Portfolio Return: These are my returns after adopting most of Saul’s growth strategies.
Year to Date Return
Stock Guidelines:
- Revenue Growth Over 50% Market leading products or services.
- Increasing Margins
- Increasing free cash flow and profitability.
- Management with high integrity (not a fan of Musk)
- Scalable businesses.
- Product or service that serves an important market.
- Large Total Addressable Market.
- Reasonably Stable Share Count
Comments on Companies
Mercadolibre (47.8% YTD): I’ve been beating the drum for a long time for Mercadolibre on this board for a long time. The stock price has been choppy through the years. Concerns? Amazon taking over Latin America. Amazon failed. Sea Limited taking over Latin America. Mercadolibre keeps dominating market. Inflation like that in Argentina going to ruin Mercadolibre. They’ve adjusted to currencies issues well for over 25 years. Now with the Federal Reserve poised to lower interest rates, it’s the dollar likely to decline. I think this will unlock significant value over the next year.
Nvidia (114.2% YTD): NVDA reported that it’s Blackwell GPU delivers 4x performance than the Nvidia H100 Tensor Core GPU. They say that this will be useful for edge computing having real time image and video processing. Perhaps this provides a large jump in self-driving technologies. In there earnings release, they said that they had a mask upgrade to improve the Blackwell chip yield and that there has never been any problem with the chip’s function. As always, continued growth will depend on the next generation chip’s rollout. No one outside of NVDA has great knowledge of how this is going to work. I think (1) they’ve been consistently successful before and (2) this earnings report was NOT a disaster. Great case for continuing to see if continued success for Nvidia’s chips pans out.
Nu Holdings (106.2% YTD): Although customer growth QOQ slowed from 6% to 5% during the prior year, loan originations are increasing 8%, much faster than the loan growth. Underwriting is said to be improving. The dollar looks like it’s starting to weaken due to Federal Reserve interest rate cuts. This looks like a perfect storm for the tailwinds. This should benefit from a weakening dollar too. This is a VERY high conviction stock for me.
TransMedics (18.8% YTD): I’ve only held my position for a few months, but Transmedics has been strong. They are addressing the need for organs and allowing transplant surgeons to have a better quality of life since their technology, internal surgical staff and fleet of aircraft, allows organs to last longer and be delivered at more consistent times, so surgeons do not have to do surgeries in the middle of the night so frequently. They have a lot of greenfield in front of them, and I plan to continue to share in their success.
Axon Enterprises (-1.2% since 8/17): I opened this position after there earnings call and after elf reported. I was impressed with their earnings and their conference call. They are especially excited about how their software can write a police report based on body cam recordings. They think this could be key to expanding sales here and abroad. I think they’re on to something too.
Monday (42.5% YTD): Monday seems to be doing OK. I wasn’t sure if I would sell, but I was pleased with the earnings report. Revenue was $236.1M and up 34% YOY. The non-GAAP operating margin was up to 16% from 9% a year ago. It sounds like their Developer and CRM software are doing well, but the company was short on specifics. Net dollar retention rate was 110%. I’m happy with the results, but not blown away. Although I was rewarded for staying the course, I am only moderately happy with the results and will keep a close eye on this position.
Celsius Holdings (-31.3% YTD): Celsius remains a wait and see stock for me. The long awaited shelf resets have been made, and their shelf space has increased by about 35%, but Red Bull is offering stiff competition in the sugar free space with a couple of new flavors. International sales were up QOQ. The question is how will Celsius’ marketing campaign due with the increase shelf space. If it goes well, Celsius may see a rapid recovery. If not, I’m probably out.
e.l.f. Beauty (7.4% when sold on 8/10): Although I planned to stay in elf, the rapid relocation of manufacturing from China and the problems from the Red Sea attacks by Houthi Rebels (which have not abated) causing large jumps in shipping costs caused me to sidestep elf until I get a better handle on the business conditions. However, Este Lauder reported a drop in luxury cosmetic purchases in China, which is a potential sign of rapid growth in China. Depending on the next quarter or two’s earnings reports, I may reenter this position.
Best,
bulwnkl