Dreamer Corp - Port Update

Investment Analysis Clubs Where Angels Fear to Tread
442

Well, I did do some dip buying, although they were pretty shallow dips.

PSTG was a $42.97 sell and bought back at $40.99.
NTNX sold at $59.01 and bought at $56.54.
ONDS sold at $1.42 and purchased… at $1.39.
GLBE sold at $41.08 and bought back at $39.64.
The other eleven stocks were not re-purchased and are pretty much unchanged now, a few hours before market opening on… Wednesday. So, o.k., I didn’t know what day it is. Go tell my neurologist. Frustrating. Body pretty easy to maintain. Damned memory… Hard to put together a decent post but my high intensity pushups, such as they are… Sets of 7, takes 20 seconds, 3x or 60 second recovery, can’t quite finish 8 sets. BP normally 115 to 120 syst. Later this week (what day is it, again?) I want to do the 6-minute walk test. Think I will crush it. Now, where were we? Oh, yes. Portfolio. No, I don’t own any Microwhateveryoucall it. :slight_smile:

Have a great day,

KC

We did not get a major geopolitical event over the long weekend. The Friday sale has amounted to something like buying a put on the market. I will just watch, day to day. he 10-year is 4.26% which is uncomfortably high, but has been steady for 10 days. NASDAQ futures down over 100. 20-some weeks of negative leading indicators. No hurry.

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For a guy awash in cash, I certainly got whacked by the market yesterday. Ouch! Still 46% cash, and better off than I would have been had I not done all the selling on Friday.

Oh well, NAZ is up over 200 points post market. We will get some premarket activity in about 6 hours, see it it holds. Have a little NVDA, so that will help. ZS is shrugging off some of the post market hit from the PANW quarterly report. That should provide a little tailwind for Thursday. Had to call E*Trade last night to get my RMD transferred in less than 10 more days. Customer service guy did a good job, saved me from transferring our accounts elsewhere.

KC

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Hi all,
Enjoying the time away - I needed and still taking more.
Dropping in just to say that with the NVDA ER out of the way, things feel top-ish, so I put some shorts back on.

relatively flat YTD, as ESPR rebounded well, I downsized PTLO a while back and waiting for ER to see if I can buy even lower. Had a fun little run with CELH from about 50 to 63 and banked the gains today. Same with some IQ and KWEB smaller gains taken yesterday.

broken record here…just hesitant to go long in full without seeing target prices I like. A few European countries officially in recession. China not doing so hot. Everywhere I look, it seems “most” consumers are paycheck to paycheck or racking up debt thanks to a compounded few years of inflation taking their toll.

I am about half cash, a couple chunks in ESPR and PTLO, and maybe 25% short SPY and QQQ now.

Google Gemini is a woke joke and Sora overblown, imo. If cloud titans over half NVDA revenues, and this is what they have to show for it is novelty image/video creation, it feels akin to NFT hype or earlier YouTube cat videos. Not exactly Oppenheimer quality movies or Foundation tv series quality, is it?

In my corporate enterprise neck of the woods, Palo Alto provided a glimpse into what I have been seeing - enterprises slowing spend. So what happens when the titans have enough GPU compute for a minute? Whether it is Pure Storage or Nutanix or EMC/Cisco/Juniper in the 2000s, or Palo Alto recently…just seems like disconnected gamblers thinking datacenter hardware never gets disrupted or never runs into cyclical demand issues…or they just forget.

Remember: the Metaverse was the next big thing. NVIDIA declared that. Facebook changed their name for crying out loud. Then they moved on. I don’t think “AI” is going anywhere, but I believe it will be commoditized and as common as internet access. Right now we are in dial-up phase but there will be widespread broadband soon enough, and just like we woke up one day and websites were expected and not a big deal, so too will be AI assistants and AI in gaming and AI on real estate websites or ecommerce sites, etc… In 2018, NVIDIA crashed. They didn’t suddenly become a crappy company at the time. It was a massive crypto buildup and then inventory flooded the market and stock sank. I expect something similar here. Don’t know the exact timing, but no point in chasing. If you don’t want to sell due to tax reasons, I totally get it. Otherwise, feels a bit dangerous as this hype cycle might be peaking soon, with no catalysts for a couple months and rates still high. All it takes is a bank to fail or something to break.

image

Good luck out there,
Dreamer

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445

Dreamer, welcome back for the visit. This post is to make two points. 1) The Dreamer Doctrine that value, i.e., purchase price, Matters. 2) Value, purchase price, matters.

The trailing 12-month returns of NTNX, PSTG, and SPY are:

NTNX     104%
PSTG       68%
SPY         26%

NTNX was a prime example of hype and its trough began in August 2018. In the last 5.5 years its CAGR is 0.64%, gaining just 4% in that time frame.

PSTG, on the other hand, didn’t receive so much hype. It, as well as SPY, peaked in November/December of 2021, along with most of the high growth IT stocks. PSTG is up 27% from its high, a little more than 2 years ago, for a CAGR of11.6%. These versus SPY being up 7% from its high or 3.1% CAGR. ====KC pauses to check the SPY numbers. ===. Yep.

So the hype cycle is a valid concern. Value matters.

Here is my random thought, developed as I am writing this. What do the users of AI gain? Is there competitive advantage gained? I think “no”. AI investment is a tax. Not spending for it puts the company at disadvantage. But, as the economist would say, in the aggregate, at the margin, AI is just an expense. The advantage goes to whom? Perhaps to the company which deploys it best? Perhaps the consumer, unless that consumer is one of the victims of increased productivity, whatever that might be.

KC

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Bottom-fished a bit on WBD after negative ER reaction.
Go listen to call or read transcript…I heard mostly positives.
Tons of debt, but they paid down $12b already since Discovery merger. International expansion of Max. Max was profitable for the year (most streamers aren’t).
DC (Superman/Joker/Penguin), Harry Potter, House of Dragons, Dune, IT Chapter 3, Last of Us, Godzilla/Kong, new Tom Cruise partnership, True Detective, Wonka, NBA via TNT, new sports partnership with Disney/ESPN and others, $6b in FCF this past year. Seems like they have a plan, and honestly Netflix has a couple things I like but for the supposed market leader, much of their catalog is crap and filler.

https://seekingalpha.com/article/4672969-warner-bros-discovery-inc-wbd-q4-2023-earnings-call-transcript

Stock can be had at an ATL at moment, around $8.50 and has regularly traded closer to $10-12-15 past couple of years. $12-15 are my exit targets.

Dreamer

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We are blessed with nine speeches by fed presidents this week. How lucky we are. Otherwise, new home sales this morning, home prices Tuesday, Inventory stuff Wednesday, heavy dose of stuff, including core PCE on Thursday, and ISM manufacturing on Friday. February will be in the books. Ides of March…

Indexes are premarket positive, 10-year yield down 0.4%, let’s go. No plan for the week, just wing it.

KC

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I tried to double my ONDS position, but… Limit order, filled only 29% of it.

Ran away from me, up 11% on the session. Pre-announced FY results, announced restructuring and investment from Charles & Potomac Capital. Hold onto your hats, un-audited revenue for FY is…$15.7 million, seven times last year’s revenue, with 4th Q up more than 10x last year. Position now 1.62% of portfolio, one of my moonshots.

News clip here: Ondas Holdings Reports Record Preliminary Revenues of $15.7 million for 2023 and Secures $8.6 Million from Investor Group Including Charles & Potomac Capital :: Ondas Holdings Inc. (ONDS)

KC

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I took the shorts off a couple days ago, thankfully. Market won’t collapse until Fed seems poised to drop rates, and they won’t drop rates until something breaks like unemployment. Everything feels bubblicious.

CELH - sigh. I may have missed the boat for good here. I made close to 25% on recent trade (good) and I just missed out on another 25% thru today’s pop (bad). I wish I paid more attention to Saul’s board stocks when CELH first popped up. I just assumed it was a tech co…no idea it was a possible repeat of MNST (which I love the drink and never owned). Then i did try out the drinks in Summer 2023 and it didn’t blow me away. Finally I got hooked over time, and got in at $50 and out around $63. I believe MNST is and has been overvalued and they are an aspirational target for CELH to eventually become. They are $60b mkt cap now, which is nutso, so I targeted CELH for a max of $40b mkt cap at end stage in 10 years. They are at $17b today, so that isn’t much of a CAGR. So I wanted an entry in the 30’s-40s to sell at 100 in 3 years. Now it is at 75 on today’s pop so that isnt a huge CAGR over 3 years if the exit goal is $100. To be clear, they are NOT worth $100 now, imo, but markets get insane, so maybe they get there in a parabolic move. But that is the FOMO/MOMO/YOLO game and I tend to never play that. So I will hope for a pullback to the $50s or lower and that might be worth it to me, but may never happen ala TTD never getting to the low 30’s.

PTLO announced and was solid and then their PE firm that took them public sold more of their class B shares today bringing price back down. Basically, plan is working and executing. This is a 15% CAGR target over next 10 years. $45 and $60 are my long-term targets, and it obviously doesn’t need to take 10 years if they become a “hot” stock name at some point in next few years. I see them at 300 locations in 10 years up from 84 at moment (a 12-14% location growth per year). So basically the stock should start tracking their new location growth, is my theory.

ESPR announced and was as expected. Main catalyst is an expanded label at end of March and then growth rate would become the catalyst as they report Q2 and Q3 in Aug/Nov. Biggest challenge I see is if their new label doesn’t improve the insurance coverage situation. Essentially, their drug works, but is expensive without insurance coverage. So you can hire all the sales guys you want, but I think the revenue upside is limited if the drug doesn’t get cheaper. Their partner, DSE, who sells to Europe and other territories, is rapidly growing the sales (which they get royalties on)…so the potential is there. Just a question if it can be replicated in US. Hard to know what stock will do with expanded label…could be baked in or a big pop or perhaps label will not be as broad as hoped. From April - Aug, could be limited catalysts except for DSE’s continued growth and any color from the May ER on forward-looking forecast.

WBD could go lower, but I wonder if the recent drop is bottom. I mentioned before I like their upcoming slate and FCF. People want to act like Sora/AI is going to destroy hollywood. It will be a tool hollywood will use. If we get to a place where I am spending my time staring at YouTube shorts and thinking it is the best content on the planet, I think the entertainment world will be in a pretty crappy place. I am sure some cohorts of the population will love random dream-like artsy video blurbs, but call me old school as I prefer good actors, good plot, good script vs some random AI video made by a GenZ dogecoin-owner who thinks he is “creative” because he wrote a 2-sentence prompt.

I am still fairly flat, as ESPR and PTLO fluctuate up and down. CELH gains probably offset other minor losses. WBD flat since I bought. Am about 75% cash I think.

Dreamer

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450

KC - did you understand the ONDS announcement of spinning off drone biz? So if you own ONDS, do you still own the drone stuff or would an investor have to take some sort of action or they just wind up owning only the Rails-related biz?

Dreamer

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Greetings, Dreamer. Welcome to your house. We just partying here…. Thanks for the question, prompted me to learn a bit more about ONDAS, or more formally, Ondas Holdings.

This Ondas news is about a restructuring but no divestiture. The makeup of the management team provides some insight, as does the inclusion of “Holdings” in the name. From the Ondas website, somewhat edited:

Chairman and CEO

Eric Brock is the Founder of Ondas Holdings and our Chairman and CEO. He is an entrepreneur with over 20 years of global banking and investing experience. Eric was an investment banker at Bear, Stearns & Co. and an accountant at Ernst & Young, LLP. He holds an MBA from the University of Chicago and a BS from Boston College.

Yishay Curelaru

Chief Financial Officer, Treasurer and Secretary

Yihsay Curelaru has held CFO responsibilities at our Ondas Autonomous Systems (OAS) business units since the acquisition of Airobotics, which closed in January 2023. He joined our subsidiary Airobotics in 2018. Had led multiple financings which included an initial public offering. Yishay is a Certified Public Accountant (CPA) and began his business career with global accounting firm PWC in 2011. He graduated from Ben-Gurion University with a B.A. in Economics, with a major in Accounting.

Susan Roberts

VP Strategy and Business Development

Susan Roberts is an inspirational, Fortune 500 aviation executive, specializing in disruption, change management and open innovation who holds your attention by being extremely interesting, exciting, pleasant, or attractive; previously the Head of Commercial Innovation for Panasonic Avionics Corporation; launched an aviation start-up backed by General Electric after winning a General Electric innovation challenge. O.k., I edited it. But they are the ones who chose to describe her as “captivating”, I just defined the word. Never saw a corporate VP described as “captivating”.

Education background not provided. However, a search shows that she has a degree in electrical engineering from Ohio State, and MBA from University of Phoenix, and a doctorate in business innovation and technology from Capella.

Stewart Kantor

President, CFO, and Co-Founder of Ondas Networks

Stewart Kantor brings 20 years of experience in the wireless industry to Ondas Networks, including senior level positions in marketing, finance, and product development at AT&T Wireless, BellSouth International, and Nokia Siemens Networks. Since 2004, Stewart has focused exclusively on the development of private wireless data network technologies for mission-critical industries. Stewart has a BA from Columbia University and an MBA in Finance from the Wharton School.

Meir Kliner

President of Ondas Autonomous Systems

Founder of Airobotics, with over 20 years of managerial experience and including developing diverse aerial systems. Founder of several businesses, including Light and Strong, a leading manufacturer of composites for aerial platforms in the drone industry. He has been leading the development of the Optimus System™ since 2014.

No educational background mentioned.

Seems like some guys decided to form a business. Or, maybe it was just Mr. Brock, bored with wearing the green eye shade at Earnst and Young. I figure that over 20 years managerial experience would place Mr. Brock as a brand new MBA headed to NYC before 2004, bright future with Bear Stearns—until 2008. But companies still need accounting, so hop over to E & Y. Meanwhile, Ondas Networks was originally incorporated in Delaware on February 16, 2006 under the name of Full Spectrum Inc. On August 10, 2018, the name was changed to Ondas Networks Inc. This is the wireless networks part of the current Ondas business. In 2014, someone formed Zev Ventures in Nevada which was an unsuccessful venture. Which was purchased as a shell company as part of the process of looking for a business opportunity. In 2018, … well, from the 2019 annual report: “On September 28, 2018, we consummated a reverse acquisition transaction to acquire a privately-held company, Ondas Networks Inc., and changed our name from “Zev Ventures Incorporated” to “Ondas Holdings Inc.” As a result, Ondas Networks Inc. (“Ondas Networks”) became our wholly owned subsidiary. We refer to this transaction as the “Acquisition.” In connection with the closing of the Acquisition, we discontinued the prior business of Zev Ventures as a reseller of sporting and concert tickets and our sole business became that of Ondas Networks.”

The drone businesses were later tucked into the broadband radio network business, and now are separated, both businesses having their own president. But spinning one of these off would not be surprising to me. I view Mr. Brock as being interested in the business of businesses without much concern whether a business is broadband radio, UAS, or rice crispies. Not someone who built a product and a business in the garage and “owns” it. And speaking of owning it, ONDS is 1.4% of my IRA. I tried to get it to 2.5% earlier in the week but the limit order did not get filled.

KC

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452

February in the bag. Last session helped a lot.

stock    % of port    Thursday Gain
PSTG        6                 25%
NTNX        5.5                7%
PGY         0.1                5%
ONDS        1.4                3%
MNDY        2.0                2.5%

So, YTD up 5.4% which is just about my RMD. I could sell all, put it in the TBIL and GBIL and JPEQ for another 5% and start off 2025 ahead of 2024. Won’t, though. Even if the leading economic indicators continue to disappoint and inflation not controlled. Market doesn’t seem to care. Until it does and the DC situation gets even weirder.

KC

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Up 1.4% for the year. Axon went up a lot on earnings and is now my largest position. Thinking about whether to trim or not. I think Nelnet looks really cheap here and that this year was likely a blip for them long term. May add although they are already a big position for me. Coupang had a great earnings as well. I agree with dreamer about the market probably holding itself together until the fed declares rate cuts which will likely be the result of some cracks. We will see.

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March has not been kind to me, which is to say that I’ve owned the wrong stuff–as the NASDQ is down a fraction of a percent. I am down 2.7% for the month, leaving me up just 2.5% YTD. Sad.

Wouldn’t mention it except that this has shifted my mindset to defensive and I am 54% cash and 29% very short term treasury bills and notes via etf’s. Sold the silver etf to secure that profit.

Timing is awful as the fed speaks today and it feels to me that there is more upside to some dovishness than downside to “higher for longer” hints. Anyway only one day I just don’t like the up-creep in the 10-year yield and I don’t believe the narrative that the Fed has the firepower to buy up the debt and keep a lid that yield. Starting to hear about small and regional bank difficulties. Why are we hearing that now? Mainstream can’t talk about a deteriorating economy. Can only spin the inflation data so much. Laying the groundwork for needing to cut rates to stimulate the economy??? Hostage to the dot plot for now.

Maybe I need to hang a heavy bag downstairs and punch myself to exhaustion when the buy/sell emotions start to build.

KC

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heavy bag
12-ounce gloves would make it harder to log onto my IRA account, right?
Going cash-heavy yesterday cost me a percent or a little more. Only saving grace was that I kept a lot of the smaller, more speculative company stocks as they didn’t seem worth the effort to sell. They were up 4% or more. So, down just 2% for the month and up 3.2% YTD.

DW is up 10.0% She has some Chipotle. She likes companies that are “real”, which includes CAVA, Texas Roadhouse, Chipotle. One can see a restaurant. Harder to feel ownership of a software company like Crowdstrike or MongoDB. Chipotle up 380% for Mrs. Buy-and-Hold, and announced a 50:1 stock split which gave it a little boost.

Oh, yes. Silver was up 2%, but I did lock in those profits… Sigh.

KC

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I still believe a recession coming, but giving up on the “when” as Powel/Fed seems content to ride out this year due to election in Nov.

The “rate” of inflation may be slowing, but the compounded effects the past 3 years combined with wage increases (those just get passed along to the consumer) has made everything pricey and house prices are still stupid high. I know because I would never pay the price I currently see as the estimated value of my house. Rent is out of hand, college costs nuts, AI making everyone question what college majors to focus on, and I expect an ongoing trickle of layoffs all year. The jobs numbers seem misleading bc these 1m+ immigrants flooding into the country account for most of that growth, and those aren’t exactly the high-paying gigs. Tech industry getting decimated quietly. Enterprises all focused on profitability in hopes of keeping their sky-high stock prices intact and pleasing wall street, bc growth is not there. So only way to continually juice profits in a flat/declining revenue backdrop is thru raising prices (inflation), improving productivity (AI, etc), or reducing costs (office closures, remote work, layoffs, harder-to-attain work bonuses, etc).

But this environment appears to be 2021 obvliousness all over again, and I made good gains that year. GLBE and SPG still aren’t back at the prices I sold them at in 2021, for example. So I am deploying more cash. Probably keeping 40-50% cash…will see.

Added IOT and GEO, and tiny sliver in KRKNF microcap.
Unsure who else to add, as my valuation phobia is still kicking in on most stocks.

I sold CELH at 25% gain at $63 or so. It is at $90+ now. Makes zero sense. NVDA at $2.25T mkt cap. I guess it goes to $3T just bc gambling degens like round numbers…who knows.

I have my “like these companies but hate their stock prices list” and most will just have to wait for a giant pullback before I ever get in.

I like that IOT sells to the operations budget at money-making large corps. Their stock price could get cut in half, but I think their future stays bright. GEO is a play on GOP retaking POTUS and the remote monitoring upside tied to the flood of illegal immigrants. Plus, a recession will be bad for everyone. We will have riots and crime will get out of control. So they have run up a ton but from a left-for-dead price level, so hard to gauge their valuation merits a bit.

PTLO is real restaurants you can see, to KC’s point.
ESPR is still a moonshot and expanded label catalyst expected by EOM. Probably a sell-the-news moment, but who knows. They are actually growing fast, and the idea is they should be a legit growth stock by EOY.

WBD seems like a value, but with declining cable, movie theaters struggling, and streaming being a tough business model, I am unsure how to value. So may get back in but don’t have a high confidence on how to price. Their debt is huge. Great creative IP though.

good luck out there all,
Dreamer

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Me, too. I think one is coming either this year or next year, if not the year or two after that.

Pete

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This was really good, you made me smile.

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I guess I haven’t made a monthly thread for 2024 yet, so I don’t have my exact numbers handy. Anyway, still enjoying the more casual approach here. Work has been chaotic and extra time focused on family or just chilling and away from screens (when not working) has been good.

This month was good. Feb not so good. Kind of feel like I am a bit up for year, but not by much.

ESPR had major catalysts and bounced off the lows. I had added more. Still holding as a moonshot and slowly it may be morphing into a true growth stock. But we won’t know until Q2 Q3 ERs which won’t be until Aug/Nov. Mini catalysts remain from now until then, so expect it continues to be a roller coaster.

PTLO slow and steady. Popped last couple days for no particular reason.
I have added into port:
IOT GEO BEEM ODD and KRKNF

Cash around 60-65% still though.

Enjoy the weekend all,
Dreamer

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Not in my neighborhood. March was down 2.8%, leaving me +2.4%. How did I manage that with the market setting new highs on a daily basis? Well, I have an appropriately labeled dumbbell portfolio. I have a lot of 4 to 9% per annum fixed investments on one end, and high volatility small cap moonshots on the other end. Self: take a note…

29% fixed income short term bills
16% cash
45% equities.

QQQ    8%
PSTG   6.3%
NTNX   5.5%
ZS       3.2%
CAVA   3.1%
BILL    2.8%
FOUR   2.7%
GLBE   2.5%
ENVX   2.1%
FAB 6   8.5%

and then bits of ESPR, PGY, CELH and ONDS.

I think the data is inconvenient for the Fed. Rate cuts are needed “for the greater good”. We get four more months of capital asset appreciation. Then, the deluge?
Meanwhile, invest the dividends and rents in BTCO and keep the cows, chickens and sweet potatoes watered and fed. Pause here while I check my tinfoil hat…, yep, in place.

DW is up 10.1% YTD. Sigh.

KC

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Up 4% YTD. Solid march ! Added to nelnet, mgm, and started a position in Terex a few weeks ago. Terex is a manufacturer that makes crushers, aerial lifts, cranes. I like management and the balance sheet. Even if we are closer to peak earnings then mid cycle i think they are reasonably priced. Genie is one of their brands that definitely has some brand recognition at the least. Theyve done a good job with moving quickly with electric options.

Now after a few weeks of all three seeing 10% moves up i will probably just mostly add to SGOV, short term treasury etf which is my cash replacement.

Think almost everything is priced rosily

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