This week’s update is both early and much shorter than normal. My little sister is getting married in Vermont in a couple days so I’m loading the car and the kids and heading north for the big event.
While I’m always in touch with the market and will reach out if anything major happens on Thursday or Friday, with all the festivities it’s quite unlikely I’ll have the quiet, alone time needed to write a full update!
So, a short and sweet update a few days early is the plan.
On to our stocks …
The good news is that, on average, our portfolio is slightly up from last Thursday’s close. Veracyte (VCYT) has jumped 7%, Goosehead Insurance (GSHD) is up 6% and Avalara (AVLR) is up 5%.
The bad news is that the trend since the beginning of September has been down. That’s hit all our stocks and cast a bit of a shadow over the broader growth stock universe. There’s no real trend out there. So even though there are small pockets of strength, the market’s just not giving us a lot to work with. This is why we have so many stocks rated hold and aren’t trying to be overly aggressive moving back in to names we took partial profits on.
Right now, there are no ratings changes.
In terms of stock-specific announcements, news flow is quiet. That’s not uncommon in the lead up to earnings announcements as management teams typically reserve the good, and the bad, for the big day.
One outlier is Veracyte, which has announced a Q3 earnings date of October 22. This should be a stock-moving event because management is sure to talk about the company’s noninvasive nasal swab test for detection of lung cancer. This is a unique genomic test that’s in development and which will be the center of a clinical data dump at the College of Chest Physicians (CHEST) annual meeting, which runs from October 18-23 in New Orleans.
Data will focus on early performance characteristics of the test, which is designed to detect lung cancer from genomic alterations in the nose. It is being developed in partnership with Johnson & Johnson Innovation. Veracyte management will also discuss data from five studies that illustrate the performance of Veracyte’s Percepta Genomic Sequencing Classifier (GSC) and Envisia Genomic Classifier (for diagnosing lung cancer and IPF). The stock is still rated buy.
In other news, Inspire Medical (INSP), last Friday’s new addition, just announced that it will release Q3 earnings on November 5. If you missed the Issue, Inspire has developed an implantable device that will help those suffering from obstructive sleep apnea (OSA). Inspire Therapy is better than continuous positive airway pressure (CPAP) and tends to have much higher compliance. The device is gaining insurance coverage across the country and management is putting together a roadmap to expand into Japan as well, where the therapy was recently approved. Management has been a little conservative on forward guidance since they don’t know exactly how the trends will evolve as the therapy moves from one that requires pre-approval to simply being approved. But overall, the big-picture trends are solid and analysts see 60% revenue growth this year.
That covers the major news of the week, thus far. As I mentioned above there won’t be a full Weekly Update on Friday. But if something material happens in the market, or with any of our stocks, I’ll be in touch.
If you have a specific question, please don’t hesitate to email me. My address is tyler@cabotwealth.com.