I haven’t posted here as much lately because I know many aren’t fans of China stocks, which is where I have been living for past month or two. But posted this on NPI and resharing here.
What I want to own:
What seems like years ago, but was only a couple months, I posted 4 stocks to beat them all over a many-year horizon: TTD, AYX, MDB, and ZS. Based on growth and relatively small market caps, I liked all 4 for their mgmt and markets too.
TTD had a great run and was up over 90% from where I reloaded during Feb 9th weak market day. I exited to protect those gains and because I honestly didn’t see, given their volatile pre/post-ER history, how they didn’t retrace a bit. So far my crystal ball has sucked there and they are holding steady. I am still content to wait, as there is bound to be 1 day, combined with a bad market day, to give it a healthy plunge, and then I am probably back in. If I have to wait until a week before Q2 ER, so be it. I project them to have a $120 stock price by end of 2019, but expected them to go sideways for a bit after such a huge runup, and wanted to put my funds elsewhere in the meantime.
MDB has earnings coming up, and my spidey sense says the market will pick apart any reason to knock it down a peg, at which point I jump in (provided the ER was actually good, imo).
AYX just had ER, and remains pricey. But it already has dipped. This is my likely next purchase.
ZS starting to trend downward, but first ER fast approaching and expect similar to MDB that the market will sell on the news. At least that is my hope. I like an entry of $20-21, which is still sorta pricey but not the crazy high P/S it has today.
Other Moves & Notes
I exited BIDU and JD for now. The market utterly hates JD…not sure why, but if next ER or two proves they are on right path, I can jump back in. BIDU was a tough one, but like Google, I wonder if the ad business is a bit at risk as more searches move to Amazon and their Chinese peers. Baidu has done a good job spinning off non-core pieces but their missteps with AI leaders coming and going, combined with fact that they were censured by govt previously and had to divest many bad business ideas tells me they the mgmt is perhaps more impulsive than needed at this time. The promise of autonomous vehicles for Baidu still exists, but there is a bit of a runway in front of that boom. I feel same on NVIDIA and likely I jump back in on both once self-driving vehicles seem on the cusp of being ready for mass production.
I exited MOMO after enjoying a 15% pop. The tea leaves seemed to say a pop was coming, and while I like the Tinder-esque purchase of TanTan, I don’t need this much exposure to China.
What I currently own:
BZUN - ecommerce/shopify-like service provider, with key partnerships with China’s titans.
IQ - they view themselves more akin to Disney than Netflix, and they are already making announcements into on-demand theatres and with online books, on top of growing their streaming video MAUs and paying subscribers rapidly. Combo of Netflix and YouTube and more sprinkled in.
NTNX - they are a 27 yr old slugging CF with speed that is entering his prime years and expected to take his game to the next level after cementing HCI and moving on to multiple cloud fronts in a SaaS-focused model for the IT Enterprise.
HUYA - haven’t said a ton on this one, and stock is priciest of my current holdings, but they announce soon (which is dangerous) but they also are capitalizing on huge new market of esports/gaming: https://seekingalpha.com/article/4175878-huya-twitch-china-b……
Huya just achieved $336 million revenue in 2017, a 174% growth YoY. No idea what growth they will show in next ER on June 5th, but willing to hold thru some post-ER-dip pain and perhaps buy more on dip too.