February 13, 2025

Small caps have underperformed since last Thursday with yesterday’s selloff pushing the index to the lowest level since mid-January.

The main culprits are yesterday’s slightly hotter-than-expected CPI report, concerns about tariffs (carveouts expected) and an uptick in bond yields. Yesterday the 10-year yield jumped back to 4.64%, a three-week high.

Following the CPI print, Fed Chair Jerome Powell said there’s more work to be done on inflation. Rate cut expectations have been pushed out further, with the next cut now not expected until December.

This morning’s PPI print also came in slightly warmer than expected, though within 15 minutes there hasn’t been much impact on futures, which signal a roughly flat open for the major market indices.

From last Thursday through yesterday’s close, the S&P 600 SmallCap index is down 2.7%, led by outsized declines in consumer discretionary and tech. Small-cap staples, energy and utilities, have been the most resilient, falling less than 1% each.

In comparison, the S&P 500 Index is down just 0.5%, with utilities, energy, and tech all up modestly and consumer discretionary the biggest underperformer, down 2.8%.

Gold continues to hit record highs, providing support for our position in Perpetua Resources (PPTA).

Given that it is earnings season, there’s a decent amount of influence on these sector returns from sector-heavy reporting.

Stepping back from all the earnings and Trump administration-related noise, I’m impressed by how resilient the broad market has been. If I had to flag two reasons why, I’d go with the administration’s focus on getting the 10-year yield down and getting a handle on the federal deficit.

While it’s early days for sure and there is a ton that could be said about the pros and cons of what’s happening, and how, the market is dealing with it relatively well, for now.

Recent Changes
None

Updates

Alkami Technology (ALKT) pulled back over the last two days but should get a little boost today given that peer Q2 Holdings (QTWO) delivered a better-than-expected Q4 result after the close yesterday that featured a solid quarter for bookings. Alkami is growing considerably faster than Q2. The company will report next Thursday. BUY

Expected Earnings Date: February 20

Artivion (AORT) has confirmed its earnings report date will be a week from Monday, on February 24. No news since the update on the AMDS PERSEVERE trial from a couple weeks ago. The data showed that, one year following AMDA implantation, there was sustained benefit in terms of minimal new occurrence of stroke, renal failure requiring dialysis, or myocardial infarction. Follow-up CT scans suggest AMDS prevents DANE tears, which typically occur in up to 70% of patients following hemiarch repair without AMDS. Translation to all this: it’s good news. Data from this study will be used to support Artivion’s upcoming application to the FDA for premarket approval of the AMDS (expected by end of the year), which was recently granted a Humanitarian Device Exemption (HDE) from the FDA. BUY

Confirmed Earnings Date: February 24

AvePoint (AVPT) hit a new all-time high last week and just launched an updated version of its AI-powered AvePoint Elements platform for managed service providers (MSPs). HOLD

Confirmed Earnings Date: February 27

Delcath (DCTH) is our newest addition, added just last week. The company has developed an innovative system for whole-organ therapy. It is currently focused on liver-dominant cancers. The company’s targeted, whole-organ treatment system delivers a high dose of a chemotherapy agent directly to the liver, which is isolated from the rest of the patient’s vascular system. It gained FDA approval for the treatment of metastatic hepatic dominant uveal melanoma (mUM) in August 2023. This is the first and only FDA-approved whole-liver directed therapy. Delcath management thinks HEPZATO can become the U.S. market leader for treating mUM. Leadership believes HEPZATO has the potential to treat several other cancers in the liver as well, and two Phase 2 trials should begin this year. Delcath is in the early stages of commercializing its technology, so it is in the supernormal stage of revenue growth. On January 13, management pre-released Q4 2024 results that surpassed expectations. Management said Q4 revenue should be about $15.1 million, roughly 21% higher above expectations. Implied full-year 2024 revenue is $37.2 million (+1,671% over 2023). BUY HALF

Confirmed Earnings Date: March 6

Docebo (DCBO) continues to trade sideways near its 200-day line and the 42 price level. There hasn’t been any momentum since news broke in early January that the company’s CFO will be moving to another company on February 28. With that date fast approaching we should soon hear how the CFO search is going and how long interim CFO Brandon Farber (current SVP of Finance) will be in the role. The company has announced five new product releases this year and will report Q4 results in three weeks. BUY

Expected Earnings Date: March 6

Enovix (ENVX) will report Q4 results next Wednesday. Most revenue in the quarter is likely to have come from Routejade with some contribution from customer sampling. There is potential that customer samples could be delivered in the second quarter, setting up orders and modest revenue in the back half of the year ahead of a bigger ramp in 2026. There will surely be questions about the unnamed Silicon Valley AI company that made the recent purchase order, but I expect management will say they can’t disclose the name. We’re also looking for an update on the CFO position after current CFO Farhan Ahmad departed for a job at Intel (INTC). BUY

Confirmed Earnings Date: February 19

FTAI Infrastructure (FIP) completed its previously announced refinancing for Long Ridge Energy, raising $600 million ($100 million more than previously estimated) of 8.75% senior secured notes due in 2032. Combined with the previously announced $400 million senior secured term loan this debt financing will be used to pay off around $600 million in existing loans and for general corporate purposes. FIP stock hasn’t done as well as I expected when we jumped into it but with numerous expansion projects in its various businesses we should see considerable revenue, adjusted EBITDA and adjusted EPS growth in 2025. The stock is currently paying a 1.8% dividend. We’ll get all the details on the current state of the business in two weeks when Q4 earnings are reported. BUY

Confirmed Earnings Date: February 27

Mama’s Creations (MAMA) held a virtual Investor Day yesterday. The prepared-foods-focused company has cash in the bank, positioning it to make acquisitions to supplement organic growth. Management says they’d like to eventually get to $1 billion in annual revenue (2024 revenue should be about $120 million) and get half of that growth through acquisitions. Management said the new relationship with Walmart (WMT) is going well with two SKUs selling through roughly 2,000 Walmart stores, roughly 25% more locations than at the launch date. Mama’s also landed in Sheetz, the convenience store chain, with first deliveries expected by the end of February. Construction and disruption at the Farmingdale facility is now done, adding 10,000 feet of production capacity. Management is now looking at its East Rutherford space and working with an industrial engineering firm to take a 360-degree look at all its assets and figure out the best expansion plan considering inbound and outbound transport, manufacturing and inventory management. Management is looking to deliver double-digit growth in 2025 with gross margins in the high 20% area and growing from there. BUY

Expected Earnings Date: April 23

Peloton (PTON) stock has acted well since last week’s earnings report and a number of analyst upgrades. We’re up about 14% on the first half of our position. BUY HALF

Earnings: Done

Perpetua Resources (PPTA) continues to act well, with modest dips finding support at the stock’s 50-day moving average line. The only news in the last couple of weeks has been some noise around rare earth supply chain disruptions given Trump’s tariff war, which supports the bull case for PPTA. The price of gold continues to hit record highs. BUY HALF

Expected Earnings Date: March 14

Weave (WEAV) stock has looked fantastic lately as it trades at multi-year highs going into next Wednesday’s Q4 earnings report. Consensus estimates call for revenue of $53.2 million (+16.5%) and adjusted EPS of $0.02 (up from -$0.01 in Q4 2023). The company has a history of beating expectations. Looking into 2025, the current expectation is for WEAV to grow revenue by 16.1% to $235.7 million and deliver EPS of $0.11, up from $0.04 in 2024. Naturally, we’re looking for management to signal results should be better than that. BUY

Expected Earnings Date: February 19

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

Copyright © 2025. 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.