Cabot Stock of the Week Issue: March 24, 2025

Stocks narrowly averted a fifth-straight down week last week and now appear to be building some bona fide momentum, with all three of the major indexes up more than 1% on Monday. Will the rally last? Or will the looming April 2 deadline for “reciprocal tariffs” derail this nascent upmove? We should have an answer in about 10 days. In the meantime, with no earnings season, the Fed’s March announcement behind us (they did no harm, thankfully), and no CPI data on the horizon, we may have entered a period of relative quiet for the market. It may only last a week. And who knows what tariff news will come out. But for now, calm has been restored, and stocks are nursing their wounds.

With that in mind, today let’s operate as if the worst of the late-February/early-March selling is behind us and add a pure growth stock, recommended by Mike Cintolo to his Cabot Top Ten Trader audience last week. It’s a cybersecurity play that has been building momentum of late – enough to catch Mike’s eye.

Here it is, with Mike’s latest thoughts.

Rubrik (RBRK)

The cybersecurity market has been in a long-term growth phase for years due to business trends (more work online and remote, everything going digital and in the cloud, etc.) that are only accelerating—but the group has seen leadership shift over time, as those with new-age offerings and new focuses grab share. We think Rubrik is set up to be the next big draw in the space thanks to its focus on cyber recovery, not just attack prevention (where the vast majority of effort is today)—the fact is that cyberattacks are only becoming more common, with the cost of those attacks skyrocketing, despite advances in protection capabilities. (In other words, bad actors are getting more advanced at the same or at a quicker pace than cybersecurity firms.) Rubrik actually integrates with many of the best-known security providers and prevention is a key part of the offering, but recovery efforts are also big, with its platform allowing for a very rapid recovery of data (and, hence, slashing the cost of these events) for clients on a variety of clouds (Azure, AWS, etc.) and types of data (including unstructured data, which is becoming more important as Generative AI use ramps up) … and it’s often able to provide this at a lower total cost of ownership for clients. Not surprisingly, it’s been a huge hit, with just about every key metric and sub-metric growing rapidly, if not accelerating. In the just-reported Q4, Rubrik’s total revenue growth accelerated to 47% while annualized recurring revenue leapt 37% and cloud-based revenue soared 67%. Meanwhile, the top brass says it’s winning most of the deals it’s going after as competitors can’t provide the firm’s depth of cyber resilience and recovery, and current clients are buying more, with same-customer revenue growth north of 20%. As for earnings, they’re in the red, but free cash flow was positive last year and, most important, management’s recent guidance breezed past guidance. To be fair, growth is expected to decelerate a bit (30% top-line growth this year), but given the size of the recent beats, most see that as overly conservative.

As for the stock, RBRK came public in April and went straight sideways before finally getting going in October, embarking on a huge run into December. Shares did chop for a couple of months from there, but they could only make grudging new highs in February before falling sharply (36%) with growth stocks of late. Still, the drop wasn’t all that abnormal, the stock isn’t late stage and the snapback last week (mostly due to Friday’s earnings reaction) was certainly an eye-opener, with RBRK recouping about two-thirds of the decline on volume far higher than what was seen during the dip. It’s not totally out of the woods, of course, so there’s nothing wrong with just watching it for now, but a nibble on minor weakness is fine by us given the tennis ball-like action. BUY

Current Recommendations

Changes Since Last Week:

Dutch Bros (BROS) Moves from Hold to Buy

After the carnage wrought on the market and our portfolio in late February and early March, it’s refreshing to have a second straight week of no selling. The only change is that Dutch Bros (BROS) moves back to Buy after quickly recovering most of its losses. In fact, most of our stocks are in recovery mode, as it seems the worst of the market selloff is behind us. Here’s what’s happening with all of them.

Updates

AbbVie (ABBV), originally recommended by Tom Hutchinson in the Dividend Growth Tier of his Cabot Dividend Investor advisory, finally had a down week after going nowhere but up the previous couple months. But the downturn was modest, with ABBV losing just 2%. It’s still up 18% year to date. Here’s what Tom had to say about the stock: “Not only did this biopharmaceutical company stock run to a new high, but it did so during a market correction. ABBV is showing some strong defensive chops. It did come off the high by a few bucks, but it is still trading at the high point of the recent range and is still very much in an uptrend that began after the earnings report in January. Immunology drugs Skyrizi and Rinvoq collectively have made up for the lost Humira revenue. The company also raised revenue forecasts on the two drugs by $4 billion to $31 billion a year by 2027. The earnings report showed AbbVie has replaced the Humira revenue and is poised for solid earnings growth.” BUY

Agnico Eagle Mines (AEM), originally recommended by Carl Delfeld in his Cabot Explorer advisory, held firm this week, taking a well-earned breather after running up 32% year to date. Here’s what Clif Droke, who also recommends the stock to his Cabot Turnaround Letter audience, wrote about the stock: “Agnico Eagle Mines (AEM) has agreed to subscribe 4.7 million common shares in capital to Canada-based Collective Mining (CNL). Collective is an established exploration and development company operating mainly in Colombia, with a focus on gold, silver, copper and tungsten. The closing of the offering is conditional upon, among other things, Agnico Eagle concurrently exercising the common share purchase warrants of the company it currently holds to acquire an additional 2.3 million shares at a price of C$5.01 per share. At the closing of the offering, Agnico’s ownership interest in the shares is expected to increase to approximately 15%.

Agnico’s strategic investment with Collective Mining is aimed at enhancing its growth prospects and strengthening its position in Colombia’s promising gold exploration potential. More specifically, the investment provides Agnico with exposure to Collective Mining’s early-stage gold exploration projects in Colombia, particularly the Guayabales project, which has demonstrated promising high-grade mineralization.

“According to a company statement, the proceeds from the investment will support Collective Mining’s ongoing exploration activities, including an aggressive drilling program aimed at expanding and defining mineralized zones within the Guayabales project (where Collective’s management thinks it can ultimately mine up to 10 million ounces of gold). In an interview with Kitco, Collective Mining CEO Ari Sussman said having Agnico as a partner provides his company with ‘every tool we need’ to advance the firm’s mining projects in Colombia.

“The collaboration also strengthens Agnico’s project pipeline and positions it to benefit from potential future discoveries and developments resulting from Collective Mining’s exploration efforts.” BUY

Airbus (EADSF), originally recommended by Carl Delfeld in his Cabot Explorer advisory, was off 3.5% this week on no major news. The stock is still up nearly 10% year to date. One of two major airplane makers in the world, Airbus has been gathering investor attention due to rival Boeing’s much-publicized struggles. And with the company set to ramp up production in the coming years, there’s plenty of upside ahead. BUY

AST SpaceMobile (ASTS), originally recommended by Tyler Laundon in his Cabot Early Opportunities advisory, was down a tick from 28 to 27, but is up 6% in early Monday trading on no news. Shares of the potentially revolutionary company – which is launching low-Earth orbit satellites intended to deliver broadband internet service directly to smartphones around the world – are up 30% year to date and have more than doubled since we added ASTS to the portfolio last July. Still mostly pre-revenue, this company’s best days are ahead of it – and so are the stock’s. BUY

Axsome Therapeutics, Inc. (AXSM), originally recommended by Mike Cintolo in his Cabot Top Ten Trader advisory, continues to rise, up another 2.5% this week on no news. Sales for this biotech are expected to exceed 60% growth both this year and next, and the company should be profitable by early next year. It’s why investors have flocked to the stock of late, with shares up 50% year to date already. BUY

Banco Santander (SAN), originally recommended by Carl Delfeld in his Cabot Explorer advisory, held firm this week after rising 55% year to date already. The Spain-based bank announced it is closing 95 of its 444 branches in the U.K. Wall Street didn’t seem to care much. Perhaps that’s because 93% of the U.K.’s population will still be within a 16-kilometer drive of a Santander branch, which speaks to the bank’s dominance in Europe. It seems the closures are thus being deemed a necessary evil for the sake of “efficiency.” Meanwhile, European stocks remain very much in favor. BUY

Broadcom Inc. (AVGO), originally recommended by Tom Hutchinson in Cabot Dividend Investor, was up slightly, from 192 to 194, after advancing 8% the previous week. In his latest update, Tom wrote, “This AI superstar recovered somewhat amid the tech wreck after another stellar earnings report. AVGO has moved off the recent bottom but hasn’t made a significant upside move yet. Broadcom soundly beat expectations with 25% revenue growth and 45% earnings growth and raised guidance for the current quarter. The even bigger news was that AI revenue grew 77% over last year’s quarter and the company reported that it has scored two more large AI chip customers. Tech and AI are getting a comeuppance now. But the AI business is alive and well. Broadcom is going as strong as ever but is being dragged lower by the sector. It will be back. Patience should be well rewarded.” We already cashed in half our position late last year. Let’s keep holding the remaining half. HOLD HALF

BYD Co. Ltd. (BYDDY), originally recommended by Carl Delfeld in his Cabot Explorer advisory, added another 3% after exploding 16% higher the previous week, as Wall Street continues to pile into this fast-rising global electric vehicle power. This morning’s earnings results only added to BYD’s growing popularity. In the fourth quarter, net profits improved 73% while sales expanded 52.7%. For full-year 2024, profit growth was 34% on 29% sales growth (to $107 billion, more than Tesla’s $97 billion last year), and BYD overtook Volkswagen as China’s top automobile seller at 4.25 million vehicles sold. That news comes on the heels of last week’s announcement that the company is launching the fastest EV battery charger ever, capable of charging to 400 kilometers in five minutes – the equivalent of filling a gas-powered vehicle at a fuel pump. Prior to that, BYD had unveiled its new God’s Eye self-driving technology and signed an AI deal with up-and-comer DeepSeek. BYD is red-hot and making all kinds of eye-popping news, and as a result, it’s one of the most sought-after stocks on the market (+55% YTD), despite its status as a Chinese stock in a Trump administration. BUY

DexCom, Inc. (DXCM), originally recommended by Clif Droke in his Cabot Turnaround Letter, was up more than 6% this week on no news. The stock is starting to recover some of its steep losses from the first half of March when it fell from 90 to 68; it is now back up to 75 thanks largely to the market rebound. We still have a solid gain on this turnaround stock, and four analysts have raised their price targets on the stock already this year. BUY

DoorDash Inc. (DASH), originally recommended by Mike Cintolo in Cabot Top Ten Trader, has regained all of its early-March losses and is up 4% today as it joins the S&P 500. We downgraded shares of the online food delivery service company to Hold a couple weeks ago after its sharp decline and will keep them there for now. But one more encouraging week could have us restoring our Buy rating. HOLD

Dutch Bros (BROS), originally recommended by Carl Delfeld in his Cabot Explorer advisory, rebounded in a big way, up nearly 15% in the last week including an 8% boost today as Morgan Stanley initiated coverage on the stock with an “Overweight” rating and an 82 price target. The analyst highlighted Dutch Bros’ margins of better than 30%, with potentially higher margins ahead, and believes the drive-through coffee chain will not only achieve its goal of topping 4,000 locations but could reach as many as 9,000. The stock is up 34% YTD but is well shy of its February highs above 85 despite this week’s dramatic bounce-back. Let’s restore a Buy rating on it, shall we? MOVE FROM HOLD TO BUY

Eli Lilly and Company (LLY), originally recommended by Tom Hutchinson in the Dividend Growth Tier of his Cabot Dividend Investor advisory, added about 4.5% this week as the stock continues to recover from its early-March swoon. In his latest update, Tom wrote, “The superstar drug company stock got an unexpected drubbing earlier this month, falling 11%. LLY had been soaring while the market got clobbered until a news event last week. A pipeline weight-loss drug for Novo Nordisk (NVO) reported disappointing results in a trial. Lilly is a big player in the red-hot weight-loss drug sector with its highly popular Zepbound. The weight-loss drug players sold off in sympathy with the Novo news as worry spread that these drugs might not be as good as previously thought. But Novo is a competitor. And Zepbound is killing it. When a type of drug gets this hot, markets tend to overreact, especially in such an unforgiving market. I don’t think this news changes anything. And now, LLY is cheaper.” HOLD

Flutter Entertainment (FLUT), originally recommended by Mike Cintolo in Cabot Top Ten Trader, continued its recovery from a steep loss, up another 5.5% this week. Shares are still well shy of their mid-February highs, but the lows (227 range) have also been left in the dust. Here’s what Mike had to say about the stock: “FLUT cascaded into a panicky low on March 10, though (a) that low came three trading days before the low in the S&P 500 and Dow, and (b) shares found buying near their 200-day line, which is a logical support area. One of the firm’s international subsidiaries recently put in one of the top two bids to help manage the Italian lottery system (decision should come within a month), and closer to home, all eyes will be on March Madness, which is one of FanDuel’s busier times, of course. Still, while the stabilization of late (similar to the major indexes) has given the stock a little breathing room, FLUT hasn’t been able to bounce much yet; we’d like to see that change, with further strength probably indicating a bottoming process is underway. If the stock can’t get going, we could cut bait (and possibly replace it with something more resilient if the market shows some life), but at this point, we think it’s best to hold your small position and give FLUT a bit more rope.” Mike wrote this last Thursday, before today’s 3% bump. Seems like FLUT is getting going again, but we’ll keep it at Hold and see if it can string together another good week. HOLD

Kyndryl Holdings, Inc. (KD), originally recommended by Mike Cintolo in his Cabot Top Ten Trader advisory, just keeps holding in the 34-35 range, as it has all month. That’s admirable resilience in the face of a choppy market, but you’d like to see shares get going and break above resistance in the mid-35 range now that the market has gotten its act together. With no news and no earnings until early May, the technicals will likely have to be the driving force here. The latest bit of actual news was that 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 Dragon Copilot this May. BUY

Main Street Capital Corp. (MAIN), originally recommended by Tom Hutchinson in the High Yield Tier of his Cabot Dividend Investor advisory, was up from 57 to 58 on no news. The business development company that pays a monthly dividend remains one of the most reliable performers in our portfolio. BUY

Netflix, Inc. (NFLX), originally recommended by Tyler Laundon in Cabot Early Opportunities, continued its recovery, up 1.5% this week. There wasn’t much news, though a week ago MoffettNathanson upgraded the stock to Buy and raised the price target to 1,100. The analyst, Robert Fishman, sees “greater profits” for the streaming giant in the years ahead and estimates $6 billion in advertising revenue in 2027 and almost $10 billion by 2030. We’ve maintained our Buy rating all along and will keep it that way for the foreseeable future. BUY

Sea Limited (SE), originally recommended by Carl Delfeld in his Cabot Explorer advisory, dipped from 130 to 128 this week but is still up 19% year to date. Carl notes, “Sea’s e-commerce group, Shopee, became profitable in Asia and Brazil. SeaMoney maintained steady profitability and increased revenue by 55%, and Garena has over 600 million users playing its games quarterly, making it one of the largest mobile gaming companies globally.” For all those reasons, Sea Limited shares have been on a tear and the stock remains a great way to play fast economic growth in Southeast Asia – and the stock still trades at roughly a third of its 2021 highs. BUY

Sirius XM Holdings (SIRI), originally recommended by Clif Droke in his Cabot Turnaround Letter, was up from 23 to 24 this week, likely in sympathy with the market. A week ago, shares were down after CFO Tom Barry expressed concern about the impact of tariffs on ad sales, but those comments merely echoed what most company executives are saying these days. As the dominant force in satellite with shares trading at less than 8x earnings, Clif highlighted the stock’s turnaround potential. Nothing since we added it to our portfolio earlier this month has changed that. BUY

Tesla (TSLA), originally recommended by Mike Cintolo in Cabot Top Ten Trader, is up 9% today and 17% in the last week as the stock once again proved why it’s worth keeping in the portfolio despite months of massive losses. The headlines remain unflattering, as BYD (see above) sold more cars than Tesla for the first time last year, the company’s self-driving technology promises keep hitting snags, particularly in China, and CEO Elon Musk has become a lightning rod due to his position in the Trump administration, with protests being held at Tesla dealerships around the country in recent days. And yet … TSLA has a long history of incredible resiliency, bouncing back with a vengeance every time investors are about to count the stock out. It happened again this week despite a wave of bad news. Let’s see how it behaves in the coming weeks. Keeping at Hold. HOLD

Waste Management (WM), originally recommended by Tom Hutchinson in the Dividend Growth Tier of his Cabot Dividend Investor advisory, was unchanged in its first week in our portfolio. As Tom wrote, “You can depend on garbage. As the market plunges and uncertainty swirls, investors are attracted to safety, and the relative performance of stocks like WM tends to thrive. Of course, this stock has also performed well in bull markets. It’s a good holding if the market turns around too.” BUY

If you have any questions, don’t hesitate to email me at chris@cabotwealth.com.

Here, too, is the latest episode of Cabot Street Check, the weekly podcast I host with my colleague Brad Simmerman.

The next Cabot Stock of the Week issue will be published on March 31, 2025.

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