Three Stocks to Watch in 2025, According to Martin Cobb

Strategic Investing in a Volatile Market: Martin Cobb’s Top Stock Picks for 2025

Editorial Team (ET)August 1, 2025

The markets continue to be shaped by uncertainty, with investors closely watching key developments such as potential tariff moves from the Trump administration. The economic environment remains complex—higher interest rates have persisted longer than expected, yet markets have shown resilience.

For Martin Cobb, Senior Vice-President of Equities at Lorne Steinberg Wealth Management, the key to navigating this environment is a disciplined and selective approach. With full valuations in the U.S. and slower growth internationally, finding quality investments that offer strong fundamentals and reasonable upside remains crucial.

Rather than attempting to predict market movements, Cobb emphasizes positioning portfolios with a balance of growth and defensive assets. In a world where unpredictability reigns, strategic investing based on probability and value is more critical than ever.

Top Stock Picks: Saputo, Smith & Nephew, and Electronic Arts

Saputo (SAP TSX): A Resilient Dairy Giant

As one of the world’s largest dairy processors, Saputo holds dominant market positions in Canada, the U.K., and Australia, with a significant presence in the U.S. The company’s operations span retail, food service, and industrial channels, making it a diversified player in the global dairy sector.

Recent headwinds, including commodity price pressures and industry oversupply, have challenged margins. However, Saputo’s long-term fundamentals remain solid. If the company’s operating margins return to historical levels, it could generate earnings per share of around $2.30, making its current valuation highly attractive at 10-11x earnings—far below its long-term average.

For value-focused investors, Saputo represents a compelling opportunity with significant potential for margin recovery and growth.

Smith & Nephew (SNN NYSE – ADR): A Healthcare Powerhouse

Smith & Nephew, a leader in medical devices and healthcare solutions, has a legacy dating back to 1856. The company specializes in hip and knee replacements, soft tissue repair, sports medicine, and advanced wound care.

The global healthcare landscape is shifting, driven by aging populations and increasing demand for surgical procedures. The pandemic caused delays in elective surgeries, but a strong recovery is underway. With market growth projected at 4% annually, Smith & Nephew is well-positioned to capitalize on this trend.

Trading at 13x 2025 earnings—far below its historical multiple of 19x—Smith & Nephew offers investors a strong value play in the healthcare sector. The potential for margin expansion and earnings growth further strengthens its investment appeal.

Electronic Arts (EA NASD): A Gaming Giant with Cash Flow Strength

Electronic Arts (EA) is a dominant force in the video game industry, boasting a portfolio of legendary franchises such as FIFA (now EA Sports FC), Madden NFL, NHL, and Apex Legends. Unlike other gaming companies reliant on one-off blockbuster hits, EA benefits from recurring revenue streams driven by annual sports titles and live-service games.

With gross margins of 80% and free cash flow margins exceeding 30%, EA is a cash-generating machine. Despite some near-term revenue pressures, the company is positioned for mid-single-digit sales growth and double-digit earnings expansion.

Moreover, EA’s strong financials allow it to return value to shareholders through share buybacks, reducing its outstanding shares by over 5% annually. Given that Activision Blizzard was acquired at a massive premium, EA’s current valuation suggests significant upside potential for long-term investors.

Final Thoughts: A Selective, Long-Term Approach

Martin Cobb’s stock picks reflect a strategic approach to investing—focusing on companies with solid fundamentals, strong market positions, and attractive valuations. In an uncertain economic environment, identifying businesses with long-term growth potential and resilient earnings power remains key.

For investors looking to navigate today’s volatile markets, Saputo, Smith & Nephew, and Electronic Arts offer compelling opportunities backed by strong fundamentals and attractive valuations.

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