Cabot Top Ten Trader Issue: March 24, 2025

Starting to Repair

Nobody is going to claim that the past couple of weeks have been perfect, but given where things stood following the market’s three-week mini-crash, the recent action has been constructive on a few fronts, including better action in the broad market (positive divergence in new lows, and a nice dry-up of late), a few successful tests of late (poor openings on bad news) that have held the early-month lows and, today, some upside follow-through as the headlines (tariffs may be rolled out more slowly than feared) turned less bad. All of that is to the good, and short term, we’d expect more upside testing, possibly a few percent worth. That said, on an intermediate-term basis, there’s much more work to do, as the trends of most everything remain down, most indexes have recouped far less than half of their prior declines and the majority of stocks are actually still below 200-day lines. We are going to bump up our Market Monitor a notch to a level 4 to respect the action, but overall we remain cautious as we wait to see how this bottom-building process develops.

This week’s list has something for everyone, though all of them have shown some intriguing strength of late as the market has found support. Our Top Pick is Alnylam Pharmaceuticals (ALNY), which has pushed back to its old highs on great volume after some positive news last week.

Stock 1

ADMA Biologics (ADMA)

Why the Strength
Patients with compromised immune systems require special protection since they are particularly vulnerable to a variety of infections that can prove fatal. This is where ADMA’s expertise comes into play: The New Jersey-based biopharma is focused on developing specialty plasma-based biologics for the treatment of immune deficiencies and infectious diseases. In addition to operating several FDA-approved human-source plasma collection facilities across the Southern U.S., the company also manufactures immune globulin products (based on a protein produced by the immune system that acts as an antibody), including BIVIGAM and ASCENIV: Both are intravenous immune globulin (IVIG) products that are indicated for the treatment of primary humoral immunodeficiency (PI), the former is for those ages 2 and above, while ASCENIV is generally for those 12 to 17 years old. It also produces Nabi-HB, a human polyclonal antibody for the treatment of acute exposure to blood containing or exposed to Hepatitis B. Last year, ADMA secured several long-term high-tier plasma supply agreements, which it said mark “a transformative milestone” since it significantly expands its plasma sourcing capacity, allows it to achieve its near-term and long-term growth objectives and, when combined with its recently enhanced yield production process, should contribute to a 20% increase in finished IG from the same starting amount of plasma. In Q4, revenue of $118 million jumped a whopping 59% from a year ago, mainly driven by higher sales of ASCENIV (thanks to increased acceptance and utilization by physicians, payers and patients), with EPS of 14 cents more than tripling the year-ago figure. Looking ahead, the top brass expects revenue and margin expansion to be driven by ASCENIV, which it sees as a potential $1 billion-plus opportunity with lasting growth durability for at least the next decade. Wall Street sees 16% top-line growth this year and 30%-ish next while earnings take off, and the top brass expects a greater than $1 billion in total annual revenue to be achieved prior to 2030. It’s an interesting story.

Technical Analysis
After a horrible decline, ADMA shot up on earnings in May of last year, kicking off an impressive multi-month run that ended with the stock nearly quadrupling by November. Not surprisingly, the correction from there was sharp (43% to its nadir) and took a while (16 weeks), but after an initial shakeout on earnings earlier this month, ADMA has found big buying support as it rounds out its launching pad. There’s still overhead resistance above here, so if you want in, start small and aim for modest weakness.

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Stock 2

Alnylam Pharmaceuticals (ALNY) ★ Top Pick ★

Why the Strength
Alnylam is focused on the discovery and commercialization of RNA interference (RNAi) therapies for rare diseases for which there are limited or inadequate treatment options. RNAi is a revolutionary approach to therapeutics that focus on “silencing” the genes that cause or contribute to various diseases, and Alnylam is at the forefront of this newer science. The company’s six commercial approvals include three medications for treating hATTR Amyloidosis Polyneuropathy (or hATTR-PN), a rare, inherited and rapidly progressive disease leading to the abnormal buildup of amyloid deposits in various organs; other treatments target abnormally high blood cholesterol and various liver diseases. Meanwhile, its clinical pipeline of RNAi therapeutics is focused on diseases in four areas (genetic, cardio-metabolic, infectious and central nervous system diseases), consisting of 20 treatments in various stages of testing for diseases ranging from Alzheimer’s and Type 2 diabetes to hemophilia and hypertension, with several more programs expected to be in the clinical stage by the end of 2025. Part of Alnylam’s strategic plan involves the ambitious goal of treating over 500,000 patients worldwide with RNAi therapeutics, marketing at least six products and achieving an annual revenue growth rate of at least 40% while becoming a top-tier biotech company by market cap. Based on recent revenue trends and clinical results, the company seems on track: Alnylam reported mixed results in Q4, with revenue of $593 million increasing 35% year-on-year, while a per-share loss of 65 cents missed estimates by six cents, but full-year 2024 saw product revenues of over $1.6 billion (up 33%), thanks to the strength of its hATTR-PN and rare disease business in the U.S. and abroad. Just as important was some news last week: In a pivotal development, the FDA approved the firm’s application to add cardiomyopathy of wild-type or hereditary transthyretin-mediated amyloidosis (ATTR-CM) to the labeling of its RNAi therapy Amvuttra, which caused buyers to rush in. Going forward, analysts see 25% to 30% top-line growth this year and next, and Alnylam is expected to become profitable in 2026.

Technical Analysis
ALNY topped out in late 2022 and suffered a very tedious, lumpy decline into last spring, when shares finally tightened up for a few months before blasting off after strong trial results for a heart drug study last June. The stock made it just over 300 in October before correcting and consolidating in a reasonable range for the next five months—but last week’s FDA-approved label expansion sparked a big-volume rally, with ALNY attacking resistance before fading a bit this afternoon. Nothing is easy in this market, but we’re OK with a small buy around here or on dips and a stop near 250.

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Stock 3

AngloGold Ashanti (AU)

Why the Strength
The ongoing escalation of a potential trade war between the U.S. and, well, most everyone else, is keeping investors playing defense, which is one of the key reasons behind gold’s latest surge to new highs. Near a record $3,000 an ounce, the precious metal is in heavy demand from individual and institutional investors, as well as from several of the world’s central banks. AngloGold is a South Africa-based company that’s the world’s sixth-largest gold miner by output and the owner of a high-quality portfolio of gold, silver and copper mining assets across South America, Africa and Australia. In late 2024, AngloGold acquired from Centamin plc a 50% interest in one of the world’s largest gold mines, the Sukari mine in Egypt, which has provided AngloGold with what it calls a “step-change” in its gold production profile. (The acquisition also solidified AngloGold’s move away from the challenges and high costs associated with mining in South Africa, as the firm sold the last of its mines there in 2020.) Specifically, the Sukari mine is expected to boost the company’s annual gold production to over three million ounces—up 450,000 ounces from prior levels—and the gold mined at Sukari is at a considerably lower all-in sustaining cost (AISC, a key metric) than AngloGold’s overall costs of recent years ($1,200 an ounce versus $1,440), which should boost what was already a great free cash flow (FCF) profile, with that metric totaling nearly $1 billion (of which Sukari contributed over $60 million, with a full year’s contribution coming in 2025). The extraordinary improvement in that metric is a reason why a major investment bank upgraded the shares after the Centamin acquisition, which it said offers AngloGold a “logical combination” for further FCF and net asset value growth going forward. The company’s Q4 results were great, as revenue of $1.7 billion increased 39% from a year ago, while earnings of $1.03 per share continued the recent gains in the bottom line. Looking ahead, analysts see big 2025 growth due to the acquisition and higher realized prices; a generous dividend (a 2.6% yield) is an added attraction.

Technical Analysis
After a mostly solid first eight months of 2024, AU encountered some turbulence in late August, with the stock starting what became a 24-week, double bottom base that took shares down as much as 31%. However, the calendar flip saw AU immediately spring back to life (along with the gold price) and take flight to new highs into February. The recent four-week rest was normal and found support near the 10-week line, with the push to new highs obviously a good sign. The two-day dip looks OK to us—we’ll aim to enter on a smidge more weakness.

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Stock 4

Ascendis Pharma (ASND)

Why the Strength
Ascendis is a Denmark-based biopharma company focused on developing therapies for rare endocrinology disorders and cancers. Its drugs are based on its TransCon (“transient conjugation”) platform, which combines known biology with the benefits of predictable sustained-release technologies that allow for tailored systemic or localized drug delivery. The company has developed and launched two drugs using the TransCon platform, including top-selling Skytrofa, a human growth hormone used for the treatment of growth hormone deficiency (GHD) in pediatric patients aged one year or older. (Skytrofa is the leading growth hormone product in the U.S. by dollar value, with a 7% market share.) Also developed by TransCon was the recently FDA-approved Yorvipath, a hormone replacement therapy for the treatment of chronic hypoparathyroidism. Ascendis captured Wall Street’s interest recently when it announced that Yorvipath was successfully launched in the U.S. for the treatment of hypoparathyroidism in adults (it’s also available in Germany and Australia), with over 900 unique patient prescriptions as of February. Management further anticipates commercial launches for Yorvipath in five additional European countries and international markets in 2025, and it sees the drug as a potential multi-billion-dollar product down the road. It also said it expects continued growth for Skytrofa through label expansions, including adult growth hormone deficiency, with a completed FDA review date set for July 27. Additionally, the firm said it plans to initiate a basket trial for Skytrofa with target indications for idiopathic short stature and Turner syndrome. Within the pipeline, topline results from a Phase II trial combining the investigational drug TransCon CNP (designed to provide sustained release of C‐type natriuretic peptide for patients with aberrant skeletal development) with TransCon Growth Hormone are expected in Q2. Financially, the company reported solid results last month for Q4, with revenue of $181 billion increasing 26% in local currency from a year ago, with the per-share loss of 66 cents tamer than expected. Going forward, analysts anticipate sales growth of 58% this year and 73% in 2026 while the bottom line should turn positive in 2026.

Technical Analysis
ASND had a rough 2021 and 2022 before bottoming out in 2023 and changing character late that year, with a persistent run (13 weeks up in a row) to 160 or so before running out of steam. What’s followed has been a year-long, 30%-ish trading range, with shares bobbing and weaving into February of this year. But the Q4 report changed perception here, with ASND gapping up and, after some market-induced wobbles, a fresh move to new price highs last week. If you want in, we’re OK with a nibble on a dip of a few points and a loose stop near 140.

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Stock 5

Expand Energy (EXE)

Why the Strength
Expand Energy is the new corporate name for the combination of Chesapeake Energy and Southwestern Energy, which officially tied the knot last October, creating the biggest U.S. natural gas player, with widespread operations in the Haynesville shake, all over Appalacia and elsewhere—and as opposed to many buyouts in this area, this one occurred after a couple of sour years in the sector with very low pricing (i.e., not after a firm was feeling flush), which, in our experience, often leads to good things. (This is in contrast to buyouts that occur when firms are flush with cash, which can be ill-timed.) Part of the cash flow story here is synergies, with the firm expecting to capture $500 million annually (more than $2 per share; up to $400 million of that should be implemented by the end of this year), and while pro-forma production has fallen off with prices the past two years, Expand sees output lifting gradually this year and next, even as CapEx remains in check. The goal, like many others in the group, is to keep costs relatively stable (partially thanks to drilling efficiencies; the firm claims it’s #1 or #2 in those metrics in the areas it operates) while reaping huge free cash flow, especially now that natural gas prices are trending higher and, at $4, are well north of their average in the mid-$2 range the past couple of years. For 2025, Expand thinks cash flow from operations will total $5 billion if natural gas averages $4, which, when deducting expected CapEx, should result in free cash flow north of $8 per share—and beyond a solid base dividend (2.1% yield), such big cash flow should allow for something like $6 per share of additional returns (extra dividends or buybacks; Expand has a $1 billion repurchase authorization on the books), as well as paying off $500 million of debt. Moreover, those figures will rise next year as production likely ticks higher. Of course, the path of gas prices will be key, but given the rising demand out there (especially for more electricity, where natural gas is the lead energy source in the U.S.; LNG demand also looks buoyant), we think the upside potential here could be big if prices stay elevated or rise further.

Technical Analysis
After a long dead period, EXE and its peers got going in September, with shares enjoying a beautiful run to nearly 110 before hitting a peak in January. The initial dip found support near the 50-day line, though the February-March slide took shares as low as 93, forming a double bottom shakeout base—and now EXE has rallied straight back to its prior high on a few days of elevated volume. Commodity stocks are notoriously tricky, but we’re OK taking a swing at it here with a stop under the century mark.

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Stock 6

Guardant Health (GH)

Why the Strength
Guardant Health has been hard to get a handle on, as the stock is subject to sharp dips and rallies, but the story has always been solid, and new product launches point toward great things ahead if and when the market kicks into gear. The firm’s base Guardant 360 offering has put it near the top of the liquid biopsy industry for years, analyzing DNA from a couple tubes of blood for patients with advanced solid tumors, allowing them to get information to better guide treatment options. That’s still a growing business and doing well, but the excitement here comes from two new offerings. The first is dubbed Sheild, which has been approved by the FDA as the first blood test for primary colorectal cancer screening for those 45 and up, which could be giant given the ease of use versus other screening methods (often stool-based), not to mention the dreaded colonoscopies. (Trial data show its effectiveness is on par with stool-based tests.) Moreover, Sheild is approved by Medicare and, last week, just received a special designation from the Centers of Medicare and Medicaid, which means the firm will get reimbursed by around $1,500 per test for Sheild this year, though the next two years of reimbursements will be dependant on what the private sector would be OK paying for the test (information to be collected for the rest of this year). Then there’s Reveal, another blood test from Guardant that’s used for colorectal cancer, but this time for disease recurrence monitoring; it received Medicare coverage earlier this year and, longer-term, there’s huge potential upside for this and other blood tests for cancer recurrence, with just a tiny fraction of those who could benefit being tested) Revenue growth has been strong here, though to be fair, the top brass’ 2025 outlook was just OK, with the top line expected to rise around 20% on an adjusted basis (taking out some one-time revenues from last year), though that could easily prove conservative if Sheild ramps.

Technical Analysis
GH has had numerous false starts and tons of herky-jerky action during the past many months, but big picture, we view the action during the past year (when the stock first took off on huge volume) as a gradual change in character that should lead to good things. And now the stock is set up nicely even as the market has fallen off: After zooming to two-plus-year highs in February, GH did correct sharply (30%), but the latest news with Sheild has seen the stock recoup more than 80% of that decline in short order. We’ll keep it simple here, placing our buy range above resistance at 50, thinking a breakout will be a strong sign of GH’s potential leadership; if you enter, use a loose leash given the volatility.

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Stock 7

SanDisk (SNDK)

Why the Strength
SandDisk has been around for years, but in this iteration, the firm is freshly public, having been spun off from Western Digital (which bought the firm back in 2016) a few weeks ago. SanDisk has always been one of the leading providers of flash memory, which has been a classic boom-bust situation over the years—while there’s definitely innovation over time, the product is largely commoditized, so prices go up and down with demand and over/undersupply, taking earnings and the stocks with them. The good news today is that the industry is likely near a low ebb of a cycle, which should mean rising demand and pricing going ahead. In the firm’s three key demand areas, cloud (driven by AI) has been strong, and while pricing there is fading a touch, that’s coming from elevated levels as the technology spending spree has plowed ahead; demand in bits (memory) remains strong and should continue to be for a long time to come with all the data center construction going on. Moreover, in personal computers, low-single-digit growth is expected, driven by the fact that half of all computers globally are at least four years old, with the advent of AI PCs likely helping in part to drive a refresh cycle that should kick in within a few months. And demand from the mobile sector also looks likely to pick up steam after a flat-ish period of time—the combination of all three should bode well. Indeed, SanDisk’s outlook is that industry-wide demand should somewhat outpace supply by the second half of the year, and it’s already taking action, hiking prices for some offerings by 10% as of April 1, and the way these things go, that will likely be the first of many during the next couple of years given that industry CapEx is about half what it was in the peak years (meaning supply is down and usually doesn’t turn on a dime). It’s not a buy-and-hold-forever situation, but earnings are likely to gallop ahead in a big way this year and next.

Technical Analysis
We always keep an eye on the IPO and spinoff market, especially during market downturns, as future leadership can often come from newly public names. SNDK just was listed back on the exchange in mid-February, and despite a horrid environment for chip and growth names, it quickly spiked to 55 and, after a shakeout, zoomed to higher highs early last week. New issues are notoriously volatile, so we’ll try to enter on dips of a couple of points.

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Stock 8

Take-Two Interactive (TTWO)

Why the Strength
Take-Two continues hitting the mark on new editions of its video game franchises, providing the business a momentum its publicly traded competitors – Electronic Arts and France’s Ubisoft – have lacked due to the poor reception of some of their franchises’ latest versions. While Take-Two publishes lots of games, both for consoles and for mobile devices (the latter through its Zynga subsidiary), there are three franchises that make or break the business: NBA 2K, Sid Meier’s Civilization and Grand Theft Auto. NBA 2K outperformed expectations with the launch of its annual edition, helping Take-Two tally revenue of $1.36 billion and earnings per share of $0.72 in Q3 of fiscal 2025 (ending in December), covering the holiday season. In the current Q4, preorders and critical reception have been solid for Civilization VII, a world-building game, and expectations are that two other games released in recent weeks, PGA Tour 2K25 and WWE 2K25, will have strong showings as well. Consensus is that the current quarter will produce revenue of $1.55 billion and net income of $1.06 a share, both better than management guidance, starting a period of sustained top- and bottom-line growth as new releases goose bookings. Expectations are high for fiscal 2026 (starting in April) given the sixth edition of Grand Theft Auto is due to be released in the fall. GTA is the best-known title for Take-Two, which has sold 210 million copies of the game since it was first released in 2000. It remains wildly popular, with subscribers to the GTA online multiplayer universe up 10% in 2024. Management has declined to project sales for the game, but Take-Two has a database of nearly one billion consumers it thinks are worth marketing to as launch approaches. Wall Street expects GTA to power Take-Two to $8.2 billion of revenue (up 46%) and earnings well over $7 per share next fiscal year, miles above the results of the past two (admittedly slower) years. It’s not changing the world, but the next few quarters at least should be boom times for the company.

Technical Analysis
TTWO isn’t going to be the fastest horse out there, but it continues to act properly. After a nice-looking nine-month base, the stock’s breakout last November after earnings was solid, though shares didn’t get too far, with resistance near 192 leading to a straight-sideways rest period. The Q4 report caused another gap up, and TTWO has moved straight sideways since, despite the tough environment. Shares did see some selling near the high today, but volume was light. If you don’t own any, you could nibble here with a stop under 200, or simply wait for a decisive breakout above 220 or so.

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Stock 9

Tradeweb Markets (TW)

Why the Strength
The secular trend of “electronification” in the financial sector—particularly in the realm of credit trading—is providing a strong tailwind for leading electronic trading platforms like Tradeweb. The New York-based outfit is no stranger to investors large or small, as it operates one of the world’s premier electronic marketplaces for banks, asset managers, funds and insurance companies. Known primarily for its fixed-income trading capabilities, it also offers a wide range of products and services for institutional and retail investors. But the big story here for Tradeweb is that, as one of the largest multi-dealer platforms for U.S. convertible bonds, it sees this formerly stodgy category as a key growth catalyst going forward. In 2024, 30% of all U.S. investors in convertible bonds (corporate debt securities that can be converted into a fixed number of shares of the issuer’s common stock at the bondholder’s discretion) used electronic trading, with 13% of non-users planning to adopt it by 2026. The company has further observed that as traders become more comfortable with electronic trading, they’re placing larger orders. For instance, last year the firm saw trades of over $5 million in convertible bonds grow 45% year over year on its platform, and Tradeweb believes this represents an “inflection point” where the historically less-liquid asset can now become more efficient and less costly for dealers and traders alike. Also expected to propel growth is Tradeweb’s recent acquisition of Institutional Cash Distributors (ICD), an investment technology provider for corporate treasury organizations buying and selling short-term (cash-equivalent) investments. Tradeweb said ICD would add corporate treasury professionals as a fourth client channel, building on its existing institutional, wholesale and retail focus, and its integration is expected to positively contribute to financial results beginning in the second half of this year. Already, the ICD addition is contributing to stronger results, as February’s total trading volume for Tradeweb reached $50 trillion, with average daily volume (ADV) increasing 33% from a year ago (up 18% excluding the impact of ICD). In Q4, revenue of $463 was up 25%, while EPS of 76 cents was in line with estimates and up 19%, while full-year 2024 was the 25^th consecutive year of record annual revenues. Wall Street expects upper teens percentage top- and bottom-line increases for 2025.

Technical Analysis
TW staged a major breakout in mid-2023 and trended higher for over a year, but shares finally ran into tough resistance in October at 136, with a failed breakout near Thanksgiving ushering in some selling. That said, the dip was reasonable and found support at the 40-week line in early February, and since then TW has been drastically outperforming the market, testing new highs once and, after a quick shakeout, pushing back to virgin turf last week. We’re OK with a nibble here or (preferably) on modest weakness with a stop near 130.

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Stock 10

XPeng (XPEV)

Why the Strength
XPeng is a Chinese firm that makes electric and hybrid automobiles. Its vehicles, targeted to the mid- to high-income segment of the market, have primarily been sold in its home country to date, but management says significant international expansion this year should double sales to RMB 80 billion (about $24.8 billion). New markets for 2025 include Thailand, where its first shipments have already landed, as well as Switzerland, Poland, Slovakia and the Czech Republic later this year. Management particularly sees southeast Asia as a prime segment and plans a network of high-speed chargers through the region to support sales. The EV market in Asia is experiencing price wars as competitors like Tesla slash prices to sell more vehicles, so there’s a chance XPeng is being too aggressive in its sales target, even as the trend has been strong: 2024 revenue rose by about a third as the Chinese market found its footing again after disappointing the prior year when the firm posted “only” 14%, growth in 2023. Unlike competitors (like Great Wall and BYD) that tend to sell to the entry-level market as well, XPeng has long thrown a lot of resources at autonomous driving capabilities, collecting data on roads and driving conditions from its vehicles. Now that the business has built up a database of 100 million kilometers of driving with billions of data points, it says its long-term future will be leading the auto industry’s transition from the age of EVs to the age of AI-based mobility. That includes autonomous driving cars, but also, eventually, flying vehicles and even humanoid robots, according to executives. Of course, a lot of that is too speculative just yet to invest on, but if Xpeng can hit its goal of selling early types of autonomous driving cars in China starting in 2026 (think self-driving at low speed), it should find a place in the market. For this year, business should continue to boom on the top line (sales could double this year) thanks in part to new releases and upgrades of current models in many different markets around the world, while the bottom line approaches breakeven.

Technical Analysis
XPEV changed character last August after a horrible decline and bottoming effort during the prior year, zooming up to 14 or so before three months of very choppy, volatile action into year-end. Shares did calm down a bit before embarking on an accelerated uptrend into early March, reaching 27 before the buyers let up. XPEV may need some time given the giant run in recent weeks, but the dip to the 25-day line looks normal so far; we’ll set our buy range up from here, looking to take a small position on a resumption of the overall upmove.

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Previously Recommended Stocks

The next Cabot Top Ten Trader issue will be published on March 31, 2025.

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