Would you be willing to expand on what you are seeing in Datadog that makes you want to add to your position? Is it more so based on the low valuation versus the recent performance or did you see something you liked that I overlooked?
…
Ultimately, Datadog is a very strong business that will likely come out of the other side stronger but I think there is a good chance the stock trades sideways for a while until they can post some stronger numbers.
I think we’re in lock step – both on the long term, and the idea that DDOG could trade sideways for a while. Personally, sideways doesn’t sound too terrible right now. And I agree with your take on Q3 and would add that I wasn’t a fan of Q2 either: DDOG Q2 2022 - #13 by PaulWBryant I don’t expect Q4 to be great, and maybe not the next couple either, but I do think most of the pain has already been dished out to the share price. If not, I’m willing to hold through more pain, or even add. That’s the kind of company I want to concentrate into right now.
So of course, I’d certainly lighten the position if the shares rise before earnings. But I guess since I’m concerned about the short term for every company, I’m more comfortable with a couple giant positions in the companies I feel the best about long term. I certainly don’t want to make the same mistake I made with Crowdstrike, thinking it a “safe” and profitable 40%+ grower for the near term, even though I questioned the growth drivers long term.
Please let me know what you think, and thanks for the discourse.
Bear
PS Datadog (DDOG) Q3 2022 Earnings Review - Software Stack Investing This great review from Peter gives a sober analysis of the quarter, yet he doesn’t seem to foresee many long term worries, and I find it hard to disagree. If anyone feels differently, I’d be interested to know why.