base on big volume last week following a major acquisition. It’s buyable around here.

Stock Name	Price	Buy Range	Loss Limit
Intrexon (XON)	0.00	55-57	49-50
Take-Two Interactive (TTWO)	123.32	29.5-31	27.5-28
Progressive Corp. (PGR)	0.00	30-31	27-28
Blackhawk Network (HAWK)	0.00	41-43	38-38.5
Alphabet, Inc. (GOOGL)	0.00	675-700	630-635
Fitbit Inc. (FIT)	0.00	42-46	37-38
Domino’s Pizza (DPZ)	339.47	128-134	117-118
Celgene (CELG)	0.00	130-135	119-121
Barnes & Noble (BKS)	0.00	27.5-29	24-25
Alaska Air Group (ALK)	0.00	72-74	66-67
ACADIA Pharmaceuticals (ACAD)	47.84	47-50	42-43

The election is over. The biggest risk, a disputed outcome, has been avoided. The new President is being viewed by markets as generally good for business and stocks. The market is thrilled today and rallying substantially.

Our Cabot Tides are now positive, which means it’s time to put some money to work.

Landmines abound out there, especially as it relates to the Fed, with two inflation prints coming this week and the Department of Justice launching an investigation into Jerome Powell. And yet, volatility is low, stocks are near all-time highs, and another potentially strong earnings season gets underway this week. So, there’s reason for optimism, particularly given that growth stocks haven’t gone anywhere since late October. Small-cap stocks are starting to gain momentum, and today we add a Canadian one courtesy of Carl Delfeld, who last month recommended our newest portfolio addition to his Cabot Explorer audience.

Details inside.

The S&P 500 continues to grind higher, now posting a year-to-date gain of 10%. Investors are collectively buying the current narrative that supports these gains: The Fed is poised to cut interest rates later this year to avoid an almost-certain recession.

The market hit a pothole today, which isn’t totally unexpected given the recent run-up; in fact, in the short-term, we don’t see much of an edge either way, as earnings season is underway and growth stocks have generally been lagging.

However, longer-term, the evidence remains piled up on the bullish side of the ledger, both via our trend-following indicators and with a growing number of bullish studies. Thus, we remain heavily invested, though we remain choosy on the buy side given the market’s short-term uncertainties.

In today’s note, we discuss the recent earnings reports from Nokia (NOK) and Newell Brands (NWL), plus 15 other earnings reports from portfolio companies, some of which impacted their standing in the portfolio. Busy week, so let’s get into it.

Mike, Thanks so much for a great year of stock recommendations! If you only knew how much better you’ve made my life through your service. You’ll never know how grateful I am that I stumbled upon Cabot Growth Investor. I look forward to another stress free investment year in 2014. Thanks again for your service and for all I’ve learned from you, Paul, Tim, etc.
J. Schnereger, Boise, Idaho

AT&T (T) and Verizon (VZ) are perhaps the two most widely recognized telecom stocks. But which is the better stock today?