Despite more grumblings out there about how “we are due for a pullback,” stocks continue to hold up. In fact, many growth stocks have done far better than that and are jumping higher on almost a daily basis.
Are things getting a little warm out there? Yes, it feels like it. It may be that investors thought Treasury yields would be up more significantly by now (thanks Delta for keeping a lid on these), that tech stocks are seen as a good bet with Covid/fall looming (it worked before) or that the influx of money from younger investors is skewed toward more aggressive growth-type companies.
While it’s tempting to try there’s no way to package up what’s going on in the market and put a neat little bow on it. There are just too many moving parts to do so on a daily or weekly basis.
The overall message now is that we’re still in a bull market and things seem to be getting stretched in some areas, but not in others. It’s all about managing position sizes and trying to put new money to work where it has the highest likelihood of generating gains over your desired time horizon.
Turning to our portfolio, news has dried up in the wake of earnings season, which is to be expected. Our portfolio is flat over the last week and up 5% over the last two.
The biggest splash lately has come from CS DISCO (LAW), last week’s new addition. Notes on that stock, as well as all other positions, are below.
Recent Changes
None
Updates
Accolade (ACCD) made a quick trip down to 41 but has bounced back up into the high 40s over the last three weeks. Nothing new to report. BUY
Arena Pharmaceuticals (ARNA) has been rallying since falling from 60 to 45 in August. With the recent jump, shares are back near 60 today. I’ve had at buy throughout since the potential here isn’t really reflected in the weekly chart – it’s all about drug approvals which will most likely have an impact immediately upon FDA approval/rejection. BUY
Avalara (AVLR) broke above previous highs last week but hasn’t opened up any white space just yet. Nothing new to report on. BUY
Cerence (CRNC) is moving sideways on no new news. Keeping at buy, but watching the 100 – 104 zone closely. BUY
CS DISCO (LAW) has only been with us for a week but what a week it’s been. We jumped into the stock the day it was set to report Q2 results (its first report as a public company) and the report was solid – exactly what we wanted. Shares didn’t do much the next day (last Friday) but jumped 10.5% on Monday. We’re currently up around 15% on our half position. Recall I advised we start with a half position because this is a recent IPO, we bought the day earnings came out (something we very rarely do) and because in front of us lies that period where IPO stocks often lose momentum and need to get through lockup expiration and likely secondary offerings (usually non-dilutive as it is early investors who are shedding some shares). While there’s no guarantee LAW will be like most other IPOs, the likelihood of some bumpiness in the near term offsets some of the bullish long-term potential for the stock, keeping us honest and feeling like building a half position (give or take a little) is still the right strategy. If we look out a few years I think LAW could be a big winner for us. BUY
Everbridge (EVBG) has rallied back near overhead resistance in the 160 area, though if we want to get technical a real “breakout” would need to clear 179 since that was the high point of the intra-day spike back in February. BUY
Fiverr (FVRR) has been down and out since reporting in early August but we’re starting to get into what could be a stronger season for the platform. Recall that I thought management was a little conservative on their guidance. Maye I’m wrong, but for now I’m leaning toward thinking FVRR is a buy here. BUY
Inspire Medical Systems (INSP) recently put out a press release saying that the CMS panel unanimously approved a recommendation to increase the previously proposed reimbursement for Inspire procedures performed in the ambulatory setting. This isn’t a surprise given that the previous reimbursement rate wasn’t economically feasible for providers. Still, confirmation that the CMS will review the panel’s recommendation and a final rule will be published later in 2021 helps to remove a modest overhang on the stock. INSP has been moving higher over the last three weeks and now sits 5% below its previous high. We’ll keep at hold, though a break above 252 may very well inspire an upgrade to buy. HOLD
JOANN (JOAN) was clobbered after reporting last week and lockup expiration just passed earlier this week. With the stock trading 14% below the IPO price and offering a compelling value for small-cap value investors I think it’s a buy. Having said that, clearly this stock is in a totally different category than the others in our portfolio, which are decidedly skewed toward growth. BUY
Kornit Digital (KRNT) continues to do its job, having made a series of higher highs and higher lows since a May pullback. No new news, other than a PR about the New York Fashion Week where fashion designers will showcase collections designed/made using Kornit’s sustainable, on-demand fashion production technologies. We’re up 32% since jumping in in March. BUY
On24 (ONTF) is still banging around near the bottom of the barrel. It hasn’t helped that Zoom Video (ZM) had a rough go after reporting. Still, at this price level and given the realities of the world around us I think buying/holding ONTF here will work out. BUY
Q2 Holdings (QTWO) came up a little off the August lows near 77 but we’re sticking with our hold rating. I expect a few more months of mediocre performance before investors can look into mid-2022 when, we think, deal activity should translate into more rapid growth. HOLD
Revolve (RVLV) has been choppy lately – as have many other retailers. There’s no new news and we’re fine with a hold rating for now. HOLD
Repligen (RGEN) has been on fire lately and is now up 50% from mid-July. That’s a big-time run for a stock like this, which now sports a market cap of over $16 billion. Not exactly a small cap anymore! We’ve been holding since late-2018 and are up nearly 400% over that time frame. This morning the company announced it is launching a novel protein A ligand with Navigo Proteins that overcomes some of the challenges with purification of pH sensitive antibodies and Fc-fusion proteins. If that just looks like a bunch of letters on the page don’t worry about it. The point is Repligen continues to innovate with bioprocessing technologies that helps trim time and costs for customers. HOLD
Sprout Social (SPT) was an under-the-radar story when I added it about a year ago and, other than that little hiccup where shares plunged 40% during the pandemic-induced market crash, the stock has done its job more-or-less flawlessly. I moved to hold two weeks ago because, along with several other growth stocks, it seemed to be getting a little overheated. Keep holding. HOLD
Thunderbird Entertainment (THBRF, TBRD.CA) has been a non-story in our portfolio since I added the stock in May. In some ways, that’s not a bad thing. We jumped into this Canadian-listed micro-cap production company at a time when a lot of growth stocks were pretty weak. Since then, this one has been in a consolidation phase. As we enter fall and winter people will be spending more time doing inside activities and the programs Thunderbird has created for Netflix, Amazon, Apple TV, etc. will help keep them entertained. Keeping at buy. BUY
Please email me at tyler@cabotwealth.com with any questions or comments about any of our stocks, or anything else on your mind.
| Stock Name | Date Bought | Price Bought | Price on 9/9/21 | Profit | Rating |
| Accolade (ACCD) | 8/6/20 | 40 | 49 | 22% | Buy |
| Arena Pharmaceuticals (ARNA) | 2/2/18 | 39 | 60 | 55% | Buy |
| Avalara (AVLR) | 2/1/19 | 40 | 187 | 368% | Buy |
| Cerence (CRNC) | 10/1/20 | 50 | 105 | 111% | Buy |
| CS Disco (LAW) | 9/2/21 | 57 | 65 | 16% | Buy |
| Everbridge (EVBG) | 12/2/16 | 16 | 162 | 942% | Buy |
| Fiverr Intl (FVRR) | 3/5/20 | 32 | 184 | 468% | Buy |
| Inspire Medical (INSP) | 10/4/19 | 59 | 240 | 311% | Hold |
| JOANN (JOAN) | 8/6/21 | 15 | 11 | -32% | Buy |
| Kornit Digital (KRNT) | 3/4/21 | 102 | 139 | 36% | Buy |
| On24 (ONTF) | 7/1/21 | 38 | 21 | -43% | Buy |
| Q2 Holdings (QTWO) | 4/1/16 | 24 | 88 | 272% | Hold |
| Repligen (RGEN) | 11/2/18 and 12/31/18 | 59 | 295 | 398% | Hold |
| Revolve Group, Inc. (RVLV) | 4/1/21 | 46 | 63 | 38% | Hold |
| Sprout Social (SPT) | 9/3/20 | 36 | 130 | 256% | Hold |
| Thunderbird Entertainment (THBRF, TBRD.V) | 5/6/21 | 3.8 | 3.4 | -12% | Buy |