Thanks to all of you who convinced me to take a beginning position again in UBNT (Andy, Chris, AJ, anirban, and others (including Atruthbomb on the UBNT board)). I read all you had to say and decided to take a tiny position and see how it goes.
Thanks again,
Saul
Hi Saul,
To preface I have a 5.78% position in UBNT, one that I likely built up too quickly. I’m down about 24% overall, it didn’t help that my first purchase was near all time highs.
Also while I am a typical SA/RB investor, since this board has started I’ve been tweaking my strategy a bit, to be more willing to sell positions that aren’t preforming well to move into faster growing companies like your portfolio.
I realize that you took a tiny position, which of course indicates that you think there is some potential, but not nearly enough to dedicate an average position, or even small position. Also if I remember correctly you held UBNT in the past, at a much bigger position then tiny.
So I was just wondering why buy back in now? It seems to be pretty much against your overall strategy, which to me are solid companies with very good growth (20-30%) trading at low valuations.
UBNT is definitely trading at a low valuation, a PE of 15 right now. Just last year UBNT’s PE was much higher at nearly 38, so it’s definitely come down in value, partially due to growing earnings, but mostly due to the stock getting cut in half.
On the growth front, the last 2 quarters have been very mediocre, and the next quarter mid point guidance is flat revenue, and decreased earnings by 5%. This will be the third mediocre quarter in a row.
There are of course some positives, and I wouldn’t be invested in them if I didn’t think the long term thesis was very good.
But after Q115 I started thinking about reducing my position (but never pulled the trigger), and after Q215 even after the pop, I came to the same conclusion.
So I seem to be coming to the opposite conclusion of every one else including you, and I just can’t figure out why. Of course part of my decision is just to reduce my fairly large position down to a more reasonable allocation, but I wasn’t going to keep more then 2.4%, and more likely 1.3%, so I’d be reducing my position by quite a bit (at 5.78% right now).
I would love to get your’s and others thoughts on this!
Thanks,
Dave aka ColdDay
I realize that you took a tiny position, which of course indicates that you think there is some potential, but not nearly enough to dedicate an average position, or even small position. Also if I remember correctly you held UBNT in the past, at a much bigger position then tiny. So I was just wondering why buy back in now? It seems to be pretty much against your overall strategy, which to me are solid companies with very good growth (20-30%) trading at low valuations. UBNT is definitely trading at a low valuation, a PE of 15 right now.
Good questions Dave. I have made it by now a “small” position, at 2%. (With 16 positions an “average” position for me is 6.25%. My largest is close to 15%, so 2% is small).
Okay, I read all the positive things that smart people on this board said about UBNT and decided to take this small position after having sold out. It is atypical for me, BUT their enterprise business is growing like gangbusters, while their legacy WISP business is shrinking a little every quarter. They have just introduced new products that they like a lot, and apparently other people like too. If they can stop the shrinkage of the WISP business, and even get a tiny y-o-y improvement, the enterprise growth will take care of the rest.
On this conference call, Pera KNEW WHAT WAS GOING ON, in contrast to three months ago when he had been paying too much attention to basketball and his head was in the clouds. That encouraged me too.
But after Q115 I started thinking about reducing my position (but never pulled the trigger), and after Q215 even after the pop, I came to the same conclusion. So I seem to be coming to the opposite conclusion of every one else including you, and I just can’t figure out why.
Well, I was probably at 7% too, like you, before all this, and I’ve certainly reduced my position, so you’re not an an opposite decision from me.
Hope this helps.
By the way, you can probably reduce without panic as I’d guess that $26 was probably the bottom for now, unless there is more bad news (which I hope is not coming)
Saul
Great thanks Saul, that helped quite a bit!
I can’t tell you how impressed I am with UBNT after listening to the conference call and reading the board posts related to this company; Pera and some of the board posters convinced me to sell out of SWKS at $82.42, and I won’t buy until they dip back down in the $78ish range. They’re obviously a winning company (I got in at $72.13 and $71.30 6 weeks ago so I am very happy with the profit) but the stock price has languished, at least for now.
I am all in UBNT, I bought once (70%) at $28.91 today and again (20%) at $28.36. $26 seems like rock bottom, I predict they’ll spend most of the quarter trading between $30-35 and I imagine the short percentage dropping as the days go by. Hopefully I’m right, who knows what the future will bring.
Sweetadeline