Cabot Stock of the Month Issue: April 10, 2025

Market Review

On the surface, the economic numbers still look pretty good. Although unemployment edged up to 4.2% from 4.1% last month, the number is still low. Jobless claims are down; jobs added, up. Manufacturing looks good, but housing continues to be weak, due to sticky prices and high interest rates.

But the good economic news is on pause, due to tariffs. Already, we’ve seen the 30-year mortgage rate rise to 6.85%, and economists are back to predicting a recession, based on rising business and consumer costs related to the tariffs—which are not yet reflected in the economic stats.

The inflation number comes out tomorrow; most economists are looking for a slight reduction but also expect inflation to gather strength by the end of the year, maybe topping 3%.

We’re in a waiting game right now until more certainty is known about the tariffs—how much, how long, which countries will ultimately be affected—are all negotiable right now.

In the meantime, of course, markets are uncertain. Value or Growth—both styles are trading negatively, year to date. Same with all sectors, with Consumer Staples down the least (-1.35%) and Industrials the most (-10.91%).

The trend is definitely down right now, as Mike Cintolo recently expressed in his Cabot Top Ten Trader publication.

But that doesn’t mean we can’t look for some very discounted bargains. Keep your cash handy, but don’t hesitate to “buy when others are fearful,” as Warren Buffett says—who, by the way, is the only mega-billionaire whose portfolio is actually outperforming in today’s market climate.

Feature Recommendation

With the extreme market volatility we’re seeing, I’m hesitant to recommend any new shares—unless they are heavily discounted and have a catalyst(s) that can boost investor interest.

And with that in mind, I consulted our turnaround expert, Clif Droke, Chief Analyst of Cabot Turnaround Letter, to find out if he had any ideas that looked attractive in this market.

He recommended a company that is more than a household name; I’d wager that it is a product in not only my but in most of my subscribers’ autos.

Sirius XM Holdings Inc. (SIRI): Still Alive and Turning Around

“At face value, it’s admittedly a challenge to build a bullish case for the long-term viability of satellite radio. Indeed, as the popularity and reach of digital streaming platforms grow, satellite as a communications medium looks antiquated by comparison.

“That said, a case can also be made that reports of satellite radio’s demise are decidedly premature. When researching for a recent issue of Cabot Turnaround Letter, for instance, I came across an article under the following headline: “Satellite Radio is Dead.” It went on to explain, “Satellite radio will come crashing down to Earth within the next two years. The newly merged Sirius XM Radio is already living on borrowed time—and borrowed money—and simply will not and cannot survive.”

“As it turns out, this article was written way back in 2008, which clearly demonstrates that satellite’s doomsayers have underestimated the medium’s longevity for quite some time. And while Sirius had around 19 million subscribers at the time of the 2008 merger, that metric had grown to over 34 million by the end of last year.

“With that said, why should investors believe satellite radio can compete with streaming’s stellar growth? The answer is at once complicated and simple, and I’ll do my best to explain the bullish thesis here. In doing so, I’ll make the case that today’s version of SiriusXM is a worthy stock for the portfolio.

“For those unfamiliar with the Sirius story, a little background is in order. As alluded to above, the New York-based satellite and online radio provider was formed by the 2008 merger of Sirius Satellite Radio and XM Satellite Radio. The company also owns a 70% equity interest in Sirius XM Canada, an affiliate company that provides Sirius and XM services in Canada. In 2020, SiriusXM reorganized its corporate structure, making SiriusXM Radio a direct and wholly-owned subsidiary of SiriusXM Holdings.

“A big part of the company’s initial growth boom was the result of the SiriusXM receivers being embedded in new cars and offering trial subscriptions to buyers. The partnership with automakers allowed the company to dramatically expand its subscriber base for many years since many drivers converted their free trials into paid subscriptions.

“As automobile sales increased, so did the number of potential new SiriusXM subscribers. Sirius also benefited from partnerships with automakers to extend trial periods and integrate its services more deeply into vehicle infotainment systems.

“Sirius has also expanded its footprint through M&A, including the acquisition of subscription-based music streaming service Pandora in 2019 for $3.5 billion. The acquisition made Sirius the world’s largest audio entertainment company.

“However, sluggish post-pandemic auto sales combined with a downturn in ad sales put stress on the company, leading to declines in Sirius’s subscriber base, monthly active users and listening hours. And while the company’s existing subscribers have shown loyalty, it lost 445,000 self-pay subscribers in 2024 and nearly 300,000 last year.

“As part of its strategic turnaround plan, Sirius is focused on improving its core subscription services with a renewed emphasis on its satellite radio business. It also plans on renewing its advertising opportunities while improving operational efficiency. And while the firm has no plans to jettison its streaming service, it has decided to pivot away from this facet of the business in returning its focus to ‘core revenue-generating segments.’ In the company’s own words, it has decided to ‘double down’ on the core automotive subscriber segment, i.e., its in-car listeners.

“On this score, Sirius noted recently that 90% of SiriusXM subscribers have the service embedded in-car today, which it says justifies using the company’s resources ‘to increase retention and capturing additional growth opportunities within this valuable segment that underpins its scaled subscriber base.’

“Indeed, Sirius still enjoys popularity among car drivers in the U.S., and the firm is also exploring other avenues, including podcasts and additional features, to attract new, younger listeners. But make no mistake, the older listener base is key to the firm’s near-term performance. As one SiriusXM customer put it, ‘We old folks may be listening with pleasure to a shrinking platform, but we may not be alone as tastes change. Folks may yet decide to dig in their heels against the complicated new platforms.’

“To put it another way, never underestimate the dual power of simplicity plus habit.

“Despite the renewed focus on satellite radio, Sirius hasn’t entirely given up on streaming as a platform. While it has decided to scale back on its formerly heavy emphasis on the medium (due to perceived lower profitability), its strategic plan also involves using streaming as a companion to its core automotive offering. Per a recent company statement:

“’SiriusXM will also utilize the streaming platform for automotive distribution where beneficial, both in support of the Company’s growing population of IP and satellite enabled vehicles with 360L and as evidenced by its recent inclusion in the 2024 Tesla Holiday Update.’

“As management has noted, by integrating the company’s streaming solution into Tesla’s IP-enabled operating system, Sirius is ‘rapidly expanding’ access to its service to more than two million vehicles already on the road, opening up a valuable new segment of its core audience in some of the most popular vehicles in North America.

“Yet another aspect of the turnaround strategy involves creating what Sirius calls ‘unrivaled content.’ This is what most analysts believe is a key aspect to reigniting the company’s growth prospects. As Sirius itself observes, its biggest competitive advantage remains its premium, exclusive, live and on-demand content from its roster of top talent and subject-matter experts.

“To this end, it plans to ‘continue cultivating deep connections between fans and hosts, with future investments centered on the major differentiators that resonate with its core, including: its human curated and hosted music channels, unmatched depth and breadth of live sports, extensive bench of leading audio talent, and growing podcast network.’

“In order to retain its trial subscribers and attract new ones, Sirius is turning to the subscription model by offering several package offerings. Each of them is advertised as being a comprehensive, content-rich product ranging from $11 to $22 per month.

“Moreover, the company’s latest content offerings will include a music-only tier for just $8 a month, with news and talk each available for $5 and a sports-related tier for $8.

“As part of its plan to lure back former customers who happen to be decidedly more cost-conscious, Sirius is offering a free ad-supported tier. (It’s currently available only in vehicles with certain technology capabilities and won’t be available on the Sirius XM app.) But with the increasing sales of newer, tech-enabled vehicles, analysts expect this strategy to increase the company’s subscriber base.

“Then there’s the cost-reduction aspect to the plan, which involves reducing costs across several of its business segments, as well as a period of ‘high re-investment’ in product infrastructure. To achieve this, Sirius intends to scrutinize the lifetime value of subscribers, optimize marketing efforts for higher returns and closely monitor the return on technology investments to drive greater operational efficiency and enhance the listener experience.

“As part of its latest effort in executing on the latter strategy, Sirius became an independent public company (last September) after completing a transaction with Liberty Media, simplifying its capital structure and positioning itself for future growth. The company believes this move will allow it to more easily realize its aims of strategic growth and expansion.

“On the management front, Sirius also recently appointed Wayne Thorsen as Executive Vice President and COO to oversee product and technology functions, as well as aspects of its commercial activities. Thorsen formerly served at ADT Inc. (ADT) as its leader of product management, engineering, business development and several other key functions, and his leadership was instrumental in accelerating ADT’s growth strategy.

“Significantly, along with operational efficiency throughout ADT, Thorsen guided the firm’s shift into AI with partnerships with Google and Sierra. This is another area where Sirius plans to execute its turnaround strategy, namely by utilizing AI and infusing it throughout its offerings.

“Already, it uses AI to personalize the listener experience, including recommendations and content discovery. It also uses Salesforce’s Data Cloud to bring together data, activate relevant data and generate content. And it uses AI to reduce costs and improve business efficiencies.

“Sirius has also partnered with automotive AI company Cerence (CRNC) and conversational AI firm Sierra to develop voice controls to assist Sirius users. These partnerships have facilitated a voice-powered onboarding experience for new SiriusXM users, along with an AI automotive assistant to learn about users’ preferences, while offering music and podcast recommendations.

“In terms of new content creation, SiriusXM has been investing on that front in order to strengthen its market position. Last August, for instance, the company signed a $125 million deal with Alex Cooper, host of the enormously popular ‘Call Her Daddy’ podcast, which consistently ranked as one of the most listened-to podcasts on Spotify (averaging a number-two ranking). In signing a three-year deal with Cooper, Sirius transitioned her show from Spotify to SiriusXM beginning in February.

“Additionally, Sirius has recently signed new agreements with other popular podcast hosts, including an exclusive deal with Dirty Mo Media, the multimedia content platform of NASCAR Hall-of-Famer Dale Earnhardt Jr., which includes exclusive advertising and distribution rights to Dirty Mo’s programming. Sirius has also signed with Adams and Rafferty to create a new original podcast series about their time on the widely watched TV show, Suits. And it just inked a multi-year deal with podcast host and best-selling author Mel Robbins, including an exclusive new weekly show to premiere this year.

“A not-insubstantial support for Sirius bulls’ case involves a certain high-profile investment in the company by none other than Berkshire Hathaway’s (BRKB) Warren Buffett. As of February, Berkshire owns more than a third of SiriusXM through a series of transactions that began in 2016, when it first bought Liberty Media’s tracking stocks. Since then, Buffett has been piling into Sirius in what some analysts see as a likely merger arbitrage play.

“In early February, the Nebraska-based conglomerate purchased around 2.3 million Sirius shares for about $54 million in separate transactions, according to SEC filings, bringing its ownership stake to around 35%. This is particularly noteworthy given that Buffett has been a net seller of stocks in recent quarters.

“When plunging into an investment of this nature, it’s always encouraging to have the added benefit of ‘smart money’ players who are also in the proverbial water—especially when one of them happens to be something of a ‘whale.’ And while the sailing ahead is unlikely to be smooth for Sirius, there’s a lot to like about this story overall.

“SIRI is in the early stages of its strategic rebound initiative, and I think it can also be viewed as a worthy income stock. And should the broad market enter turbulent times in 2025 (as many investors anticipate), SIRI could also be regarded as something of a wealth preservation play.

“The window for this potential turnaround is roughly 12 to 24 months, and while I don’t anticipate SIRI to return to the heady days of 2016 to 2018 (the last time it could be considered a momentum stock), I see upside potential to potentially the 40 area in the intermediate-term outlook.

“The company’s return on its payout is more than triple that of the average S&P 500 stock, making it a potentially strong choice for income-oriented investors.

“What’s more, the stock’s low P/E ratio increases the likelihood Sirius can grow (intermediate-to-longer-term) from a rising earnings multiple.

“Sirius XM (SIRI) saw some share price weakness after comments the company made regarding recent advertising softness at an industry conference.

“’In the last week-and-a-half we are starting to see a drop-off,’ Sirius XM CFO Tom Barry said at the 33rd Annual Deutsche Bank Media, Internet & Telecom conference. ‘We had some softness on CPG and retail in the last couple weeks. We are also seeing more softness in other categories in the last couple of days.’

“He added, ‘Right now we are a little concerned and cautious about where ad sales are going,’ due to tariffs, inflation and ‘just overall uncertainty in the market.’

“While he believes there are some risks due to macroeconomic factors, Barry said he feels ‘very comfortable’ with the company’s financial guidance for 2025.

“I have no comment to make on this right now other than I see a host of companies reacting to the escalating tariff war in similar fashion, so I suspect this is more of a knee-jerk overreaction and not a reason for long-term worry. Buy”

For the last quarter of 2024, Sirius saw net income rise by double digits, to $487 million, with revenues of $2.19 billion. For 2025, revenue estimates for SIRI are $8.52 billion, with EPS of $3.03.

The company plans to reduce costs by $200 million this year.

Additionally, the company made progress on reducing its debt, aiming to reach a leverage ratio of 3.6x by the end of 2025, decreasing debt by $700 million.

Facing increasing competition from streamers, SIRI is doubling down on its broadcasting segment, including:

• The exclusive audio broadcaster for the Masters Tournament this month
• Providing the most comprehensive audio coverage of the 2025 Major League Baseball (MLB)
• Just inked a multi-year extension of their broadcasting agreement with Formula 1 (F1)

And now, with the recent market gyrations, the stock is trading at a very discounted level. With the turnaround in process, it may be time to take a “listen” to these shares. Buy

About the Analyst: Clif Droke, Chief Analyst, Cabot Turnaround Letter

Clif Droke is the Chief Analyst of Cabot Turnaround Letter. For over 20 years, he has worked as a writer, analyst and editor of several market-oriented advisory services and has written several books on technical trading in the stock market, including Channel Buster: How to Trade the Most Profitable Chart Pattern and The Stock Market Cycles as well as Turnaround Trading & Investing: Tactics and Techniques for Spotting Winning Turnaround Stocks.

Clif has an extensive background in metals, mining, and companies trading at discounted prices. So, naturally, with the market’s current volatility, I wanted to pick his brain about how tariffs may affect the metals sector, as well as the market in general. Here is our interview:

Nancy: Well, it seems that the market is “all about tariffs” these days. In a recent update to your newsletter, Cabot Turnaround Letter, you mentioned both Alcoa (AA) and SLB Ltd. (SLB), in terms of tariffs. Can you elaborate on your current thinking about these two stocks, and how tariffs might affect them?

Clif: Alcoa, which owns two of the four primary smelters in the U.S., is currently dealing with the House imposing a 25% tariff on all steel and aluminum imports, including from Canada, back in March. That has put downward pressure on the stock, especially compared to some of its competitors that aren’t as reliant on aluminum sourced outside the U.S. Indeed, most of Alcoa’s company’s aluminum production is outside the U.S.—in fact, 85% of it is sourced from foreign countries—and it’s clear that Trump wants to repatriate production of the metal. Of the 2.2 million tons of aluminum the company produces each year, 42% of it is made

in Canada and shipped to the U.S.

Since 2000, the U.S. aluminum industry has seen an 82% reduction in the amounts of the metal produced domestically, which has left the nation heavily dependent on foreign imports of the metal. The company’s CEO has emphasized that Alcoa is “aligned with [Trump’s] wanting to bring back manufacturing jobs to the U.S.,” but he said the best way to do this is to bring Canadian metal into the U.S. to support the firm’s downstream customers (such as the auto industry and other major users of the metal).

The White House is trying to revive U.S. industrial manufacturing through the tariff policy. But Alcoa has made clear it won’t be making long-term investment decisions based on Trump’s tariff structure, which Alcoa said, “can change overnight.” In other words, the company seeks clarity from the White House and demands an exemption from the tariffs in order to better comply with the government’s demands to produce more aluminum domestically.

Moreover, Alcoa said it wants the federal government to make efforts towards reducing energy costs, which it said is the biggest constraint for expanding domestic aluminum production—especially since a typical smelter uses as much electricity (the biggest input cost for aluminum) as a small city. Specifically, the CEO said his company’s decision to invest in the U.S. in the future won’t be based on tariffs, but on a more benign energy policy.

Alcoa also warned the tariffs could cost the U.S. aluminum sector 100,000 jobs (including 20,000 direct jobs), as well as a 12% job reduction in the global aluminum industry. As of early April, the White House hasn’t granted Alcoa the exemption it seeks, although it has held off on the imposition of any new tariffs, which should provide at least some relief for Alcoa. (As an aside, Australia is another point of origin for Alcoa’s aluminum, and it has said it will likely replace its Australian aluminum output to the U.S. in the wake of the tariffs.)

At a recent industry conference, the firm’s CEO indicated that the global aluminum market presents “significant opportunities” for consolidation, and he suggested that M&A “could enhance efficiency and competitiveness within the industry.” He also signaled a willingness to engage in further M&A discussions with potential suitors, with many observers predicting the tariff war will facilitate consolidation within the aluminum industry due to the needs of producers to achieve economies of scale and reduce costs.

Beyond the near-term impacts of the tariffs, the aluminum industry in general—and Alcoa in particular—should benefit longer term from the ongoing transition to alternate forms of energy production, which heavily utilize aluminum. Alcoa also sees opportunities in the emergence of low-carbon aluminum in terms of creating new smelting technologies (which Alcoa is presently exploring).

Further, with the market for bauxite (the main ore for aluminum) extremely tight and prices near record highs, it’s creating global aluminum industry supply constraints. This, in turn, is expected to drive steady mid-single-digit annual growth in aluminum demand for many years to come, in turn further driving the potential for Alcoa to benefit from this trend, especially through strategic M&A. Bottom line, I still like Alcoa’s long-term investment potential since it’s a key supplier of a

critical metal whose demand profile isn’t going to diminish.

As for SLB Ltd., the tariff war isn’t expected to have a major direct impact on its energy production and processing business. However, the company is in the midst of a reorganization designed to enhance its operational integrity and global business services. It’s part of a broader cost-saving initiative to address what the company sees as “stagnant growth due to cautious customer spending” in the face of the current economic climate (obviously a result of the tariff war to some extent). But all told, I don’t foresee any significant setbacks for SLB as it directly relates to the tariffs.

Nancy: The price of gold—despite a recent pullback—has been rapidly rising. You have long believed in gold’s potential, and you have a couple of gold stocks in your portfolio. Where do you think gold goes from here?

Clif: Near term, it’s no secret gold is becoming “overbought” as investors have recently flocked to the metal for safety during the latest wave of equity market selling pressure. I wouldn’t be surprised to see a potentially sharp pullback in the coming weeks in response to this technical condition.

However, I still believe 2025 will be a solid year for the yellow metal and the companies that mine it. You’ll recall that I picked Agnico-Eagle (AEM) as one of my two outperforming stocks for 2025 in your Top Picks 2025 issue. I still hold to that prediction as gold demand remains extremely buoyant on not only the retail investment level but also among major central bank buyers and in terms of global jewelry demand.

Basically, gold prices are reflecting—among other factors—the persistence of inflation in the U.S. and other countries. Inflation is a result of excess money creation, which we saw in the wake of the 2020 Covid episode, but it’s also a result of how severely supply chains were impacted worldwide by government-imposed shutdowns during the Covid years. Those supply chains still haven’t fully recovered, and I think that’s a big reason behind gold’s strength.

For those who buy gold, it’s essentially more of an inflation hedge than anything else. And since most consumers don’t expect inflation to abate anytime soon, I think gold remains in an overall position of strength in the foreseeable future.

Nancy: What about the prospects of other metals? Your portfolio also includes a silver miner, and silver has been so-so. Do you see any coming spikes in silver or other metals?

Clif: I can see silver riding the inflation-driven demand boom along with gold. Silver enjoys a significant price discount to gold due to its higher annual supply, as well as demand that exceeds simple safe-haven buying. For instance, silver is in greater industrial demand than its counterpart, and with the alternate energy revolution accounting for much of that demand, along with several major emerging technologies, I believe silver will see conspicuous strength in the next few years, with the potential for a couple of potentially big demand-related price spikes this

year.

Additionally, demand for physical silver coins has become so acute that many dealers are reporting a scarcity for some of the most popular silver bullion coins.

For instance, there were reports earlier this year that traders were moving billions of dollars in silver from the Bank of England (BoE) to other locations. It was even said that delivery times from the BoE had risen from a few days to as many as eight weeks, causing a shortage in both gold and silver, with silver bullion demand said to be exceeding gold demand in some locations.

Aside from its industrial applications, and as I alluded to earlier, one of the main drivers for the surge in silver demand is the continued threat of rising inflation and the need to hedge against the dollar’s diminished purchasing power.

Beyond silver, copper is another metal I consider to have tremendous long-term economic value, which is a key reason for its year-to-date strength (up 25% so far in 2025). Copper is also a byproduct of gold mining, with the two metals often found together. Given the economic climate that favors so-called “energy metals,” it’s not surprising that a growing number of gold mining companies are beginning to put greater focus on producing copper than gold.

Nancy: You recently took some profits on Starbucks (SBUX), and then, this week, sold your remaining shares. What is behind these moves?

Clif: Starbucks is undergoing a strategic overhaul after years of underperformance. Its strategic initiatives include revamping the physical stores to give them more of the classic coffeehouse vibe, plus recent digital improvements, enhanced brand marketing and fewer sales promotions, all of which should help boost margins and, I think, lift the stock price in the coming years.

Another factor that first drew me to Starbucks as a turnaround candidate last year was the presence of the well-known activist investor Elliott Management, which has an established track record for pushing companies into making the right decisions to put the lagging parts of the business back on track. The onboarding of the successful turnaround CEO, Brian Niccol, who is renowned for helping to turn around Chipotle Mexican Grill (CMG), should also help the stock longer term.

That said, I recently made the decision to exit our remaining stake in SBUX based on the uncertain economic backdrop of the recent tariff war escalation. Being a retail sector member, the company is especially vulnerable if the U.S. enters a recession this year (as a growing number of economists are predicting), so I believe that discretion is the better part of valor when it comes to having too much exposure to this sector right now. But once the smoke clears on the tariff front, I’ll certainly take a closer look at the stock.

Nancy: Which sectors do you find the most attractive right now? And which would you stay away from?

Clif: While it’s part of the broader technology sector, which is obviously undergoing some weakness right now, I see value in the specific industry group of semiconductors. I also see strength for basic materials, specifically each of the metals I mentioned above. Utilities should also benefit from the immense energy requirements of the AI revolution (not to mention its defensive value in the present climate due to its demand among safety-oriented investors).

As for the sector I would avoid right now, I would say real estate, as persistent inflation, elevated interest rates and economic uncertainty are combining to create some potentially heavy headwinds for the sector in general.

Nancy: What are the 3-5 most critical challenges to growth of the stocks in your portfolio right now?

Clif: The first, and most obvious, main challenge is the escalation of the global trade war. This will clearly create periodic bouts of volatility in the foreseeable future for stocks across a number of major sectors and industry groups represented in the portfolio.

Secondly, and somewhat related, is the continued decline in consumer sentiment. Our colleague here at Cabot, Michael Brush, has pointed out that the University of Michigan Index of Consumer Expectations has recently tanked to bear market/recession levels. If consumers continue to feel a lack of confidence about their economic prospects in the foreseeable future, it could eventually undermine the near-term prospects for some of the retail sector components in the portfolio (including SBUX mentioned above).

Thirdly, a persistence of the rising trend in Treasury bond yields could have some conspicuous ripple effects across a number of industries, including those that aren’t normally thought of being rate sensitive. That could pose another potential hurdle for at least some of the stocks in the portfolio.

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Portfolio Updates

Qualcomm Inc. (QCOM) was updated by Tom Hutchinson, Chief Analyst of Cabot Dividend Investor, saying, “Technology has not been a good place to be. QCOM had been holding up okay because it wasn’t riding high before the market rolled over. But last week took no prisoners and QCOM got whacked. It made a new 52-week low on Monday morning and then bounced back. I like the prospects for the mobile device chipmaker for the rest of this year and beyond. But the next several days and weeks are anybody’s guess. It will be downgraded until the market stabilizes to the point of less volatility and more sustainable upside traction. HOLD”

I agree with Tom’s assessment of QCOM’s future prospects, and the company continues to move forward with its AI focus, recently acquiring MovianAI, the former generative AI division of VinAI, a prominent Vietnam-based AI company.

VinAI has “comprehensive expertise in generative AI, machine learning, computer vision, and natural language processing.”

QCOM will announce its earnings on April 30. Analysts expect the company to post EPS of $2.80 on revenues of $10.6 billion. Let’s change our recommendation to Hold for now.

Tom also reviewed Brookfield Infrastructure Partners (BIP), commenting, “After a rough couple of years of inflation and rising interest rates, BIP has only managed to go sideways since the environment improved. It’s disappointing. The upside of this underperforming stock is that it’s defensive. But it sold down along with everything else in the recent turmoil. BIP better show some chops soon or it will be cut loose. It’s perplexing because the business is sound. Earnings beat expectations with 8% FFO (funds from operations) growth for 2024. Brookfield also announced a 6% distribution increase, marking the 16th consecutive year of payout increases. The business is delivering, but the stock price isn’t. (This security generates a K1 form at tax time.) HOLD”

Brookfield Infrastructure Partners is also in the buying mood, agreeing to acquire Colonial Enterprises, including the Colonial Pipeline, for about $9 billion. Colonial owns the largest refined products system in the country, covering around 5,500 miles (8,851.3km) from Texas to New York.

I agree with Tom’s rating, so let’s continue to Hold BIP.

UnitedHealth Group Inc. (UNH) was also updated by Tom, who noted, “The health insurer stock jumped on Tuesday on news that the government reimbursement rates for Medicare Advantage Plans will be larger than previously expected for 2026. UNH was knocked back last year because of a series of problems, one of which this news alleviates. But the bigger story is the stock’s performance in the rough market. UNH is actually up sharply in April and has been trending sharply higher since late February. It shows some strong defensive chops and is great to have in markets like this. HOLD”

Trump’s initiative is expected to put $25 billion in the pockets of the Medicare Advantage companies. Continue to Hold for now.

Tom reviewed McKesson Corporation (MCK), reporting, “This supply chain pharmaceutical distributor stock was quietly soaring to a long series of new highs in a tough market before last week. The stock had been knocked down last summer and fall after the company reported supply chain issues with weight-loss drugs. But those problems are behind the company. MCK has resumed its old habit of slowly going higher and higher as it deals in a market that grows all by itself because of the aging population. I believe it will resume moving higher in a more stable market. BUY”

McKesson Corporation shares are now in the portfolio of 78 hedge funds, and it is one of Jim Cramer’s favorite stocks. MCK just completed the acquisition of 80% of PRISM Vision Holdings, LLC, a leading provider of general ophthalmology and retinal management services, for approximately $850 million. Continue to Buy.

Lastly, Tom updated his views on Ally Financial Inc. (ALLY), commenting, “Despite an impressive rebound so far this week, ALLY is too cyclical for the current level of uncertainty in the market, and it is downgraded to ‘HOLD.’ It had been holding strong until last week and had positive returns YTD. If the economy holds on and we avoid a recession, ALLY should do well. But it specializes in auto loans which could be a problem if the economic prognosis turns south. It could also be affected by the tariffs. However, if the economy hangs in there or economic news gets better, it could really take off. HOLD”

I agree. Continue to Hold for now.

Curaleaf Holdings, Inc. (CURLF) will report its first-quarter results on May 8. Analysts are forecasting a loss of $0.07 on $316.08 million in revenues. Continue to Hold.

Green Thumb Industries (GTBIF) will announce its earnings on May 7. Wall Street is expecting EPS of $0.04 on revenues of $283.36 million. Continue to Hold.

Carl Delfeld, Chief Analyst of Cabot Explorer, updated International Business Machines (IBM), saying “Shares were unchanged this week as IBM and Tokyo Electron announced a five-year extension of their agreement for the joint research and development of advanced semiconductor technologies. IBM offers us exposure to growth opportunities in areas from cloud computing to quantum computing and is building a strong market position in artificial intelligence. Buy a Half”

International Business Machines Corporation is moving further into AI, announcing that it acquired Hakkoda Inc., a prominent data consultancy provider. Spending on enterprise intelligence services is expected to grow at 13% CAGR, reaching $243 billion by 2028, according to IDC, and IBM is ramping up accordingly.

The company also announced that it is launching a new mainframe that it said is “fully engineered for the AI age.” Not all enterprise computing is in the cloud, and IBM says its mainframes “are used by 45 of the top 50 banks, four of the top five airlines, seven of the top 10 global retailers and 67 of the Fortune 100 companies, according to the company.”

Let’s continue to Hold our shares.

Let’s change our recommendation of Oberweis Micro-Cap Fund (OBMCX) to Hold during this market volatility.

Our most recent recommendation of Axsome Therapeutics, Inc. (AXSM) from Mike Cintolo, Chief Analyst of Cabot Growth Investor and Cabot Top Ten Trader, has been removed from Mike’s watch list, after Axsome’s drug Sunosi had two misses on tests for depression and ADHD treatments. Let’s also cut it loose. Sell

Portfolio

*Aggressive (A), Moderate (M), Conservative (C)

ETF Strategies

Our ETF portfolio is holding up, with all but one in the gain column. I’m staying conservative and not recommending any new ETFs while the market is swinging so wildly.

These ETFs remain on our Watch List:

• Vanguard Small-Cap Growth Index Fund (VBK)
• Vanguard Mid-Cap Growth Index Fund (VOT)
• The Industrial Select Sector SPDR Fund (XLI)

ETF Spotlight

In this section of the newsletter, I highlight one of our portfolio ETFs, showcasing its largest holdings and past returns so that you can decide if the ETF fits into your investment strategy. Here is this month’s featured ETF:

Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) is a 3-star-rated fund in which the adviser employs an indexing investment approach designed to track the performance of the index, which consists of common stocks of companies that have a record of increasing dividends over time. The adviser attempts to replicate the target index by investing all, or substantially all, of its assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index.

Top 10 Holdings

Returns

ETF Portfolio

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Satellite Radio Is Alive and Well

Sirius owns the automotive satellite radio market, with 32.3 million subscribers and a 60.2% market share. That’s substantial, in a $30.61 billion marketplace. According to Market Research Future, that market is expected to grow from $32.35 billion this year to $53.10 billion in 2034.

Sirius has had its challenges, as Clif noted, with subscribers peaking in 2019, at 34.91 million users, amid increasing competition from streaming services such as SoundCloud, Amazon, Apple, Spotify and iHeartMedia, as well as internet-connected vehicles which allow users to customize their listening preferences.

But Sirius is fighting back, aligning itself with strategic partnerships with automakers for in-vehicle integration, such as its agreement with Tesla’s IP-enabled operating system, podcasts, and its unique content with live and on-demand top broadcast talent. Additionally, the company’s efforts to cut costs and debt should aid in beefing up its top and bottom lines.

The market, as mentioned above, is expected to expand, due to:

• Adoption of satellite radio in luxury vehicles
• New technologies (high-definition radio, 5G, and V2X communication—a communication technology that enables vehicles to exchange data with other vehicles, pedestrians, road infrastructure, and networks) that improve reception and sound quality
• Source for live sports broadcasts and additional premium content
• More connected cars
• Rise in demand for in-vehicle entertainment systems
• Integration with other in-vehicle tech such as nav systems and smartphones
• Higher penetration of hybrid and electric vehicles, which often come with advanced infotainment systems
• Increasing demand in the Asia-Pacific region, particularly in China and India.

And that expansion should serve SIRI well. At its current discounted level, the shares are appealing.

The shares of SIRI are aggressive. Buy

The next Cabot Money Club Stock of the Month issue will be published on May 8, 2025.

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