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In today’s note, we discuss the recent earnings reports from Berkshire Hathaway (BRKB), B2Gold (BTG) and Kopin (KOPN), among others. We’re also making a new addition to the portfolio in the form of YETI Holdings (YETI).

WHAT TO DO NOW: Remain optimistic, but continue to pick your spots. Most of the evidence is positive, but the action among growth stocks is good but somewhat mixed, with many names acting great but some hitting air pockets and lots hitting resistance near prior highs. In the Model Portfolio, we’re doing a little reshuffling tonight—we’re going to sell one-half of DraftKings (DKNG) and sell one-quarter of Uber (UBER), but we’re also going to start another half-sized stake in On Holding (ONON). We’re also placing Pulte (PHM) on Hold. We’ll still have about 23% in cash after these moves. Details below.

The auto insurance market has been in a deep freeze since the middle of 2021. But now it’s thawing ... maybe even shifting into growth mode. That means huge potential for companies with direct access to the market.

That’s where today’s idea comes in. It’s a micro-cap internet company that offers unfiltered exposure to the auto, home and renters’ insurance markets.

All the details are inside the February Issue of Cabot Small-Cap Confidential.

Half of all people need cataract surgery. But even though messing with your eyes is a massive decision, the Big 3 MedTech players in this market don’t have the best solution out there.

This is where today’s company comes in. It has developed cutting-edge technology that drives better outcomes for patients needing cataract surgery. The key? Its lens can be customized once in the eye!

All the details are inside the March Issue of Cabot Small-Cap Confidential.

I’m excited to share a couple of enhancements to Cabot Early Opportunities —improvements designed to sharpen our focus and better help you stay on top of the stocks we own.

This week was all about the Fed. But those of us watching small caps noticed some major news too – the S&P 600 has broken out to its highest level in just over a year.

The catalyst was the Fed’s fully expected 25 bps cut yesterday. It was less of a hawkish cut than expected and included a commitment to buy $40 billion in short-term Treasuries to ease money-market strains that emerged after halting balance-sheet runoff.

Prior to that announcement, the index was toying with a breakout, but afterward it shot up and closed 2.4% higher on the day.

WHAT TO DO NOW: Remain bullish, but continue to keep some of your powder dry. The market remains in a solid uptrend, but more indexes and stocks have been stalling out. To be fair, we are seeing some growth names finally kick into gear, but we still think it’s best to ease off the accelerator a bit as we see how earnings season goes. In the Model Portfolio, we sold Uber (UBER) and bought a half-sized stake in Oracle (ORCL) on a special bulletin Tuesday; tonight we’ll make one small move, adding another 3% position to Rubrik (RBRK), which appears to be emerging from its slumber. We’ll still hold around 30% cash after these moves.

WHAT TO DO NOW: From a top-down perspective, there’s plenty of good news from the secondary evidence and our Cabot Tides is very likely to turn positive tomorrow, which is another good sign. That said, individual stocks remain very tricky, with lots of selling on strength and poor earnings reactions among names we own or have been watching—that’s not a reason to be bearish, but we advise going slow until we see more real breakouts. In the Model Portfolio tonight, we’re jettisoning our small stake in Argenx (ARGX), which has fallen apart this week pre- and post-earnings, but we’ll add two new half-sized positions: Halozyme (HALO) and GE Aerospace (GE). That will leave us with around 70% in cash—we’d like to put more cash to work but will wait for names to emerge instead of forcing the issue.

WHAT TO DO NOW: Continue to lean bullish, but pick your spots. Our intermediate-term indicators remain bullish, and the market’s consolidation so far has been tight and quiet, which is a plus. Leadership remains good-not-great, with many names acting well but also plenty of wobbles and some selling on strength, too. All told, we’re content to follow the playbook we’ve been using, adding as names emerge and averaging up if they start well. Tonight, we’ll fill out our position in Snowflake (SNOW), adding another half-sized stake, but we’ll hold 31% or so in cash and see how things go from here.

Market continues to climb a wall of worry. I don’t know if this is the last hurrah of the bull market. A final push before a major retreat. But I do know that we should be mindful of the risks out there.

In this Month’s Issue of Cabot Early Opportunities I reveal a few tips to help you buy into IPOs at reasonable prices and we look at some compelling data that suggests the 150 to 180 day period after IPO just might be one of the ideal times to buy.

We also go inside five companies that look great right now, including a few software stocks, a consumer goods company and a MedTech stock that’s flying under the radar now, but not for long!

In the January issue of Cabot Early Opportunities, we take heed of the improving market breadth and dig into five companies from different industries that look compelling now.

Our top pick this month is a small-cap oil and gas equipment company that’s a leader in the offshore market. I also feature an online retailer specializing in the luxury market, an emerging MedTech name, a customer experience specialist and an online learning marketplace that’s poised to recover nicely.

As always, there should be something for everyone in this month’s issue!

Today, there are two rating changes for portfolio stocks. And, news on three other stocks.

In the January issue of Cabot Early Opportunities, we take a look at updates within our portfolio then dive into five stocks from markets ranging from defense to cybersecurity to the blooming IT infrastructure market.

As always, there’s something for everybody!

Current Market Outlook


Last week’s issue was titled “Next Few Days Should be Key,” and we think they were—in a bullish way. The market’s strong snapback to new highs (in the indexes and many leaders) made the prior dip look like a shakeout, which generally bodes well. That said, the action didn’t erase all the yellow flags out there, either, as sentiment is bubbly, many stocks are extended in time and price and, most important, tons of names are set to report earnings in the days ahead, which will be key for the intermediate term. Don’t get us wrong, we’re encouraged, but we still think it’s best to pick your spots on the buy side and trail your stops (and book some partial profits here and there) as opportunities arise. We’ll move our Market Monitor back up a notch and see how things go from here.

This week’s list is brimming with strong names, including more than a few that reacted well to earnings last week. For our Top Pick, we’ll go with Dynatrace (DT), which has just gotten going from a multi-month structure and looks ready for a sustained advance.

Stock Name	Price	Buy Range	Loss Limit
Align Technology (ALGN)	602	585-605	525-540
Bill.com Holdings (BILL)	179	170-177	150-154
Canada Goose Holdings (GOOS)	42	40-42.5	35.5-37
Dynatrace (DT)	56	53-56	47.5-49
PayPal (PYPL)	282	267-277	240-246
Pinduoduo (PDD)	188	178-186	160-164
SM Energy (SM)	12	10-11	8-8.8
Snap Inc. (SNAP)	64	60.5-63.5	53-54.5
Tapestry, Inc. (TPR)	39	35-37	31.5-33
Zendesk (ZEN)	156	150-155	138-141