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The market encountered a little wave of selling last week, with a big reversal on Tuesday and some follow-through selling on Thursday. But leading stocks held up well, and in fact, we continue to see more and more stocks joining the party. Sure, it’s not a wild bull market, and yes, there’s always the chance that post-Labor Day some big investors will sell into the recent rally. But there’s also the chance that this under-the-radar advance (most investors still believe the market is languishing) will gather steam! As always, it’s best to go with the evidence, and today, that evidence is bullish.

The expanding leadership can best be seen in our recent Top Tens, including this week’s list, which has all kinds of stocks and sectors. Our favorite of the week is Teradata (TDC), a leading play on the “big data” trend. The stock has stormed back this month and looks ready to assault new-high ground soon.

Stock Name	Price	Buy Range	Loss Limit
Chico’s FAS (CHS)	0.00	17-18	-
The Hain Celestial Group, Inc. (HAIN)	0.00	66-69	-
IACI (IACI)	0.00	50-53	-
JAH (JAH)	0.00	47-49	-
Mellanox Technologies (MLNX)	92.00	109-116	-
NetSuite, Inc. (N)	0.00	54-56	-
Sherwin-Williams (SHW)	526.09	135-141	-
SolarWinds (SWI)	0.00	51.5-54	-
Teradata Corporation (TDC)	0.00	73-76	-
TFM (TFM)	0.00	58-61	-

This is a fantastic environment for income. The upward bias of the market is creating high call premiums. And certain pockets of the market still offer deep value and higher dividend yields than have existed in many years.

In this issue I identify three excellent dividend stocks to buy now.



One is a high yielding energy play with a stratospheric, but safe, yield. Another is one of the most defensive and reliable income generating stocks in the market that still offers good value and a strong yield. And the third is a technology stock that sells at a reasonable price with an incredibly strong catalyst for the stock price to shoot up in the future.



The issue also includes covered calls on these same stocks that will provide a double digit income in a short time if the stocks move higher, and a great income return if they don’t.

In the August Issue of Cabot Early Opportunities, we continue to lean into the market rally, be it bear market rally or new bull. We step up to the plate with a partial position in a biotech stock I’ve been eying, jump into a rapid-growth security software name and also a fintech company in a recovering industry. Two more conservative growth ideas are added to our Watch List and may fit the bill down the road should the market soften.
Enjoy!

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.

Last Thursday evening, I was a guest at a friend’s regular poker game. It seemed friendly enough – the regulars were average players (like myself), pleasant to spend time with (no jerks), and the evening included a tasty dinner. Also, favorably to me as the newbie, the stakes were modest.

The games were straightforward: 5-card draw, 7-card stud high-low, while a few others included a small field of common cards similar to Texas Hold’em. Betting was reasonable, with limits on both the size and number of raises. So far, so good.

In selecting today’s stock, I looked for a quality stock with a strong and healthy technical pattern that was presenting a decent buy point. Oddly, it’s a bricks-and-mortar retailer, a category with an abundance of losers these days. But it’s a winner, and I think you’ll like it.

It’s been a tough market for covered calls. Although the market has rallied off the low, call premiums are subdued because investors are less willing to bet on higher prices in the future with still high inflation, a hawkish Fed, and a looming recession.

Many of the more successful positions were called away at options expiration as they exceeded the strike price. But in hindsight it was beneficial to take those profits as well as generate a high income. Many of the remaining portfolio positions left are more cyclical stocks that have fallen below the purchase price. Several more defensive positions have since been added to the portfolio.

The market has hit a little turbulence as we wade into the early innings of the Q3 earnings season. But despite the bumps, there are more than enough stocks acting well enough to fill the pages of the October Issue.

This month, I continue to spread things around, exploring new ideas from the Fintech, software and coal (yes, coal!) industries while plucking two steady performers from our Watch List to add to the portfolio.

Enjoy!

In doing this month’s research, I was struck by the preponderance of excellent investment opportunities within the banking industry – so many that I could fairly easily create a mutual fund entirely devoted to bank stocks!

We all want to find those rare gems that are disrupting big markets with new solutions.
Today’s company may be one such opportunity. It’s relatively unknown and has a software platform that can address $45 billion in annual enterprise spending right now. That’s a big pond.
It’s a story about big data, digital transformation and business intelligence (BI). These are more than buzzwords. They’re what every company in the digital age needs. And this little guy can give it to them.

A bubble in shopping malls is forming, and hedge funders are plotting their next big short. I’d rather take the other side, and find the best stocks to buy.

Small caps made no net new progress over the past week but we definitely saw some movement under the surface. This week we’re pulling back just a little given some softening in momentum stocks. A few positions were moved to hold, but for now we’re not cutting anything from the portfolio.

Commodity stocks have been (and remain) the leaders of the market’s advance, but interestingly, the tech-heavy Nasdaq has been outperforming all other major indexes for the past few weeks. Now, finally, some individual tech stocks are beginning to pop up—there are two chip stocks and one hard disk drive maker in this week’s Top Ten. We’re not ready to tell you to move a ton of money into technology sectors, but it’s a sign the rally is broadening out. Elsewhere in this week’s list, there are the usual suspects of oil, natural gas, steel and alternative energy. Our favorite of the week is Marvell Technology (MRVL), a chip firm that gapped up in a big way after its earnings announcement last Friday. We think you could nibble around here, although a drop of a point or two isn’t out of the question.

Stock Name	Price	Buy Range	Loss Limit
AMSC (AMSC)	0.00	30-33	-
CMI (CMI)	0.00	67-71	-
EAC (EAC)	0.00	65-70	-
GTI (GTI)	0.00	24-26	-
HK (HK)	0.00	27-29	-
MA (MA)	0.00	295-305	-
MRVL (MRVL)	0.00	15-17	-
NETL (NETL)	0.00	34-36	-
PCX (PCX)	0.00	100-110	-
WDC (WDC)	0.00	34-36	-

This week, we review earnings reports from Capital One Financial (COF), General Electric (GE), Nokia (NOK), Western Digital (WDC) and Xerox Holdings (XRX).

Next week, we anticipate earnings from Polaris (PII) and Janus Henderson Group (JHG). Please know that some reporting dates are estimated based on the companies’ reporting history, others are confirmed dates. As always, it’s likely that some companies will report on a day different from what we anticipate.

Few things are more enduring than America’s love of a good hamburger. Indeed, the iconic sandwich is so much a part of the country’s pop cultural heritage that, according to numerous opinion polls, it’s one of the first things foreigners mention when asked to name the most American symbol they can think of.

Markets are hoping for some sort of breakthrough from the Xi-Trump meeting on the sidelines of the G-20 meetings in Japan over the weekend. Most likely there will be some positive face-saving news with most key issues kicked down the road. The Chinese want no new tariffs and Huawei sanctions pulled back. Emerging market signal is still positive and we remain cautiously optimistic.

Market sentiment for emerging and global markets improved this week and we are putting some cash to work including a new recommendation that plays on Asia’s thirst for coffee. Sentiment for emerging and global markets improved somewhat this week as our market timer (EEM) turned neutral between its 20-day and 50-day moving averages. Uncertainty regarding China and Mexico is a headwind but institutional flows into emerging markets remains pretty robust.

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