Summary
I’m glad to see the back of March. Goodbye winter hello spring! From a portfolio high of 39% in Feb to -8% at one point in March, it’s not been fun. In hindsight I should have been heavy trimming but it’s easy to say looking back. But it’s been a good time to revisit conviction and study my companies, it certainly tests your conviction when you still your companies in a sea of red day after day.
My background
See details here. https://discussion.fool.com/horseplayandrew-update-nov-2020-from…
Performance to date
YTD - 1.7%
2020 - 209%
January > 29%
February > 23%
March > 1.7%
Previous updates
February 2021 - https://discussion.fool.com/horseplayandrew-update-feb-2021-3476…
January 2021 - https://discussion.fool.com/horseplayandrew-update-jan-2021-3473…
December 2020 - https://discussion.fool.com/horseplayandrew-update-dec-2020-from…
November 2020 - https://discussion.fool.com/horseplayandrew-update-nov-2020-from……
October 2020 - https://discussion.fool.com/horseplayandrew-update-oct-2020-from……
September 2020 - https://discussion.fool.com/portfolio-update-from-london-uk-sep-……
My portfolio
Pinterest - 9.79%
Crowdstrike - 9.17%
Sea - 8.32%
Roku - 7.34%
Upstart - 6.85%
Fiver - 6.36%
Peloton - 6.24%
Snowflake - 6.14%
Magnite - 6.12%
Etsy - 5.02%
Twilio - 4.97%
Mohawk - 4.40%
fubo - 3.72%
Skillz - 3.67%
STPK - 3.67%
Futu - 3.30%
Lemonade - 1.87%
DermTech - 1.83%
OpenDoor - 1.22%
March 2021 Activity
I’ve done a lot of reading, youtube watching of our CEO’s this month to finesse my conviction. One of the headline moves was reducing my Etsy position. I brought to the board my concerns about the comments made on the last earning call. I will sit and wait to see how their numbers start to play out for 2021 and would be more than happy to buy back in as there is a lot to like about Etsy.
As I said in my Feb 2021 update, I think it’s a fair assumption to watch our companies appreciate in share price in line with their revenue growth. Valuations have been reset and we now have a solid base for our world class companies to grow from. I tried to be really focused on the companies that have the best shot at maintaining their hyper growth.
SOLD
Teladoc I had already reduced my position considerably in February and I let the rest go somewhere in the $230 range. I agree with posters who have had said they are complicated to follow and there is a lot of uncertainty in the short term. I will again look to revisit on positive future earnings.
Cloudflare I didn’t want to let it go as I’d only recently bought this position but when I was looking to raise cash for other positions they were the prime candidate, I’m taking a calculated risk that until they move north of 50% revenue growth, they won’t show a considerable breakout. Still excited about the long term story. The fundamentals are so strong here though so I may regret this.
HAAC So this was a bit of an experiment, it had the reward of explosive growth if the ex livongo guys announced yet was protected at a net asset value because it was a SPAC. It kind of worked, they didn’t get beaten up as much as our growth stars and I used this as a cash position to buy elsewhere. I will look to reenter in the future as I’d hate to miss the pop when they announce.
NGA I had ro raise money for buys elsewhere and when I ranked my conviction, these guys were at the bottom. Will keep an eye on.
BUYS
Snowflake I’ve been watching them, along with a lot of people on Sauls board by the looks of it, for a while now. I couldn’t resist opening a position after its big drop. I’m really excited at the use cases and potential for Snowflake to grow at hyper growth for many years to come. The CEO is world class and their latest earnings report further increased my conviction.
Twilio The recent volatility led me to finally opening a Twilio position. I consider Twilio to be the ultimate digital transformation position. Companies are just getting started in moving their communication into the digital world, and Twilio has fast become the leader in this space. I really like their move into marketing so they become the omni-channel, single customer view provider. I want to see them keep up the 50% growth.
Upstart My lone portfolio star in March! I’m super impressed with the CEO and founder, this gives a good flavour: https://www.youtube.com/watch?v=vfVcp3Mq-_A Their guidance for 2021 blew the price out of the water, guiding for $500m (up 115% YOY), and that’s without any moves into auto insurance factored in. They acquired https://getprodigy.com/ which seems like a really smart move to quickly integrate into the car loan space. I need to see more bank partners signed and less revenue concentration in order to increase conviction but I’m really excited to see what they can do. I trimmed otherwise my position was going to be too big but I’m happy and holding now.
Mohawk Group A 2.0 version of Procter & Gamble, exploiting the growth of e-commerce, by consolidating the best reviewed products sold on marketplaces (mainly Amazon for now) and using their tech focused operations, supply chain and marketing to drive margins and sales. Their AIMEE software is a strong competitive advantage to identify products to acquire and streamline operations. Their strategy is accretive M&A so it’s a model I need to get comfortable with. This is a speculative position but there are a lot of tailwinds that could lead to some explosive growth.
Futu A Chinese Robinhood. I know most board members don’t invest in China so I’ll keep it short. Insane growth on both the top and bottom line. Last four quarters of earnings growth: 240% 327% 1,826% 1,111%, revenue was up 212% in 2020. Lots of risk here but after its big drop I couldn’t resist.
I also added to several positions: Sea, Roku and Peloton.
My companies
Pinterest - No real news on Pinterest. It held up relatively well in the big sell off.
Crowdstrike - Another stellar earnings report. Still in the top league for me and excited to see them keep up the growth this year.
Sea Delighted with their earnings report and continued push into South America. They are very much following the Tencent playbook with new division lines like AI and venture, and their continued push into digital payments and banking. They are now in the top tier of conviction for me and I’ve increased my position.
Roku - I’ve added to my position because I really liked their earnings and see the CTV advertising tailwinds hitting hard over the next 1-2 years. International expansion is something I’m keeping a close eye on because they need it in order to keep up the hyper growth.
Upstart discussed above
Fiverr Nothing really to share, they continue to execute and move into the Enterprise market. Happy and holding.
Peloton - Lots of news for Peloton this month with some acquisitions announced, showing their intent to continue to digitise fitness at home. They have also announced expansion into Australia for the 2nd half of the year, registered the brand in China, and done a deal with Adidas on their apparel. Oh and delivery times are being reported to be coming down. Lots to like here and I’ve added to my position when it dipped to the $100 mark.
Snowflake Discussed above.
Magnite - I trimmed a little because I am a little concerned to hear about Disney building their own adtech platform. This will take time but hopefully Magnite can grow enough over the next 1-2 years with other publishers as to be not so reliant on them. They need to show that CTV revenue can really add some juicy numbers to the top line.
Twilio Discussed above.
Etsy - As I said above, I’ve reduced my position size. There were too many warning signs on the earnings call of a dramatic slow down in growth. I could be wrong and I’ll be ready to buy back if Q2 guidance looks positive.
Mohawk Group Discussed above
FuboTV They continue to work on their betting expansion. It’s super early days on this and won’t start to contribute until 2022 but if they can keep signing betting licence deals with states and get a product live soon they will continue the momentum. They also need to show strong subscriber growth as the year goes on. I reduced my position size to reflect my conviction level, with very low margins and competition, I consider this is a high risk position but with potentially a lot of upside.
Skillz Skillz has been beaten up hard over the past month. They’ve certainly tested my conviction with lots of doubts around their stalling MAU’s and heavy marketing spend. I read their earnings call again and it excited me enough for the long term of what is possible here to hold.
STPK Looks like the merger has been pushed back to April. Holding and excited to see what they can do in 2021.
Futu Discussed above
Lemonade Beaten up hard. I actually sold early in the month and bought back at a fairly decent discount. I’m still bullish for the long term. Keeping the position size small until they prove out more of the story.
DermTech - Q4 really confirms how early this story is. Their revenue is tiny. But the sequential quarter growth of 53% bodes well and with the US reopening their field sales teams have an opportunity to transform the revenue profile of this company.
OpenDoor - lots to prove still. They are still reeling from a horrific 2020 but I’m keeping them on the basis that 2021 has them moving again in hyper growth mode.
Watch List
Nvidia I like the potential they have to keep serving up huge growth numbers at their scale with the tailwind of AI and 5G. The merger with Arm doesn’t seem clear cut so I’m a little hesitant to open up a position just yet.
Voyager Digital A coinbase and Robinhood rival that is on par with them in the download charts. Explosion of users and assets under management. Looks to be quite a compelling growth story for those comfortable with crypto.
Enthusiast Gaming An owner of over 100 gamer content websites, audience of 300m gamers and moving big into the e-sports world. They are in the early days of monetising their audience and are growing quickly. An industry with huge tailwinds. On my list to look harder at.
Drio Some call it a baby Livongo… one to keep an eye on as they are pivoting hard into the B2B2C space.
HAAC Still excited to see what the ex Livongo guys bring to the table. Could miss out on the break out as the deal could be announced at any point but willing to give that up considering what was on offer in the market.
Blockchain I’m planning on opening positions in Bitcoin, Ethereum and Chainlink overtime this year as well.
Thanks for reading and best wishes from a sunny and opening up UK.
Andrew