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Today’s special bulletin brings news on one of our stocks, followed by brief comments on additional portfolio stocks.

This Weekly Update includes summaries for four Cabot Benjamin Graham Value Investor companies which reported quarterly financial results or other important news during the past week. I have also included questions from subscribers along with my answers.

One new stock joins the Growth & Income Portfolio, plus updates on three other stocks.

There’s been a lot of movement in recent days in the broad market, the major indexes and various sectors, so let’s get right to our thoughts.

Shares of Vertex Pharmaceuticals (VRTX) rose 22% this morning on reports of successful results of Phase III studies of VX-661, a cystic fibrosis combination treatment.

It’s been a constructive week in the market, with most major indexes tacking on gains, and the largest upmoves registered by small- and mid-cap indexes.

Well, it couldn’t last forever, right? After months of hardly any pullbacks on the heels of the massive post-election rally, stocks—including small caps—finally had a down week.

I’m closely watching our newest position, which recently reported results and is now trading right around the 9.5 to 10 level. The current trading range should represent a nice entry point to add to existing positions, but we’ll need a little support from the broad market to prevent a drop into the low 9s.

The Emerging Markets Timer is in good shape, with iShares EM Fund sitting well above its 25-day moving average.

We remain mostly bullish on the market because the evidence remains mostly bullish. All major indexes are above their 50-day lines, the Nasdaq has shot ahead to new highs and many Top Ten stocks are acting well—strong stocks are generally reacting well to earnings and following through on the upside. That said, there are a couple of things we’d like to see before we get fully bullish.

It’s been a wild week, much more so than a high-level look at the small-cap index would imply. According to the index, we’re just moving sideways with a little wiggle here and there. But when you look within our portfolio—wow! This was anything but a quiet week. Stocks were jumping all over the place as earnings reports came out.

Recently, I decided to hold our Visa (V) calls through earnings and sold our Coca-Cola (KO) calls the day before their earnings announcement. I thought I would break down why I decided to take the risk in V, and not in KO.

After three weeks up in a row, the major indexes were flat-to-lower this week, with the lagging small- and mid-caps performing worst, and the leading Nasdaq holding up the best.

Here are earnings updates on three of our stocks, including a rating change, plus minor updates on three others.

Most of the market’s evidence remains bullish, so we remain optimistic that higher prices are ahead; the Model Portfolio is more than 80% invested in nine strong stocks. That said, it’s not all peaches and cream, as some key indexes are again testing their 50-day lines and we’re still in the thick of earnings season.

We have non-urgent news and price action today: a few trading ideas, and a possible new CEO.

The S&P 500 and Dow finally joined the Nasdaq at new highs this week, although they continue to underperform the tech-oriented index. Despite this divergence, most signals continue to point to further gains for the stock market in the months ahead. I have one rating change today.

Updates on four of our stocks—all rated Strong Buy.

The market has finally begun to consolidate after a heady eight-week run in the major indexes and leading stocks. It’s never fun to see things retrench, and we do think the next couple of weeks (very roughly speaking) could see more choppy, tedious trading. But our focus remains on the intermediate- and longer-term picture, and on that front, the evidence remains bullish, so we remain heavily invested.



The Model Portfolio has been steadily putting money to work, including filling out two positions last week. We now have eight stocks and a cash position of around 14%.



In tonight’s issue, we give our latest thoughts on all our positions and write about yet another unique, longer-term bullish occurrence that bodes well going forward.

The broad market remains strong, and all Cabot’s market timing indicators are currently positive, so I remain optimistic that we’ll see higher prices in the month ahead.

This week’s recommendation is a growth-oriented medical stock with great potential; it was originally recommended by Mike Cintolo last November and it’s currently hitting new highs.



And as for the current portfolio, most of our stocks look fine, but because I limit the portfolio to 20 stocks, one has to go—and it’s the weakest.



Details in the issue.