Bear's Portfolio through Feb 2018

This has been what you might call a long month. I no longer believe February is the shortest of the year! So much has happened. We went through a minor panic. I bought Alteryx for the first time (really seems like more than a month ago). Most of my companies reported on their 4th quarter for 2017. Also, my messing around with options escalated a bit, with extreme success. It’s hard to even believe, but 35% of my February gains are from options! This is amazing because I never had more than 2% (TWO! percent) of my portfolio at risk at any time. I don’t imagine options will treat me this well every month, but apparently these babies can definitely juice an already good month!

Anyway, let’s look at February!

My 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             10.96%
S&P                      -3.89%
Nasdaq                   -1.87%
Russell 2000             -3.84%
 
**YTD**
My Portfolio             25.35%
S&P                       1.50%
Nasdaq                    5.35%
Russell 2000             -1.38%

Previous Month Summaries

Dec 2016 (contains links to all 2016 monthly posts): http://discussion.fool.com/bear39s-portfolio-at-the-end-of-2016-…
Dec 2017 (contains links to all 2017 monthly posts): http://discussion.fool.com/bear39s-portfolio-through-dec-2017-32…
Jan 2018: http://discussion.fool.com/bear39s-portfolio-through-jan-2018-32…

My Current Allocations


Ticker	Curr%	Buy/S	Mo Ch	YTD Ch
SHOP	14.7%	-22%	8.0%	36.8%
ANET	12.7%	14%	-2.2%	14.5%
WIX	12.1%	0%	22.9%	30.4%
PSTG	6.8%	0%	7.6%	36.6%
TLND	6.7%	0%	20.8%	25.6%
AYX	6.5%	NEW	24.8%	35.3%
HDP	6.2%	63%	-9.9%	-10.6%
SQ	5.9%	9%	-1.8%	32.8%
HUBS	4.7%	-20%	14.4%	25.6%
NVEE	4.6%	22%	-11.3%	-20.1%
NEWR	4.2%	NEW	20.2%	24.3%
MU	3.6%	-24%	11.6%	18.7%
INST	3.4%	-33%	20.9%	31.1%
OKTA	2.3%	NEW	31.0%	50.7%
Options	1.5%			
Cash	4.1%			

New 2018
January - nothing
February - AYX, NEWR, OKTA

Sold 2018
January - TTD
February - TDOC, ALRM

So I now have shares in 14 companies, up from 13 at the end of January. I have options positions in a few other companies, including BL and JD.

SHOPIFY - SHOP (14.7%)

About the company: To slightly modify what they say about themselves, Shopify is “the only platform you need to build your [small or medium sized business] empire [online].” They provide a website, a way to take payments, SEO optimization, etc, etc, etc. They’re innovating and growing…and boy are they growing. They make money when businesses sign up with them, and then they make more when those business grow and sell more stuff.

Latest Quarter Review: http://discussion.fool.com/bear39s-shopify-decq-review-32985461…

Recent Action: I trimmed this a bit because of the size of my position and because of the valuation. I’ve learned not to trim too much based on valuation, and have decided to trim no more than about 20% for that reason in any given month. In Feb 2017 I trimmed my SHOP position by more than 50% after a run up (at around $60/share), and I’ve never forgiven myself. Even after I shed some shares, it sits comfortably as my largest position.

Plans: This is a top confidence position, and I’m in this company for the long haul.

ARISTA NETWORKS - ANET (12.7%)

About the company: Arista sells network switches, just like Cisco, except Arista’s switches use SDN (Software Defined Networking), which I understand makes for better control, performance, and security. Oh, they’re also pretty hard to make, because Cisco is sucking wind trying to catch Arista, but to no avail.

Latest Quarter Review: http://discussion.fool.com/bear39s-take-on-arista-32987482.aspx

Recent Action: I had trimmed this position just a tiny bit since it had grown so big so fast before earnings, but thanks to Mr Market getting a little too excited about low-ball guidance, I bought a big chunk, and now own 14% more than I did at the end of January.

Plans: Obviously I like this company and its management a lot and plan to hold indefinitely.

WIX.COM - WIX (12.1%)

About the company: Wix is a company that helps users create websites, and then hosts them. It makes most of its money by charging subscription fees for premium content. It has over 100M users, and more than 3M of them pay for premium accounts.

Latest Quarter Review: http://discussion.fool.com/bear39s-decq-earnings-thoughts-vol3-3… - I especially love the guidance for revenue acceleration! I think 2018 is going to be a BIG year for Wix.

Recent Action: Even as Wix has risen about 25% this month, I haven’t sold a share.

Plans: I still think this one is significantly undervalued. I have no plans to trim, at least as long as that is true.

PURE STORAGE - PSTG (6.8%)

About the company: Pure Storage provides flash storage arrays. Storage arrays are nothing new, but flash is different. How different? Bert Hochfeld says it’s the biggest change in storage since spinning discs replaced tape: https://seekingalpha.com/article/4007341-pure-storage-nimble…

Latest Quarter Review: They will report tomorrow, 3/1

Recent Action: PSTG is up 38% ytd, but I’m holding. I think over the next few quarters, the market could really figure out what they’ve got going. (I also hold options.)

Plans: Hold, and possibly add after earnings.

TALEND - TLND (6.7%)

About the company: Talend has carved out a niche within big data integrations by specializing in Hadoop, an expertise that will not be easily disrupted. Saul has called them a “category crusher,” a leader with no viable competition in its niche. I tend to agree, though others will not ignore this space forever. Hopefully Talend will continue to build up years of subscription revenues while they occupy the catbird seat.

Latest Quarter Review: http://discussion.fool.com/bear39s-decq-earnings-thoughts-vol3-3… - A slightly down quarter at only 36% revenue growth, but guidance to grow faster next quarter.

Recent Action: I sold a little when it jumped to $45 AH when they reported, but added it back at $42 the next morning.

Plans: Hold and enjoy, but probably not add.

ALTERYX - AYX (6.5%)

About the company: A very familiar friend to many on this board (most of all its eponymous leader), Alteryx is a little company that is changing the landscape of data integration and analysis for data scientists. They have a product that from all accounts is inexpensive, easy to implement, and saves users incredible amounts of time while enhancing accuracy. The companies who try it seem to love it, because every year they spend (on average) 30%+ more money with Alteryx!

Latest Quarter Review: I called it “perfect,” and I stand by that: http://discussion.fool.com/alteryx-delivers-the-perfect-quarter-…

Recent Action: It’s a new position this month. I bought a 4% position when my conviction changed: http://discussion.fool.com/alteryx-ayx-conviction-update-3297110… Then I added to it pre-earnings, and it appreciated significantly when they announced. Then I added even more.

Plans: Hold and add strategically…probably including adding options.

HORTONWORKS - HDP (6.2%)

About the company: Hortonworks helps companies manage big data with Hadoop. Customers subscribe to the HDP software platform, and Hortonworks stores, processes, and analyzes their data.

Latest Quarter Review: http://discussion.fool.com/hortonworks-kills-it-32979213.aspx 63%+ growth in subscription revenue the last 2 quarters – simply astounding. Their growth is accelerating.

Recent Action: I added substantially when HDP dropped to $17/share from recent highs around $22. I now have 63% more HDP shares than last month, plus a small options position.

Plans: Hold while it’s down, but probably not add any more.

SQUARE - SQ (5.9%)

About the company: If you’ve ever paid with a credit card at a local vendor, there’s a good chance they used a Square device to take the payment. Square also provides many other services available to their customers. One of the most profitable is Square Capital, which really leverages their data advantages to offer extremely profitable and low-risk loans to their customers.

Latest Quarter Review: Revenue accelerated to 47%! That’s most of the story. They are also having no trouble re-investing almost every bit of that…I have mixed feelings about that, but as long as revenue is accelerating, I’m leaning toward “Go get ‘em, Jack and Sarah!”

Recent Action: I added a little this month. Tough to add much at this valuation, but I’ve also sold some puts.

Plans: Find a way to meet Sarah Friar, on whom I have a huge crush.

HUBSPOT - HUBS (4.7%)

About the company: Hubspot helps companies manage their brand online. This is much more than just buying ads. This is SEO, website, blog, social media, etc, etc. Hubspot is such a powerful and value-adding tool for marketing departments (a CMO’s dream) that I can’t see why any company of a certain size wouldn’t want to use it, and use it increasingly. Of course with a product that’s this much of a value add, there are certainly competitors. Yet it sure seems to me like Hubspot is a leader, if not THE leader, in the space, and the results it continues to achieve seem to confirm this.

Latest Quarter Review: http://discussion.fool.com/bear39s-decq-earnings-thoughts-vol3-3… Fantastic quarter of acceleration.

Recent Action: I trimmed 20% early in the month (before earnings) while everything else was down and Hubspot wasn’t (much). I haven’t bothered to add back.

Plans: This one is fine around 5% – I like it and have no plans to sell it, but it’s probably not going to be a top holding for me again.

NV5 GLOBAL - NVEE (4.6%)

About the company: NV5 is an engineering and consulting services company in the infrastructure industry. They grow by many small acquisitions, but they increase profitability all the while. The founder/CEO owns 10% of the company and altogether insiders own 35%. Their ~50% growth in 2017 is certainly an impressive pace, but I believe this company will continue to grow quickly and profitably. That’s enough for me, but I also believe they might be at an inflection point with scaling (operating leverage). Lots more info here: http://discussion.fool.com/new-position-nv5-global-nvee-32916511…

Latest Quarter Review: They will report on March 8th.

Recent Action: I added a bit more in February.

Plans: This one seems undervalued. I don’t plan to add any more shares, but I have a low risk, low probability options position in case something significantly positive happens.

NEW RELIC - NEWR (4.2%)

About the company: New Relic monitors web and mobile applications in real time, detecting issues before they become problems, and helping companies figure out where the pain points may be before it costs them sales, or even customers. Along with Cisco’s recent acquisition, AppDynamics, and a private company called Dynatrace, New Relic is one of the main leaders in the APM space (Application Performance Monitoring). Also, they partner with Splunk.

Latest Quarter Review: http://discussion.fool.com/new-relic-newr-32978733.aspx

Recent Action: I bought back in during February due to their fantastic December quarter. It has appreciated faster than my overall portfolio since I bought.

Plans: Solid but not cheap. I’ll probably just hold.

MICRON - MU (3.6%)

About the company: Micron (MU) makes chips for four different business units: Compute and Networking (CNBU) - read: DRAM, Storage (SBU) - read: SSDs, Mobile (MBU) - read: NAND, Embedded (EBU) - read: Auto. I’ve talked about how cheap they are before, and how they’re seen as a commodity (and may be). The numbers seem too good to be true.

Latest Quarter Review: They will report on 3/22.

Recent Action: I sold 24% of my shares in February, mostly just to raise cash to buy something else (probably AYX).

Plans: I won’t be adding any more shares, because I just don’t understand them well enough. I’m fine keeping a small position, because I think there’s tons of upside. But I’m not really convinced they’re not a commodity, so this one is on a short leash.

INSTRUCTURE - INST (3.4%)

About the company: I brought Instructure to the board in September 2017. http://discussion.fool.com/why-i-bought-instructure-inst-3283437… It’s is a cloud-based learning management platform for academic institutions and companies across the world. Their platform enables virtual learning, and they’ve gotten so good at it in the education context (since they started in 2008) that they’re now (actually since early 2015) offering it in a business context as well. Their classroom product is called Canvas, and their business solution is called Bridge. They are constantly signing school districts and businesses to expand their reach to hundreds of thousands of new users.

Latest Quarter Review: http://discussion.fool.com/bear39s-decq-earnings-thoughts-vol3-3…

Recent Action: I trimmed 33% of my shares. This was a very normal report with an out-sized reaction. I’ll take it…and it appears to be holding up, so I didn’t find a spot to add back.

Plans: Maybe add back, but I’m ok with a smallish position here.

OKTA INC - OKTA (2.3%)

About the company: [Stealing this from Saul] What they do is called Identity and Access Management, or IAM. They are a SaaS company, and are still racking up big losses in Net Income and even in Cash Flow. Their TTM revenue is $231 million, which is up 67% from TTM revenue of $138 million a year ago.

Latest Quarter Review: They will report on 3/7 but they gave impressive preliminary results already.

Recent Action: I missed buying in while it was down, so I just took a starter position around $35 and will see how it goes.

Plans: Add if I can find a good spot. Otherwise, options!

My best to all!

Bear

“I guarantee nothing but hard work.” - Bear Bryant, Alabama Football Coach, 1958 - 1982

“If you must tell me your opinions, tell me what you believe in. I have plenty of doubts of my own.” attributed to Goethe (but not sourced)

“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” - Attributed to Albert Einstein

“exponential compounded growth does not fit the analytical backward looking skill sets of most Wall street analysts” - mauser96

“I presume the thing is to ride the momentum for the short squeeze and exit fast with enough money for a few months supply of whisky before everyone realises it’s a value trap.” - Strelna

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