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Take Profit in Starbucks (SBUX); Sell American Airlines (AAL)

Sell Astera Labs (ALAB) and Cellebrite (CLBT)

Sell a Quarter Position in JetBlue Airways (JBLU)

I love to read, so I was very excited when e-readers first came on the market. But since then, I’ve discovered several things about them that have stopped me from buying one. However, I have a solution that may make them more appealing.

The investment idea that I’m floating in this issue is just that, an idea. But it’s a big idea. Taleo Corporation is a California-based company, founded in 1999, that’s trying to do two huge tasks: First, get companies the talent that they need to succeed; and, second, reduce the cost of an in-house human resources department. Taleo uses talent management software that is designed to recruit, manage and develop different classes of employees, from Professional to Hourly to Contingency (temporary). Among other tasks, Taleo’s online programs guide clients through recruiting on campuses, complying with labor laws, and transitioning a new hire from candidate to employee.

Chinese stocks were hit this week both on American exchanges and overseas as Chinese regulators ratcheted up the pressure through antitrust and regulatory steps that caught many executives and investors off guard. The Golden Dragon index of Chinese technology stocks fell by 15% in two days before rebounding after regulators tried to reassure markets.

In the May Issue of Cabot Early Opportunities, I profile a potential turnaround story in a well-known stock that is returning to its roots.

We also take a closer look at one of the highest-end luxury brands in the world, an unknown green tech company, an emerging MedTech star and a construction materials specialist that’s spreading across the U.S.

Enjoy!

The market and many leaders bolted ahead last week, which is just what we wanted to see as the big investors came back from the beach; it’s clear the buyers are in control. That said, despite some heady gains, we wouldn’t call this a runaway bull market—we’re seeing some under-the-surface rotation every few days, with money cycling out of some stocks and sectors and into others. That is totally orderly and, over time, healthy, but it does mean you get some periodic weakness in favored names. Thus, keep your feet on the ground, and look to use pullbacks as buying opportunities in the best stocks. As for winners, you should generally hold on to your best performers, though taking partial profits here and there (hopefully on the way up) is a good idea.

This week’s list is another potpourri of stocks and sectors, most of which have unique catalysts for higher prices. Our favorite of the group is Urban Outfitters (URBN), part of the very strong retail group. The stock is following through beautifully from a huge earnings gap a couple of weeks ago. Try to buy on weakness.

Stock Name	Price	Buy Range	Loss Limit
Affiliated Managers Group, Inc. (AMG)	0.00	118-122	-
eBay Inc. (EBAY)	0.00	47-48.5	-
Fortune Brands Home & Security (FBHS)	81.02	25.5-26.5	-
GHL (GHL)	0.00	46-48	-
IPG Photonics (IPGP)	0.00	59-62	-
Men’s Wearhouse (MW)	0.00	36-37	-
ServiceNow (NOW)	341.86	33-35	-
Tesoro (TSO)	0.00	38-41	-
Urban Outfitters (URBN)	0.00	37-38.5	-
Valero Energy (VLO)	97.40	30-31.5	-

U.S. stock markets continue to suffer, wiping out year-to-date gains that had previously culminated in all-time-high prices on the S&P 500, Dow Jones Industrial Average and NASDAQ indexes. If you’re looking for “the bright side” of this dour news, take heart that none of these market indexes have retraced their early-2018 lows.

The last couple of years haven’t exactly been kind on food, beverage and restaurant stocks. Generally speaking, the companies in the food and drinks category underperformed the S&P 500 last year, while in the case of restaurants, 2025 was a particularly bad one.

Clearly, it’s in the interests of full-service brokerages to discourage you from making your own investing decisions. They make their money from commissions for trading your account and fees for managing your money. And the more they can count on keeping you in a standard mix of index funds, ETFs, sector funds and bond funds, the better they like it.

Here’s an interview with Paul Goodwin, Cabot China & Emerging Markets Report chief analyst.

Small-cap cloud software stocks have been on a roll lately, and these three are showing strong momentum heading into 2024.

While AI seized the headlines in 2023, software stocks have been performing well in their own right. Here are three small caps I like right now.

“The sharp drop in the market value of our small cap portfolio caused me some concern earlier this week. It is reassuring to receive your special bulletins and weekly updates in providing some guidance and perspective. The timeliness of the special bulletins are appreciated. I suspect this week was very hectic for you! I am also impressed with the depth of research and analysis in your monthly recommendations. Your service is first class!”

K. Ting, Trinidad, West Indies

As early as last summer, I predicted that the S&P 500 would continue rising into early 2018, then experience its overdue correction. I was about a month off on the timing. I was guessing March, but the correction arrived in February. I was right on the size of the downturn, though, almost to the penny. That was a small part technical analysis and a large part luck.

I just renewed my subscription to your small cap service. This was unusual since my subscription was not up until next year. It wasn’t for the saving either. My renewed early subscription was to show my thanks and appreciation for your service, which I find to be the most comprehensive and accurate of any I have subscribed to. The reports are concise, well written, and followed up weekly. You tell your subscribers when it is time to take some profit, even though it must be difficult sometimes when a stock is going straight up. I subscribe to a myriad of services and advisories, but none, and I mean none, compare to what you do. Sure, your picks sometimes require patience, but the continued flow of information at least lets us know you are on the case and a stock acting poorly does not go by the wayside and get forgotten as it builds its business. This gives me the confidence to stay in a position, and add to it when it does not prove out immediately. I also appreciate the fact that you limit the size of your readership to protect the integrity of your stock selections, allowing those of us who have subscribed to enter at reasonable prices. Again, thanks for the extremely good work. It is much appreciated.
Ron A, Wilmette, Illinois

A sure-fire method to find strong stocks is to ferret out high-quality stocks with low PEGnD ratio.

Becoming an active investor will help you enjoy the market when it gets moving again.

I wouldn’t touch General Electric stock with a 10-foot pole. But there are valuable lessons to be learned from the company’s demise.