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The major indexes continue to hit new highs, all Cabot’s market timing indicators remain positive, and our portfolio is solid, overall, though I’m downgrading three stocks to Hold today for various reasons.

As for today’s new recommendation, it’s a very familiar name—a dividend-paying Wall Street Blue Chip—that Mike Cintolo says now has great growth potential because of its new business.



Details in the issue.

With weeks of churning action and complacent sentiment, the market was flirting with trouble for a while, and now it’s hit the intermediate-term tripwire. Thus, we mostly advise defense here—after a big run-up and the aforementioned churning, the odds favor more short-term downside testing and/or pain ahead. That said, the odds also favor a resumption of the longer-term uptrend down the road, so it’s best not to get too holed up in your bunker, either. Tonight, we’ll leave our Market Monitor at a level 6, and the main message is to hold a good chunk of cash, honor stops and be very selective on the buy side.

This week’s list is another broad mix of stocks, with something for everyone in terms of stories, sectors and setups. Our Top Pick is a reliable grower in the infrastructure area that’s pulling back toward support. Given the market, keep new buys on the small side.

It was another positive week for the market, with some major indexes nosing to new highs, and while it’s far from 1999 out there, individual stocks are seeing very few breakdowns while the leadership ranks gradually expand. Of course, there remain some headwinds out there, but the intermediate-term evidence remains positive, and we’re now even seeing some longer-term evidence start to point up. Thus, we’ll nudge our Market Monitor up another notch to a level 8.

This week’s list has something for everyone, with some zingers, some steady Eddies and more than a few recent earnings winners. Our Top Pick looks like an emerging blue chip in the cloud software field, and shares emerged from a big consolidation after earnings last week.

Three years ago this month, I went to see my first movie in a theater since Covid. The film was Top Gun: Maverick, a movie that tapped into my 1980s nostalgia and was more entertaining and coherent than your average sequel. I wasn’t alone – the film grossed nearly $1.5 billion worldwide, making it the highest-grossing movie of Tom Cruise’s career, which is really saying something. Steven Spielberg thanked Cruise for “saving movie theaters.” He may have been right: In the two previous Covid-tainted years, 2020 and 2021, U.S. movie theaters grossed just over $6.5 billion combined – barely more than half of the industry’s 2018 peak of $11.89 billion.

In today’s note, we discuss pertinent developments for some of the stocks in the portfolio, including Agnico Eagle Mines (AEM), Centuri Holdings (CTRI), GE Aerospace (GE), Intel (INTC), Paramount Global (PARA), SLB Ltd. (SLB) and UiPath (PATH).


Centuri Holdings (CTRI) remains a strong performer in light of the tariff backdrop and thanks also to recent award wins.

The bull market is alive and well, but the growth stock environment remains tricky at best, with more names either testing or cracking intermediate-term support during the past couple of weeks. Eventually, there will be another run in growth, possibly soon given the many stocks that have built launching pads during the past two-plus months; we do have an expanding watch list of solid setups. But for now, we’re playing things cautiously, trying to give our positions a chance but also holding a good chunk of cash until the meat-grinder environment shifts.

Insider selling is ramping up, but there’s one sector where insider selling is on the rise: energy. Here are two energy stocks insiders are buying.

WHAT TO DO NOW: Remain cautious, though remain flexible. The market’s initial bounce this week was good to see but it didn’t offset the recent weakness, and today’s Meta-inspired selloff didn’t help the cause. All told, our Cabot Tides remain negative, and most growth stocks are still in rough intermediate-term shape—though the long-term picture is still positive. After selling the rest of our Arista (ANET) position last Friday, our cash position is 44%—we’ll sit tight tonight with our remaining names and our cash and see how earnings season continues to play out.

The market remains in good health, and all Cabot’s market timing indicators are positive, telling us the odds are that the market will be higher in the months ahead.
For today’s recommendation, I have a well-known dividend-paying mega-cap that has a very good chance of providing good capital gains in the months ahead, thanks to a landmark deal with Apple.
As for the current portfolio, overall, our holdings are performing quite well, with many hitting new highs in recent weeks. The portfolio is now full, but I have no sell recommendations. Details in the issue.

There is a brand new industry just coming of age.

New industries only come along once in a while and they almost always present an array of investments that will be superstars of tomorrow. We dream of going back in time and buying Microsoft (MSFT) or Starbucks (SBUX) or Netflix (NFLX) when they were new, upstart companies. But we might get another bite of a similar apple in 2020.

Current Market Outlook


The issue following the huge selloff on June 9 was titled, “What Happens From Here is What Counts,” and so far, we’ve been encouraged by what we’ve seen—the Nasdaq found intraday support three times in the 6,100 to 6,150 area last week, and few growth stocks decisively broke key support levels. And today, we saw the Nasdaq and many leading stocks pop nicely. In the short-term, we can’t say the market is completely out of the woods, so picking your spots makes sense. But our main focus is on the intermediate-term, and the trends there remain up for most major indexes and the vast majority of leading stocks. All in all, we remain mostly bullish, though don’t be surprised to see some more “tests” for the market in the near-term.

This week’s list is also encouraging, as our screens aren’t finding it difficult to find great charts and enticing stories. Our Top Pick is LendingTree (TREE), which just broke out in late-April and has held up well during the recent market wobbles.

Stock Name	Price	Buy Range	Loss Limit
Bluebird Bio (BLUE)	0.00	106-112	96-100
Cooper Companies (COO)	0.00	234-242	220-223
HealthEquity, Inc. (HQY)	70.70	50-52	45-46
IAC/InterActiveCorp (IAC)	0.00	99-103	91-94
Impinj (PI)	0.00	52-56	46-48
Lending Tree (TREE)	411.51	166-174	152-156
PayPal (PYPL)	147.00	51-53	47-48
Summit Materials (SUM)	0.00	27-28.5	25-26
Supernus Pharmaceuticals (SUPN)	52.50	37-39	33-34.5
Zillow (Z)	76.64	44.5-47	40.5-42.5

The market has rallied like crazy over the past seven weeks. It’s up over 30% from the low in March. The market is already looking beyond the coronavirus to a strong economic recovery.

But stocks are trading on a rosy scenario that may not come true. While the market is always difficult to predict in the near term, there is at least a good chance of disappointment going forward. The overall market may have gotten ahead of itself and it is prudent to prepare for the possibility of more turbulence ahead.



For those reasons, the Cabot Dividend Investor portfolio is only buying very selectively. While the overall market may be shaky at this point, certain companies are thriving during the pandemic. There are niches where business is actually booming.



In this issue I highlight two stocks that are selling at bargain prices, have businesses barely affected by the pandemic, and stand to thrive in the post-Covid-19 market as well.

I was recently asked, “Why are there so few small-cap stocks in the Cabot Turnaround Letter portfolio?” That’s a fair question—a timely one at that—so I’ll address it here.

It’s a thorny subject, but one that I think merits at least a brief discussion: direct government intervention as it pertains to the private defense sector—and by extension, to our holding in GE Aerospace (GE).

On January 7, the White House issued an executive order (EO) that prohibited defense companies from making share repurchases and paying dividends to shareholders. It also placed restrictions on executive compensation, except for companies making investments to modernize weapons production facilities.

How can you keep more of your money and give less to Uncle Sam? For investors, here are five tips for how to reduce your investment taxes.

In this Month’s Issue of Cabot Early Opportunities I reveal a few tips to help you buy into IPOs at reasonable prices and we look at some compelling data that suggests the 150 to 180 day period after IPO just might be one of the ideal times to buy.

We also go inside five companies that look great right now, including a few software stocks, a consumer goods company and a MedTech stock that’s flying under the radar now, but not for long!

The market’s primary evidence remains in good shape, and that’s especially true for leading growth stocks continue to act very well, and after two-plus years in the wilderness, we’re optimistic that the best names can continue to do well. That said, near-term, risks are rising for some sort of change in character (pullback, rotation, etc.) as there’s a growing divergence and some of the action out there is frothy. Because of that, we’re mostly riding our winners, but we sold a couple of laggards earlier this week and--for now--are holding about 30% in cash.

All that said, stay tuned: We could put some money back to work in the days ahead as earnings season continues to roll on, but for now, we’ll stay a bit closer to shore than we have been and see how things play out.

The title says it all—overall, the trend remains up for the major indexes and most stocks and sectors, and so our Market Monitor remains in bullish territory. But there’s also no question that the environment is whippy; big moves happen almost daily, and earnings season continues to bring a bunch of big moves in both directions. None of this is bad, per se, but it does mean you have to be more discerning with your buys and make sure your timing is right and your stops aren’t too tight.

This week’s list has yet another impressive crop of stocks with good stories and charts that have shown large recent buying power (usually on earnings). Our favorite is Yelp (YELP), a relatively recent IPO that has a great, sustainable story, rapid sales growth and a stock that just exploded higher on earnings.

Stock Name	Price	Buy Range	Loss Limit
Yelp (YELP)	41.30	29-31.5	26-27
Trulia (TRLA)	0.00	33-35	29.5-30.5
Seagate Technology (STX)	0.00	39.5-41.5	36-37
Parexel Corp. (PRXL)	0.00	42-44	39-40
IntercontinentalExchange, Inc. (ICE)	0.00	165-170	156-158
Hertz Global Holdings, Inc. (HTZ)	0.00	23-24.5	21-22
Hornbeck Offshore (HOS)	0.00	49-50.5	44-45
Guidewire (GWRE)	90.60	39.5-41	35-36
Gilead Sciences (GILD)	75.10	51-54	47-48
EQT Corporation (EQT)	0.00	73-75	67-69

As a growth investor, I’ve spent years studying the things that drive growth investors crazy, and I have a little list I’d like to share with you. I even have some recommendations for how to keep your blood pressure down while playing the growth game.

Here at Cabot we try to find out which way markets are trending and manage our portfolios accordingly.