Cabot Stock of the Week Issue: April 14, 2025

Tariffs aren’t gone, but the clouds have parted a bit, if only temporarily. President Trump’s announcement last Wednesday that he was pausing reciprocal tariffs on virtually all countries except China for 90 days led to one of the biggest one-day rallies (S&P +9.5%, Nasdaq +12%) the market has ever seen. Stocks pulled back sharply again on Thursday but have since stabilized somewhat. As a result, the major indexes had their best week of the year, and the S&P has averted a bear market, for now.

Volatility remains sky-high, with the VIX still in the mid-30s. So who knows what this week will bring. But first-quarter earnings season is now underway, which could be a welcome distraction, and a potential catalyst if they’re as strong as expected (FactSet estimates 7.3% growth among large-cap companies). So, in today’s issue, we add without subtracting, introducing a new recommendation with plenty of momentum via Mike Cintolo’s Cabot Top Ten Trader advisory.

Here it is, with Mike’s latest comments.

Planet Fitness (PLNT)

Planet Fitness has had some challenges over the years, from the pandemic crushing in-house attendance for a while and some other PR issues more recently (likely part of the reason there was a new CEO and top brass put in place last year), but the underlying story has never changed: The firm is the biggest national fitness center player, with 2,722 gyms at year-end that cater to people who want to use the gym ... but aren’t exactly fanatics about fitness and don’t want to pay for some premium offerings seen among many high-end local competitors. Indeed, the base level plan with Planet remains cheap ($15 per month), though for a bit more ($25 per month) you can use any Planet Fitness location and get plenty of perks (discount on drinks, use of hydromassage or massage chairs, bring a guest, etc.). The customer base has always been well-rounded financially, with 26% of members making south of $50k per year, but 21% making north of $100k, so the appeal is broad. That said, growth had been slowing, so the new leadership team has put in place some changes, including the first hike to the base membership plan in years (it was $10), a reduction in build costs and elimination of certain fees for franchisees, with the end result being a rate of return profile that’s back to where it was before the pandemic, which is getting a big thumbs up from its franchise partners. (It’s also adding more strength equipment in many locations in reaction to customer requests and surveys.) All told, last year was a transition given the new top brass, but business cranked ahead regardless (memberships and gym count both rose 5% to 6%, with revenues up 10% and EBITDA up 12%), and 2025 should see similar low double-digit growth figures, too. It’s not the rapidly-growing outfit it was a decade ago, but Planet Fitness offers an affordable product that should do well even if the economy hits the skids.

Moving to the stock, PLNT built a huge, listless launching pad from late 2021 into late last year, but shares began to tighten up nicely in October, and the November earnings move was a character change. That said, shares didn’t advance a ton from there, with another tight area leading to marginal new highs before the stock got pulled down by the market’s implosion. Even so, PLNT has been holding its 200-day line (better than 80%-plus of stocks in the market) and has, so far, held above its early-March low, which is rare these days.

Current Recommendations

Changes Since Last Week: None

For the first time in weeks, we have no changes to the portfolio, as thanks to the market bounce-back since last Wednesday, nearly all of our stocks have rebounded nicely after the nightmarish start to the month. On the heels of two weeks of total extremes – one of the worst weeks for the market in recent memory, followed by the best week for the market so far this year – let’s stick with our current stocks and ratings and see how they perform in a (hopefully?) more normal week. Fortunately, we did some wholesale pruning of weakened positions before Liberation Day sent markets into chaos, so the damage to our portfolio was limited. Now, we rebuild, with one addition and no subtractions. A nice reprieve. Let’s hope there are more weeks like this one.

Here’s what’s happening with all our stocks.

Updates

AbbVie (ABBV), originally recommended by Tom Hutchinson in the Dividend Growth Tier of his Cabot Dividend Investor advisory, pulled back 4.5% this week and is now down nearly 19% in the last month. Here’s what Tom had to say about it: “ABBV had been a solid performer in a mostly rotten market. But it didn’t hold up in last week’s bloodbath. The more cyclical companies that took the biggest hit have been rebounding so far this week while ABBV is still floundering. I’m still very bullish on the stock over the course of this year and beyond as the company has finally moved beyond the Humira patent issue as new drugs have replaced peak revenue. The patent issue had been holding the stock back, and now it should move higher. The stock could benefit if investors gravitate toward more defensive stocks after the recent market turmoil.” For that reason, I’m keeping ABBV at Buy, even after a sharp decline. BUY

Agnico Eagle Mines (AEM), originally recommended by Carl Delfeld in his Cabot Explorer advisory, is up more than 18% in the last week as gold prices continue to soar to new heights. Both Bank of America and UBS have raised their price targets on AEM in the last week. Clif Droke, who also recommends the stock to his Cabot Turnaround Letter subscribers, had this to say about AEM on Friday: “The gold miner hit a record high on Thursday on broad flight-to-safety demand for all things gold-related.

“Driving gold is a combination of safe-haven demand from the obvious uncertainties surrounding the global trade/economic outlook. Then there’s gold’s currency component, which is pushing additional safety-related demand due to inflation being an ongoing concern.

“Specifically, the development of the BRICS (Brazil, Russia, India, China and South Africa, plus other countries) currency is another major, and overlooked, demand driver. BRICS could especially drive gold substantially higher longer-term if gold ends up backing the new currency, as many have speculated will be the case. And as the BRICS nations move toward de-dollarization presumably accelerates in the face of trade disputes with the U.S., investors both at home and abroad might begin to look askance at the dollar and look to gold to hedge against a potentially weaker dollar in the coming years.

“Aside from broad gold-related demand, Agnico has lately announced a series of strategic developments that have underscored the stock’s momentum. The company unveiled expectations for a stable first quarter with an estimated EBITDA of $1 billion and earnings per share of 40 cents. A major investment bank has increased its price target for Agnico to 140, maintaining a Buy rating based on bullish gold price forecasts and anticipated stable mining and processing operations.

“In other news, Agnico Eagle has also expanded its stake in Canadian gold exploration company Cartier Resources (ECRFF) through a private placement, increasing its ownership to approximately 28% undiluted. The stake further allows Agnico to nominate individuals to Cartier’s board of directors.” AEM is up more than 50% year to date and has been our best performer so far in 2025. BUY

Airbus (EADSF), originally recommended by Carl Delfeld in his Cabot Explorer advisory, is up 3% in the last week after rival Boeing (BA) delivered fewer aircraft (130 vs. 136) than Airbus in the first quarter. This was the entire premise behind Carl adding it to his Explorer portfolio: air travel in the post-Covid era is back near record levels, and Boeing has been struggling mightily due to a variety of issues, leaving Airbus as an increasingly preferred aircraft maker around the globe. Airbus will report its own earnings on April 30, so we’ll know about how much the company is growing then. BUY

AST SpaceMobile (ASTS), originally recommended by Tyler Laundon in his Cabot Early Opportunities advisory, is up 10% in the last week, recovering nicely after dipping to two-month lows the previous week. The company was awarded a $43 million contract via the U.S. Space Development Agency and recently launched its joint venture with Vodafone to enhance satellite services in Europe. AST SpaceMobile has the ambitious goal of delivering broadband internet service straight to smartphones all over the world via space-based satellites. The company launched its first five satellites into low-Earth orbit last September, with many more to come this year. The upside for this potentially revolutionary company is immense, especially after the recent dip. BUY

Axsome Therapeutics, Inc. (AXSM), originally recommended by Mike Cintolo in his Cabot Top Ten Trader advisory, was flat this week and appears to have found a bottom in the mid-to-high 90s after pulling back from a high of 137 in late February. There’s been no news. The stock is still up nearly 17% year to date, so the trajectory on this mid-cap biotech remains up. Any dip below 95 may force our hand to reconsider our rating, but for now I’m keeping at Buy, anticipating that the next big move will be up. BUY

Banco Santander (SAN), originally recommended by Carl Delfeld in his Cabot Explorer advisory, was up 14% this week, recovering most, but not all, of its early-April losses. A bounce-back in bank shares around the world in the wake of President Trump’s 90-day tariff pause helped spring SAN back to life. The pullback was relatively minimal in the grand scheme, as SAN is up more than 43% year to date. As the largest bank in the European Union at a time when European stocks are outperforming and Europe’s interest rates are lower than America’s, this is a good way to play investors’ flight to ex-U.S. stocks in this time of tariff uncertainty. BUY

BYD Co. Ltd. (BYDDY), originally recommended by Carl Delfeld in his Cabot Explorer advisory, is up more than 22% this past week, erasing nearly all of its early-April losses. It’s one of the most desired stocks on the market right now, so it rarely stays down long. BYD’s lack of presence in the U.S. market is currently an advantage, as it will thus not be subject to the 125% tariffs that took effect last week. Its expansion to other parts of the globe should be unaffected – and you could make the case it will actually accelerate as Tesla sales continue to slow all across Europe, and as trade between China and Europe thaws.

BYD will release first-quarter earnings on April 25. In the meantime, the stock has multiple catalysts in the form of its new superchargers, capable of charging an electric vehicle almost as fast as it takes to fill the tank of a gas-guzzler; its AI initiatives, propelled by a new deal with Chinese upstart DeepSeek; and its new God’s Eye autonomous driving feature that will soon be available in even its cheapest ($9,500) models.

Put simply, BYDDY is arguably the best stock in the portfolio right now. BUY

DoorDash Inc. (DASH), originally recommended by Mike Cintolo in Cabot Top Ten Trader, was up more than 10% this past week, and is currently higher than it was to start April – no small feat in this market. The quick rebound came despite two Wall Street firms (B of A and JPMorgan) lowering their price targets on the stock. The stock was added to the S&P 500 earlier this month, giving it some extra gravitas. Plus, the online food delivery giant keeps inking new deals, the latest being with Domino’s Pizza and Canada’s Giant Tiger Stores. Still trading well off its February highs, we’ll keep DASH at Hold for now. But it seems to have left its lows in the dust, for now. HOLD

Dutch Bros (BROS), originally recommended by Carl Delfeld in his Cabot Explorer advisory, bounced back nicely this week, up 10%, but remains miles below its February highs. There was no news, although Baird lowered its price target on the stock from 80 to 66. The company recently reiterated its intent to up its store count to 2,000 by 2029; it currently has 982 drive-through coffee shops in 18 states. I think you can buy the dip now that the stock has seemingly righted the ship. BUY

Eli Lilly and Company (LLY), originally recommended by Tom Hutchinson in the Dividend Growth Tier of his Cabot Dividend Investor advisory, is up 3.5% in the last week but remains 19% below its 2025 highs. Tom is increasingly bullish on LLY at these levels, as he wrote in his issue last week: “LLY has taken a big hit in the recent market. As of early April, it was down 7% over the last year. The recent panic selling takes everything down. But there are good reasons to believe that LLY will continue its phenomenal performance going forward.

“Indiana-based Eli Lilly is a global pharmaceutical company with over $45 billion in annual revenue, 41,000 employees, and sales in 110 countries. Founded in 1876, Lilly is noteworthy for its unusually high focus on research and development (R&D), where it allocates over 25% of sales compared to an average of high teens for the industry.

“The R&D focus pays off, as Lilly has arguably the very best pipeline and lineup of recently launched drugs in the industry. The catalyst for the stock recently has been the potential mega-blockbuster weight-loss drugs. Its new weight-loss drug Zepbound and its other diabetes drug combined delivered over $5 billion in revenue last quarter. And the drug is new. Plus, Alzheimer’s disease drug donanemab also has mega-blockbuster potential.

“In the fourth quarter, Zepbound and Mounjaro generated a whopping $5.4 billion. The company reported revenue growth of 45% for the quarter and EPS growth of 102%. For the full year, revenue grew 32% and earnings grew 101%.

“The company is expected to generate 80% earnings growth in 2025. But there is another potentially huge catalyst in the works. It has a weight-loss drug in late-stage trials that is taken orally. The current drugs on the market require an injection. It could be a game-changer in the white-hot weight-loss drug arena.”

Let’s keep LLY at Hold until it can demonstrate more momentum. HOLD

Freshworks (FRSH), originally recommended by Tyler Laundon in his Cabot Early Opportunities advisory, rebounded 4.5% this week to get off its knees but has a lot of work to do to get back to its January highs above 19. There’s been no news. Tyler writes, “Freshworks is a high-growth software company offering cloud-based customer engagement (CRM) and business software to customers of all sizes.

“It is well known for offering user-friendly, cost-effective alternatives to enterprise software from companies like Salesforce (CRM), Zendesk (private), and ServiceNow (NOW).

“The company’s intuitive and affordable software has integrated artificial intelligence (AI) and automation features through its Freddy AI assistant that helps with customer support and sales processes.

“The product lineup includes Freshdesk (customer support and helpdesk solution with AI-powered ticketing and automation), Freshservice (IT service management platform), Freshsales (CRM tool with AI-powered insights), Freshmarketer (marketing automation platform) and Freshchat (live chat and messaging with AI).

“Fourth-quarter results beat expectations and highlighted 21.5% revenue growth ($195 million) and EPS of $0.14 (+75%).” First-quarter results are due out April 29. Keeping at Buy for now. BUY

Kenvue (KVUE), originally recommended by Clif Droke in his Cabot Turnaround Letter, was up about 5% in its debut week in the Stock of the Week portfolio. The high-yielding Johnson & Johnson spinoff was added as a safety play regardless of what happens to the economy, since people always need most of the things it makes – Band-Aids, Benadryl, Tylenol, Nicorette gum, Listerine, etc. It’s an all-weather dividend stock that should sustain us through tariff turbulence. BUY

Main Street Capital Corp. (MAIN), originally recommended by Tom Hutchinson in the High Yield Tier of his Cabot Dividend Investor advisory, was up nearly 6% this week after pulling back from all-time highs above 63 all the way to 49 earlier this month. It appears to have bottomed, and there was no real reason for the pullback other than the market being down. If the economy slows in a meaningful way, it would likely put a dent in this issuer of high-interest loans. But for now, like Kenvue, this is the type of low-risk, high-dividend-paying stock that should help anchor the portfolio in a time of great uncertainty. BUY

Netflix, Inc. (NFLX), originally recommended by Tyler Laundon in Cabot Early Opportunities, was up more than 8% this week as the Mag. 7 led a rebound in tech stocks. But the real catalyst could come this Thursday, April 17, when the company reports first-quarter earnings. Analysts are looking for 12.1% revenue growth with 8.3% EPS growth. Netflix has topped earnings estimates in each of the last four quarters; another beat could catapult shares back near their February highs. BUY

Sea Limited (SE), originally recommended by Carl Delfeld in his Cabot Explorer advisory, was up 9.5% this week to regain about half its losses from the previous week. The selling in SE seemed overdone, as it does business primarily in Southeast Asia and is thus not a tariff risk. Its three main business segments – Shopee (e-commerce), SeaMoney (fintech) and Garena (gaming and entertainment) – are thriving, so I’d view this market-fueled pullback as a buying opportunity. This is a great entry point if you don’t already own SE shares – which still trade at roughly a third of their 2021 highs even after more than doubling in the last year. BUY

Sirius XM Holdings (SIRI), originally recommended by Clif Droke in his Cabot Turnaround Letter, is roughly flat in the last week but appears to have bottomed. Seaport Global initiated coverage on the stock with a Buy rating and a 27 price target (the stock currently trades at 20). Satellite radio isn’t exactly new or hip anymore, but people do still listen to it, and Sirius boasts the ageless and always-popular Howard Stern still. This was a turnaround play from Clif, so we may need to be patient with it. Earnings are due out May 1, which may be the next potential catalyst. BUY

Tesla (TSLA), originally recommended by Mike Cintolo in Cabot Top Ten Trader, keeps churning out bad headlines, many of them thanks to CEO/founder Elon Musk. But this week at least, the stock bounced back, up 6.5% despite three Wall Street firms lowering their price targets. Notably, all of those price targets are well above the current price, and the stock appears to have found consistent support in the low 220s. So, we will continue to Hold and see what next Tuesday’s (April 22) earnings report brings. Expectations are quite low, which could be a good thing. HOLD

Waste Management (WM), originally recommended by Tom Hutchinson in the Dividend Growth Tier of his Cabot Dividend Investor advisory, is up 5% in the last week and is one of the rare stocks that’s close to its 52-week highs! Garbage collection, after all, is impervious to tariffs and slowing economies. And WM has a long history of outperformance in all types of markets. With a beta of a mere 0.67, this is about as safe a stock as it gets in this investing climate. 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. This week we went deep on tariffs, the upcoming earnings season, how to play the sky-high market volatility, and welcomed on guest Bryan Perry of the Cash Machine.

The next Cabot Stock of the Week issue will be published on April 21, 2025.

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