Cabot Stock of the Week Issue: June 9, 2025

The market continues to nurse itself back to health, with the S&P 500 back above 6,000 for the first time since February and volatility at a four-month low. Countless newsy items could derail it: this week’s inflation reports (Consumer Price Index on Wednesday, Producer Price Index on Friday), ongoing tensions with China, new tensions between the President and the richest man in the world (see more below), surging conflict in California, Ukraine-Russia developments, the lack of tariff deals as the 90-day pause approaches the home stretch, etc., etc. But lately, the market has ignored all that, and so should you.

So today, we ignore the headlines and myriad possible headwinds and try and capitalize on what’s in front of us: a strong market, with lots of stocks popping. That includes growth stocks, and today we add a potential new leader with enough momentum that Mike Cintolo tabbed it as his “Top Pick” in last week’s Cabot Top Ten Trader issue.

Here it is, with Mike’s latest thoughts.

New Recommendation

Veeva Systems (VEEV)

Veeva Systems is the hands-down leading cloud software provider to the life sciences industry, with a solution built from the ground-up many years ago to handle the intricacies of that business, starting with sales and marketing functions and expanding to everything from clinical trial management, tracking and reporting, regulatory submissions, safety and quality control aids, medical content creation, data analytics and much more. Of course, the latest growth angle could come from AI, which Veeva announced in April and with offerings that will hit the market later this year: The firm sees two bots (one for CRM functions, one for commercial) launching around year-end, and aims to integrate AI into many parts of its platform, allowing many routine tasks to be automated and even allowing users to create customized automation tools, too. To be fair, Veeva is a larger firm these days—it just crossed $3 billion of annualized run-rate revenue—so growth isn’t going to be off the charts, but the firm continues to execute and the top brass recently set a $6 billion run-rate goal by 2030, expecting continued mid-teens growth for many years to come. Q1 results were terrific, with total revenue rising 17% (subscription revenue, which makes up more than 80% of the total, was up 19%), accelerating a bit from recent quarters, while operating income lifted 34% (margin of 46%!) and earnings of $1.97 per share rose 31% and crushed estimates. It’s not changing the world, but Veeva is an emerging blue chip with a steady growth outlook, and if its AI products gain big adoption in 2026, results should continue to top estimates, and growth could accelerate from the years-long, mid-teens baseline.

As for the stock, VEEV was a huge winner during the cloud software boom of 2016-2020, but then it fell hard in 2022 and really never regained its shine, with slightly higher lows over time but no powerful, sustained advances. Indeed, the last time it nosed to new high ground last December was immediately met with selling, with a failed breakout leading to many more months of grinding sideways action. That said, VEEV didn’t fall apart during the market correction, holding the 200 level and the 200-day line, and after a decent recovery, last week’s huge-volume earnings move (biggest weekly volume in years) looks like a change in character. We’re OK entering here with a stop under 250. BUY

Current Recommendations

Changes Since Last Week:
AST SpaceMobile (ASTS) – Sell Half, Hold the Rest

We advise selling half your stake in ASTS this week, for good reason: The stock is up nearly 50% in the last week and has now tripled since we added it to the portfolio 11 months ago. While not at 52-week highs – that would be last August – shares have run up for reasons that have little to do with the company itself, meaning a comeuppance of some kind is likely coming. I still love the upside of this potentially revolutionary space-based satellite internet service upstart, but let’s be smart and book profits on half our shares and let the rest ride.

No other changes today. Here’s what’s happening with all our stocks, in what was another very good week for the Stock of the Week portfolio.

Updates

AbbVie (ABBV), originally recommended by Tom Hutchinson in the Dividend Growth Tier of his Cabot Dividend Investor advisory, was up 2% this week as healthcare stocks continue to shake off the cobwebs after getting knocked to the mat when President Trump singled out big pharma for hiking drug prices and relying on “middlemen.” In his latest update, Tom wrote, “ABBV is hanging in there. It took a hit along with the rest of the market in early April. Then the quick recovery got interrupted by pending tariff and pricing issues. Health care is in the crosshairs right now. The executive order tying U.S. drug prices to international prices landed without much damage to the stocks. But there is also the issue of pharmaceuticals being targeted for tariffs floating around after the administration said they are coming. The issue could have a negative impact on drug companies, and they are unlikely to move meaningfully higher until there is more clarity. AbbVie itself is going great as the Humira expiration pain is behind it and earnings are growing again.” The 3.5% dividend yield enhances our fairly modest return thus far. Keeping at hold. HOLD

Agnico Eagle Mines (AEM), originally recommended by Carl Delfeld in his Cabot Explorer advisory, was off 5% this week as gold prices retreated slightly. Cabot Turnaround Letter Chief Analyst Clif Droke noted that gold prices and stock prices rarely rally in tandem like they are now, and that eventually one of them has to give. The last time both gold and the market were near all-time highs like this? 2007 … right before the Great Recession and accompanying stock market crash. That doesn’t mean that’s what’s going to happen this time around. It could be that gold prices are the asset class that blinks first, which could spell (relative) doom for our AEM position. But for now, gold is still very much in demand, so let’s see how it behaves in the coming weeks. Keeping at Buy, especially now that shares have pulled back a bit. BUY

Airbus (EADSF), originally recommended by Carl Delfeld in his Cabot Explorer advisory, was up 2% this week on reports that China plans to order 500 Airbus jets in an effort by Xi Jinping to strengthen trade ties with Europe as a hedge against souring U.S. relations. The order could be announced as early as next month. If it comes to fruition, it would go down as one of the largest single orders for a commercial aircraft ever. That could be a major future catalyst for Airbus shares. BUY

AST SpaceMobile (ASTS), originally recommended by Tyler Laundon in his Cabot Early Opportunities advisory, is up nearly 50% in the last week (!) and 13% today alone on no obvious company-specific news, though it’s clear the spat between President Trump and Elon Musk is at least a partial catalyst, as investors speculate that Trump will redirect government funding away from Musk’s SpaceX and to rivals like Virgin Galactic, Rocket Lab and, potentially, AST SpaceMobile. At 35 a share, this is the highest ASTS has been since it topped 38 last August on news that the company was finally launching its first six BlueBird low-earth orbit satellites the next month. That rally fizzled, even though AST did indeed launch the satellites as expected last September, in a true buy-the-rumor, sell-the-news situation. This sudden jolt in the share price is a lot different since it’s not related to the company specifically, which perhaps makes the run-up even more flimsy than last August’s. I believe in ASTS and think the stock’s run could just be getting going if the company achieves its ambitious and potentially revolutionary objectives (delivering internet service via space directly to smartphones around the world). But given that shares have now tripled since we added the stock to the portfolio 11 months ago, I suggest locking in a good chunk of those profits by selling half your shares. And we’ll let the rest ride, with a Hold rating. SELL HALF, HOLD THE REST

Banco Santander (SAN), originally recommended by Carl Delfeld in his Cabot Explorer advisory, continues to hold at 8 after running up 75% through the first five months of the year. The Spain-based bank recently announced the opening of its first Openbank location in the U.S., with a branch opening in Miami. Launched in 2017 in Europe and last October in the U.S., Openbank is a primarily digital banking option; this is its third physical location in the world. Since launching digitally in the U.S. last fall, Openbank has already brought in over 100,000 customers and $4 billion in deposits. The Openbank push comes at a time when Santander has been closing some of its physical branches, including 18 in the U.S. by the end of August and 95 in the U.K. by the end of June. Due to its digital component, Openbank has far less overhead than physical Santander locations. The company’s U.S. success with Openbank is one of the many reasons the stock has been on a tear this year. BUY

BYD Co. Ltd. (BYDDY), originally recommended by Carl Delfeld in his Cabot Explorer advisory, recovered slightly from a rare down week the week before, advancing 2% this week. Recent price cuts to 22 of its models, at least through the end of June, were what spooked investors, at least for a few days. But as Carl noted in his latest update, “This is a competitive market, and lower prices will squeeze some automakers out of a market dominated by BYD. One of BYD’s advantages is that it is vertically integrated, making some semiconductors and advanced lithium ferrous phosphate (LFP) batteries.” I have zero worries about the implications of BYD’s price cuts in China, since the company is having major success in its efforts to become a global brand, outpacing Tesla sales in Europe in April for the first time ever. This quick pullback is a buying opportunity into one of the world’s great emerging growth stocks. BUY

Carnival Corp. (CCL), originally recommended by yours truly in my Cabot Value Investor advisory, is up 4% in the last week and is off to a very good start for us. There was no company-specific news. Earnings are due out later this month.

I recommended the stock because its sales are at record highs and have fully recovered from the damage Covid did to the cruise industry … but the share price has not. As long as the U.S. economy remains in reasonable shape, Carnival should continue to report record sales, and its share price should play catch-up and get back to pre-Covid levels. BUY

Coeur Mining (CDE), originally recommended by Carl Delfeld in his Cabot Explorer advisory, was up nearly 9% this week and 16% in the first two weeks since we added it to the portfolio! Soaring silver prices are the reason. After lagging behind gold’s rally to the point where the disparity between the two triggered a rarely seen “100-to-1” gold-to-silver ratio, silver is quickly playing catch-up, rising more than 26% year to date and 12.5% in just the last month. At $36, silver prices are the highest they’ve been since 2011. As a junior miner with a mere $6 billion market cap, CDE is a speculative play. But our timing appears to have been correct here. As long as silver prices keep advancing, so should CDE. BUY

DoorDash Inc. (DASH), originally recommended by Mike Cintolo in Cabot Top Ten Trader, has been on a slow-and-steady rise, up another 2.5% this week to get to new 52-week highs above 218! There was no news. The firm has been quiet on the news front since last month’s quarterly report, in which EPS of 44 cents easily topped estimates of 38 cents and was up from a net loss the previous year. Also, the company announced two big acquisitions worth roughly $5 billion. DoorDash is buying London-based Deliveroo for $3.9 billion, plus hospitality tech company SevenRooms, for $1.2 billion. The stock is now up 30% year to date, and our gains are now north of 65%. BUY

Dutch Bros (BROS), originally recommended by Carl Delfeld in his Cabot Explorer advisory, bounced back nicely this week, up 3.5%. There was no news. Shares are still well below their February highs above 85, but momentum has definitely returned after a sharp dropoff (to 51) in March and April. The upstart drive-through coffee company now has over 1,000 locations in 18 states, with designs on getting to 7,000 locations in the next 10 years. An ambitious goal. But after adding more than 160 new stores last year and on track for another 150-plus this year, investors are starting to believe, and the stock has nearly doubled in the last year. There’s plenty of potential upside ahead. BUY

Eli Lilly and Company (LLY), originally recommended by Tom Hutchinson in the Dividend Growth Tier of his Cabot Dividend Investor advisory, is starting to string together some much-needed momentum, up another 3% this week. In his latest update, Tom wrote, “LLY is a juggernaut that’s been stuck in the mud. It’s down more than 20% from the 52-week high and has returned -8% over the past year. This is a stock that has returned over 400% over the last five years. That’s a big slowdown. Drugs are likely soon to be targeted for tariffs and inputs for Lilly’s weight-loss drugs come from Ireland. However, the administration indicated that time would be given to relocate facilities to the U.S., and Lilly has already begun that process. Tariffs are unlikely to sting Lilly that much. There’s also the issue of ‘most favored nation’ drug pricing. But it’s unclear how that will work and how much other nations will reduce their prices.

“Lilly is still knocking the cover off the ball with huge demand for its weight-loss and other drugs. There is also likely approval for an oral weight-loss drug later this year. But until there is more clarity on these issues, LLY is unlikely to generate lasting upside traction. That’s why it is rated HOLD for now. But the stock should soar on the other side of this uncertainty and make up for lost time.” Let’s keep holding as well. HOLD

Freshworks (FRSH), originally recommended by Tyler Laundon in his Cabot Early Opportunities advisory, was up more than 4% this week but remains in the 14-16 range it’s been in for the past six weeks. There’s been no news. It’s a mid-cap cloud software stock with plenty of upside, and it’s off to a decent start for us. Perhaps a break above 16 could trigger a more substantial run-up. BUY

Kenvue (KVUE), originally recommended by Clif Droke in his Cabot Turnaround Letter, tumbled more than 9% this week after CEO Thibaut Mongon gave the following downbeat assessment: “We saw a longer winter, so winter pushed spring into later in Q2…and so far, it’s below last year. We are just at the beginning of the [summer] season. So, it’s too early to read the season [but] it will certainly impact Q2.”

Does that mean it’s time to sell? Not according to Clif – or Jefferies. Here’s what Clif wrote last Friday: “While Mongon previously acknowledged potential headwinds from ‘macro shifts and seasonal variability,’ he had expressed confidence in Kenvue’s ability to navigate the challenging environment. However, many of these factors were already known to management and guidance wasn’t changed.

“What’s more, analysts at Jefferies see opportunity in the recent share price decline, reiterating a Buy rating and calling the company a ‘self-help transformation story,’ while noting that broad U.S. retail trends have recently returned to growth.

“Additionally, the firm’s skin care business is reportedly showing early signs of recovery, driven by the Neutrogena product line. Jefferies further highlighted Kenvue’s re-investment push, with marketing, R&D and capital spending growing 11% in 2024.

“KVUE maintains a Buy rating in the portfolio.” Those are ringing endorsements. So let’s keep the stock at Buy – for now – despite the recent weakness. BUY

Main Street Capital Corp. (MAIN), originally recommended by Tom Hutchinson in the High Yield Tier of his Cabot Dividend Investor advisory, is up 3.5% this week and has been trending steadily higher for two months after dipping below 50. At 58 a share, the stock is still below its February highs above 63, but the momentum is clear. There’s been no news. As a business development company that pays a monthly dividend with a high yield, MAIN is an attractive income generator for us. Movements in the share price are mostly gravy. Thankfully, the stock is up more than 26% since we recommended it. BUY

Netflix, Inc. (NFLX), originally recommended by Tyler Laundon in Cabot Early Opportunities, keeps holding its gains, and even tacking on slightly to advance further to new all-time highs. There’s been no major news, although both Citigroup and UBS have raised their price targets on the stock in recent days. This remains one of the more reliable growth stocks out there, and it has now more than doubled in the 15 months since we added it to the portfolio. For those who haven’t yet bought the stock, I’d wait until the next dip of 3% to 5% (ballpark) to start a new position given the elevated share price. BUY

Palomar Holdings, Inc. (PLMR), originally recommended by Tyler Laundon in his Cabot Early Opportunities advisory, is not off to the most auspicious start for us, down more than 9% this week. There’s been no real news, and this is an insurance stock with a very low beta (0.50), so the abrupt decline is a bit of a head-scratcher, especially since Piper Sandler just raised its price target on it from 171 to 177. It’s likely just normal consolidation after a very fast start to the year (+51%) for the stock. PLMR peaked at 175 a week ago. I’m going to bet it claws its way back there in the coming weeks, as long as the market behaves. BUY

Planet Fitness (PLNT), originally recommended by Mike Cintolo in Cabot Top Ten Trader, held steady at 104. There’s been no news. Shares of this affordable membership gym chain have been solid, if unspectacular, in the two months since we added them to the portfolio. Keeping at Buy. A move above 105 resistance could be bullish. BUY

Sea Limited (SE), originally recommended by Carl Delfeld in his Cabot Explorer advisory, was exactly flat this week and has mostly held its gains since a big post-earnings run-up last month. In its last quarter, sales climbed 30% to $4.84 billion, roughly in line with estimates. Shares of this Singapore-based conglomerate have roughly tripled since we added the stock to the portfolio 15 months ago – and yet they still trade at less than half of their 2021 highs. Given the tremendous growth in Southeast Asia, I like the upside even after such a major run. BUY

Stoxx Europe Total Market Aerospace & Defense (EUAD), originally recommended by Carl Delfeld in his Cabot Explorer advisory, was down 1% this week but is off to a fast start for us. This ETF, the only one in our mostly stock-centric portfolio (hence the name), is a play on the strength of European stocks and Europe’s increased focus on defense spending as its economy improves. European stocks are up more than 8% year to date, while U.S. stocks are basically flat. BUY

Tesla (TSLA), originally recommended by Mike Cintolo in Cabot Top Ten Trader, was down 13% this week. That’s what happens when your CEO starts feuding with the leader of the free world. This is the cost of doing business with Tesla these days: The potential upside is there as long as relations between Elon Musk and Donald Trump are at least relatively cordial. When they’re not … Wall Street worries about the potential consequences for Musk’s companies, including Tesla. As with everything under the current regime, this is a fluid situation, and perhaps cooler heads will prevail. But this is why I’ve been reluctant to upgrade TSLA back to buy despite its impressive recovery in the last six weeks: The company is so tethered to its founder’s reputation, and right now that reputation is literally costing the company money. You could potentially buy the dip if you think the Musk-Trump tete-a-tete will soon blow over. But my official rating will stay at Hold until further notice. HOLD

Toast Inc. (TOST), originally recommended by Mike Cintolo in his Cabot Growth Investor advisory, was up nearly 2% this week on no news. In his latest update, Mike wrote, “Toast (TOST) has been a bit tedious of late, losing some ground since its big gap and follow through, which isn’t great, but the stock has remained north of its earnings gap (near 40) and its 25-day line has just now caught up to the stock. The Q1 report went a long way to change perception, with both the core small/mid-sized restaurant business doing well while newer (and often larger) signups among international and enterprise clients (Applebee’s was its largest ever deal) ramp. If shares sink below 40, we’ll throw up a tight mental stop—but right here, we think the story, numbers and chart continue to favor upside ahead. Hang on if you’re in, and if not, we’re OK starting a position here.” BUY

The next Cabot Stock of the Week issue will be published on June 16, 2025.

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