Cabot Stock of the Week Issue: March 10, 2025

It’s officially a bloodbath out there.

With today’s ferocious, tariff-fueled selling, the S&P 500 is now down 8.5% from its all-time highs of just three weeks ago; the Nasdaq is in correction territory at -13%; and even the more even-keeled Dow is off more than 6%. Are we hurtling toward a bear market? Or is this a mirror of the July/August sell-off when the major indexes declined an almost identical amount in a similar amount of time? We may know the answer by the end of the week. That’s because we’ll know the latest inflation readings (Consumer Price Index and Producer Price Index) by then, and those could either help quell inflation fears, as they did in January, or add fuel to the spreading inflation-angst fires.

In the meantime, let’s start to play some defense. Today we do so by selling six (yes, SIX!) of our existing positions that have fallen apart, half of them at decent gains, and by adding a low-risk gold stock to the portfolio that’s been a favorite of Cabot Explorer Chief Analyst Carl Delfeld for quite some time.

Here it is, with Carl’s latest thoughts.

Agnico Eagle Mines (AEM)

Gold prices just keep rising to new heights. At more than $2,900 an ounce as of this writing, the price of gold is already up more than 12% year to date and 34% in the last year. And it’s likely to ascend even higher in the months to come.

One overlooked reason for higher gold prices is the surge in central bank buying of gold. According to the World Gold Council, central bank purchases have been one of the primary drivers of gold prices as demand from central banks for gold reserves during the last six months leapt to 23% of total demand, up from an average of 10% over the previous decade. The U.S. remains the largest holder of gold reserves, Germany and Poland saw the largest increases by 28 tons and 22 tons, respectively, in the fourth quarter. China was next at 15 tons. I wonder if China could be considering linking its currency to gold in some way.

So, it’s still a great time to invest in a gold miner. And my favorite of the bunch is Agnico Eagle Mines (AEM). Agnico follows a conservative strategy, with a history spanning more than 60 years, and now operates a sizable portfolio of 11 assets located in four countries. The company produced a record 3.48 million ounces of gold in 2024 and estimates it has about 54 million gold ounces of proven and probable reserves. Furthermore, Agnico Eagle has paid a dividend for 41 consecutive years with a dividend-compounded growth rate of 23% per year since 2005 and paid a dividend of $1.60 per share in 2024.

The company reported adjusted earnings of $1.26 per share for fourth-quarter 2024, up from 58 cents in the year-ago quarter. Revenue was $2.22 billion, up nearly 26.6% year over year. Agnico Eagle Mines is reportedly on track to become the world’s second-largest gold producer. Agnico has mines in Canada, Australia, Finland, and Mexico, with exploration and development activities focused on Canada, Australia, Europe, Latin America, and the U.S.

The stock is up 82% in the last year but is trading below its mid-February, post-earnings highs. With 12.5% EPS growth forecast this year, there’s more growth ahead for the company – which means there’s more upside for the stock, especially if gold becomes more of a safe haven in this risk-off environment. BUY

Current Recommendations

Changes Since Last Week:
Capital One Financial (COF) Moves from Buy to Sell
Centuri Holdings (CTRI) Moves from Hold to Sell
DoorDash (DASH) Moves from Buy to Hold
Dutch Bros (BROS) Moves from Buy to Hold
Flutter Entertainment (FLUT) Moves from Buy to Hold
Intuitive Surgical (ISRG) Moves from Buy to Sell
Klaviyo (KVYO) Moves from Buy to Sell
Peloton Interactive (PTON) Moves from Buy to Sell
Reddit (RDDT) Moves from Buy to Sell

We are selling off a quarter of our portfolio today in reaction to the ongoing market meltdown. Specifically, we are selling six stocks that have completely fallen apart – some at a nice gain, a couple at sharp losses. With the addition of Agnico Eagle Mines, we now have just 18 stocks in the portfolio, the first time we’ve been below 20 in more than a year. Additionally, we are downgrading three other stocks from Buy to Hold. That’s just the state of the market right now, and we need to play defense in order to minimize losses.

Fortunately, a) so many of our positions had a sizable cushion prior to this three-week sell-off, and b) our portfolio was a bit bloated to begin with, so some early spring cleaning was warranted. Let’s hope we don’t have to do much more of it.

And believe it or not, there were some true bright spots in the portfolio, namely AbbVie (ABBV) and AST SpaceMobile (ASTS), both of which are off to fantastic starts in 2025. Here’s what’s happening with the rest of our stocks, what’s staying, what’s going, and what’s getting downgraded.

Updates

AbbVie (ABBV), originally recommended by Tom Hutchinson in the Dividend Growth Tier of his Cabot Dividend Investor advisory, has been one of the few bright spots amid the market massacre of the last three weeks. ABBV was up another couple points this week and is now up more than 20% year to date! Two prominent Wall Street firms have raised their price targets on the healthcare giant this month: B of A Securities raised their price target from 200 to 223, while Wells Fargo raised theirs from 210 to 240. There’s been no other company-specific news, but healthcare has been the best-performing sector this year, up more than 8%. ABBV, of course, is faring much better than that. BUY

Airbus (EADSF), originally recommended by Carl Delfeld in his Cabot Explorer advisory, held firm this week despite reporting that deliveries were down 18% through the first two months of the year. Part of it was due to some aircraft orders being pulled forward to the fourth quarter of 2024 to help engine supplier CFM reach last year’s shipment target. On the bright side, Airbus had 65 net orders in the first two months, roughly double the 33 net orders from last January and February. Plus, the down first two months for deliveries haven’t altered the company’s full-year 2025 target of 820 deliveries, which would be up from 766 last year. As a result, the stock price wasn’t affected much, and shares are now up more than 13% year to date. BUY

AST SpaceMobile (ASTS), originally recommended by Tyler Laundon in his Cabot Early Opportunities advisory, was through the roof this week after beating earnings estimates, with EPS losses coming in at -$0.13 versus a -$0.18 estimate. That was also less than half the 35-cent loss in the fourth quarter a year ago. While revenue of $1.92 million came in shy of the $3 million estimate, the company is still mostly pre-revenue, and that $1.92 million represents nearly half of AST’s total 2024 revenue ($4.42 million). The company now has $565 million in cash and equivalents and just $155.6 million in debt, up from a mere $85.6 million in cash at the end of 2023, with $59.3 million in debt. Wall Street loved the results, pushing ASTS shares up from 25 to 33 in just a couple days. Shares remain in the 32-33 range as of this writing and are now up more than 58% year to date – but still shy of their August peak above 38. BUY

Axsome Therapeutics, Inc. (AXSM), originally recommended by Mike Cintolo in his Cabot Top Ten Trader advisory, pulled back another 6% this week but is still up 43% for the year, so the recent damage has been minimal. Here’s what Mike had to say about the stock in last week’s issue of Cabot Growth Investor: “The group has had an endless number of false starts in recent years, but we’re wondering if the time for medical stocks—biotech and device makers—may finally be getting close, as many are holding up relatively well so far despite the market carnage; our first two stocks on this page look like fresher potential leaders of the next sustained market rally. Axsome is a drug maker focused on central nervous system disorders, and it has a couple of treatments on the market and is likely to have a few more drugs or indications approved in the quarters ahead, too. The main growth driver today is Auvelity, an oral treatment for major depressive disorder, which affects north of 20 million people; without getting into all the details, it mimics the action of ketamine but without the side effects. It’s been a hit, with Q4 sales and prescription growth in the upper 80% range, and the firm thinks peak sales here could be well over $1 billion (vs. $291 million in 2024). Also on the market is Sunosi for wakefulness in adults with sleep apnea or narcolepsy; growth here is milder (up 16% in Q4), and peak sales could be $400 million or so down the road. But there’s also a lot of excitement about some new drugs. First is Symbravo, for acute migraines ($500 million-plus peak potential), which was approved in late January and should hit the market by the middle of the year. And Axsome is expected to submit three new drug applications in the first half of 2025 alone—one for fibromyalgia ($500 million-plus potential), one for narcolepsy (also $500 million-plus) and one for Alzheimer’s disease agitation, where trials were good-not-great but management thinks it’s still very likely to be approved ($1.5 billion to $3 billion peak potential). Obviously, with so many trials and FDA submissions, there’s event risk here—some bad news could hit the stock, like it did in December when there were worries about the Alzheimer’s agitation trial results. But the fact is sales growth here is rapid and should remain that way (66% growth in Q4, 60%-plus estimated this year and next) and, while the bottom line is in the red, losses should start to shrink dramatically soon and turn green next year. As for the stock, AXSM made no net progress for more than two years, but it’s changed character since 2025 began, with a strong move to all-time highs and resilient action during the market’s plunge.” BUY

Banco Santander (SAN), originally recommended by Carl Delfeld in his Cabot Explorer advisory, held mostly firm this past week, at least after pulling back 4% this morning. The 178-year-old Spanish bank that does most of its business in Latin America and Europe is coming off a strong fourth quarter (reported in early February) in which both net profits and revenue improved 10%. Santander now also oversees 500 billion euros of assets for wealth management clients and has 105 million credit cards issued. The bank also raised its dividend by 19%.

Wall Street loved the Q4 results, and SAN shares are now up more than 41% already in 2025. And yet, the stock still only trades at 8x earnings and 0.96x book value. BUY

Broadcom Inc. (AVGO), originally recommended by Tom Hutchinson in Cabot Dividend Investor, got a bump from fiscal first-quarter earnings last Thursday, with EPS coming in at $1.60 vs. $1.50 expected and revenue of $14.92 billion topping the $14.61 billion estimate. Shares have gotten a 3.5% bump since, and Truist raised its price target on the stock. Broadcom’s AI revenue is still booming, up 77% year over year, and the company expects AI semiconductor revenue to reach $4.4 billion in the current (fiscal second) quarter. Its software sales improved 47% year over year. There was a lot to like from the report, and Wall Street did, pushing shares up 16% immediately after the report before pulling back a bit since. At a time when AI stocks, including Nvidia, have been getting hammered, a good week for Broadcom, especially on earnings, was much needed. Let’s keep holding on to our remaining half. HOLD HALF

BYD Co. Ltd. (BYDDY), originally recommended by Carl Delfeld in his Cabot Explorer advisory, held firm this week after a down week the week before. Shares are up more than 28% year to date, with the big bump coming after the company announced its move into self-driving technology and AI, including a new partnership with news-making Chinese upstart DeepSeek. Earnings are due out in a couple weeks, on March 24. It’s possible BYDDY shares will remain in a holding pattern until then. BUY

Capital One Financial Group (COF), originally recommended by yours truly in the Growth/Income portfolio of my Cabot Value Investor advisory, totally collapsed this week after the Trump Organization filed a lawsuit against Capital One for allegedly debanking hundreds of its accounts after the January 6, 2021, attack on the U.S. Capitol. That, in turn, has cast doubt on whether or not Capital One’s proposed $35 billion merger with Discover Financial will gain approval in a couple months, as expected. So, with shares falling fast and the reason for owning COF (the Discover merger) being called into question, let’s sell while we still have a modest profit on the stock. MOVE FROM BUY TO SELL

Centuri Holdings Inc. (CTRI), originally recommended by Clif Droke in his Cabot Turnaround Letter, continued to wallow despite beating earnings a couple weeks ago, falling from 17 to 16, and is now well below its 200-day moving average. The stock simply hasn’t worked out since we added it to the portfolio last October. Let’s move on. MOVE FROM HOLD TO SELL

DexCom, Inc. (DXCM), originally recommended by Clif Droke in his Cabot Turnaround Letter, had a rough week, falling from 87 to 73 on news that the Food and Drug Administration (FDA) found problems at its manufacturing plants in Arizona and California. While the report has yet to be published – Dexcom simply received a warning letter from the FDA – the letter describes “non-conformities” in the manufacturing process and quality management systems at the two facilities. For its part, the company does not expect the FDA letter to have a meaningful impact on operations or its 2025 guidance and is working to bring the two plants into compliance. But it’s an embarrassing headline at a bad time for the market, so this week’s sell-off was no surprise. If it’s true that full-year guidance will be unchanged, then this seems like a classic “buy bad news” scenario for DXCM … assuming the market can get its act together. BUY

DoorDash Inc. (DASH), originally recommended by Mike Cintolo in Cabot Top Ten Trader, was down a whopping 14% this week despite joining the S&P 500 today. After weeks of holding the line in the face of massive selling among growth stocks, the dam finally broke for DASH this week. In his latest update, Mike wrote, “Given the destruction seen in so many names, DASH’s pullback hadn’t been that bad of late, with shares still holding above their 50-day line and, importantly, above the stock’s prior highs (near 180) from the December/January period. But good (or good-ish) stocks can go bad in a hurry in a bad market, as sellers will sometimes come around for stocks that have ‘meat left on the bone,’ i.e., those that have been holding up decently—and we think that’s what’s happening now, as DASH nosedived today on no meaningful news through the 50-day line and into the prior support area. Fundamentally, we think this growth story has legs and won’t be affected by most of the recent worries (tariffs, etc.), so it’s tempting to hold onto our small position to see if/how well it can eventually bounce. But given the extreme weakness in the market and among growth stocks, our thought is to make sure any bad situation doesn’t get much worse, especially should the market continue to unravel. Translation: We’ll sell our half-sized stake here, cutting the loss and holding the cash.”

Should we do the same? No. Because we recommended the stock at a much lower price point (126) than Mike (210), we still have a decent profit. Meanwhile, DASH is still well north of its 200-day line. So, let’s simply downgrade to Hold, and keep a close eye on it in the coming days. MOVE FROM BUY TO HOLD

Dutch Bros (BROS), originally recommended by Carl Delfeld in his Cabot Explorer advisory, gave back all of its 27% gain in February in just one week. Shares plummeted from 79 to 58 on no news as, like Mike wrote above, sellers are coming for stocks with “meat on the bone.” BROS shares are still up more than 10% year to date, and we have a sizable gain on the stock. But given the sheer velocity of the sell-off, let’s downgrade to Hold until the barrage ends and shares can right the ship again. MOVE FROM BUY TO HOLD

Eli Lilly and Company (LLY), originally recommended by Tom Hutchinson in the Dividend Growth Tier of his Cabot Dividend Investor advisory, gave back all of its gains from the previous week, down nearly 10%. The stock is still up 9% year to date. The healthcare behemoth is coming off a stellar 2024 in which its earnings more than doubled; it expects to grow them by another 90% this year. Also, underwhelming clinical trial results from Lilly’s closest rival in the weight-loss drug space, Novo Nordisk, could be Lilly’s gain as it hopes to launch its signature weight-loss drug, Mounjaro, in emerging markets like China, India and Brazil later this year. The down week for the stock after a big post-earnings run-up wasn’t surprising. Keep holding. HOLD

Flutter Entertainment (FLUT), originally recommended by Mike Cintolo in Cabot Top Ten Trader, is down about 16% since reporting mixed earnings results last week. Mike wrote about them in his update last Thursday: “Flutter’s Q4 results were released earlier this week, and while they were harmed due to good luck by bettors, that was already well known—and, really, the numbers weren’t bad anyway, with revenues up 14% and EBITDA up 4% from a year ago despite unfavorable outcomes, with huge free cash flow, too. (Pre-2022 opened states continued to grow, up 9% despite poor outcomes, a good sign the sports gambling and online casino market is far from penetrated.) More important, the top brass said 2025 was off to a good start, with neutral sports betting outcomes so far this quarter (Super Bowl helped offset some not-so-good outcomes in January) and continued solid customer acquisition—all in all, it sees U.S. revenue lifting 23% this year (if you normalize Q4 results) with EBITDA margin likely to expand five full percentage points. (International growth will be slower but still positive, with 6% sales and 10% EBITDA growth this year.) Lastly, the firm began its share buyback program, gobbling up $121 million of stock in Q4 and expecting up to $1 billion in buybacks in 2025 (north of 2% of the current market cap). Of course, even the good news didn’t bring in much buying, and the market’s latest implosion today dragged the stock toward key support in the 250 area. Given our profit and the fact the selling in FLUT isn’t outrageous (the action isn’t good but shares are down 14% from their highs, miles better than much of what’s out there), we advise hanging on here; we still think there’s a solid chance that, once this selling storm in the market ends and big investors refocus on the underlying growth story, FLUT can regain lost ground. Hold for now.” With the stock down another 6% in Monday trading on no news, let’s downgrade to a Hold rating as well. MOVE FROM BUY TO HOLD

Intuitive Surgical (ISRG), originally recommended by Tyler Laundon in his Cabot Early Opportunities advisory, has imploded in the last couple weeks, falling below its 200-day moving average after a 15.5% drop this past week. The maker of the da Vinci robot surgical system has been a solid stock for us since we added it to the portfolio almost exactly a year ago, delivering about a 25% gain even after the recent nosedive. But you can’t fight the tape, and with the stock down more than 6% this year and now trading at its lowest point since October, it’s time to part ways. MOVE FROM BUY TO SELL

Klaviyo, Inc. (KVYO), originally recommended by Tyler Laundon in his Cabot Early Opportunities advisory, kept falling, all the way through multi-month support and its own 200-day moving average. We now have a small loss on the stock. We thought its presentation at last week’s Morgan Stanley Technology, Media & Telecom conference might help turn shares around, but that failed to materialize. So let’s also sell this underperforming stock before our small loss becomes a bigger one. MOVE FROM BUY TO SELL

Kyndryl Holdings, Inc. (KD), originally recommended by Mike Cintolo in his Cabot Top Ten Trader advisory, was off about 10% this week despite reporting a new partnership with Microsoft. Kyndryl, the world’s largest IT infrastructure services provider, is teaming with Microsoft to deliver a new AI-powered healthcare assistant. Called Microsoft Dragon Copilot, the new solution uses voice dictation and natural language capabilities to automate clinical documentation, allowing providers more time with patients and less time doing paperwork. Kyndryl plans to begin offering the Dragon Copilot this May. The good news did little to slow selling in this mid-cap stock, though shares are only about break-even for the year and are trading well above their 200-day line. Keeping at Buy for now. BUY

Main Street Capital Corp. (MAIN), originally recommended by Tom Hutchinson in the High Yield Tier of his Cabot Dividend Investor advisory, pulled back from 61 to below 58 after reporting earnings late last month that narrowly missed estimates on both the top and bottom line. The earnings miss sparked a bit of selling, but not much, as MAIN is an appealing holding in this volatile market as it’s a business development company with a high yield (7.2%) that pays a monthly dividend. It’s done a solid job for us and takes on extra importance now as a sort of flotation device to help get us through the current choppy waters. BUY

Netflix, Inc. (NFLX), originally recommended by Tyler Laundon in Cabot Early Opportunities, was off more than 11% this week as the sellers came for the mega-cap stocks again. There was no company-specific news that necessitated the selling. NFLX shares are now down for the year but remain above their mid-January lows. This could be a good entry point in a great stock for those who don’t already own shares of the streaming giant, but I’d start small with any new position in the current environment. BUY

Peloton Interactive (PTON), originally recommended by yours truly in my Cabot Value Investor advisory, just keeps falling, as small caps are getting hammered – even companies that just reported strong earnings results, like Peloton. Our timing was poor here, adding PTON to the portfolio a month ago, right before the market imploded for small caps in particular. So let’s cut our losses before they become worse. Perhaps we’ll revisit this battered-and-bruised stock in better times. MOVE FROM BUY TO SELL

Reddit (RDDT), originally recommended by Tyler Laundon in Cabot Early Opportunities, is down 14% today on no news, so it’s also time to say goodbye to this well-known name that has completely fallen apart. Like PTON, we added shares of RDDT earlier this year, and the timing wasn’t great. No need to overthink it. Time to sell. MOVE FROM BUY TO SELL

Sea Limited (SE), originally recommended by Carl Delfeld in his Cabot Explorer advisory, mostly held firm this week, though it’s down 7% in Monday trading as the sellers are coming for anything growth-y with meat on the bone. Last week’s earnings were a bit underwhelming, with EPS (60 cents) coming in shy of estimates (69 cents); however, sales improved 37% in the fourth quarter, including a 41% boost in its Shopee e-commerce wing. Wall Street mostly loved the report, with three analysts significantly raising their price targets since last Tuesday’s report: Jefferies from 131 to 157; JPMorgan from 133 to 160; Barclays from 148 to 182. The stock currently trades at 126 a share and is up more than 17% year to date. At a time when U.S. stocks are under fire, it’s a great time to invest in this Singapore-based play on Southeast Asian growth. BUY

Sirius XM Holdings (SIRI), originally recommended by Clif Droke in his Cabot Turnaround Letter, had a solid first week in the portfolio, up roughly 3%. Given the week we just had, that’s a double-digit gain in a normal week. Satellite radio is certainly nothing revolutionary, but Clif pegged SIRI as a turnaround candidate because the company 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.’”

Warren Buffett spotted an opportunity in Sirius XM years ago, buying more than a third of the company. There were some lean years there, but it may be starting to bear fruit, with SIRI shares up more than 8% year to date. BUY

Tesla (TSLA), originally recommended by Mike Cintolo in Cabot Top Ten Trader, is in a full-on meltdown, down 44% this year and erasing all of its post-election gains. TSLA is down 13% today alone after UBS lowered its price target on the stock from 259 to 225 … roughly where the stock is as of this writing. TSLA has been perhaps the single greatest investment in Cabot history, as you can see from the returns since it was first recommended in December 2011. But right now, it’s a sinking ship, and Elon Musk needs to take a break from his busy schedule of laying off government employees and figure out a way for his flagship company to return to growth. The stock is still up 30% in the last year and has a history of bouncing back when everyone is ready to count it out, so we will maintain our Hold rating. But the company needs to re-prove itself before we go back to Buy. HOLD

The next Cabot Stock of the Week issue will be published on March 17, 2025.

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