Bulwnkl's Portfolio Thru February 24

January Investment Portfolio Review

Growth Stock Year to Date Return

5 Year Rate of Return = 41.3% (Recalculated at the beginning of each year)

Stock Allocations: I try to build an individual stock allocation to the 10-15%, then I prune as little as possible. If my thesis clearly breaks (e.g. Upstart), I remove it from my portfolio. If a stock is a market leader and the business is doing well (e.g. Monday and Samsara), I will leave it alone as much as possible. This is me correcting my process after I sold Crowdstrike at the beginning of last year and lost out on a 350% gain. If I do modify my holdings, it will be when I am convinced that there is a much more dominant stock to replace a stock with. I’m happy with my 6-7 companies, but will always be looking for something that would upgrade my portfolio.

I made no adjustment to my allocations in February. These differences are purely from variations in stock performance.

Comments on Companies

Mercadolibre (4.5% YTD): Mercadolibre’s earnings were hit by a $351M impairment due to difficulties passing inflationary costs along to Argentinian customers and a Brazilian court decision that increased tax costs. Importantly, revenues increased 42%, Gross Merchandise Volume increased 56.5%, and Total Payment Volume increased 47.3%. The impairment looks like it’s a one-time thing, so the 12% sell off after the earnings announcement seems WAY overdone. For a company growing this fast, a Price to Sales ratio is 4.83. No reason to sell, what-so-ever.

Celsius Holdings (32.8% YTD): Sales up 95% YOY. International sales increase by 52%. The US market share was 10.7% vs. 4.9% last year. Part of the 20.4% stock price increase may be due to a short squeeze, we’ll see. Q4 sales were slightly lower than Q3, but that pattern may be seasonality. It happened last year too. I think 2024 will largely be determined by how well international sales go. I am happy to wait and see.

Monday (15.7% YTD): Monday got clipped by about 12% after announcing their first price increase and reduced guidance. Their last earning release showed 35% revenue growth with 90% gross margins and a free cash flow of $55.4, their business looks vibrant. I still believe Monday has seemed to developed work management tools and a Work operating system that’s ease of use is second to none. They overdelivered this quarter, and I plan to hold for the time being to see if they deliver more of the same.

Nvidia (36.5% YTD): My goodness, what a quarterly report. Operating income up 563%, gross margins up to 76.7%. Their CEO, Jensen Huang, says that generative AI is reaching a “tipping point”. Of course, this growth cannot go on forever, but it probably won’t stop for a few years.

e.l.f. Beauty (30.2% YTD): This cosmetic company just grew sales by 85% and market share by 305 basis points. Be still my heart. They can keep their growth increasing due to expanding online sales, expanding international sales, and a value proposition that is resonating with US consumers.

Nu Holdings (28.4% YTD): First a shoutout to JabbokRiver for recommending Nu Holdings to me. It’s been up 65.4% since she pointed me to it last September. Merci beaucoup! Nu revenues are growing by 57%, it’s TTM earnings have just flipped positive, QoQ customer 5.4% for the last year, and it’s deposits are growing at about 50% YoY. They appear to be hitting critical mass, so I expect outsized profits to come in while they address the needs of the 50% of the unbanked people of Latin America. NU dropped 4% on 2/22 during their last earnings release, but gained an additional 12% since then. The revenue growth rate was 70% the quarter before, so the slowdown might concern some, but Nu is expanding into Mexico and Colombia in 2024, so I expect revenues will be lumpy during the investments for those countries.

Samsara (3.3% YTD): Because I think fleet management for airlines, trucking companies, municipalities, and waste management is lacking, I see a lot of growth for Samara. I’m a little concerned with what looks like a lack of maturity in dealing with a IP dispute. Sales grew 39.9% last quarter. Free cash flow when from -$2.2 M to $4.7M to $8.5M over the last 3 quarters. Additionally, Samsara generated their first quarterly profit of $0.04/share last quarter. Hopefully, this is a sign that Samsara’s business is scalable. We’ll see if this continues in about a week.