January 30, 2025

Small caps are up a very, very small amount over the last week. In fact, the S&P 600 SmallCap Index has hardly moved over the last five sessions.

I think that’s remarkable given everything that’s gone on lately.

The DeepSeek drama inspired a truly magnificent wipeout for the broad market on Monday. And we had an FOMC meeting yesterday that barely registered on the S&P 600.

Granted, the insulation from the DeepSeek-driven decline is partially thanks to the small-cap index having totally different sector exposure than either the S&P 500 or Nasdaq.

And the Fed did exactly what was expected by holding rates steady (next cut still expected in June). So there haven’t exactly been a lot of surprises that directly impacted small caps since last Friday.

Still, if I’m an investor looking around the market for places to put money to work and I see the relative resilience of the small-cap index (Russell 2000 +0.90% today vs. Nasdaq -0.75%), and maybe I’ve also seen more and more headlines touting upside potential in the asset class in 2025, I’m probably tempted.

Maybe even doing some buying.

I’m not going to predict when small caps will become the “it” asset class again. But I will say that when they do it will probably sneak up on a lot of investors who will need to chase the index. And that will drive a lot of individual stocks, which we will own, meaningfully higher.

We’re doing fine with our portfolio at the moment. But, naturally, I’d like to do better. That extra juice from a combination of institutional and retail buying just hasn’t kicked in, yet.

The chart below from Bank of America shows what I mean. It’s a couple weeks old, but as you can see, small-cap (as measured by the Russell 2000) ownership is low relative to history.

I’m looking forward to when the real buying begins.

Recent Changes
None

Updates

Alkami Technology (ALKT) has moved higher over the last two weeks and the last three days. The company just announced it will host its annual conference for financial institutions, Alkami Co:lab 2025, between March 31 and April 2 in Nashville, TN. Keynote speaker will be Jason Dorsey, researcher, author, and speaker known for his expertise in generational trends, particularly regarding Millennials and Generation Z. BUY HALF

Expected Earnings Date: February 20

Artivion (AORT) is up modestly from last Thursday’s close and just a hair from its all-time high. On Tuesday the company announced data from AMDS PERSEVERE trial showing 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 the end of the year), which was recently granted a Humanitarian Device Exemption (HDE) from the FDA. BUY

Expected Earnings Date: February 13

AvePoint (AVPT) announced on Friday that the company will pursue a dual listing on the Singapore Exchange. Not major news but interesting. Shares have been creeping back up towards the all-time highs from December. HOLD

Confirmed Earnings Date: February 27

Docebo (DCBO) remains flatlined near its 200-day line and 42.5 price level. Looking for the stock to get back closer to 50 where it was looking super solid, until mid-December. The company has announced five new product releases this year, with the first one coming in late February, shortly before the expected earnings date. Also in February, the company’s CFO will wrap up his stint with DCBO. As I stated last week, the current price still looks like an attractive entry point for a stock that enjoyed a lot of momentum last fall. BUY

Expected Earnings Date: March 6

Enovix (ENVX) stock has been acting well lately, supported somewhat by bullish commentary from JP Morgan analysts who have it listed as one of the top two Clean Tech stocks for 2025 (EVGO is the other one). It also helps that the company has recently announced the successful completion of Site Acceptance Testing (SAT) for its high-volume manufacturing line at fab2 in Malaysia, as well as a prepaid purchase order for silicon batteries from a Silicon Valley AI technology company, rumored to be Meta (META). BUY

Confirmed Earnings Date: February 19

FTAI Infrastructure (FIP) has been struggling lately, possibly due to speculation about the future of clean energy investments (of which FIP has several) given the knee-jerk reaction to some of Trump’s seemingly anti-clean energy executive orders. It’s worth mentioning that we still don’t have any major bank analysts covering FIP, which means not a ton of vocal support for the stock out there when the price trend is soft. This morning the company filed an 8-K disclosing that its Long Ridge Energy subsidiary intends to launch a $500 million senior secure note offering (due 2032). The proceeds, along with a previously announced $500 million senior secured term loan, will go toward paying off almost $600 million of existing loans, exiting a few electricity sale derivative contracts and entering new ones (pricing has gotten more favorable for FIP lately). This financing should be completed at rates more favorable to FIP than the rate on previous loans, though the exact rate has yet to be determined. BUY

Confirmed Earnings Date: February 27

Mama’s Creations (MAMA) will host a virtual Investor Day presentation on Wednesday, February 12. Shares have pulled back a little this week after revisiting the 8.0 level in the days after management spoke at the ICR conference. Construction costs are behind the company and the focus is on growth. BUY

Expected Earnings Date: April 23

Peloton (PTON) has been dribbling lower lately. However, we have a new CEO, Peter Stern, who joined on January 1 and we’ll get our first major update from the company under his leadership on February 6. BUY HALF

Confirmed Earnings Date: February 6

Perpetua Resources (PPTA) continues to act well and the little dips find staunch support at the stock’s 50-day moving average line. We haven’t seen a breakout to new highs above 13.2 however. Last week I discussed management’s commentary at the Maxim Group Mining Conference. The only incremental news this week is that management issued a press release voicing support for Idaho Governor Brad Little’s Executive Order on the SPEED Act, which stands for “Strategic Permitting, Efficiency, and Economic Development.” The measure establishes a SPEED Council to improve coordination among state agencies, reduce permitting delays, and drive forward projects that promote energy independence, national security, and economic growth. In other words, Perpetua wants to get things going quickly, and the SPEED Council may help. BUY HALF

Expected Earnings Date: March 14

Weave (WEAV) is one of those sleeper small caps that’s always right there but doesn’t often give us much to talk about. That’s fine by me. The stock is trading at four-year highs. 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.

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