Bear's shopping list

Investment Analysis Clubs Saul’s Investing Discussions
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New Relic

  1. They just reported a quarter that was perfect in my eyes: https://discussion.fool.com/new-relic-sep-2018-quarter-34055883…
  2. It’s just gotten cheaper and cheaper since it peaked at over $110 in June / July. Right now that’s down more than 30% from the highs.
  3. The profit engine has only begun, and growing EPS is a trend the market loves.
  4. Market cap is ~$4.2b and TTM revenue is $413m. (PS ratio of ~10.2!)
  5. PE is 151, but if profit margin was 30% their PE would be 34. (Probably I should say “when,” not “if” – this will happen faster than you think!)

I’ve added twice this week already.

Paycom

  1. Great September quarter and today they announced a $150m share buyback.
  2. Steady as growers get and highly profitable.
  3. I really trust the CEO since he’s so aligned with shareholders.
  4. Amazingly down more than 30% from highs over $160.
  5. Market cap is ~$6.6b and TTM revenue is $530m. (PS ratio of ~12.4)
  6. PE is 48!

I’ve added twice this week already.

Twilio

  1. Had an incredible quarter of accelerating growth, and shares jumped 30%+ on a huge day. They’ve peeled back 20% now, though.
  2. Not profitable but growing faster than anything – 68% this quarter! Wow.
  3. Market cap is ~$8.3b and TTM revenue is $561m. (PS ratio of ~14.8)

I’ve added once this week so far.

Wix is also great, and the only reason I haven’t added is because it’s already my largest position. It’s profitable, with a PE of 109 (down from over 200 in a single quarter!), and if their profit margin was 30% their PE would be 25! That’s really too low for a SAAS company whose revenue is growing at 30%+.

I’ve also added to Alteryx and Mongo since they’ve been down. They’re not as cheap as the ones above, but they’re growing like Twilio, and Alteryx is even beginning to show profit!

These are my 6 top confidence positions, and my 6 top positions, percentage-wise. I’ve also bought back into Pure Storage for a mid-sized position. It’s WAY undervalued right now.

Happy buying, everyone! Whether the market snaps back tomorrow or some time next year, these companies are becoming more valuable every day.

Bear

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