January 16, 2025

The market’s trends were looking pretty iffy until better-than-feared inflation data came out on Tuesday (PPI) and Wednesday (CPI).

Those data releases finally gave Treasuries a boost and knocked the 10-year yield down from last week’s level of 4.8%, which was the highest since November of 2023 (the 10-year yield hit 4.74% last April, which was close, but not quite as high as last week).

The Wednesday rally was a relief, for sure. Most of the major market indices enjoyed their best day since the day after Trump’s election in November.

The beginning of bank earnings this week has also helped the market firm up, and the AI theme is back in focus, helping to juice some of the growthier names that we’ve all come to love (when they go up).

Interestingly, one Fed official sang a somewhat dovish tune this week. Fed Governor Christopher Waller said he can’t rule out a March rate cut and doesn’t see tariffs as having a significant or persistent impact on inflation.

It’s not the same bull market that we enjoyed in November and early December. But suffice to say a bit of a reprieve on rates and the potential to keep some rate cuts on the table in 2025 is helping.

The S&P 600 SmallCap index has enjoyed a little rally and is now back to its 25-day moving average line after bouncing solidly off the 200-day line. A good technical buy point, if you’re interested in buying the index go with the IJR ETF.

On to our stocks.

Recent Changes

None

Updates

Alkami Technology (ALKT) has yet to really get in a groove, though this isn’t unexpected since we just stepped into the software stock last week during a pullback (hopefully just a pullback). Alkami provides white-label digital banking software solutions to credit unions and small and mid-sized regional banks in the U.S., helping these smaller financial institutions (FIs) to compete more effectively with bigger, more technologically advanced and well-capitalized banks. The stock should do well this year based on the trends of client and registered user growth, solid cross-sell performance from the sales team and a variety of initiatives to expand margins. Analysts expect Q4 revenue to grow by 25.6% to $89.6 million (in line with guidance) and EPS to improve from $0.03 to $0.08, implying full-year 2024 revenue growth of 26% (to $333.8 million) and EPS of $0.27. Looking out to 2025, we should expect revenue to grow by around 25% to $416 million and EPS to grow 88% to $0.50. BUY HALF

Artivion (AORT) has been quietly pushing up against all-time highs near 30.5 for the last five sessions. There’s nothing major to report since we learned (in mid-December) that the company’s AMDS Hybrid Prosthesis (not yet approved in the U.S.) was granted a Humanitarian Device Exemption (HDE) from the FDA. If and when fully approved, AMDS represents about a $150 million annual U.S. market opportunity, which is significant for a company of this size. Artivion is currently working with facilities and physicians to obtain hospital IRB approvals so patients will have access to the medical device. A broader Premarket Approval is still expected by the end of 2025. BUY

AvePoint (AVPT) hit an all-time high of 19.2 back in early December then went on a five-week slide that pulled the stock down to 16 by late last week. Shares have posted solid performance this week and had a very nice day yesterday (+6%) on news that the company will acquire Ydentic, a software company that automates IT management tasks for Microsoft (MSFT) Managed Service Providers (MSPs). HOLD

Docebo (DCBO) has pulled back to its 200-day line over the last five weeks, with no company-specific news driving the retreat. This looks like a very attractive entry point. BUY

Enovix (ENVX) had a solid showing at CES 2025, which came on the heels of two positive announcements (timing not coincidental) that I detailed a couple of weeks ago. First, the company announced the successful completion of Site Acceptance Testing (SAT) for its high-volume manufacturing line at fab2 in Malaysia. This sets up mass production this year along with the inevitable production line tweaking depending on capacity needs and equipment upgrades. Second, Enovix announced that the company received a prepaid purchase order for silicon batteries from a Silicon Valley AI technology company to be used for head-worn mixed reality wearables. The rumor is that the company is Meta (META), and additional rumors suggest Enovix is talking to the other big boys, like Alphabet (GOOG). Not expecting huge order volume right away. At CES, management also talked about growing interest in its conventional graphite battery business, Routejade, given it does not have a Chinese supply chain (which many competitors have). ENVX stock is still very “spikey,” which is frustrating/annoying. Looking forward to the day when it just starts to climb and climb and climb … BUY

FTAI Infrastructure (FIP) announced it’s now moving ahead with the financing of loans related to its investment in Long Ridge and is also working with GCM Grosvenor (49.9% equity holder in Long Ridge) to buy all of its interest for around $200 million. The accounting of all this is fairly complicated so I’ll save that for another day (probably after deals close), but the bottom line is these should be incremental positives for the stock. On that front, FIP stock is looking better than it did in December but still not performing as I think it should. I believe it’s still a very attractive stock to buy. BUY

Mama’s Creations (MAMA) pulled back from all-time highs after the earnings report in mid-December after management disclosed higher-than-expected construction-related costs. Shares have begun to recover somewhat, possibly helped by a solid discussion from management at the ICR conference. No big news was disclosed, but management reiterated that construction costs are behind the company, and they discussed their growth plans. For a small company like this, getting the story out there is always good. BUY

Peloton (PTON) remains a recovery story that’s not widely loved. The stock recently got a price target bump from Morgan Stanley (MS) to 5.25 from 5 (stock trading near 8.6), which I think illustrates the level of excitement among skeptical investors. I’m looking forward to hearing an updated growth strategy by mid-year from the new CEO, Peter Stern, who just joined on January 1. Also expecting subscription price increases and cuts to operating costs. BUY HALF

Perpetua Resources (PPTA) stock popped in early January when news broke that the company got the green light from the U.S. Forest Service, which issued the Final Record of Decision (ROD) authorizing Perpetua’s mine plan for the Stibnite Gold Project. Following that announcement, HC Wainwright increased their price target from 22 to 25. The company has yet to publish an updated timeline for next steps, which will include a wetlands permit from the U.S. Army Corps of Engineers. The Forest Service worked with the agency prior to issuing the ROD so things should go smoothly. I look forward to hearing about next steps soon. We will need to be patient here. Gold and antimony production is not going to start for a while. We’re up 10%. BUY HALF

Weave (WEAV) has been steady lately, trading in the 15 to 16.5 zone YTD. Nothing new, and that’s fine by me (for now). BUY

That’s it for this week. Please email me at tyler@cabotwealth.com with any questions or comments about any of our stocks, or anything else on your mind.

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