The major indexes are relatively quiet this morning, with the Nasdaq and S&P 500 up a bit, though growth stocks are mixed, with some bouncing but others remaining under pressure.
This bulletin is about Samsara (IOT), which was looking great heading into earnings last week, but the action since has been iffy. As for the numbers, the firm reported a good-not-great quarter—sales (up 36%) and earnings (up 75%) topped expectations, but the Q4 outlook was left alone (wasn’t bumped up), which was disappointing, leading to some selling last Friday.
That initial downdraft was unpleasant but normal … but IOT has fallen further both yesterday (with most growth stocks) and again this morning (as software peer Oracle (ORCL) is getting hit on its own report), causing the stock to fall below both its 50-day line and round-number support in the 50 area.
To be fair, IOT isn’t a disaster, and our loss is reasonable, but given the action of growth stocks and the three days of high-volume selling, we’re going to cut our loss here. SELL IOT
That will boost our cash position into the upper 30% range, which might be too high—while growth stocks have definitely hit an air pocket, many are handling themselves normally. Thus, we’re not ruling out putting some of that cash back to work, especially as some names we’re following approach solid risk/reward areas. Right now, though, we’ll sit tight as we wait for support to appear in many names we’re watching.
Don’t hesitate to email me directly (mike@cabotwealth.com) if you have any questions.
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