The WIX (what I call my portfolio) was relatively flat. Had a great second to last week, then got caught-up in the stuff going on in China the last week of the month, even though none of the positions are Chinese companies (by design; for those that don’t know why, Saul goes over that in the KB I believe). Just too much risk when there are plenty of great companies without that risk. Anyway, the FUD hammered Sea Limited the most, so far.
Monthly performance July June Roku -6.74% 20% 21% Crowdstrike .92% 18% 18% Sea Limited .57% 17% 18% Data Dog 6.36% 14% 13% Snowflake 9.89% 12% 11% FuboTV -18.9% 11% 13% Upstart -3.31% 8% 4% Dario Health SOLD
Not many transactions this month. Only made 2 moves. The first was to trim a tad from Roku, Sea Limited & Crowdstrike to add to Upstart. The reason for this is two-fold. First, I’m getting more and more convinced on the Upstart future, mostly due to the potential to add more clients, and as a result, want a bigger % of my portfolio in them. Second, I like my positions to be large enough to make a very nice impact if (when) they pop. Along the lines of this thinking, I sold out of my tiny position in Dario Health and added to Upstart.
Roku reports earnings on August 9. ADVERTISING, ADVERTISING, ADVERTISING!! Particularly TARGETED advertising. Owning the platform provides quality data to use for targeted advertising that many other companies simply do not have.
I don’t really have much to add that others haven’t already stated. I expect the next report will be upper 60s with guidance being in the mid 50%s. They’re coming up on a couple more difficult comps but in my opinion, nothing unexpected.
Wowsers, what an end of the month. Its almost as if some Sea Limited shareholders think they operate in China or that they own a large stake of Tencent instead of the other way around. In any case, I don’t expect them to stay down long as people recognize the FUD and buying opportunity presented. It started coming back and I’m sure there will be another blowout quarter. This company just keeps performing.
Its fascinating how they’ve been able to transform themselves from a gaming company with one HUUUUUGE hit into an ECommerce BEHEMOTH! I think they’re going to out-MELI MercadoLibre!! Overall revenue growth YoY of 146%. E-commerce was up 250%. 250%. They don’t provide guidance so the only estimates are analysts who are usually nowhere close to accurate. One AMAZING thing to point out here is that ECommerce is a cyclical business. Q1 is almost always slower than Q4. What did the Sea Limited ECommerce do? Well, their revenue was UP almost 10% SEQUENTIALLY!! What a great start to the year! Their ECommerce revenue has now eclipsed their gaming revenue, so expect these TRIPLE DIGIT COMPOUNDING numbers to continue for a long long time.
Another company I don’t have a ton to add. One thing I’ve been looking at is the Q3 report should be a big acceleration in YoY growth rates as the COVID impacted quarter will no longer be included in the YoY numbers. I expect somewhere in the 60s. However, I also expect them to be in a run-rate in the 50s. In any case, like CRWD, nothing really of concern, yet.
So… Snowflake! I am a HUUUUUUUGE fan of snowflake. I believe they can grow triple digits for a couple more years before sinking below that mark. The only question for me has always been valuation. Well, between the post-lockup & crash price drop and a couple more reports, I think we’re at the point where valuation is reasonable, so expect it to grow about what their revenue rates grow at. DOLLAR BASED NET RETENTION RATE AROUND 170!! I mean… without churn, this means sales just needs to add 30% a year to get TRIPLE digit growth!! How long can they maintain 170? If you know data and workloads and how easy it is to write poor performing queries, then you know that very elevated NRR is very reasonable. 170 though, I don’t know. Maybe. Even if they don’t though, Lets say they settle in at 150 and sales just adds 20% net new customers a year. Well, that’s 70% growth a year. 5 years of compounding 70% growth is 14x $$$$
Fubo reports earnings on August 10, the day after Roku. Fubo is currently in EXPAND phase. Their overall profits will come from sports betting and advertising. Advertising is already growing at 200%; albeit off a small base. They doubled the number of customers. In Q3, they are releasing their FREE TO PLAY app. This is essentially a free ‘betting’ like game. It could be a way to engage more people during games. I know I’ll be more likely to watch games on Fubo instead of the MLB app because of this. Their goal for this is to get more subscribers. Another big catalyst for subscribers is the world’s most popular sport (not a favorite of mine), SOCCER. I’ve seen plenty of stadiums in South America make the BIG HOUSE or the Indianapolis Motor Speedway look like a chicken coop. The plan is to get more subscribers. Then when the sportsbook comes online, just a little betting here and there from subscribers will be a HUUUUUUGE money machine. With each passing month and quarterly report, they are becoming less of a speculative investment.
I came across this article on Fubo the other day. Basically, it maps out how Fubo can be Cash Flow POSITIVE within a year or two. The AMAZING part about this in the article is that it does NOT include a dime of betting money!! I mean… If this author is even in close to accurate, Fubo will hit the moon.
This company is doing EXACTLY what they need to be for extended future HYPER growth. Adding clients & products!