This is my 2nd portfolio update, apologies for the name confusion but I had to change my username from JeremyHill as I kept getting messages calling me Jeremy!
Background
I’m often intrigued about the background of the champion board members here when I read their monthly updates so I thought I’d share a little information about me.
I’m a 37 year old Brit, I have 3 kids under the age of 6, live in London, and run my own angel investment co & incubator, focusing on Saas, fintech, marketplaces and D2C. I founded designmynight.com and exited a few years ago.
I began picking stocks about 10 years ago, started out penny stock investing on the AIM market in the UK but thankfully discovered the Motley Fool, fell in love with the Gardner brothers and found my way to Sauls board, which I am forever grateful for.
Over the past two years, I’ve evolved from picking long term hold, founder led growth companies to a hybrid of that and Sauls methodology.
I use a combination of the Motley Fool, Sauls Board, CML Pro, Beth Technology, and Berts Ticker Target services as my research tools to ultimately land on my companies.
Performance to date
YTD - I am up 101% as of October 31st 2020
January 2020 - 16%
February 2020 - 12.40%
March 2020 - 20%
April 2020 - 9%
May 2020 - 22%
June 2020 - 29%
July 2020 - 60%
August 2020- 68%
September 2020 - 105%
October 2020 - 101%
My portfolio
Peloton - 19.35%
Zoom - 16.74%
Crowdstrike - 16.71%
Teladoc - 16.68%
Etsy - 13.34%
Digital Turbine - 10.51%
Docusign - 6.67%
October 2020 Activity
A wild month, at one point the portfolio was sitting pretty at 160% but we’ve had quite a wobble since then. I was planning on a few buys on my watch list but held off after the last few red days. November could be a very busy month for me.
SOLD
Fastly - what a turnaround. As I said in September’s update, Fastly was just about to enter the Tier 1 companies for me, with a serious top up, but luckily I was delayed and the pre-announcement of earnings put the brakes on. I sold out the day after, unfortunately trading in the UK, I don’t get access to the pre-market, but still managed to escape at about $90. Hopefully lesson learnt with these guys, momentum, exuberance got the better of the stock and myself, a shame I didn’t realise this when it was at its highs but still made plenty from this stock. I’m still very excited about edge@compute so I will be a keen follower.
Peloton - I trimmed as I needed cash for some private tech investments, but still very bullish.
BOUGHT
Etsy - I took advantage of the early month sell off and increased my position.
Teladoc - I had always planned to increase my position going into Q3 earnings, a top tier holding for me now.
Docusign - thanks to some fantastic analysis from Stocknovice and others on this board, I’ve gone back in on Docusign, I’ve owned them a few times over the years. For me it was a straight shoot out between these guys and Twilio, I see a lot of similarities in terms of where they are on their lifecycles, market cap and growth. I’ve gone for Docusign on the basis of their revenue being a true Saas, I’ve been a little spooked by usage, and they seem to be more consistent, which my portfolio could benefit from.
My companies
Peloton - it continues to be my No 1 conviction. On a personal level, I decided to order the Bike+, to really understand the brand and offering. I ordered 1st October and the backlog was 3 months, so I wont get it until late December! A great sign of demand. Also of note, the bike in the UK costs £2,300 but they have an interest free payment plan with Klarna (competitor to AfterPay) so I’m happily paying £60 a month for the bike and membership. I can see this attracting a LOT more customers. Can’t wait for earnings in December.
Zoom - I continue to hold my new sized Zoom position. I was having a bit of a wobble with Zoom but Zoomtopia was exactly what I wanted to see to answer the optionality concerns. Eric & The team seem to be executing, utilising their cash and making the right moves to continue their stunning growth. Further lockdowns will keep the market happy.
Crowdstrike -No real updates on Crowdstrike. Still undervalued in my view and their time will come.
Teladoc - a great earnings release, three digit revenue growth, customer counts exploding and early signs of synergy with Teladoc. It looks like we’ll need a few more quarters for the market to believe again.
Etsy - I was delighted with their earnings report. Gross margin was up to 75%, revenue grew 128% and they are really focused on repeat buyers ala Amazon, really impressed with how management are executing. Lets not forget, they are doing almost $2b in revenue run rate but are only a 15b company, they have guided 70-90% revenue growth for Q4 but I am very confident they are going to kill this, Christmas is going to be big for Etsy!
Digital Turbine - I shared their latest earnings, which was another outstanding quarter. I don’t have a high conviction due to customer concentration but I think they are still considerably undervalued so lets see what the rest of the year brings for them. If they can crack into CTV advertising as well, then we’ll see this stock’s popularity rise.
Docusign - as discussed above.
Watch List
Roku - After reading some cracking research from Beth Kindig & CML Pro they’ve bumped to the top of my watch list. CTV is undoubtedly early innings, a huge secular trend, and Roku are first in line here. The fact they posted 42% revenue growth in Q2 kind of blew me away. I’m expecting some very fruity earnings reports from them over the next few quarters so I’m watching closely.
Pinterest - I’ve been a user of Pinterest for years and always wanted to buy the stock but it never quite got over my conviction threshold. Their Q3 earnings was very impressive, they seem to be turning on the money taps now. All metrics seemed to be ticking up and management were very bullish. Founder led, a triumvirate of social media, e-commerce and video, a ridiculous amount of users not yet monetised, seems a bit of a no brainer to me. I’m very excited about Pinterest for 2021 so again I could be a buyer this week.
Sea Limited - I’ve been prompted to look again at SEA from a member of this board, RollerCoaster. I came across this fascinating report https://www.temasek.com.sg/en/news-and-views/subscribe/futur… which basically shows the size of the opportunity of ShopeePay, 70% of small & medium size business in SE Asia use cash still, the market is expected to grow from 11b to 35b in a few years. I’ll be looking to buy in November.
Cloudflare - I was planning on buying but I got a little spooked by Fastly. Incredible product updates, earnings next week, lets see how the market goes the next few days as it might be a good time to buy just before earnings.
Snowflake - I’m starting to dig deeper with these guys. Tons of hype which combined with the opening price, put me off. But their numbers and CEO are very impressive. I’ll be tempted to open up a position if there is a fairly big sell off.
Bandwidth - CPaaS, powering Teams, Google, Zoom and has shifted from snail pace revenue growth to significant quarter on quarter growth in 2020 due to high usage from their partners. Hitting 40% in Q3, up from 34% in Q1, and 21% in Q4… a 3-4b market cap, might just be the beginning. Would love to know if anyone is following them here?
The Trade Desk - I’ve been in and out of them, wish I held over the years, they are a classic TMF buy and hold, founder led play. If we get a significant market correction I’ll finally open up a buy and hold position with them.
Square - similar to The Trade Desk but I’ve never owned them. I love Jack Dorsey, I love CashApp and how they are poised to be the bank of the future. I still can’t justify a spot for them in the portfolio but they are getting close.
Thank you to everyone that contributes to this board and stay safe.
Andrew