Previous Month Summaries
Dec 2016 (contains links to all 2016 monthly posts): http://discussion.fool.com/bear39s-portfolio-at-the-end-of-2016-…
Jan 2017: http://discussion.fool.com/bear39s-portfolio-at-the-end-of-janua…
Feb 2017: http://discussion.fool.com/bear39s-portfolio-at-the-end-of-febru…
Mar 2017: http://discussion.fool.com/april-fools-suckers-here39s-the-real-…
Portfolio Performance
note that I use tickers .INX, .IXIC, and IWM to benchmark. These do not include dividends, I don’t think. If anyone can suggest tickers that do, I will switch over.
This Month
My Portfolio 5.03%
S&P 0.91%
Nasdaq 2.30%
Russell 2000 1.15%
YTD
My Portfolio 24.95%
S&P 6.49%
Nasdaq 12.34%
Russell 2000 3.12%
I’m going to switch things up a little this month. I’ll list my stocks first, and then talk about each in order of allocation.
My Current Allocations
Ticker Curr% Buy/S Mo Ch YTD Ch
TLND 9.0% + 0.3% 34.5%
TTD 8.8% 0.3% 35.0%
HDP 8.3% 6.1% 25.3%
YELP 8.3% 8.1% -7.1%
FB 7.4% - 5.8% 30.6%
XPO 7.1% 3.1% 14.4%
TWLO 7.1% + 14.5% 14.6%
SHOP 6.2% 11.5% 77.2%
HUBS 5.7% 10.7% 42.7%
STMP 5.7% + -10.3% -7.4%
SQ 5.5% - 5.6% 33.8%
WIX 4.8% NEW 21.4% 83.4%
AAXN 4.2% 7.9% 0.0%
SPLK 2.8% 3.2% 25.7%
PAYC 2.6% - 4.8% 32.4%
PSTG 2.2% NEW 7.9% -5.9%
PCRX 0.9% NEW 6.5% 39.7%
cash 3.5%
TLND (9.0%) - I first invested in Talend in February. I added in March and now again in April, and it’s grown into my largest position, though still only 9% of the portfolio. This company is on the bleeding edge of what I consider a mega-trend. They’ve carved out a niche within big data integrations by specializing in Hadoop, an expertise that will not be easily disrupted. And at the rate they’re growing, the P/S of ~8 is certainly not expensive relative to others. Here’s more about this company: http://discussion.fool.com/tlnd-32598219.aspx
March quarter earnings will be released 5/11 after the market closes.
TTD (8.8%) - The Trade Desk was a new position in February as well. In March the stock flew up and then back down, and I added a ton on the way down. In fact, it was my second biggest position by the end of the month. This month I’ve just held, as I don’t want to let this get too big, and I wanted to add to other things. This company plays in the somewhat crowded world of advertising, but it seems the way they’ve positioned themselves to work with ad agencies instead of companies placing ads has really made them a preferred source. They also don’t buy inventory but just facilitate, so they can remain completely neutral. Their growth is phenomenal: revenue grew by 70% DecQ over DecQ and 78% 2016 over 2015. And they’re profitable with a PE around 45, which given their growth, seems insanely low.
March quarter earnings will be released 5/11 after the market closes.
HDP (8.3%) - I first bought Hortonworks in January, and added in February until it ended the month as my largest position. I’ve just been standing pat since then, as an 8 or 9 percent position seems like plenty. Like TLND, they specialize in Hadoop, but where TLND does integrations, HDP takes it from there and does everything else. The SaaS business model with plenty of subscription revenue is fully in play here, and while they are growing revenue at a blistering 40%, billings are growing EVEN FASTER. Although guidance is for sub-30% revenue growth, that kind of a drop seems really unlikely given this business model. Here’s a great write-up Saul did in February: http://discussion.fool.com/hi-aj-i-have-some-ambivalence-as-well…
March quarter earnings will be released 5/4 after the market closes.
YELP (8.3%) - I’ve had Yelp since last July, and added as recently as March, but I just held steady this month, as it’s already a large position. I think we all know what Yelp does, but I didn’t realize just how steadily the company was growing until recently. They of course are known for reviews, but they’ve been branching out into transactions, and it’s going well. I highly recommend taking a look at their 4Q16 Data Sheet here: http://www.yelp-ir.com/phoenix.zhtml?c=250809&p=irol-irh… The growth has been steady and solid, and they’ve turned their focus toward profitability and are making great progress there too. The value here is tremendous, too: at a P/S just over 4, they are far less expensive than most of my stocks, even though growth is around 30%. I discussed Yelp here: http://discussion.fool.com/i-posted-the-following-on-the-yelp-bo…
In early April, Yelp spent 20M of it’s roughly 500M in cash to buy Turnstiles, a social Wi-Fi company, whatever that is. Actually, this link explains a little. See the video. https://seekingalpha.com/article/4060798-yelp-acquires-turns…
March quarter earnings will be released 5/9 after the market closes.
FB (7.4%) - This is a little company that…just kidding. I’ve had Facebook since November, and increased it a lot lately. It was my largest position last month, and I reduced it a little in April to buy other stuff. No other reason. I will say more about Facebook in the future, but needless to say their growth has been phenomenal. And at this point, the value is compelling. At a PE of just 35, a company that is taking over the world and still grows revenue at 50%+ is pretty amazing.
March quarter earnings will be released 5/3 after the market closes.
XPO (7.1%) - XPO Logistics is a company I’ve owned since 2015. They’re a logistics company that grew at a torrid pace by acquisitions and has recently settled and started working on profitability. The value is pretty crazy. Their PE has already come down to 50, but net margin is only around 1%. Imagine if they can get that to 5 or 10%! They’re expected to grow EPS by about 150% in just 2 years, and don’t think it will stop there. Here’s more about the story: http://discussion.fool.com/xpo-turned-in-another-solid-quarter-3…
March quarter earnings will be released 5/3 after the market closes.
TWLO (7.1%) - I first bought Twilio in February, and I’ve been adding. Most readers of this board are familiar with this leader in app-to-person communications. This is a stock that has garnered a lot of skepticism and was once valued almost ridiculously at 20-something times sales. Now it’s in a much more reasonable range, and I think the lingering fear is overblown. I won’t claim to understand exactly what they do, but I know they’re doing it well, because I see their growth and the friends they keep (both customers and partners). Considering their business model, including recurring revenue and the dollar based net expansion rate they’ve been running (one of the best I’ve seen: 155% last quarter), I don’t see them suddenly slowing down to 30% growth as the prevailing expectations predict.
March quarter earnings will be released 5/2 after the market closes.
SHOP (6.2%) - I’ve had Shopify in my portfolio since June. It’s been a crazy ride so far. Shopify is growing so much faster than anything else, but it’s also more expensive than anything else. Still, if they can keep up growth anything CLOSE to what it has been (near 100%), they’re still a bargain.
March quarter earnings will be released 5/2 before the market opens.
HUBS (5.7%) - I’ve had Hubspot in my portfolio since October. It grew into a top 5 position in 2016, but I reduced it in January because I just don’t know that much about them. However, I’ve become increasingly convinced of their leadership position as I hear their name thrown about in the advertising world. I’m glad I’ve held since then as it’s up 42.7% this year!
March quarter earnings will be released 5/2 after the market closes.
STMP (5.7%) - I owned Stamps.com off and on last year, but it is so volatile I let it go. After they reported yet another stellar quarter, I added it back in February. I just planned to leave it alone, but then it went from $135/share to $105/share on no news of any substance, and I just couldn’t take it anymore. I doubled my position. Then it went up to $115 or so and then right back down to $104 and I added a bit more. Volatility is awesome.
March quarter earnings will be released 5/3 after the market closes.
SQ (5.5%) - Square is another phenomenal grower than I’ve held since November. I reduced it for the first time this month just relative to my confidence level. I like it a lot, but didn’t want it to be a top 5 position.
March quarter earnings will be released 5/3 after the market closes.
WIX (4.8%) - Wix is a new position for me. It’s a company somewhat akin to Shopify that helps users create websites, and then hosts them. We’ve discussed Wix quite a bit this month. A lot has happened. Here’s the original write-up. http://discussion.fool.com/my-new-position-wix-32677125.aspx
March quarter earnings will be released 5/10 before the market opens.
AAXN (4.2%) - I started a position in Taser in March, and in April I had shares of Axon. No it wasn’t acquired – they changed their name. Their body camera and web-hosting (SaaS) business segment, called Axon, was growing like a weed, and they saw the opportunity and re-branded. They’re also doing something extraordinary: offering free cameras and a free year of service to departments that sign up! They must be really confident about their product. Anyway, it’s all exciting, but I thought I’d just hold for now and see what happens.
March quarter earnings release date has not yet been announced.
SPLK (2.8%) - I’ve held Splunk shares since December, but I reduced my position in March. Growth is a bit slower than some others, and they are getting pretty big. I still like them a lot, but thought I’d refocus some of my dollars elsewhere. In April I just stood pat.
March quarter earnings release date has not yet been announced.
PAYC (2.6%) - I’ve had Paycom since May, but I finally decided to reduce. Like Splunk, they aren’t growing as fast as some other things, but are still pretty pricey. They are profitable, which is great, and I don’t want to let them go. Just reallocated a bit. Honestly, I like all these companies I own a lot, and I’m having trouble deciding what to add to and subtract from. Hopefully they’ll all do well, and I won’t worry too much about which I owned more or less of.
March quarter earnings will be released 5/2 after the market closes.
PSTG (2.2%) - This is a company Ant mentioned recently, and I read Bert’s write ups and liked it enough to take a small position. They sell flash storage products that are part software and part hardware. Their growth has been phenomenal, but I haven’t had a chance to study them much more or write them up. I won’t be adding to my position until I do, but I thought I’d go ahead and mention them. Thanks, Ant! In addition to Bert’s article I found this one helpful: https://seekingalpha.com/article/4061662-pure-potential-intr…
March quarter earnings release date has not yet been announced.
PCRX (0.9%) - I was feeling left out of all the Biotech talk, so I got into the health care world myself with Pacira Pharmaceuticals. This was a company discussed on a recent episode of the Fool’s “Industry Focus” podcast. They have a drug called EXPAREL that can be injected when surgeries are done, and significantly reduces or eliminates the need for doctors to prescribe pain killers after the surgery. Since opiod abuse and addiction is a huge problem these days, alternative solutions have the potential to be huge too. I know a surgical physician’s assistant who told me they use EXPAREL a lot, and she said that if it is approved for more procedures it could really “take off.” We’ll see.
March quarter earnings will be released 5/4 before the market opens.
Random Thoughts and Conclusions
Adding 3 positions and not selling out of any of the 14 I had in March, I’m now up to 17 positions. That’s if you count PCRX.
I’m a little too tired from all this writing to discuss my watchlist. I never seem to buy anything from it anyway. It has actually grown, but like with TEAM or MELI, nothing ever seems like a better value than what I currently own, or like GRUB I just can’t get my head around it. And then something like Wix, which wasn’t even on the watchlist, comes along. More on watchlist stocks next month, maybe.
Currently none of the companies I’ve let grow into large positions are over 10% of my portfolio. I have let positions get much bigger in the past when I feel the immediate value is there, like with SHOP at $40 in late 2016. As Buffett says, “When it rains gold, put out the bucket instead of the thimble.” Right now I’m seeing lots of good opportunities, but none are jumping out from the pack. So I’m just reducing and increasing my positions on the margins, whenever it seems to me one thing or another is more of a bargain. Again, hopefully they all do well and I have no regrets.
With some I’ve probably increased too early just to see a stock do nothing (my top two are basically flat in April), or decreased too early when a stock still had room to run. It’s not like I can somehow time the market. It’s simply about confidence level and perceived opportunity. I just do the best I can to have as much of each company as I think the current situation warrants.
My best to all,
Bear