Cabot Early Opportunities Issue: October 15, 2025

Stocks in This Issue

Recent Portfolio Updates

Alamos Gold (AGI) stock continues to benefit from a strong gold price. With the planned sale of its Turkish mines, Alamos should have more energy and capital to focus on its North American assets and pay down some debt. Current-year production guidance is for 580,000 – 630,000 ounces with potential to ramp to 900,000 – 1,000,000 ounces over time. Couple that with lower production costs (thanks to the new Magino mill), and the story continues to sound pretty good. BUY

Credo Tech Group (CRDO) has looked shaky lately, and yesterday the stock traded slightly below its 25-day moving average line. Given the supernormal pace of growth (Q2 revenue was up 274%), it’s not surprising that the stock will move a lot when the market gets excited about AI investments, as well as when skepticism creeps in. With a fourth hyperscale customer (in addition to Amazon, Microsoft and xAI) now accounting for over 10% of revenue, and a fifth one expected to ramp throughout the year, the pace of growth at Credo should stay strong. Management says gross margins in the 63% to 65% range should remain intact as well. Keeping a close eye on CRDO but holding for now. HOLD HALF

Doximity (DOCS) stock was acting well until a high-profile downgrade due to valuation concerns at JPMorgan last Friday sent shares down 10%. On the flip side, there have been reports that some pharma companies, including Alnylam Pharmaceuticals (ALNY), have recently stopped airing TV commercials after receiving letters from the FDA saying that the commercials were “misleading.” The FDA has ramped up scrutiny on pharma companies and their DTC advertising methods. This could lead to more of these companies pushing advertising spend toward the healthcare practitioner (HCP) channel, which would benefit DOCS. We should get an update in early November when the company reports quarterly results. BUY

GE Vernova (GEV) has been asleep for most of the last two months but has perked up this week since earnings will be out next Wednesday. Analysts, on average, are expecting revenue to have grown by 2.5% to $9.14 billion and EPS to have grown from -$0.16 in the year-ago quarter to $1.67. As important as Q2 results will be, investors will likely be more focused on upside potential in backlog and margin expansion over the coming years. The company will host an analyst day in December that will be a major event and likely focus on big-picture opportunities in electrification, data centers, new services and, of course, gas turbines. Management recently said they see the current cycle as going stronger and longer than almost any period in history. HOLD HALF

Microsoft (MSFT) has also been moving sideways lately in what seems like a relatively calm period in terms of company-specific news. Earnings will be out on October 29, when analysts expect the company to report revenue growth of 14.8% ($75.3 billion) and EPS growth of 10.8% ($3.66). BUY

Millicom (TIGO) has mostly moved sideways since I added it a month ago. The company completed the planned acquisition of Telefonica in Uruguay and will report on November 6. BUY

Primo Brands (PRMB) will report on November 6. This continues to be a deep value stock – not my original intent – due to poor summer weather for water sales and integration challenges with Blue Triton. The bottom line is that investors need to see real progress turning things around and “hitting the numbers” before the stock will work. Provided that progress can be shown – and I think it will, eventually – PRMB has a lot of upside. HOLD

Sensient Technologies (SXT) is our play on the MAHA movement’s pressure to have food manufacturers remove synthetic colors from their products. The stock has not worked lately, and there’s been a lack of news to get investors excited about the story. But we have earnings coming out on October 31. Get ready for management to make some bad “dad jokes” about how Sensient is ready to flood the market with candy made with all-natural coloring that’s a lot less bad than what kids are currently consuming. We doubled down on the stock a couple of weeks ago. BUY

Sportradar Group (SRAD) fell back with other sports betting-related names (I put out a Special Bulletin explaining the situation) but has acted better since hitting its 200-day line last week. Looking for a recovery here, though that may not happen in earnest until there’s more regulatory clarity around how and when prediction market operators can participate with sports betting. That said, in recent meetings with JPMorgan analysts, SRAD says it sees more opportunity than not with prediction markets. Either they will be shut down, which means no change to the status quo from a few months ago; they will be legalized, which means SRAD can sell them data and products; or they will be able to keep operating, which SRAD thinks will have limited impact on its business. BUY

Triple Flag Precious Metals (TFPM) is our newest gold stock. This is a gold streaming and royalty company. Last week the company released preliminary Q3 revenue ($93.5 million) and gold equivalent ounces (GEOs) sold (27,037 ounces). The market liked the result, and TFPM has hit new highs this week. BUY

Unity (U) has fallen back from its September highs, prompting me to add the second half of our position on October 2. The stock has not recovered at all since then, which isn’t all that surprising given there’s been no meaningful stock-specific news and what sector-specific news there has been has tilted negative (i.e., tariffs and restrictions for China on “critical” software). With the latest drama being too fresh to separate what’s real and what’s not, we’ll let the stock’s action guide us. On that score, On that score, U moves to a hold. HOLD

What to Do Now

With the S&P 500 having churned out nearly four months of steady upside progress since it hit fresh highs in June, it has felt like smooth sailing for a long time.

That makes the recent turbulence seem a little more worrisome than it otherwise might.

However, it’s completely rational to get a little concerned when the government shutdown is running on three weeks and the tough talk around tariffs is firing up again.

After all, it wasn’t all that long ago that this kind of thing tanked the market.

That all said, there’s little doubt the equity market likes the recent cut to the federal funds rate (FFR). And with market odds currently well over 90% that the Fed will cut again on October 29, and then again on December 10, it’s not surprising that the market is resilient to a lot of the noise out there.

We also have the Q3 earnings season getting into gear. And the results are expected to be pretty good, not just this quarter but in 2026 as well.

Earnings in the S&P 500 and S&P 600 are expected to rise by 10% and 11%, respectively, this year and then accelerate to 13.5% and 18.5%, respectively, next year.

There are, of course, numerous curveballs that could inspire analysts to throw those estimates out the window.

But for those who are trying to keep an eye on the big picture while the day-to-day action gets a little messy, this macro perspective really does help to keep things in perspective.

Translating all of that to managing the Cabot Early Opportunities portfolio means we’re not diverging in any significant way from what we’ve been doing.

I’m adding three new positions that are acting well today while moving one current position, Unity (U), from a Buy to a Hold rating. We stepped aside from two names last week, so there are no new sells today.

NEW STOCKS

Figure (FIGR) – Fintech Dominating HELOC Market

Figure (FIGR) is an emerging blockchain-based fintech company with a compelling, attractive differentiator – a potentially disruptive technology that offers clear, tangible benefits to consumers.

At a high level, Figure operates as a financial services platform with consumer credit marketplaces across lending, trading and investing.

However, what sets it apart is its use of blockchain infrastructure to power these marketplaces, resulting in greater efficiency, lower costs and a superior user experience.

The company is best known for its leadership position in the non-bank HELOC (Home Equity Line of Credit) space. In Q1 of 2025, only Bank of America, PNC Bank, Rocket Mortgage and Citizens Bank originated more HELOC volume.

That’s a notable achievement for a firm that launched in 2018 with a direct-to-consumer (DTC) product, then quickly began renting this technology to third parties, including mortgage originators, servicers, wholesalers, banks, and credit unions.

Today, Figure has 168 third-party customers, including half of the top 20 retail mortgage shops. In the first half of 2026, HELOCs accounted for 99% of the company’s total loan originations.

All loan originations are recorded on the Provenance blockchain, which was created by Figure’s founders but is not owned by the company. Loan ownership is updated automatically on Provenance as the loans are bought and sold through the Figure Connect marketplace.

Figure earns fees for facilitating these transactions. While the marketplace is still in its early stages – no revenue was recorded in 2024 – management estimates that Figure Connect could contribute nearly 40% of total revenue by year-end 2027.

Though the underlying tech may seem complex, the bottom line is that originating and recording illiquid assets like HELOCs on blockchains improves trading liquidity, improves audit and quality control, and dramatically speeds up the loan application process. Figure’s platform cuts the average time to fund a HELOC from 42 days to just 10.

While HELOCs are the company’s current focus, Figure is likely to expand into other verticals, including auto loans.

That said, the company recently pivoted away from launching another consumer lending vertical and into crypto with the launch of Figure Exchange (digital asset exchange), Democratized Prime (blockchain-based marketplace) and the YLDS stablecoin.

This gives the company/stock upside potential depending on regulatory progress in the crypto sphere (GENIUS and CLARITY Acts) but also complicates the story and adds elements of risk.

Analysts expect Figure will grow revenue by about 30% this year followed by mid-20% growth in 2026 and 2027. But these are rough estimates.

On balance, it’s not a name we’re going to get involved with today, especially given that the stock is trading roughly 80% above its September IPO price of 25. But it’s one that I want to monitor via our Watch List.

The Stock

FIGR came public at 25 on September 11. A week later, the stock was trading in the mid-40s. It fell back to around 35 by the first of October then shot right back up, topping out at 49.5 in the middle of last week. FIGR has since pulled back into the low-to-mid-40s. It’s a fresh name that needs to calm down before we’ll get involved. WATCH

Karman Holdings (KRMN): Wall Street’s Favorite Missile Stock

Karman Holdings (KRMN), which I added to our Watch List last month, is one of those stocks that grinds higher while I patiently wait for an “obvious” entry point to emerge.

Sometimes, you just need to hold your nose and jump in. So that’s what we’re doing today.

To refresh your memory, Karman is a California-based aerospace and defense company that’s delivering double-digit growth thanks to U.S. federal spending across many of the programs it supports.

As a recent Barrons article stated, “the Defense Department wants more missiles.” Well, Karman has some of the biggest leverage to that theme, given that roughly half of revenue is tied to missiles.

The company focuses on the rapid design and production of next-gen systems for launch vehicles, satellites, spacecraft, missile defense, hypersonics, and unmanned aircraft systems (UAS).

It produces propulsion systems, launchers, and subsystems used in hypersonic weapons, missile deterrent technologies, and missile defense platforms.

It also manufactures interstage systems for precision-guided, small-diameter rockets and missiles, as well as payload protection and deployment systems – such as shrouds and nose cones – used in space launch vehicles, capsules, and other spacecraft.

In other words, while missile-related components are a major driver of Karman’s business, it’s not a pure play on the theme.

On its Q2 earnings call in August, management highlighted the major drivers behind 35% revenue growth (to $115.1 million) and record profitability (EPS of $0.10).

These included restocking of U.S. missiles and unmanned systems, as well as increased military spending from NATO allies and a faster pace of space launches.

Management also highlighted the recently signed “big, beautiful bill” and the Golden Dome project as likely drivers of future demand.

M&A is another growth lever. Recent acquisitions include Metal Technology, Inc. (MTI), which specializes in strategic missile programs, and Industrial Solid Propulsion (ISP), a producer of specialty solid propulsion systems. Both add incremental growth while strengthening ties with key customers.

Management raised full-year revenue guidance to $452–$458 million, implying 32% growth in 2025. Analysts currently model growth slowing to around 21% in 2026, though this is likely a placeholder given Karman’s short history as a public company.

On the bottom line, EPS is expected to come in at $0.34 this year (not directly comparable to $0.08 in 2024, when Karman was private), rising to $0.56 in 2026 (+53%).

The Stock

KRMN came public in February at 22 and has risen, almost steadily, to 80 in the eight months since. Buyers have stepped in on any meaningful pullback. The only legitimate consolidation phase (mid-July to early September) lasted less than two months. Shares jumped out to new highs above 57 on September 5 when Raymond James picked up coverage and slapped a 100 price target on KRMN. The stock has walked up to 80 in the six weeks since then. It’s a little hotter than I’d like, but we’ll still step in today. BUY

Life360 (LIF) – The Family Safety Platform

I added Life360 (LIF) to our Watch List last month, and with the stock having pulled back from all-time highs and trading at about the same price as a month ago, we’ll step in to buy a half-sized position today.

The company’s platform is designed to help keep loved ones connected and protected. It consists of a variety of small tracking devices and a family safety app that lets users share real-time locations, driving behavior, and emergency alerts.

The idea for Life360 was born out of a social networking app that was created in 2008 in response to Hurricane Katrina. The basic functionality of the platform remains the same today, though additional features – like crash detection, roadside assistance, behavior monitoring, physical property theft and digital identity theft – have been added.

In September 2021, the company acquired the wearable GPS tracker Jiobit, a very small-form-factor device specifically made for tracking kids and pets. Jiobit has its own secure connection to the internet and GPS, which differentiates the product from Apple’s (AAPL) AirTags, which rely on Bluetooth signals from nearby Apple devices to anonymously relay AirTag locations.

In early 2022, Life360 acquired Tile, which had developed small Bluetooth tracking devices for keys, electronics, luggage, wallets and more.

With the user bases of these three companies consolidated into the Life360 app, the company is now able to offer a unified solution that works across Android, iOS and Tile devices to keep track of almost anything families care about.

About 75% of revenue comes from software subscriptions, 15% from hardware (Tile and Jiobit devices) and 10% from the sale of location-based data.

The core product, which has location tracking and crash detection, is free. From there, subscribers can select paid plans starting at $7.99/mo. ($79.99/yr.) for the Silver plan up to $24.99/mo. ($249.99/yr) for the Platinum plan, which adds in 50 miles of free towing, $1 million of stolen funds reimbursement, disaster response, medical assistance, travel support and more.

Revenue grew by 36% in Q2 2025 (reported August 11), and monthly average users (MAUs) grew by 25%, to 88 million. The pace of growth outside the U.S. was 34%, nearly as fast as that inside the U.S.

Leadership boosted full-year revenue and profit guidance, prompting many analysts to raise price targets. Consensus estimates currently call for revenue to grow 28% to $475 million in 2025 (including +28.3% in Q3, which will be reported on November 11) and adjusted EPS to grow 64%, to $0.87.

Early estimates for 2026 call for 24% revenue growth and EPS growth north of 34%.

The Stock

LIF came public last June at 27 and has performed beautifully, rising roughly 280%. The latest big breakout came after the May 12 quarterly report when shares blasted 20% higher, moving through the stock’s previous high of 52.8 to close at nearly 60. After a quiet spell, the stock began to advance into the August 11 quarterly report, which catalyzed another rally (13% the next day) and sent LIF into the low 80s. The stock has mostly been trading above the 100 level for the last four weeks and hit an all-time high of 109 on October 3. It has recently pulled back to just below its 25-day line, offering us an entry point to start a position around the 100 level. BUY HALF

Varonis (VRNS) – Best of Breed in Data Security

Varonis (VRNS) is a data security specialist, which means it plays a critical role in helping enterprises that are preparing to launch AI projects.

The company’s solutions help clients protect sensitive files like emails, customer and patient records, financial data, strategic and product development plans and more.

Its software finds important data and figures out when it’s been exposed to too many people, or to the wrong people. It also monitors the heck out of what people are doing with data so it can detect when there is an internal threat, an external attacker, or a ransomware threat.

Demand for these types of Data Security solutions is extremely high since companies need to first understand and secure their data before they can move GenAI and Agentic projects into production.

Imagine what happens when a company rolls out an internal AI chatbot and employees can ask it who got raises over the last year? That’s just one simple example of what can go wrong when data is not secured.

Having one of the best providers in the industry there to determine what data should be accessible, and what shouldn’t, can eliminate these types of avoidable disasters. And that’s one of the main reasons Varonis is doing well.

Having a Software-as-a-Service (SaaS) offering – versus just the on-premises version Varonis had years ago – is another growth catalyst.

So is the company’s new MDDR product, which just launched last year. MDDR stands for Managed Data Detection & Response. Management says it’s the industry’s first managed service dedicated to stopping threats specifically at the data level.

A few highlights from the most recent quarter included an expanded partnership with Microsoft (MSFT), FedRAMP Authorization (meaning the platform was available during the just-closed Federal budget cycle) and protection of OpenAI’s ChatGPT Enterprise.

The company also beat expectations, delivering revenue of $152.2 million (+16.7%) and adjusted EPS of $0.03 (a $0.02 beat).

Looking out through the end of 2025, Varonis is expected to grow revenue by 13.5% to $626 million and deliver adjusted EPS of $0.13.

Those numbers should accelerate into 2026, when revenue is expected to grow almost 18% to $736 million and EPS could rise 160%, to $0.35.

The Stock

VRNS has been public since 2014. Shares reached a pandemic-era high near 75 and a post-pandemic low near 16. During the most recent drawdown, which began exactly a year ago, VRNS fell from 60 to 36. The low point was struck in April when Trump’s tariffs roiled the market. Since then, VRNS has been as steady as they come. The stock has walked steadily back into the low 60s with every dip to the 25 and 50-day moving average lines pulling in buyers. Given that shares began their latest drawdown right after the Q3 report last October, we’ll watch the upcoming report from the sidelines, then decide if VRNS has a place in our portfolio. WATCH

Warrior Met Coal (HCC): Fighting Through the Downturn ★ Top Pick ★

U.S. coal production has been in decline for three decades. Last year, for the first time in history, coal produced less electricity than wind and solar.

But that trend may change. On April 8, Trump signed an executive order declaring coal a national priority and advocating to reduce regulations that have stymied coal production.

Then, at the end of September, Trump doubled down on coal, stating that the Department of the Interior would open 13.1 million acres of federal land for coal leasing, lower royalty rates and streamline coal project approvals.

He also said his administration would release $625 million aimed at modernizing coal plants and supporting coal-fired generation.

Suffice to say, this is a controversial policy. Many people have no interest in coal, especially when it’s used for electricity generation (thermal coal), which has a reputation for being the dirtiest fossil fuel.

But I’m here to present stocks that should go up in price, not ignite a debate on whether coal is “good” or “bad.” The bottom line is that it appears coal stocks are in the early stages of what could be a significant run.

Warrior Met Coal (HCC) is one of the better-known names. It is a pure-play metallurgical coal producer that supplies the global steel industry. It does not produce any thermal coal for electricity production.

Warrior’s customers are spread across Europe (37% of revenue), South America (16% of revenue) and Asia (47% of revenue). So far in 2025, sales to Asia have been almost exclusively to India, South Korea and Japan, with very little to China.

The company has struggled with a relatively weak market and weak pricing, largely due to excess Chinese steel exports, poor global demand and an oversupplied market. But the market may well be bottoming, and leverage could shift away from buyers and toward suppliers over the coming quarters.

This would be good for Warrior. Especially with the added help of the One Big, Beautiful Bill, which, among other things, classifies metallurgical coal as a “critical mineral” that’s eligible for meaningful tax credits.

Management has said details will become clearer over time. But it expects a positive impact from the bill.

In the first half of October, analysts at UBS and B. Riley raised their price targets on the stock to 68 and 83, respectively.

Warrior has two active mines, Mine 4 and Mine 7, both based in Alabama. These mines can produce up to 8.0 million metric tons per year at full capacity and have roughly 40 years of life given the current production plan.

The next big production growth catalyst should come from the Blue Creek Mining Complex, which is scheduled to start production in Q1 2026. Blue Creek has roughly 50 years of production capacity running at 6.0 million metric tons per year.

Blue Creek has been a major investment. Warrior has invested $824 million to date and expects total CapEx will approach $1.1 billion. Now, Blue Creek is transitioning from a cash drain to a cash generator.

With significant production set to start next year, Warrior’s revenue is expected to surge, as are earnings.

This year, revenue should be around $1.25 billion (-18% vs. 2024), with Q4 the only quarter expected to show growth. Adjusted EPS in 2025 should be about -$0.37.

But in 2026, revenue is expected to jump by about 40% to $1.75 billion, and adjusted EPS should be around $4.75.

We’ll step in here.

The Stock

HCC came public in 2017. The stock’s all-time low near 9.5 was struck in April 2020, and its all-time high of 75.2 was struck last November. Following that ATH, shares came under pressure and trended down until this past April, when the stock briefly traded as low as 38. HCC stabilized soon after but remained rangebound in the 40 – 50 zone through early July when it broke above 50 and ran to 60. A brief drawdown to 50 preceded the Q2 report on August 7, after which HCC shot up to 64. The action was a little dicey in the month that followed, but Trump’s comments in support of the coal industry in September lifted HCC back above 60, and the stock has been inching its way higher for the last five weeks. BUY

PORTFOLIO CHANGES SINCE LAST ISSUE

On October 7, we sold ThredUp (TDUP) for a 25% gain and Live Nation (LYV) for a 4% loss.

Today we freshen up our Watch List by dropping a few names we haven’t acted on while adding a few more. Those dropped include Cloudflare (NET) and Lemonade (LMND).

An updated table of all stocks rated BUY, HOLD and WATCH as well as recent stocks SOLD, is included below.

Stocks rated BUY are suitable for purchasing now. I suggest averaging into every stock to spread out your cost basis.

For stocks rated BUY A HALF, you should average into a position size that’s roughly half the dollar value of your typical position.

Those rated HOLD are stocks that still look good and are recommended to be kept in a long-term-oriented portfolio. Or they’ve pulled back a little and are under consideration for being dropped.

Stocks rated SOLD didn’t pan out, or the uptrend has run its course for the time being. They should be sold if you own them. SOLD stocks are listed in one monthly Issue, then they fall off the SOLD list.

Please use this list to keep up with my latest thinking, and don’t hesitate to email with any questions.

Active Positions

Recently Sold Positions

The next issue of Cabot Early Opportunities will be published on November 19, 2025.

Copyright © 2025. All rights reserved. Copying or electronic transmission of this information without permission is a violation of copyright law. For the protection of our subscribers, copyright violations will result in immediate termination of all subscriptions without refund. Disclosures: Cabot Wealth Network exists to serve you, our readers. We derive 100% of our revenue, or close to it, from selling subscriptions to our publications. Neither Cabot Wealth Network nor our employees are compensated in any way by the companies whose stocks we recommend or providers of associated financial services. Employees of Cabot Wealth Network may own some of the stocks recommended by our advisory services. Disclaimer: Sources of information are believed to be reliable but they are not guaranteed to be complete or error-free. Recommendations, opinions or suggestions are given with the understanding that subscribers acting on information assume all risks involved. Buy/Sell Recommendations: are made in regular issues, updates, or alerts by email and on the private subscriber website. Subscribers agree to adhere to all terms and conditions which can be found on CabotWealth.com and are subject to change. Violations will result in termination of all subscriptions without refund in addition to any civil and criminal penalties available under the law.