After a couple of tough weeks, maybe due to a lingering yen carry-trade impact and a little too much concern over a weakening economy, the market has acted much better the last couple of days.
It seems we’re in one of those periods where there isn’t a major market catalyst, even though we’re getting inflation reports, presidential debates and a Fed meeting. So the market is just bouncing around.
On the one hand, yes these are big events. But on the other hand, so far there really haven’t been any surprises, and certainly no major negative surprises.
In short, “no” news has been neither really good, nor really bad.
It’s worth noting that Oracle (ORCL) stock has had a fantastic week. While one stock doesn’t signal what’s going on in the market at all, Oracle’s quarterly report has given a boost to AI stocks. And we all know how important that group has been to the overall market’s health in 2024.
Turning specifically to small-cap stocks, the S&P 600 SmallCap Index was recovering extremely well from the rapid three-day selloff in early August, then ran into a brick wall two weeks ago and dropped right back to the 1,300 level. That’s where the index found its 200-day moving average line, which acted like a trampoline yesterday.
Are these rather sudden and dramatic moves relaxing? Heck no.
But over the last few years, a lot of us have become somewhat desensitized to rapid market moves. And knowing this is a seasonally weakish period, with the overall economy appearing to be pretty good (despite the doom and gloom scenario implied during the presidential debate) and with rate cuts likely to come soon, it’s hard to get too bearish right now.
Speaking of rate cuts, the Fed meeting wraps up next Wednesday, and Jerome Powell will hold his press conference after the rate decision has been announced. Market odds (using FactSet Futures) are at 86% for a 25bps cut and 14% for a 50bps cut.
Bigger picture, odds are we keep ticking lower from there. By May of next year, there’s a roughly 85% probability the federal funds rate will fall between 3.0% and 3.75%. That’s significant.
If you want to lock in yields on Treasuries, time to get on it!
Let’s move on to our portfolio.
Recent Changes
None
Updates
Artivion (AORT) stock has pulled back over the last two weeks, matching the trend in the small-cap index but not that of the broader MedTech space (as measured by the IHI ETF). There’s no company-specific news that’s been behind AORT’s weakness, and thus far, the stock has found support near the 24 level, which was also an area of support in August. Keeping at buy, though admittedly watching that 23.8 – 24 area pretty closely. BUY
AvePoint (AVPT) was just added to our portfolio last Thursday, and so far so good, the trend continues to be up and to the right. The software company offers a data management and governance platform that helps customers control and secure information within their digital systems. It’s increasingly recognized as a play on AI given that organizations can’t implement AI technologies if their data and security controls are a mess. AvePoint does the vast majority of its work within the Microsoft (MSFT) environment currently, but its solutions also work within Google (GOOG), Amazon (AMZN) and other cloud platform providers. BUY
Docebo (DCBO) pulled back over the last couple of weeks, more or less in line with the move in software stocks (WCLD and CLOU ETFs). Earlier in the week, the company announced that interim CEO Alessio Artuffo has become the official CEO and a member of the board of directors. Needham appears to like the news. Analysts at the firm boosted DCBO’s price target from 45 to 50. DCBO closed at 41.7 yesterday. BUY
Enovix (ENVX) has had a tough time lately, though shares have perked up over the last couple of sessions. Management will participate in a fireside chat with analysts at William Blair this afternoon, at 4:30 PM ET. We should hear an update on when the high-volume production line will achieve Site Acceptance Testing (SAT) and will begin sample production, which was previously expected by the end of this month. BUY
FTAI Infrastructure (FIP) dipped with the market, and especially energy stocks, last week but has found support near the 8.0 level and is moving higher this week. There’s no news to report, even though expansion projects continue at a number of the company’s properties. Revenue should grow by almost 60% between 2024 (estimated revenue of $365 million) and 2026 (estimated revenue of $575 million). Adjusted EBITDA profitability should expand even more, by nearly 90%, from $150 million to $284 million. BUY
Mama’s Creations (MAMA) reported Q2 results on Tuesday after the close, and I reviewed the results in yesterday’s Special Bulletin. Shares were down a good amount early in the day then came back as the market regained its composure after an initial negative reaction to the no-surprises CPI inflation report at 8:30 AM ET. MAMA is still a buy. BUY
RxSight (RXST) dipped to the 51 area last week, which is also where the stock’s 200, 50- and 25-day moving average lines converged (roughly). The stock has firmed up this week, possibly due in part to commentary at both the Wells Fargo and Morgan Stanley healthcare conferences, but also due to broader market strength. RxSight is disrupting the cataract surgery market with the first, and only, FDA-approved intraocular lens (IOL) technology that lets doctors customize a patient’s vision after cataract surgery. BUY
TransMedics Group (TMDX) picked up another plane (for $14.4 million) last week, bringing the total fleet up to 18 aircraft. Shares found support late last week/this week near 136 (level of support from July as well) and are now back above 150. The rather quick three-day decline from 165 to 140 early last week wasn’t (as far as I have learned) due to anything specific with the company. Hold a Quarter
Weave (WEAV) had a great run going in July and August but ran out of gas near 11.5 (above major moving average lines) then pulled back almost to the 10 level. At this point the stock still looks “weak but not broken,” and I think it will perk up if the broader software group can regain its composure after a few tough weeks. It has seemed that software has done well when talk of rate cuts gets into the headlines. With the FOMC meeting next week, this should be a plus for WEAV near term. BUY
Zeta Global (ZETA) just had a very quick dip to the 25 level but has maintained its poise and seems to want to bust out to new highs above 27.3. The company just announced its fourth annual Zeta Live 2024 Conference lineup will include keynotes from Shaquille O’Neal, Simone Biles, Michael Milken, Dr. Deepak Chopra, and Tiffany Haddish. The event happens in New York City on September 26. 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.
Currently Open
| Ticker | Stock Name | Date Bought | Price Bought | 9/12/24 | Profit | Rating |
| AORT | Artivion | 6/5/24 | 23.3 | 24.8 | 6% | Buy |
| AVPT | AvePoint | 9/5/24 | 11.6 | 11.9 | 2% | Buy |
| DCBO | Docebo | 12/7/23 | 44.6 | 42.7 | -4% | Buy |
| ENVX | Enovix | 10/6/22 | 20.4 | 9.1 | -55% | Buy |
| FIP | FTAI Infrastructure | 8/1/24 | 10.2 | 8.7 | -14% | Buy |
| MAMA | Mama’s Creations | 7/3/24 | 7.2 | 8.1 | 13% | Buy |
| RXST | RxSight | 3/7/24 & 3/28/24 | 52.7 | 54.9 | 4% | Buy |
| TMDX | TransMedics Group | 7/7/22 | 34.1 | 150.8 | 343% | Hold A Quarter |
| WEAV | Weave Communications | 1/4/24 & 5/9/24 | 10.1 | 10.4 | 3% | Buy Second Half |
| ZETA | Zeta Global | 5/2/24 | 12.6 | 26.7 | 113% | Buy |
Copyright © 2024. All rights reserved. Copying or electronic transmission of this information without permission is a violation of copyright law. For the protection of our subscribers, copyright violations will result in immediate termination of all subscriptions without refund. Disclosures: Cabot Wealth Network exists to serve you, our readers. We derive 100% of our revenue, or close to it, from selling subscriptions to our publications. Neither Cabot Wealth Network nor our employees are compensated in any way by the companies whose stocks we recommend or providers of associated financial services. Employees of Cabot Wealth Network may own some of the stocks recommended by our advisory services. Disclaimer: Sources of information are believed to be reliable but they are not guaranteed to be complete or error-free. Recommendations, opinions or suggestions are given with the understanding that subscribers acting on information assume all risks involved. Buy/Sell Recommendations: are made in regular issues, updates, or alerts by email and on the private subscriber website. Subscribers agree to adhere to all terms and conditions which can be found on CabotWealth.com and are subject to change. Violations will result in termination of all subscriptions without refund in addition to any civil and criminal penalties available under the law.
