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tyler-laundon

Tyler Laundon

Chief Analyst, Cabot Small-Cap Confidential and Cabot Early Opportunities

Tyler Laundon is chief analyst of the limited-subscription advisory, Cabot Small-Cap Confidential and grand slam advisory Cabot Early Opportunities. He has spent his entire career managing, consulting and analyzing start-up and small-cap companies. His hands-on experience has taught Tyler that the development of a superior business model is the biggest factor in determining a company’s long-term success. Accordingly, his research focuses on assessing the viability of management’s growth strategies, trends in addressable markets and achievement of major developmental milestones.

Tyler’s small-cap portfolios favor a high allocation to stable, high growth companies, upon which he layers strategic purchases of higher risk, event-driven investments. He first began publishing his analysis of small-cap opportunities in 2009. Since 2012, he has led his subscribers into 10 doubles. Between 2012 and September, 2015 his small-cap recommendations generated cumulative returns of over 2,300%, including both winners and losers, and outperformed the Russell 2000 Index by an average of 28% per year.

Prior to joining Cabot, Tyler founded and operated a small business for 15 years. He then worked as a consultant for start-up technology companies, as well as Vermont’s largest health care institution. From 2009 to 2015, he was the chief analyst of growth stocks at Wyatt Investment Research, where his research spanned the full spectrum of the growth stock universe, from micro-cap start-ups to multi-national mega-caps.

Tyler holds a B.S. and MBA from The University of Vermont, where he graduated Valedictorian. He has been a long-time contributor to the Wall Street’s Best Investments, has been quoted by U.S. News & World Report, and has presented investing ideas and strategies for The Money Show and Bloomberg Markets LiveINSIGHTS.

From this author
Shares of Elastic (ESTC) continue to struggle in the weeks after reporting earnings. We sold part of our position on March 5 for a 30% gain, and we’ll sell the rest today for a roughly 22% gain. SELL REMAINING SHARES
Shares of Cadre (CDRE) were down almost 10% yesterday on news of a secondary offering, which will be priced at 35, roughly the level of yesterday’s closing price. It’s not atypical for a stock like this to absorb a secondary over a week (roughly) then resume its upward march. Additionally, with part of CDRE’s growth strategy revolving around M&A, it’s not too surprising that they would seek to raise capital and do so with equity (strong stock) rather than debt (high cost). Maintaining Buy rating as this offering doesn’t change the big-picture story. BUY
Small-cap stocks continue to underperform their larger peers though, with the exception of this morning, the S&P 600 Small-Cap Index ETF (IJR) has been inching higher toward resistance at 110.

It’s possible that with expectations for the first rate cut being pushed out to June (currently, subject to change) that my expected small-cap rally has been similarly delayed. I have been surprised that this asset class hasn’t seen more momentum.
Spotting a “top” in in high-flying stocks is impossible but sticking to a system of taking partial profits on a very fast-moving stock is pretty darn easy, if you can manage your emotions.
Cadre (CDRE) and Soleno (SLNO) Report
Half of all people need cataract surgery. But even though messing with your eyes is a massive decision, the Big 3 MedTech players in this market don’t have the best solution out there.

This is where today’s company comes in. It has developed cutting-edge technology that drives better outcomes for patients needing cataract surgery. The key? Its lens can be customized once in the eye!

All the details are inside the March Issue of Cabot Small-Cap Confidential.
Sell Braze (BRZE)

Sell Gen Digital (GEN) and Part of Elastic (ESTC)
GitLab (GTLB): Good Quarter, Questionable Guidance. Book The Gain
My “plan” to enter the weekend patting myself on the back for a week of decent stock performance in our portfolio might be foiled by Elastic (ESTC).
It’s amazing how much some of our stocks have moved over the last week while the average gain of our portfolio is almost EXACTLY the same as that of the S&P 600 Small Cap Index.

Measuring Wednesday to Thursday early morning, shares of Remitly (RELY) are up 18%, Docebo (DCBO) is up 17% and Enovix (ENVX) is down 12%. Taking a simple average of our positions’ change over the last five sessions, though, the average change is 0.7%. That compares to a 0.8% gain in the S&P 600!
A rapidly evolving global threat landscape coupled with positive market sentiment has been a tailwind for this small-cap defense stock.
Leonardo DRS (DRS) Rising
EverQuote (EVER) and TransMedics (TMDX) Deliver


In this week’s video, Mike Cintolo talks about the market’s under-the-surface improvement that he’s seeing; no indicators have changed, which will need to happen for him to extend his line in a big way, but there’s no question most stuff has seen improvement and more stocks are beginning to act properly. Mike did a little buying this week and is hoping to add more should the market be able to build on the recent action.
At 6:30 AM ET this morning Docebo (DCBO) dropped its Q4 earnings press release. The company operates a learning platform for both internal and external learners and, yes, AI is mentioned in the first sentence of the press release!

It may not be capturing headlines, but better productivity is having a major impact on bottom lines, may help us avoid a recession, and is a key driver of recent stock market gains.
Small caps traded slightly lower the first two sessions of this holiday-shortened week while the S&P 500 and Nasdaq wobbled a bit but enjoyed a bigger pop than small caps today.

Nothing high level that’s a huge priority at the moment, other than that today we saw a significant “risk on” rally as Nvidia’s (NVDA) monster quarter restoked the AI enthusiasm flame that was beginning to dim earlier in the week.

Given all the earnings reports, and another due up early tomorrow (DCBO) I’m jumping right into our stocks for short and sweet updates.

Vertiv (VRT) Snaps Back, Joby (JOBY) On Watch, Rivian (RIVN) Q4 Raises Eyebrows
Weave (WEAV) reported Q4 results after the close yesterday that beat expectations on both the top and bottom lines while also giving 2024 guidance above consensus. Revenue grew 21.2% to $45.7 million (beating by $1.5 million) while EPS of -$0.01 improved by $0.05 over last year and beat consensus by $0.03.
Shares of Enovix (ENVX) are trading down today following the Q4 report and conference call last night, most likely because there was nothing major revealed during the call (nothing huge was expected). That said, there were a few incremental positives and the story remains on track.
Shares of Vertiv (VRT) have been flat (at best) to down around 10% today after the company reported Q4 results prior to market open. While the stock’s action today isn’t confidence-inspiring, it’s likely a reflection of super high expectations heading into the event and some turbulence in growth-oriented areas of the market.
In the February issue of Cabot Early Opportunities, we take something of a barbell approach, reviewing a couple of phenomenal large-cap stocks poised for the next big chapter of their lives while also uncovering a handful of much smaller companies, one of which is just getting its business off the ground (literally)!

As always, there’s something for everybody!
In this week’s video, Mike Cintolo talks about the market’s under-the-surface improvement that he’s seeing; no indicators have changed, which will need to happen for him to extend his line in a big way, but there’s no question most stuff has seen improvement and more stocks are beginning to act properly. Mike did a little buying this week and is hoping to add more should the market be able to build on the recent action.
Shares of Crocs (CROX) are breaking out to multi-month highs above 120 today after Q4 earnings sailed past expectations (not a complete surprise given the January 8 pre-release) thanks to outperformance of the Crocs brand (HeyDude brand was in line with expectations).
Small caps have had a volatile week, which we can blame on the CPI inflation report (Tuesday) and subsequent move in interest rates. That all said, if you just woke up from a two-week nap you wouldn’t notice much at all at the small-cap index level. It’s actually a touch higher than it was on January 30 and currently challenging the levels seen last Friday (pre-CPI report).

That’s all a long-winded way of saying the market has digested the CPI report and determined (for now) that one slightly-higher-than-expected reading doesn’t make a trend. It’s helped that a few Fed officials have said the same.
Shares of Shopify (SHOP) are giving up last week’s gains (plus a little) today after the company reported Q4 results before the market opened. Revenue growth of 24.5% to $2.16 billion was solid (beat by 3.7%) as was Gross Merchandise Value (GMV) growth of 23% (roughly 10 points faster than broad eCommerce growth) and adjusted EPS of $0.34 ($0.04 better than expected).
Shares of Pinterest (PINS) are selling off today after Q4 earnings came in slightly below expectations (food and beverage weakness a culprit), though the big-picture story remains one of a company that’s made a number of operational adjustments and launched a series of growth initiatives that should drive higher revenue and EPS growth in 2024. I think the recovery story is intact and the stock’s worth owning. Keeping at buy half.
The past week hasn’t been the best for small-cap indices given some concerns around smaller financial institutions and modest weakness in value-oriented areas of the asset class. But big picture, the growthier areas continue to look good and in our specific higher growth arenas (software, MedTech, etc.) I haven’t seen much at all to complain about.

The real test will be how the next three weeks go as that timespan will cover the bulk of earnings reports from our portfolio.
Intapp (INTA) is down about 10% today (downside move wipes out January gain and puts stock at support near 40) after reporting Q2 fiscal 2024 results. I don’t love the reaction but think this will prove to be “noise” and that INTA remains a supremely compelling stock to own.