Small-cap stocks continue to act extremely well, and we have a new all-time high for the S&P 600 SmallCap Index. It hit 1,520 on an intra-day basis on Monday, then closed at 1,545. Both levels surpass the previous all-time high of 1,477 from November 2021.
The index is hanging tight to those levels today too, trading near 1,537.
Suffice it to say, this is a bullish development. And while I’m obviously a big fan of individual small-cap stocks, I would suggest that investors hesitant to go too big with individual names consider playing the small-cap move with ETFs, such as the IJR (S&P 600 SmallCap Core) and VBK (Vanguard’s small-cap growth offering).
Stepping back from small caps for a minute, we also have a positive development in the yield curve, which is likely helping stocks across all market cap classes.
On Monday the yield on the 10-year bond fell sharply, to 4.41% from 4.43% on Friday. That move was catalyzed by Trump’s nomination of Scott Bessent for U.S. Treasury Secretary.
Bessent is a market-friendly choice. He was a partner at the hedge fund Soros Fund Management then founded Key Square Group. In the first interview since his selection, Bessent said a top priority is to make Trump’s first-term tax cuts permanent and eliminate taxes on tips, Social Security benefits and overtime pay.
The thinking here is that higher growth will generate higher tax revenue, thereby reducing the federal deficit.
Bessent is targeting 3% growth in real GDP. With the current positive productivity trends, the addition of lower taxes, higher growth and lower regulations has the potential to unleash a sustained stock market rally.
Equally important, the bond market appears to like Bessent’s selection as well. Yields continue to hold below last Friday’s level, probably helped by ceasefire talks between Israel and Hezbollah. This is good news.
Moving on to our portfolio, there’s not a lot that’s changed since last Thursday afternoon, so I’ll keep this week’s notes short and sweet, and only pertaining to stocks with new developments.
Recent Changes
None
Updates
Enovix (ENVX) hired a new Chief Technology Officer, Hongwei Yan. Speaking about the hire, T.J. Rodgers, Enovix Chairman said, “We all know that Korea and China lead the world in lithium-ion batteries. Now, we have a top scientist who has worked at both Korea’s No. 1 battery company, Samsung SDI, and China’s No. 1 battery company, Amperex Technology Limited (ATL) where he led over 30 battery qualifications with a 100% success rate for a Tier 1 US mobile customer. He brings us deep technical relationships with the battery experts at our top customers, an in-depth understanding of their qualification processes, and a successful track record in working with them to scale their production.” BUY
FTAI Infrastructure (FIP) announced plans to refinance debt at Long Ridge (as I expected). The high-level strategy here is to reduce fixed charges, provide more flexibility, and convert existing power sale hedges (set at $28 per megawatt hour) to a higher price that reflects current market prices. We’ll find out what the final details are when the refinancing goes through, but the bottom line is that this should drive higher adjusted EBITDA (a measure of earnings) from Long Ridge. BUY
Mama’s Creation (MAMA) has broken out to new all-time highs above 8.69 (finally!). We also have an earnings date of December 10. BUY
Earnings Date: December 10
That’s it for this week. I hope you have a wonderful Thanksgiving.
Cheers,
Tyler
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 | 11/27/24 | Profit | Rating |
| AORT | Artivion | 6/5/24 | 23.3 | 29 | 24% | Buy |
| AVPT | AvePoint | 9/5/24 | 11.6 | 17.8 | 53% | Hold |
| DCBO | Docebo | 12/7/23 | 44.6 | 48.7 | 9% | Buy |
| ENVX | Enovix | 10/6/22 | 20.4 | 9.2 | -55% | Buy |
| FIP | FTAI Infrastructure | 8/1/24 | 10.2 | 8.8 | -14% | Buy |
| MAMA | Mama’s Creations | 7/3/24 | 7.2 | 9.4 | 30% | Buy |
| PTON | Peloton | 11/7/24 | 8.1 | 9.4 | 17% | Buy Half |
| WEAV | Weave Communications | 1/4/24 & 5/9/24 | 10.1 | 14.2 | 40% | Buy |
| WLDN | Willdan Group | 10/3/24 | 42 | 42.4 | 1% | Buy |
| ZETA | Zeta Global | 5/2/24 | 12.6 | 20 | 60% | Hold |
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