June 12, 2025

*Note: Your next update of Cabot Small-Cap Confidential will arrive next Wednesday, June 18 due to the market holiday next Thursday, June 19 in observance of Juneteenth.

The S&P 600 SmallCap Index hit a multi-week high on Tuesday before giving a little back yesterday.

There’s some interesting data that suggests small-cap stocks could be in for a run starting now.

According to data from Evercore ISI, small-cap stocks have done better than large caps 60% of the time in June, dating back to 1990. The odds are even better when small caps enter June underperforming, as they have for a while now.

In those instances, the data shows small caps have done better in every June.

Given that small caps remain almost 16% below their 2024 all-time high from November 25, and that that level represented a very short-lived breakout above the previous high, which was from all the way back in November 2021, this would be very welcome performance from small caps.

Given that we’re now in the 12^th year of a very long small-cap underperformance cycle, and that the typical cycle lasts about nine years, it’s fair to say small caps are extremely overdue.

Whether or not they’ll deliver this June is, of course, an open question. But I don’t think putting some money to work in a broad-based small-cap index ETF, like the IJR, is a bad call. That data is pretty clear.

On to our portfolio.

Recent Changes

Axogen (AXGN) Moves from Buy Half to Sell

Updates

Artivion (AORT) has been moving sideways since early May. The only news is that on June 17, management will speak at the Truist MedTech Conference and the Citizens Medical Devices and Healthcare Services Forum. BUY

AvePoint (AVPT) has been toying with the idea of breaking out above 20 but hasn’t committed yet. The Baird Conference (June 3) may have given the stock a little juice, but the D.A. Davidson Conference on Tuesday didn’t do much. Next up is Northland (June 25). HOLD

Axogen (AXGN) has been dribbling lower, so we’re going to cut bait here. I had been contemplating adding the second half of our position, but the company’s presentation at the Goldman Global Healthcare Conference (yesterday) has come and gone, and there’s no positive stock-moving news. Rather than throw more money at it, we’ll move on. Sell the half position. SELL

Byrna (BYRN) is our newest position and is acting extremely well, thanks to a better-than-expected pre-announced Q2 report issued soon after we added the stock. I sent out a Special Bulletin detailing the results, so I won’t rehash those today. In the last week, there’s been no new news. After giving back a little of its rally in the two days following the big upside move, shares of BYRN are moving higher again. The stock is just above 30, meaning we have a paper gain of about 13%. BUY

Delcath (DCTH) has been moving sideways on no news. Back on May 22, management stated that full-year 2025 revenue should be in the range of $94 to $98 million (consensus was $94.1 million), and soon after, HC Wainwright boosted its price target on shares from 24 to 29. BUY HALF

Enovix (ENVX) has quietly strung together a series of higher highs and higher lows since early May. The stock is back above its 25- and 50-day moving average lines, and the 200-day line, at 9.2, is just a hair above the current share price of 8.7. There’s been no company-specific news for a few weeks. Enovix remains on track to launch with its first smartphone customer by the end of this year, with first purchase order expected in the September to November timeframe. There is a second smartphone customer in the pipeline as well. Management is also pursuing coating capacity and production for the Korean defense market, which could be supported by the newly acquired SolarEdge facility. HOLD

FTAI Infrastructure (FIP) stock was upgraded to buy two weeks ago and continues to act well. It hasn’t gone up much, but it has definitely not gone down. The company’s wholly owned electric power and natural gas business, Long Ridge Energy & Power (LREP), is holding a Q1 investor call mid-morning today. Shares of FIP should reflect any meaty announcements (the stock is up to start the day). Recall that the other major news around FIP is that Nippon Steel is expected to close the previously blocked deal to acquire U.S. Steel (X). This is likely an incremental positive for FIP, which should have more flexibility to work with new customers. BUY

Hannan Metals (HANNF, HAN.CA) shares shot up as high as 1.36 last week, fully erasing the drawdown from the second week of May. They are trading around 1.15 today. We’re awaiting drill results from the first hole (HDDVA001) at Belen, which is sampling the Vista Alegre target. That hole has been completed, and the drill is working on the second hole (HDDVA002). Once Vista Alegre has been drilled, the team will move on to the Sortilegio target, then the Ricardo Herrera target, all of which are within the Belen prospect. The company is also working on more detailed sampling to define the high-grade structures recently found within an expanded zone at the Previsto prospect, which is about 20 km to the north of Belen. BUY

Natural Grocers (NGVC) stock has been trending lower since it blasted higher after the Q2 report on May 8. This is frustrating as NGVC has given back that entire rally and then some. However, I didn’t intend for NGVC to be a quick trade and fully expect shares to head north again relatively soon. There’s no fundamental reason for the decline. NGVC can be volatile at times for a grocery store stock. BUY HALF

Perpetua Resources (PPTA) stock is down about 20% today thanks to an up to $374 million public offering priced at 13.2. Management says the offering is part of a comprehensive financing plan that includes the $2 billion debt financing application with the Export-Import Bank of the U.S. and that part of this equity offering is needed to satisfy equity requirements. Management says that application is ongoing and, if successful, anticipates closing the debt financing in 2026. This is a significant offering (roughly 25% of market cap), and given that the price is about 20% below yesterday’s closing price, it makes sense that PPTA is down roughly that amount today. Clearly, the debt financing deal is a big one, and we knew PPTA has been getting low on funds, so this isn’t a huge surprise. The stock should handle it and recover, but it’ll probably take a week for the offering to work its way through. BUY HALF

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