Cabot Explorer Issue: October 23, 2025

Portfolio Changes: Baidu (BIDU) Move from Buy a Half to Sell

Jobs, Robotics, and Productivity

To begin, just a heads up that there will be no Cabot Wealth Explorer issue on November 13 as I will be in transit for a mining and resource conference in Senegal.

Morgan Stanley (MS) notes that stock picking is back, with single-stock activity as opposed to funds and ETFs seeing a significant rise in recent months. This is interesting as there are now more ETFs trading on exchanges than stocks. Blending the two together is the optimal strategy for most.

Robotics is a sector I’m watching closely. Amazon (AMZN) has a U.S. workforce of more than 1.2 million and about a million robots at work at home and around the globe. This is just a start, and Amazon’s automation team expects this will allow it to avoid hiring more than 160,000 people in the United States it would otherwise need by 2027. That would save about 30 cents on each item that Amazon picks, packs and delivers to customers. Is it worth it? You don’t have to pay salaries, health insurance, or FICA taxes for robots.

Amazon’s Blue Jay is a new robotics system designed to improve warehouse operations by coordinating multiple robotic arms to perform tasks like picking, stowing, and sorting items. Many are counting on AI and robotics to boost productivity. Productivity growth ran at 3%-4% annually in the 1950s and 1960s but has recently fallen close to zero.

Alphabet (GOOG) ran an algorithm on its “Willow” quantum computing chip that can be repeated on similar platforms and outperforms many supercomputers by unbelievable margins.

Tesla (TSLA) is expensive. The stock is trading at about 190 times expected earnings over the next 12 months, according to FactSet and Dow Jones Market Data. That’s more than six times the average price-to-earnings ratio for stocks in the Nasdaq Composite.

As we approach the Asia Pacific Economic Cooperation (APEC) meetings in South Korea, it looks like the U.S. and China are deadlocked. Beijing has achieved a kind of parity with America after decades when Washington had all the financial and technological leverage. The key is China’s dominance of the manufacturing and critical minerals supply chain.

Gold prices pulled back this week, especially on Tuesday, after a rise of about 60% so far this year. We were expecting this profit-taking at some point. Remarkably, gold has now closed at a new all-time high an extraordinary 21 times over the past 63 sessions due in part to attacks on the Fed’s independence. You can see that gold is now about 6% of investable assets but still below levels seen in the early 1980s. The volume of gold held by ETFs has grown by 4.2 million ounces in just the past five weeks to almost 100 million ounces.

In China, prices across the economy are falling, and property prices are either declining or stalled. Youth unemployment is very high; even college graduates are struggling to find good jobs. The Chinese yuan is decreasing in value, helping exports stay competitive. China is in the clear lead in both building and using robots, leveraging its demand due to weak demographics and its massive engineering and technical talent.

This is what America needs more of and where we go for our new recommendation.

New Recommendation

Universal Technical Institute (UTI)

Two clear market trends right now are increasing enrollment in technical schools and increasing demand for healthcare specialists. This trend is likely to persist and is fueled by more government financial support of technical education. The U.S. Bureau of Labor Statistics projects about half a million new job openings in skilled trades from 2025 to 2032 as labor markets realign amidst changing technology and demographics. Artificial intelligence is unlikely to dent demand in this category and could raise productivity significantly.

Source: Grandview Research

This vocational education focuses on skilled tech in areas such as auto, marine, aviation, welding, HVAC, and robotics. Robotics technicians at Amazon currently make about $25 an hour. On the healthcare side, primarily through its acquisition of Concordia in 2023, Universal offers degrees in dental tech, medical tech, nursing, and physical therapy.

Most importantly, these programs are working, with 84% of students finding jobs in less than a year.

Universal currently has 22,000 students spread across 32 campuses offering both online and onsite classes, so the economies of scale are significant in terms of revenue and margins. In its last quarter, revenue was up 15% and earnings per share were up an impressive 115%.

Programs are flexible and can be rapidly tailored to meet the changing needs of employers. Compared to traditional four-year college degrees, these schools provide good value, minimizing loans and maximizing returns.

This stock has both momentum and stable ownership, with 94% of shares held by financial institutions. The company will also grow through acquisitions as well as through corporate partnerships, such as existing ones with Tesla (TSLA), Ford (F), and Toyota (TM).

BUY A HALF

Explorer Weekly Stock Commentary

Below is a brief update on each Explorer stock. Any changes in ratings will be highlighted. This section is all you need to read each week.

Explorer Disrupter Recommendations – need to watch more closely and have a 20% trailing stop-loss in place.

Agnico Eagle Mines (AEM) shares pulled back 8.4% this week, pretty much in line with gold futures. The company will report earnings next week, on October 29, and expectations are high. Agnico has a profit margin of 30% with only 3% debt to equity. Buy a Half

Alibaba (BABA) shares have been steady this week as there are concerns about how investments in cloud and AI will impact free cash flow. The company is expanding cloud services and e-commerce through a massive UAE data center. BABA makes widely used open-source AI systems. Buy a Half

Baidu (BIDU) shares lost 3.8% this week after pulling back 11% last week. Analysts expect a decline in both earnings and revenue for the next quarter, so I’m moving this to a sell to preserve a profit. We may be back to Baidu, and you may wish to hold on to this stock if you have a particularly long-term perspective. Move from Buy a Half to Sell

Banco Santander (SAN) shares were steady this week and have beaten earnings expectations over the last three quarters. It has been a top-performing stock, is the largest bank in Europe and still has upside potential, but you may wish to sell some shares to lock in profits. Buy a Half

Coeur Mining (CDE) shares were hit hard this week, down 14.8% as silver prices pulled back from their peak of $54.50 to $49.20 per ounce. I have been suggesting taking some partial profits to lock in big gains and will keep the stock a hold. Hold

Luckin Coffee (LKNCY) shares were down 3.8% this week. Outside China, Luckin has global ambitions, having opened nearly 90 outlets in Singapore, Malaysia and the United States. The Australian broker Macquarie has set a price target of $52, based on earnings estimates for 2026. China’s coffee drinkers still consume far fewer cups per person each year than consumers in the United States or Japan, leaving plenty of room for growth. Buy a Half

Newell Brands (NWL) shares were up a bit this week as the company announced that Extra Fine Point Permanent Markers are coming back exclusively at Walmart. Newell stock is a good value, trading at just 80% of book value with a forward price-to-earnings ratio less than 7 and a dividend yield of 5.3%. Third-quarter earnings will be out October 31. Buy a Half

Sea Limited (SE) shares were down 4% this week, and there is some concern about profit margins. Sea is delivering balanced growth across all core businesses, including e-commerce (Shopee), digital entertainment (Garena) and digital money (Monee). I’m leaving this a hold. Hold a Half

Explorer Dominator Blue-Chip Recommendations – More Buy and Hold

Alphabet (GOOG) shares were steady this week. This dominating stock has evolved into an infrastructure for the daily life of individuals and enterprises. From search to YouTube, Google has become the operating system of the modern economy. Google is the gateway to the internet for the world outside of China. Buy a Half

International Business Machines (IBM) shares were up 2% this week as the company reported quarterly earnings, with revenue coming in at $16.3 billion, representing a 9% increase. IBM’s software segment led growth with a 10% revenue increase to $7.2 billion, while Infrastructure revenue jumped 17% to $3.6 billion. The company’s AI book of business is now $9.5 billion, highlighting the company’s continued focus on artificial intelligence. Overall gross profit margin improved to 58.7%. Buy a Half

Visa (V) shares were again steady this week as Wells Fargo came out with a report highlighting Visa as a key beneficiary of structural trends in digital commerce. The company expects to report its next quarterly earnings on November 4. Buy a Half

Explorer ETF/Fund Positions

CurrencyShares Swiss Franc Trust (FXF) gives you exposure to a high-quality country and currency with fiscal discipline, a trade surplus, and very little foreign debt, and a reputation as an asset haven in times of stress. Buy a Half

Grayscale Bitcoin Trust (GBTC) offers investors a way to track very closely to the day-to-day or “spot” movement of bitcoin prices. For aggressive investors comfortable with volatility. Hold

JPMorgan Equity Premium Income ETF (JEPI) offers double-digit yield coming from both option premiums and dividends using a value-focused strategy. Buy a Full

Oberweis Micro-Cap Fund (OBMCX) stands out for several reasons. The fund’s sound investment process and strong management team earn it a rare Morningstar Medalist Rating of Gold. Over the past five years, it has posted an impressive average annual return of 24%. Buy a Half

ProShares MSCI EAFE Dividend Growers ETF (EFAD) seeks to capture the performance of companies with at least 10 years of consecutive dividend growth. Buy a Half

Sprott Platinum and Palladium ETF (SPPP) offers direct exposure to both platinum and palladium, which are selling at a sizable discount to gold, offering potential upside appreciation. Buy a Full

Stoxx Europe Total Market Aerospace & Defense (EUAD) tracks an index of top defense contractors, including Leonardo, Rheinmetall, and BAE Systems. Buy a Half

Tweedy, Browne Insider and Value ETF (COPY) provides exposure to a combination of value, international, and small-cap stocks managed by a stellar asset manager. Buy a Half

VanEck Junior Gold Miners ETF (GDXJ) is a basket of junior miners that has 84 positions, with the top 10 accounting for 44% of total assets. Half of the stocks are Canadian, 21% Australian, and 7% from South Africa. Buy a Half

WisdomTree Emerging Markets High Dividend Fund (DEM) offers a high dividend yield and some of the highest-quality emerging market stocks. Buy a Half

Model Portfolio

ETFs

The next Cabot Explorer issue will be published on November 6, 2025.

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