2025 May Portfolio Review
Portfolio Return: These are my returns after adopting most of Saul’s growth strategies.
25-year/lifetime average results = 23.3%
Year to Date Return
To escape market turmoil in March, I moved to 80% cash and options. Mid-May returned to the stock market, but I’ve also hedged my bets with a few options to derisk my portfolio (which I won’t discuss here). Why did I get back into the market? First, every time the market gets negative, Trump backs off of the tariffs. Second, most of my portfolio is tariff resistant.
Allocations
Comments on Companies
Mercadolibre : PS is at 5.8, revenue is growing at 37% YOY. Advertising is growing at 26% YOY. Total payment volume is growing at 47% YOY, and Gross Merchandize Volue is growing at 40%. Mercadolibre is gradually becoming a predominantly fintech company. Mercadolibre’s nascent credit card business has grown 111% to $3.2 B. This company has steady, durable growth.
Nvidia: Blackwell chips are rolling out well, but I decided to sell my position this quarter due to the chips that have been disallowed for sale to China and the global trade turmoil. I think that it has a bright future, but I am concerned that it is a bit of a political football. I may reenter this position due to a solid quarter.
Nu Holdings: PEG around 0.7, and I have been happy to hold this company for a few years. However, the turnover in the c-suite and the rapid expansion to other verticals has me concerned. The COO, Youseff Lahrech, has removed from his position with little fanfare on May 21, one week after he participated in the conference call with the CEO taking over his duties. Recently the Chief Product Officer, Jag Duggal, the Investor Relations Office, Jorg Friedemann, and Chief Legal Officer Elita Ariaz were also shown the door. For a high growth bank that is expanding to mobile cellular networks, digital payments, travel, and, possibly ecommerce. This contrasts sharply with Mercadolibre that maintains a highly cohesive management team through all of its growth. I could be wrong, but this kind of “streamlining” is more typical of mature companies that are attempting to gain efficiency. This upheaval seems more like policy differences amongst leadership. I think NU is too risky to continue to hold. I am in the process of liquidating my entire position.
Axon Enterprise Inc.: Axon provides equipment that improves safety, accountability, and reduces cost for law enforcement. As it is purchased by municipalities, I think it would be fairly recession resistant. Currently non-GAAP revenue is growing at 42%, 30K users are now using it’s Draft One AI service to write police reports, software and services are growing at 39%. The business is as strong as ever.
Monday.com Ltd.: Yeah, Monday has competitors, but it’s built a great platform, and its business has stayed strong thru a rolling price increase. It helps with project management, sales, IT support, software development, marketing, HR, and operations. It’s got 30% revenue growth with 112% net retention rate. It’s free cashflow positive, and is non-GAAP profitable. They are investing in new product development while maintaining fiscal discipline.
Crowdstrike It is recovering nicely from outages that occurred last summer. Customers are readopting the software. Apparently, CRWD remains the best or breed for end point security. We’ll see if things continue during the June 3 earnings release.
Applovin They’ve sold off their gaming business and their apps to help with advertising and app growth. Their advertising margin is 81%, their advertising adjusted EBITA is growing at 92%, and their advertising revenue is growing at 71%.
Cloudflare Added 13,000 net new customers, up 78% YOY, and revenue is up 6.57%. Free Cash Flow is at $53M, well ahead of expectations. RPO is $1230M which is up 31% YOY. This company is an essential secure networking company.
Stocks that I am considering:
Reddit: Ad execution is encouraging, but AI searches could cause usage declines. Will international expansion cover AI losses?
Samsara: This company is provides IOT solutions that have a nice ROI with shipping/transportation. Will the tariffs reduce usage due to lower shipping? Will ROI impacts increase adoption over dramatic tariff concerns?
Best,
bulwnkl