At the index level, small-cap performance has been unremarkable (though stable) for a while, but under the hood, there continue to be plenty of performing names, and we’ve been fortunate enough to be in a number of them.
That said, there’s been some shifting of the deck this week with a few growthy stocks (TMDX, RXST) taking a bit of a hit. On the flip side, continued performance from the likes of ENVX and new addition (from June) AORT is very nice to see.
Our newest position, Mama’s Creations (MAMA), continues to act well, and I’m looking forward to new customer additions (expected, not confirmed yet) as we march through the summer.
On the macro front, the odds of a September rate cut have been rising (Jerome Powell’s recent comments have not shut that trend down, which is a positive) with this morning’s CPI inflation report hopefully paving the way for the Fed to finally ease a little (two cuts now expected this year).
We also have the beginning of the Q2 earnings season firing up, with financials the first group to report. Financial stocks enjoyed a rally yesterday (small-cap financials especially strong, look at the PSCF ETF).
Let’s jump into portfolio updates.
Recent Changes
Intapp (INTA) moved to SELL on 7/9/24
Updates
Artivion (AORT) was added in June, and shares have risen about 10% over the last month. Since we added the position, Artivion has provided more debt funding to Endospan (owns the NEXUS Stent Graft System, which is used for aneurysms and aortic dissections and is expected to gain FDA approval in 2026) in exchange for lowering the acquisition price on its purchase option. On July 2 Lake Street increased their price target from 28 to 30. AORT closed at 26 yesterday. BUY
Docebo (DCBO) is moving sideways in the high 30s with no material news. Needham was out this week saying they’re maintaining their 45 price target. While software stocks remain depressed, DCBO is growing revenue in the 18% to 20% range and is solidly profitable, with expected EPS of $0.90 this year growing by 40% in 2025. BUY
Enovix (ENVX) has turned into a hot stock lately as the new management team appears to be following through on the development plans they’ve communicated to the market. The announcement of the mixed-reality headset deal (rumored to be Meta (META), which is more likely, or Apple (AAPL), less likely) continues to draw eyeballs to the name. The grand opening of the Fab2, high-volume battery production facility in Malaysia on August 8 should be another interesting event. Still a ton of work to be done here and, with the stock performing, there’s more pressure on management to execute. BUY
EverQuote (EVER) fell to 18.2 in mid-June but has recovered nicely over the last three weeks. Shares closed at 21.6 yesterday. There’s been no major news since the J.P. Morgan conference in mid-May. Maintaining at hold. HOLD HALF
Intapp (INTA) was sold for a 35% gain on Tuesday. Like a lot of software companies, Intapp is operating in a disrupted market due to AI innovations. The stock hasn’t been able to sustain any momentum for a while, so time to book a gain and move on. SOLD
Mama’s Creations (MAMA) is our newest addition and was just added last week. It’s a pure-play deli prepared food vendor that sits right at the intersection of two big-picture trends: consumers that are time and budget constrained, and grocery deli departments are adapting to meet a tidal wave of demand for high-quality, grab-and-go prepared meals. The company is doing all the things we want to see out of a small, growth-oriented player, namely introducing new products, cross-selling, going after big clients and looking to add a little boost through M&A. The stock was added to the Russell 2000 Index at the beginning of the month. BUY
RxSight (RXST) was down 10% yesterday (closed well off the lows of the day) after Stifel reduced their price target from 75 to 70 though maintained a buy rating. Stifel’s latest surgeon survey suggests Light Delivery Device (LDD) placement attach rates might be slower than anticipated, and upside from the recently introduced premium Light Adjustable Lense (the LAL+ version) might be more limited than hoped, at least in the near term. This would mark a reversal of the trends in Q1 when LDD placements beat expectations and LAL pricing helped drive outperformance. RXST closed at 51.1 yesterday. I sent out a Special Bulletin saying that I think the selling was overdone. Sticking with a buy rating but will be watching closely. BUY
TransMedics Group (TMDX) has been ticking along near 150 on no news, though shares sold off 6% yesterday as a number of growth names took a little hit. Looking forward to the Q2 earnings report, which should come around August 1. HOLD A QUARTER
Weave (WEAV) announced a new client, Patterson Dental, but it’s the release of the new platform designed for healthcare practitioners with multiple offices that was announced a couple weeks ago that I’m more interested in. We should hear more on the Q2 call (around July 31). As I mentioned in the last update, this should be significant since it helps the company move upmarket to larger customers and allows current customers that are expanding to stay with Weave. BUY
Zeta Global (ZETA) has been chopping around in the 15 to 18 zone since the May 6 earnings report. A couple of weeks ago there was a wave of analyst price target increases (Bank of America from 18 to 20, Canaccord Genuity going from 17 to 20) and some new coverage (RBC Capital picking up coverage with a price target of 20). This week Oppenheimer increased their price target from 18 to 20. Management announced that Q2 results will be released on July 31. Zeta is an AI-powered marketing platform, and a recent deal with Amazon (AMZN) Bedrock to deliver Gen AI marketing automation services will likely be a discussion topic on the earnings call. HOLD
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.
Currently Open
| Ticker | Stock Name | Date Bought | Price Bought | 7/11/24 | Profit | Rating |
| AORT | Artivion | 6/5/24 | 23.3 | 26 | 11% | Buy |
| DCBO | Docebo | 12/7/23 | 44.6 | 37.9 | -15% | Buy |
| ENVX | Enovix | 10/6/22 | 20.4 | 17.5 | -14% | Buy |
| EVER | EverQuote | 2/1/24 | 13.7 | 21.6 | 58% | Sold 1/2, Hold 1/2 |
| INTA | Intapp | 1/4/23 | 25.7 | SOLD | 35% | SOLD |
| MAMA | Mama’s Creations | 7/3/24 | NEW | 7 | NEW | Buy |
| RXST | RxSight | 3/7/24 & 3/28/24 | 52.7 | 51.1 | -3% | Buy |
| TMDX | TransMedics Group | 7/7/22 | 34.1 | 138.5 | 307% | Hold a Quarter |
| WEAV | Weave Communications | 1/4/24 & 5/9/24 | 10.1 | 9 | -11% | Buy Second Half |
| ZETA | Zeta Global | 5/2/24 | 12.6 | 16.6 | 32% | Hold |
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