Search

This month, we’re going back to what’s served us well, small business software. The company has a cloud-based software solution tailor-made for property managers. It’s growing revenue by more than 30%, has no debt, and is on track to become profitable this year. The chart is solid. And I believe the company will ultimately be sold, hopefully at a nice premium to where shares trade today.

Investor received a well-deserved wake-up call last week but the big-picture trends are still positive and growth stocks continue to be where the action is. In this month’s Issue of Cabot Early Opportunities, we take a look at a diverse mix of fresh opportunities that are all linked by one commonality – they give investors exposure to some of the most interesting and durable growth trends out there.

Artificial intelligence is the biggest thing in the market these days. But AI doesn’t work without energy.

The world doesn’t run on technology. It runs on energy. Energy is the respiratory system of the modern world that can’t function without it. Technology doesn’t work without electricity powering its systems.

Sure, clean energy is the future, but not yet. In fact, the U.S. and the rest of the world still rely on fossil fuels (oil, natural gas, coal) for more than 80% of energy needs and will likely continue to do so for decades to come. But fossil fuel consumption is changing. A new king is emerging – natural gas.

Natural gas is by far the fastest-growing fossil fuel. It is the number one fuel source by far to generate electricity in the U.S. and much of the rest of the world. There are also powerful trends adding to the already growing demand.

U.S. electricity demand is growing at breakneck speed because of data centers, electric vehicles, and increased onshoring of manufacturing. U.S. natural gas exports, in the form of natural gas liquids (NGLs), are soaring. This country is already the largest exporter, and the growth is staggering. U.S. NGL liquid exports over this past year have grown a whopping 67% over the prior year.

Natural gas was already the fastest-growing fossil fuel. The addition of soaring electricity demand and exploding U.S. exports accelerates that growth. The fuel is shaping up to be a dominant theme in 2026. In this issue, I highlight the country’s largest producer of natural gas.

With the market now down 1.25% on the day, some of our buy-writes are reaching, or breaking, our break-even levels. If this selloff continues, we may need to exit or adjust these positions. If we adjust our buy writes, we will likely close the call we’re short and sell another call, which will further lower our cost basis.

One thing that few investing systems really cover is position sizing, however it is one of the most important things to know.

First and foremost, all of us at Cabot wish you a great long holiday weekend; our offices will be closed tomorrow but we’ll be back at it again on Monday.

As for the market, the story remains largely the same--there are some blemishes, but most of the evidence is positive, so we’re sticking with a heavily invested stance, albeit with some moves based on the action of individual stocks. Earlier this week, we trimmed a bit, leaving us with around 14% in cash.



In tonight’s issue, we write about one new liquid leader we’d love to own at the right price, along with all our latest thoughts on our stocks and the market.

In researching potential candidates for this month’s edition of the newsletter, I narrowed down my final list of top choices to the usual 10 stocks. What caught my attention when reviewing the list, however, was how many of them were in the healthcare sector—in particular, the therapeutic arena.

I was gratified by this discovery since I feel that a.) medical stocks are underrepresented in the portfolio, and b.) the sector is at once defensive in nature (always a good thing in my estimation) yet also poised to benefit from ongoing sector rotation.

This month’s candidate is another software stock—but not a high flyer. Rather, this company is still scooting just below the radar, and trades at a big discount to most of its peers. When you value it based on growth, it’s downright cheap—but valuation isn’t why we’re buying it.

Just when it looked like happy days were here again, volatility has reared its ugly head.

Granted, this week’s volatility spike was muted by historical standards, but relative to the ultra-low volatility of the last few weeks, it was enough to give pause for the bulls.

In today’s note, we discuss pertinent developments for some of the stocks in the portfolio, including GE Aerospace (GE), Paramount Global (PARA), SLB Ltd. (SLB), Starbucks (SBUX) and UiPath (PATH).

This month’s catalyst report features a mixed bag of longer-term attractive turnaround candidates in industries ranging from car rentals to dental equipment to semiconductors.

With plenty of potential potholes threatening the stock market, some defensive stocks make sense. Here’s one defensive small-cap growth stock to consider.

Current Market Outlook


The downtrend continues, with the major indexes extending their latest leg lower, with most reaching new lows this morning and some (like the S&P 600 SmallCap) falling more than 20% from their all-time peaks. We continue to keep a very open mind, especially given the horrific sentiment environment that’s emerged—various measures tell us investors are beginning to throw in the towel, which, combined with the fact that we still see many resilient growth stocks means it wouldn’t shock us to see another rally attempt unfold. But that’s speculation at this point—with the trends pointed down for the market and most stocks and sectors, you should remain in a defensive stance, with most of your portfolio in cash and, if you buy, buying just small positions.

This week’s list is another that’s full of stocks we think can do very well if the market can get going. Our Top Pick is Tableau Software (DATA), one of the strongest growth stocks in the market today as big investors buy into its transition to the cloud.

Stock Name	Price	Buy Range	Loss Limit
Ciena (CIEN)	44.25	32-33.5	29-30.5
Cree, Inc. (CREE)	67.96	42-44	39-40
CyberArk (CYBR)	111.74	68-71	63-64.5
Franco-Nevada (FNV)	125.51	69.5-72	63-64
MarketAxess (MKTX)	439.96	213-218	200-204
PayPal (PYPL)	147.00	82.5-85	77-78
Pinduoduo (PDD)	87.53	21-22.5	17.5-19
Tableau Software (DATA)	126.42	116.5-121	107-109
Twilio (TWLO)	183.39	85-89	75-77
Twitter (TWTR)	40.37	32-34	29-30.5

Recent market volatility has sparked a rash of insider buying. But not all insider buys are created equal. Here’s how to identify the ones that matter.

Many major indexes have hit new highs in recent days, and all Cabot’s market timing indicators are currently positive. Conclusion: it’s a bull market and you need to be heavily invested.

But, as always, you need to manage your portfolio. In our own portfolio, eight of our stocks have hit new highs in the past week, which is great. But two of the others are being downgraded to hold because their prospects are less secure.

As for today’s new recommendation, it’s a young, fast-growing company in a high-risk/high-potential market sector. It’s certainly not for everyone, but for aggressive investors, it could be fun.

After a big run higher for the market to end 2023, 2024 got off to a rough start yesterday, especially for growth stocks. And while yesterday was sloppy, this action isn’t terribly surprising as crosscurrents in the new year are typical.