May 15, 2025

Portfolio Changes: Airbus (EADSF) – Move from Buy a Half to Sell

Tariff Ceasefire Lifts Markets

As the United States and China reached a 90-day trade conflict ceasefire, markets have responded positively though the deal is not binding and lacks much detail. The S&P 500 edged into positive territory for 2025.

Banco Santander (SAN) shares were up 7.2% this week, 18% in the last month, and 69% so far this year. Dutch Bros (BROS) shares were up 21.4% this week following last week’s quarterly report. Luckin Coffee (LKNCY) shares pulled back 2% this week but the stock is up 30% so far in 2025. BYD (BYDDY) shares were up 8.7% this week and are up 56% this year as the company’s overseas sales are surging.

In April, foreign investors bought a record $57 billion in Japanese assets as capital looked for safe havens. Chinese shipments to the United States plunged by 21% compared with the same period a year earlier but Chinese exports to Southeast Asian countries jumped by 21%.

Capital and trade flows can be diverted but are difficult to stop.

For example, since early 2022, the Magnificent Seven have posted a collective return of 62% though their momentum has slowed.

Meanwhile, the top seven contributors in the MSCI EAFE International Index returned 55% over the same period – with far less volatility.

Companies like Novo Nordisk (NVO), ASML (ASML), and SAP (SAP) are firing on all cylinders, fueled by weight-loss drugs, global semiconductor demand, automation and industrial AI.

If you look at investing through a sector trend frame, you can see the opportunities.

• Healthcare: Novo Nordisk is redefining obesity treatment.
• Industrials: Siemens (SIEGY) is electrifying Europe’s grid.
• Financials: UBS (UBS) and HSBC (HSBC) are exploiting interest rates and lower valuations.
• AI Infrastructure: ASML Holding (ASML) offers indirect AI exposure with lower valuations.

Developed stock markets outside the U.S. – Europe, Japan, and Australia – are still below their historical averages.

U.S. outperformance has lasted 14 years though historically, these cycles reverse every eight years.

You can also forget the stereotype of sleepy Japanese companies because in 2024, Japanese firms executed a record ¥18 trillion in share buybacks.

Keep rebalancing your portfolio via stocks and ETFs.

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.

Airbus (EADSF) shares were up 2% this week and this stock has made us some money, but this trade is not working as expected. The tariffs on China have been up and down and China has eliminated restrictions on Boeing aircraft. The trade has become too unpredictable and Airbus sales in April were soft so I’m moving this to sell. Move from Buy a Half to Sell

Agnico Eagle Mines (AEM) shares were off 10.7% this week as gold prices were weak in the wake of the trade deal over the weekend. The stock is still up 40% so far in 2025. Buy a Half

Banco Santander (SAN) shares were up 7.2% this week, 18% in the last month, and 69% so far this year. The bank plans to return 10 billion euros to shareholders over the next two years via buybacks. Buy a Half

BYD (BYDDY) shares were up 8.7% this week as the company’s overseas sales are surging. BYD’s Thailand plant, its first full-assembly plant outside of China, is still ramping up and a plant in Uzbekistan puts together partially assembled vehicles. A Brazil factory is due to open soon and they should have a Hungary plant up and running by early 2026. BYD also is building or plans to build factories in Indonesia, Turkey, Cambodia and Pakistan and has a footprint in Morocco and Mexico, two countries with free trade agreements with the U.S. and the EU. Buy a Half

Dutch Bros (BROS) shares were up 21.4% this week after last week’s quarterly report showed net income of $15.4 million. Revenue growth jumped 29% while company-operated same-shop sales grew 6.9%. The company opened 30 new locations in the first quarter, pushing its total store count above 1,000. Hold a Half

Luckin Coffee (LKNCY) shares pulled back 2% this week but the stock is up 30% so far in 2025. First-quarter same-store sales were up 8.1%, operating margins expanded 8%, and the company opened 1,750 new kiosk and retail stores during the quarter. Buy a Half

Mitsui (MITSF) shares declined 3.6% in the stock’s first week as an Explorer recommendation. Mitsui boasts assets of $112 billion, $6 billion of profits and $7 billion of operating cash flow. Despite all these strengths, Mitsui stock is down 24% over the last year and trades at just a bit above book value and 10 times forward earnings. Buy a Half

Sea Limited (SE) shares followed consecutive weekly gains of 11.3% and 6.6% by surging another 14.5% this week after reporting a strong quarter. Sea reported net income of $410.8 million compared with a year-earlier loss. Sales climbed 30% to $4.84 billion, roughly in line with estimates. Hold a Half

Subaru (FUJHY) shares were up 1.9% despite Bloomberg reports that Japan’s carmakers are bracing for a hit of more than $19 billion from tariffs that have roiled the global auto industry. This stock is struggling despite the company making most of its vehicles it sells in America. Still, the stock is trading at about five times trailing earnings and only 70% of book value. Buy a Half

Explorer Dominator Blue-Chip Recommendations – More Buy and Hold

DBS Bank (DBSDY) shares were up this week for their fourth straight week of gains, but the bank’s CEO warned of the potential impact of tariffs on its business going forward. DBS is still looking at a loan growth of 5% to 6% this year and as Southeast Asia’s biggest bank, it is a good proxy for this region’s dynamic growth. Buy a Half

International Business Machines (IBM) shares were up 1.7% this week as a new IBM survey showed that businesses are struggling to achieve acceptable returns from AI investments. Cheaper AI is likely required to successfully scale up commercially but IBM continues to successfully use AI internally as well as in advising clients on best use scenarios. IBM’s CEO also urged more federal funding for basic AI research. Buy a Half

Visa (V) shares edged up this week after the company recently announced a $30 billion share buyback program. For the fiscal year ending in September, analysts expect Visa’s earnings to climb 12.7%. Visa’s products are accepted by over 150 million merchants. Buy a Half

Watch List – Stocks we like but do not follow day-to-day

ConocoPhillips (COP), Franco-Nevada (FNV), MOOG (MOG-A)

Explorer ETF/Fund Positions

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. Buy a Small Allocation

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

Morgan Stanley China A Share Fund (CAF) offers exposure to a basket of top Chinese-listed stocks. Buy a Half

Oberweis Micro-Cap Fund (OBMCX) fund stands out for several reasons. The fund’s sound investment process and strong management team earns 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

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 Half

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

Explorer Stocks Summary

Brief company summaries that will not change week to week.

Agnico Eagle Mines (AEM) follows a conservative strategy and with a history spanning more than 60 years, and now operates a sizable portfolio of 11 assets located in four countries. Management forecasted gold production of approximately 3.45 million ounces in 2024. The company 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.

Banco Santander (SAN) was founded in Spain in 1857. The bank’s U.S. headquarters is in Boston, but its strength lies in Latin America and Europe where it has more than 8,000 branches with 171 million customers as well as 58 million digital accounts. About 55% of deposits and loans are in Europe with the balance in Latin America. In its most recent quarter, Santander’s revenue was up 8% while net profits increased 16%.

BYD (BYDDY), in both 2021 and 2022, more than tripled sales from the previous year. That’s hyper growth and including hybrids, BYD has already surged past Tesla in terms of sales. Most of BYD’s sales are still in China but it has a big international expansion underway, including in the U.S., Europe, and Asian markets. BYD is the world’s largest EV battery maker and with CATL and others, is working on sodium-ion batteries. Much less energy dense than lithium batteries, sodium batteries should be much cheaper. BYD will also launch a next-generation Blade battery in 2025, with longer range and faster charging. That, along with various other models, could help rev up BEV sales growth next year. BYD expects solid-state batteries for high-end models by 2027, but not fully reaching lower-end models until 2030-2032.

Watch List: ConocoPhillips (COP) is a global energy industry giant and one of the largest independent exploration and production (E&P) companies in the world, as measured by production levels and proved reserves. The company, founded in 1917 and based in Houston, has operations in 13 countries, although almost half the company’s production is derived from U.S. sources.

DBS Bank (DBSDY) is one of the largest banks in Southeast Asia with a presence in 19 markets. It is headquartered in Singapore, with its main listing on the Singapore Stock Exchange, and is the largest constituent of the Singapore Straits Times Index. The Government of Singapore established DBS in July 1968 and its largest and controlling shareholder is Temasek Holdings, which is one of two large sovereign wealth funds controlled by the Government of Singapore. DBS has assets of roughly $750 billion and a growing presence in the three key Asian areas of growth, which it defines as Greater China, Southeast Asia, and South Asia, meaning India. It is the largest and strongest bank in Southeast Asia and the leading consumer bank in both Hong Kong and Singapore.

Dutch Bros (BROS) is an operator and franchisor of drive-through coffee stores, with 1,012 stores as of the end of the first quarter, including 30 that it opened in the quarter. It’s expanding at a steady pace, expecting up to 150 new stores in 2025, and it envisions up to 7,000 stores over the next 10 to 15 years.

Watch List: Franco-Nevada (FNV) is a company with more than half of its revenue coming from gold, but it also offers exposure to platinum, silver, and oil and gas. Franco-Nevada’s focus on royalties and streaming reduces risk and enables it to sidestep the huge capital costs that impact traditional miners. It enjoys cash flow and profits as its mining partners finance and complete exploration and expansion projects. That cash flow enables it to invest in new deals, pay a dividend, and operate debt free. Franco-Nevada has increased its dividend each year since its IPO in 2008.

International Business Machines (IBM) is a blue-chip artificial intelligence (AI) and India play with a nice dividend yield. Known as “Big Blue,” IBM now primarily helps businesses and governments manage their information technology in the cloud era. The stock sells at a discount to the S&P 500 multiple and the information technology sector’s forward earnings multiple. IBM has paid a dividend every quarter since 1916 and has had 30 consecutive years of dividend increases.

Luckin Coffee (LKNCY) is a leading purveyor of coffee and specialty drinks in China. The price of a cup of Starbucks coffee is more than double that of Luckin coffee. In addition, Luckin is adept at adapting to local tastes and launching new products that broaden the market. For instance, it brings to market about 60 new products each year, offering a new drink every week. Its new coconut latte sells nearly $140 million worth annually. All this shows in the numbers as Luckin’s latest quarter revealed strong sales and store count growth.

Mitsui (MITSF) stands out among the big five by leaning into mining and materials. Mitsui has entered joint ventures around the world, taking project stakes in iron ore, metallurgical coal, copper, nickel, and LNG with 50%-60% of profit coming from metals and energy. But Mitsui’s chairman emphasizes that Mitsui is not a resource company. Rather he describes the company as a place where smart people identify new trends and pursue big profits through small experiments. For example, Mitsui owns a 33% stake in IHH Healthcare, the largest hospital group in Asia, and 17% stake in Penske Automotive in North America. Other sectors of activity include energy, infrastructure, agriculture and food, and consumer retail.

Watch List: Moog, Inc. (MOG-A) supplies advanced primary flight controls on the most modern military aircraft. That includes the Lockheed Martin F-35 Lightning II and the Future Long Range Assault Aircraft program. The company’s major platforms include the 787, A350, Joint Strike Fighter (F-35 Lightning II). The company also supplies primary flight controls for the Boeing 787 and Airbus A350 widebody aircraft, as well as business and regional jets from Embraer (ERJ) and Gulfstream, owned by General Dynamics (GD).

Sea Limited (SE) has three core businesses: 1) digital gaming/entertainment, 2) e-commerce, and 3) digital payments and financial services, known as Garena, Shopee, and SeaMoney, respectively. Garena is a leading global online games developer and publisher. Shopee is the largest e-commerce platform in Southeast Asia and Taiwan. SeaMoney is a leading digital payments and financial services provider in Southeast Asia.

Subaru (FUJHY), based in Tokyo, holds a 10% market share in Japan, making it the third-largest automaker in the country. In America, the Subaru brand has a cult-like following and Subaru’s stock sells for only five times trailing earnings and about 70% of book value. It also sports a 3.8% dividend yield, has a market value of $13.3 billion and has a strong balance sheet with a net cash position of $7 billion.

Visa (V) doesn’t extend credit but provides the plumbing for financial payments and communications throughout the world. Visa’s financial infrastructure also underpins much of the world’s commerce. The duopoly between Visa and Mastercard is often referred to as one of the best businesses in the world, with insurmountable moats, low operating costs, and plenty of opportunities for unlocking additional value. Visa currently trades at a discount to its archrival MasterCard.

Currently Open

ETFs

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.