WHAT TO DO NOW: Remain defensive. The market has gotten off its duff somewhat this week, but as seen the past couple of weeks, there’s still plenty of selling and news-driven action out there. We do think it’s possible a repair process has begun, but right now, the trends of the major indexes and most stocks are pointed down, so we continue to advise a defensive stance. We’ll again stand pat tonight with our four small-ish positions and our big cash position, though we’ll be on the horn if we have any changes (including possibly re-jiggering the portfolio a bit) in the days ahead.
Current Market Environment
The market is very quiet today, with the major indexes down about 0.2% as of 1:30 EST.
After its straight-down decline from February 20 to March 13, the market has found some support during the past couple of weeks, with some buying pressures emerging that pushed most indexes into their declining 25-day lines earlier this week and allowed some stocks to poke higher as well.
Near term, we wouldn’t be surprised to see some further upside testing given the size of the prior selloff, especially as investor sentiment continues to sour and, anecdotally, repeated tariff news has generally (not always) been absorbed in recent days.
That said, when looking at the intermediate-term, the odds continue to favor patience being required: Our trend-following indicators are clearly negative, and most stocks out there (large, mid-sized or small) are south of their 50-day and 200-day lines. Plus, even among resilient names, there are relatively few out there that look ready to really get going. Thus, we think staying mostly on the sideline makes sense as the market works through the current round of uncertainties and as new leadership begins to develop.
As a very, very general blueprint, these sorts of sudden meltdowns often will see a bounce phase of two to three weeks, and then some sort of re-test four to eight weeks after the initial low. Again, this is a very loose framework, and the action usually involves lots of gyrations, making it hard to trade; even among individual stocks, you’ll often see good stocks go bad in a hurry (we’ve seen some resilient medical names sell off this week despite the bounce action), making buying tricky.
We’re open to anything, including the unusual—a powerful straight-up rally that turned our indicators positive would likely be very bullish, for instance—but we always go with the odds, and right now the odds favor the market needing more time before being able to embark on a fresh, sustained uptrend that will produce solid profits.
We could always do a little nibbling or re-jiggering (selling a name or two and replacing them) in the Model Portfolio, especially given our huge cash position. But at this point, we’re OK standing pat, as all of our names have found some support and a couple have lifted in decent fashion. All in all, we’ll again stand pat tonight, though as always, we’ll be on the horn if anything changes.
Model Portfolio
Argenx (ARGX) stands 12% off its all-time high, which is very solid given the destruction among growth stocks that had any sort of run. A clinical-stage competitor in the autoimmune space released decent trial results for one of its drugs, though the firm isn’t likely to pursue approval for the drug, instead investing in a higher-potential competitor … though that drug is still in earlier-stage trials. Obviously, that could affect perception of Vyvgart’s big-picture potential, but at this point there’s no sign of that—if anything, ARGX is in the midst of a normal base-building effort as analysts continue to look for a booming bottom line (nearly $12 per share this year, nearly $20 in 2026) as Vyvgart continues to penetrate its markets. HOLD A HALF
Flutter Entertainment (FLUT) continues to look a bit like an egg at this point—not much of a bounce after its decline—though it has settled down and is holding its 200-day line, which is better than most stocks. There have been some worries surrounding the impact of sports contracts—essentially prediction markets—which, while in a gray area regulatory-wise, are being rolled out by some firms like Robinhood and Khalshi … though these markets (which are basically yes-or-no outcomes) are far less attractive than the in-depth betting options offered by FanDuel, DraftKings and others, so most don’t see it as a major pull. In other news, it looks like Maryland opted to increase their tax on sports gambling, but only to 20%, less than the 30% rate that was proposed. At day’s end, we think the growth story here has a very long way to run, and with shares at least holding up, we’re OK hanging on to our small position—but it’s up to the stock to show some strength during this bounce phase or we could move on. HOLD
On Holding (ONON) also hasn’t bounced much of late, though we are intrigued by its weekly chart, which shows three tight weekly closes (and possibly a fourth this week), which is often (not always) a constructive sign. Still, the lack of a bounce isn’t ideal, and with tariff threats being thrown around by everyone, ONON is certainly vulnerable to more selling. Going forward, we’re playing it by the book—a move to a swing high above resistance near 50 would be a good sign following this bottoming area, but decisive new lows obviously would not. Given our huge cash position and small stake, we’ll continue to hold, thinking a few good days could refocus investors on what is still a tremendous long-term growth story, but we’ll be watching the action closely. HOLD
Palantir (PLTR) was in the news today, as it looks like the Feds are looking to use “battlefield AI” and satellite surveillance on the southern border, and Palantir is among the firms in talks to provide services. We doubt that will do anything to impact near-term numbers, but it does reinforce the view that Palantir is well out ahead of competitors in the AI platform arena, with an offering that results in real, measurable improvements in a firm’s actions and bottom line. As for the stock, it’s bounced decently well—it nearly recouped half the drawdown at its Tuesday high, is near its 50-day line and, at 26% of its peak, it’s far better than most other former glamour leaders—though a move above 100 would be a more telling sign that buyers are getting serious. We’re optimistic that, having survived the growth stock implosion reasonably well, PLTR has a shot at rounding out in the weeks ahead and resuming its longer-term upmove. Still, there’s still a lot of repair work to be done, so just sit tight if you own some. HOLD
Watch List
The good news is that our watch list is gradually expanding as more wheat separates from the chaff—like everything, most of these stocks likely need some more seasoning, but if the action continues, there should be a good number of potential growth leaders to buy once the correction finishes up.
Alibaba (BABA): BABA (and Chinese stocks in general) retrenched some recently, but the dip has been normal, essentially part of what is now a five-week rest after a big early-year run. Current numbers here aren’t great, but it’s likely growth should accelerate in the quarters to come.
Axsome Therapeutics (AXSM): AXSM sold off this week after releasing solid trial results for one of its drug candidates this week (for ADHD), though shares are “only” down to their 50-day line. We still see the last few weeks of action as normal and think AXSM could help lead the next market advance.
Dutch Bros. (BROS): BROS is now six weeks into a new base structure, and like most things out there, it likely needs some time to round out. After a few quarters of issues (slow same-store sales growth, elevated costs), it’s looking like rapid, reliable sales and earnings growth is now set for the next few years.
Expand Energy (EXE): Expand is the combination of Chesapeake and Southwestern Energy, the combination of which is the largest natural gas producer in the U.S. Peers also look good, though we’re attracted to Expand’s mix of chart (kissed new highs this week; multiple days of big volume of late) and well-rounded shareholder return plan, which should support the stock.
GE Aerospace (GE): GE looks like a potential liquid leader, with shares actually kissing new high ground yesterday before falling back; the aerospace group as a whole is acting solid, too. It’s not the sexiest name out there, but the potential for many years of buoyant, growing free cash flow here is enticing.
GeneDX (WGS): WGS has also sagged a bit this week, as the selling has hit some resilient stocks and sectors this week (typical action in a weak market). Even so, shares remain within their recent range (call it 85 to 110), which is good to see. The story and numbers here are outstanding, though after a big run over the past year, the question is whether the stock can continue to hold up in a weak tape—so far, so good.
Penumbra (PEN): PEN is five weeks into a normal base-building effort, with its set of devices for vascular blockages driving steady sales and booming earnings growth, which in turn is keeping big investors interested.
Rubrik (RBRK): RBRK tried to stretch higher from its huge post-earnings gap this week, though it was repelled, which is typical (selling on strength, near resistance) in a weak market. Overall, though, the stock is acting well, and we think the cybersecurity resilience and recovery story has huge growth potential.
TG Therapeutics (TGTX): Like most stocks, TGTX exhaled a bit yesterday, though the stock remains in fine shape. The firm likely has something very big on its hands with Briumvi, its treatment for relapsing multiple sclerosis; sales should continue to ramp (likely up 68% this year), and we like that earnings are also taking off, with estimates north of $1 per share this year.
That’s it for now. You’ll receive your next issue of Cabot Growth Investor next Thursday, April 3. As always, we’ll send a Special Bulletin should we have any changes before then.
Model Portfolio
| Stock | No. of Shares | Price Bought | Date Bought | Price on 3/27/25 | Profit | Rating |
| Argenx (ARGX) | 196 | 540 | 9/13/24 | 592 | 10% | Hold a Half |
| Flutter Entertainment (FLUT) | 480 | 231 | 9/20/24 | 237 | 3% | Hold |
| On Holding (ONON) | 2,625 | 40 | 5/24/24 | 46 | 14% | Hold |
| Palantir (PLTR) | 1,904 | 32 | 8/16/24 | 92 | 188% | Hold |
| CASH | $2,416,443 | 82% |
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