Cabot Stock of the Week Issue: May 27, 2025

Stocks were stagnant this past week after a big recovery the first few weeks of May. The pause is normal, especially in the absence of the type of catalysts (a U.S.-China 90-day cease-fire, cooler-than-expected inflation, etc.) we saw in previous weeks. What happens in the coming weeks will likely determine whether the market continues on to new all-time highs … or retreats back closer to its April lows. It’s possible it does neither and instead meanders along for a while during this temporary reprieve from tariffs. Either way, it feels like the market has reached an important crossroads, at least in the short term.

Meanwhile, gold stocks remain in demand as gold prices continue to soar as a safe haven against all the uncertainty. But gold isn’t the only metal getting some love. Silver prices are also starting to spike. One silver stock in particular caught Carl Delfeld’s eye recently, and he recommended the stock to his Cabot Explorer audience last week. Today, it gets the Stock of the Week treatment.

Here it is, with Carl’s latest thoughts.

New Recommendation

Coeur Mining, Inc. (CDE)

With gold prices on an extended upward trajectory, silver stocks should also be considered.

Historically, silver prices both lag and follow gold. The silver-gold price ratio is extremely wide and indicates that a silver price catch-up is going to happen.

The gold-silver ratio is an intimate relationship. It indicates how many ounces of silver are needed to buy one ounce of gold. In the last century, this ratio reached its lowest point at just under 15:1 at the end of 1979 and peaked at over 110:1 during the COVID crisis.

For many precious metal investors, silver is seen as gold’s “little brother,” but it has a long history as a means of payment going back centuries, as the Spanish silver dollar was once the reserve currency of the day.

This year, we passed the 100:1 mark for only the fourth time in a hundred years – a strong signal that silver may be underpriced.

While gold has reached a historic high, the silver price is almost 50% off its all-time high in U.S. dollars per ounce.

There are limited pure silver plays, and I have chosen a smaller North American speculative play.

Coeur Mining (CDE) is a mining company that explores gold, silver, zinc, and other related metals in the U.S., Canada, and Mexico. Through off-take agreements, it markets and sells its concentrates to refiners and smelters. It stands out as one of the best breakout stocks to buy, owing to the growing demand for gold and silver, which could result in a significant price spike.

In 2024, Coeur Mining executed a deal to acquire SilverCrest Metals in a $1.7 billion all-stock acquisition, which is expected to boost financial performance in 2025 as it is expected to contribute about $350 million in free cash flow. With this acquisition, Coeur also gains access to the high-grade Las Chispas mine in Mexico.

The company is close to becoming profitable, and the numbers are going in the right direction. It also generated $85 million in free cash flow in the second half of 2024 as it reduced its debt by $80 million.

This is a speculative recommendation, and timing a strong turn in silver stocks is difficult.

But looking at Coeur Mining’s chart, I note a nice uptrend and that periodic spikes can be explosive. BUY

Current Recommendations

Changes Since Last Week:

Sprouts Farmers Market (SFM) Moves from Buy to Sell

Updates

Yes, we continue our recent pattern of showing one stock the exit as we welcome in a new one, keeping our portfolio at a manageable 21 positions. Today’s “victim” is Sprouts Farmers Market (SFM), which didn’t do anything “wrong” per se … it just didn’t do enough right to warrant further inclusion.

Most of the rest of our stocks are acting well, although like the market, most of them stagnated this week on the heels of big post-earnings rallies. Several, including rivals BYD (BYDDY) and Tesla (TSLA), posted solid gains for very different reasons.

Here’s what’s happening with all our stocks as we enter the last week of a very productive May.

AbbVie (ABBV), originally recommended by Tom Hutchinson in the Dividend Growth Tier of his Cabot Dividend Investor advisory, was mostly unchanged this week on no major company-specific news. But big pharma has been taking some heat from President Trump of late, which hasn’t helped the stocks, as Tom noted in his recent update: “While the rest of the market got great tariff news, healthcare is in the crosshairs. 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 it is 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. Immunology drugs, Skyrizi and Rinvoq, grew sales 65% in the quarter with revenue of $5.1 billion. The trajectory is great, but we’ll have to wait and see how these externally caused issues play out in the weeks ahead.” Sound advice. Keeping at Hold. HOLD

Agnico Eagle Mines (AEM), originally recommended by Carl Delfeld in his Cabot Explorer advisory, was back with a vengeance this week, rising 8% as gold prices bounced back as tariff-related volatility resurfaced. There was no company-specific news. Gold remains a popular safe haven amidst ongoing economic uncertainty and market volatility. So, there could be many more productive weeks like this one for AEM. For that reason, it’s still a Buy. BUY

Airbus (EADSF), originally recommended by Carl Delfeld in his Cabot Explorer advisory, was off about 1.5% this week on no news. Vietnam’s low-cost airline VietJet ordered 20 Airbus aircraft, doubling their total. But newfound momentum for embattled rival Boeing (BA), whose shares are up more than 17% in the past month, may be holding EADSF back, at least in the short term. That said, the business is healthy, as the aircraft maker grew sales by 5.5% and earnings by 33% in its most recent quarter. But we’d like to see some better share price movement soon. Keeping at Buy for now. BUY

AST SpaceMobile (ASTS), originally recommended by Tyler Laundon in his Cabot Early Opportunities advisory, was unchanged this week on no news. On its earnings call earlier this month, the company announced plans for a satellite orbital launch every one to two months over the next nine months, starting with its Block 2 BlueBird satellite launch in July (the first BlueBird satellite launch was last September); expectations to build six new satellites per month, starting in the third quarter; and that it hopes to achieve straight-to-smartphone internet service via low-Earth orbit satellites in the U.S., Japan, Europe, the U.S. government and other markets by 2026. Also, the fledgling company has $874.5 million in cash, with adjusted operating expenses in Q1 of $44.9 million. This potentially revolutionary company is still in its beta phase, but the growth could be immense if it achieves even close to its ambitious goal. The next six to nine months should be pivotal. BUY

Banco Santander (SAN), originally recommended by Carl Delfeld in his Cabot Explorer advisory, was flat this week after a big move the previous few weeks. One of the largest banks in Europe, Santander also recently topped 100,000 customers in the U.S. The stock is up 74% year to date so is taking a well-earned breather. It’s one of the best bank stocks out there. BUY

BYD Co. Ltd. (BYDDY), originally recommended by Carl Delfeld in his Cabot Explorer advisory, was up another 5% this week to reach new all-time highs! The Chinese EV maker continues to be a crowd pleaser, slashing prices by as much as 34% and announcing incentives and subsidies on trade-ins of more than 20 of its models. Also, the company – which still does close to 90% of its business in China – topped Tesla’s EV sales in Europe for the first time ever in April. Sales in Europe improved 169% year over year, with 7,231 battery electric vehicles registered; Tesla’s European sales slipped 49% last month. When you factor in BYD’s hybrid sales, its April haul in Europe was a whopping 359% higher than it was last April.

There’s a lot to like about BYD, even with the stock at fresh highs. Given that the company is just now starting to spread its tentacles globally (though, notably, not in the U.S., which right now is a good thing because that means it’s mostly free from tariffs), I think this has the potential to be China’s version of Tesla, if you bought TSLA shares a decade ago. It’s our favorite stock in the portfolio. BUY

Carnival Corp. (CCL), originally recommended by yours truly in my Cabot Value Investor advisory, was flat this week, at least in the aggregate, as it rode the tariff headline waves. We recommended CCL earlier this month on the strength of the flourishing cruise industry post-Covid, with global passenger numbers 30% higher now than in 2019. Carnival’s revenues are at all-time highs as well, and yet the stock (23-24 range) trades at just a fraction of its pre-Covid highs (low 70s), at a mere 12x forward earnings estimates. It’s a true “growth at value prices” play, and it’s off to a good start for us. As long as tariffs don’t tank the U.S. (or global) economy, CCL should continue to climb. BUY

DoorDash Inc. (DASH), originally recommended by Mike Cintolo in Cabot Top Ten Trader, was up another 1.5% this week on no major news. The food delivery app company is coming off a strong quarter 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 23% year to date, and our gains are now north of 60%. BUY

Dutch Bros (BROS), originally recommended by Carl Delfeld in his Cabot Explorer advisory, gave back a couple points this week, slipping from 72 to 70, after a big post-earnings runup from 59. EPS of 14 cents topped the 11-cent estimate and were up from 9 cents in Q1 a year ago; sales of $355 million edged past estimates and were 29% higher year over year; and same-store sales improved by 4.7%. Meanwhile, the drive-through coffee store chain added 30 new locations in the quarter to bump its total to 1,012 stores – crossing the psychologically meaningful benchmark of 1,000, an important hurdle on the way to the company’s ambitious goal of opening 7,000 stores in the next decade. Also, Dutch Bros plans to introduce a food menu soon – something it currently lacks, as it offers a wide range of coffees, teas, lemonades and other drinks at its drive-through locations, but no food. That could be a game-changer. Meanwhile, the company plans to present at three separate investor conferences the first week of June, which could offer more insight into its expansion plans. Stay tuned. BUY

Eli Lilly and Company (LLY), originally recommended by Tom Hutchinson in the Dividend Growth Tier of his Cabot Dividend Investor advisory, was off about 3.5% this week as its recent slide continued. In his latest update, Tom wrote, “Healthcare is under some pressure. Lilly is a similar story to AbbVie at this point. The big news is the executive order tying U.S. drug prices to international prices. Initially, big pharma stocks sold off on the news. But they have rebounded as it is unclear how the pricing will work or if it will have a big effect outside of Medicare. There is also the tariff issue. The administration has already warned that it intends to target drugs for tariffs soon. The company itself is doing great. But there could be some turbulence in the near term as these external issues play out. That’s why LLY was downgraded to a HOLD.” We did the same earlier this month. Let’s keep it right there. HOLD

Freshworks (FRSH), originally recommended by Tyler Laundon in his Cabot Early Opportunities advisory, held firm just below 15. There was no news. The company is coming off a strong first-quarter report in late April in which EPS of 18 cents topped the 13-cent estimate and Q2 revenue guidance came in ahead of estimates. That, accompanied by a 5% bump in early May, was enough to restore our Buy rating a couple weeks ago. We’re sticking with that rating. BUY

Kenvue (KVUE), originally recommended by Clif Droke in his Cabot Turnaround Letter, just keeps holding in the 23-24 range where it’s been all month. There’s been no news since the May 8 earnings report. EPS narrowly topped estimates (24 cents vs. 23 cents expected). Sales came in at $3.74 billion. Both numbers were down year over year, but the Johnson & Johnson spinoff did raise full-year revenue growth guidance to a range of 1-3%, up from a range of a 1% loss to a 1% gain. The maker of Band-Aids, Tylenol, Listerine and other signature consumer staples conceded that tariffs are taking a toll on estimates, with EPS expected to be flat for the year and adjusted operating income margin expected to decline. But the sales forecast improvement mostly outweighed the bad news, and investors nudged the stock up slightly. This remains an all-weather stock that should hold up well even in a recession, and the 3.4% dividend yield helps. BUY

Main Street Capital Corp. (MAIN), originally recommended by Tom Hutchinson in the High Yield Tier of his Cabot Dividend Investor advisory, held steady at 56 as there’s been no major news since the May 8 earnings report. As Tom noted, “The BDC reported basically solid earnings with a recovering net asset value (NAV) and higher distributable income. Although earnings slightly exceeded expectations, they were slightly lower than last year because of rising costs. The investment outlook is cautious because of rising expenses and tariff concerns, like most other companies.” Shares are up about 22% in the 14 months since we added MAIN to the portfolio, but share price movement is essentially a bonus for this high-yield, monthly dividend-paying business development company. It currently yields 7.7%. BUY

Netflix, Inc. (NFLX), originally recommended by Tyler Laundon in Cabot Early Opportunities, tacked on another 1% to extend further into record-high territory, now around the 1,200-per-share mark. Both JPMorgan and Canaccord Genuity recently raised their price targets on the stock. With no immediate catalyst on the horizon, I’d expect at least a slowdown in the near term, if not a mini-pullback. But this remains one of the more reliable growth stocks out there, and it has now exactly 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 to start a new position, given the elevated share price. BUY

Penumbra (PEN), originally recommended by Mike Cintolo in his Cabot Top Ten Trader advisory, pulled back another 2.5% this week and is now below its 50-day moving average. The company is set to present at three investor conferences next month, starting with the William Blair 45^th Annual Growth Stock Conference on June 3, so perhaps that can help jumpstart a rebound. Keeping at Buy for now, but any further slippage in the share price may necessitate a downgrade. BUY

Planet Fitness (PLNT), originally recommended by Mike Cintolo in Cabot Top Ten Trader, inched up from 101 to 103 this week after Stifel raised its price target from 82 all the way to 120 and upgraded the stock from Hold to Buy. The analyst note highlighted the steady membership growth and long-term sales potential as reasons to be bullish on this low-priced fitness center chain. The analyst also likes that the company is raising prices on its Black Card Spa experience, which could juice comparable-store sales by about 3-4%. There’s a lot to like here, and the stock is off to a solid start for us. BUY

Sea Limited (SE), originally recommended by Carl Delfeld in his Cabot Explorer advisory, gave back some, but not much, of its 14% post-earnings gain from two weeks ago, down from 169 to 166 this week. The muted pullback is totally normal after such a quick runup. Meanwhile, the quarter was good: 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. EPS of 86 cents fell short of estimates but more than quadrupled the 21 cents it earned in the first quarter a year ago. Broken out by segment, Garena (gaming/entertainment) generated $495.6 million in revenue, up 8.2% year over year; Shopee (e-commerce) brought in $3.1 billion, up 28.7% year over year; and Monee (formerly SeaMoney, its fintech wing) generated $787 million, the fastest-growing segment at 57.6% growth. So the three-pronged Singapore-based conglomerate is seeing strong growth in all three segments. The stock is up 55% year to date yet still trades at less than half of its 2021 apex. BUY

Sprouts Farmers Market (SFM), originally recommended by Tyler Laundon in his Cabot Early Opportunities advisory, pulled back about 3% after a 7% gain the previous week. It’s only been in the portfolio for a little over a month, but the lack of movement has been frustrating. Tyler decided to sell the stock last week, writing, “Sprouts Farmers Market (SFM) stock rallied to 178 two days after its Q1 report on April 30 then hit overhead resistance (shares stalled at the same level back in February prior to the Q4 report). SFM closed 6% below that level yesterday. SFM is a defensive growth stock that trades at a high valuation. We’re up about 4%-5% in a month, and while that’s not huge, I’m going to take the modest win today.” With a similarly modest gain, let’s do the same. MOVE FROM BUY TO SELL

Stoxx Europe Total Market Aerospace & Defense (EUAD), originally recommended by Carl Delfeld in his Cabot Explorer advisory, was up another 5% this week and 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 up another 4.5% this week and has reached its highest point since February. The stock is up more than 5% today alone despite the aforementioned (see BYD write-up) 49% plunge in European sales last month. Counteracting that bad news, however, was CEO Elon Musk’s social media post over the weekend saying that he will be stepping back from his DOGE and Trump administration duties and focusing on his companies again, including Tesla. That was music to investors’ ears, as Musk’s polarizing government role has been a major contributor to Tesla’s plummeting sales of late. We’ll see if he’s true to his word and how much it moves the needle for the company’s flagging revenues. In the meantime, the stock is up more than 25% in the last month after being down more than 40% through the first three-plus months of the year. Keeping at Hold. HOLD

Toast Inc. (TOST), originally recommended by Mike Cintolo in his Cabot Growth Investor advisory, tumbled from 45 to 43 in its first week in the portfolio. There was no reason for the pullback. In his update last week, Mike wrote, “We started Toast (TOST) with a half-sized position (the same with many other recent buys), knowing a short-term dip could come—and it has, with a normal-looking, low-volume retreat after its big post-earnings rush higher. We’d sit tight if you own some, and if not, we’re OK starting a position here.” That’s good advice. If you missed the boat on this developer of payment platforms used in the restaurant industry, you can get it at an even cheaper price now. 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.

The next Cabot Stock of the Week issue will be published on June 2, 2025.

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