It’s been just over a week since the first Issue of Cabot Early Opportunities became available and I’d first like to thank all of you for jumping in early, and for the loads of positive feedback I’ve received. Thank you.
Second, it’s time to do a quick update on the five stocks featured in the first issue. Not that a ton has changed lately. But, still. It’s been another wild week in the market with all the impeachment talk and the ongoing trade war rhetoric, and we do have a few company-specific updates to discuss.
I’m pleased to say that while we’re not in the black on all the stocks in the first Issue, we are up modestly on average, pulled higher mostly by Arco Platform (ARCE) which is up around 9% over the past week. Dynatrace (DT) is the biggest detractor to overall performance, but the modest dip of just 3% there isn’t anything to lose any sleep over.
Finally, one quick housekeeping note. Some of the marketing messages that went out for Cabot Early Opportunities erroneously stated that we would be doing regular Weekly Updates. That’s not the case. While we do have a set schedule for Issues, we don’t have a firm schedule for updates.
That’s not because we want to leave you hanging! It’s because we’ve made the choice to use Special Bulletins, like this one, to relay relevant news. The timing of those will be determined by news flow; if there’s nothing going on, they’ll be more spaced out. If there’s a lot going on, they’ll be more frequent, perhaps several in the same week.
So remember, moving forward the monthly Issues are the main vehicle for getting new ideas. Special Bulletins will be delivered on an “as relevant” basis, to fill that critical role of putting important information in your hands when you need it and can act on it, not on a set day of the week.
As always, if you have a burning question, just email me. My email address is: tyler@cabotwealth.com
Now, on to a few quick updates, none of which have any impact on the ratings for the first five stocks, which I continue to keep at “buy”.
Arco Platform (ARCE) was in the news this week, not because of any big product development or M&A activity, but because its founders have become “billionaires” due to the huge growth of the company! The story showed up in Bloomberg and wasn’t exactly a hard-hitting piece. Still, there are some interesting tidbits about Arco founder Ari de Sa Cavalcante Neto and his father, Oto de Sa Cavalcante, who together hold a 54% stake in the company. They should continue to be happy this week given the recent pop in the stock, which has recently jumped from a September low of 40.65 to over 50.
Digital Turbine (APPS) was the September Issue’s Top Pick and shares are essentially flat over the last week. There’s been no news to speak of and the stock is holding above its 50-day line. It’s still looking good.
Kornit Digital (KRNT) is just 3% off its all-time high and also looks good. Management of the digital printing technology company just announced that France-based Brodelec purchased and installed Kornit’s Presto S system for roll-to-roll pigment-based textile printing. The equipment will allow Brodelec to print custom designs on fabric extremely quickly. It’s not a groundbreaking announcement, but a good reminder of what Kornit is doing out there around the world.
Dynatrace (DT) is a recent IPO (it went public in August) and the IPO lockup is still in place so this is one of those stocks you don’t need to rush out and load up on right away (as I wrote in the first Issue). Dynatrace was spun out of Thoma Bravo, which continues to own over half of shares outstanding. The business just completed a transition to a subscription business model and should become a more valuable asset as a pure-play seller of application performance monitoring (APM) software. No new news.
Lightspeed POS (LSPD.TO) just announced the launch of Lightspeed Retail 3.0, a dedicated app for iPads that introduces three new tabs; Profile, Sales History and Retail Manager, along with a host of other improvements so retail salespeople and managers can do their jobs better and more efficiently. Speed, accuracy and ease-of-use are the name of the game when you’re behind the counter and have a line of customers waiting to check out! I like it.