GolfCaddy4PLynch Portfolio Summary June 2021

Portfolio Summary June 2021

YTD by Month:
Jan: +20%
Feb: +28%
Mar: +1.6%
Apr: +11%
May +13%
Jun +33%

I guess growth stocks are now back in vogue?

What’s interesting to me is that while many popular growth stocks are up significantly since the bottom in May, not all growth stocks are up. Some notable names like FSLY (down 30% for the year) and ZM (up 7% for the year) have not been great picks so far. While favorites of mine like SE (up 40% for the year) have held up and continue to accelerate.

For me, this is clear evidence that stock picking works. If you pay attention, buy quality companies, with great numbers, you will be rewarded as an investor. Andr to be good at growth investing you must pay attention and move on once growth slows.

Selling, and determining when to sell, I think is under-explored and it’s something that I have been thinking a lot about.

I have been selling more this year than last year and my approach is:

  1. To sell if it goes up fast in a short period of time. This is something I have regretted in the past with stocks like Zoom. It hit what I thought was an obvious pandemic top and I should have sold and moved on. Lesson learned.

  2. I sell if I have any doubt or hesitation. I want to focus on stocks where I have true conviction and sometimes I just sell for no reason other than I want to have the cash to add to a position that I really believe in.

This may or may not work for you. I am not advocating for any particular approach other than encouraging everyone to experiment, test out ideas, and learn from doing.

About Me
I have worked in internet media and technology on the business side my entire career. I live in the SF Bay Area and focus on investing in what I know, high-tech growth companies.

Investing Style
I like to buy small positions, this gets me focused to learn about a company. Then I sell, or I add to it over time in small increments depending on a variety of factors. Some positions I hold for years, others for only a few months. My goal is CAGR. Not 10-baggers and I try hard not to fall in love with a stock. My aim is to maximize my returns and I have no allegiance to any particular method or style of approach.

Current Portfolio:

Cash 14%
Sea (SE) 16%
Crowdstrike (CRWD) 16%
Asana (ASAN) 15%
Roku (ROKU) 12%
Upstart (UPST) 10%
Fiverr (FVRR) 9%
DataDog (DDOG) 8%

I still can’t make up my mind here. While I think this has potential, I also think that it may be overhyped and overvalued like SNOW. On the one hand, there are too many fintech stocks, on the other hand fintech is a big growth area where massive winners are to be found. I am still following this and I may get back, but I prefer UPST for now.

Bought and Sold (I know… But that is what is cool with managing your own money is you can just change your mind when you have new information.)
PubMatic (PUBM)
I just can’t stay away from these connected TV ad plays. I bought a bunch of shares when I saw this was one of the most shorted stocks on the exchange, which it should not be. Then I got lucky with the pop it had from the Google cookie announcement and I sold. Happy with my return. Yes, it’s a short story, but it was fun.

No meme stock trades. I am over all of that.

Companies I am Excited About
Asana (ASAN) Updated
Looks like the CEO got excited about his own stock this month and bought $20 million of it over the past few weeks. The market reacted favorably to this show of confidence as did I. I added to this all the way up to $60 per share. It’s now my third largest position. Their competitor Monday (MNDY) went public in June, bringing even more attention to this space. But I am not a buyer.

My big bet is that Asana will emerge as the category leader. They are thinking long-term and the CEO has the capital to fund this project indefinitely. I also think the product is great, we use it where I work. Many have compared Asana to Slack, while in some ways I agree, I believe Asana is a better product that provides more utility than Slack. It’s also much harder to replace than Slack.
With many companies now embracing distributed teams, Asana I think is well-positioned to finally monetize the massive free user base they have built up over the past seven years.

Many expect revenue to accelerate to 70% in the next ER. I think it’s very possible as the combination of the accelerating economy opens up more budgets and distributed teams realize that they need to start paying for tools like Asana.

Fiverr (FVRR)
Kaboom! The highest Q1 revenue figures reported in their history, with revenue growth accelerating to 100% YoY. And the guidance, Fiverr expects business momentum to continue and is upgrading guidance for 2021 from 46-50% to 59-63% revenue growth. Active buyers are up to 3.8 million, an increase of 56% year over year. Spend per buyer (SPB) reached $216, compared to $177 as of March 31, 2020, an increase of 22% year over year.

The last ER shows that digital transformation is here to stay. We are not going back to the old in-person way of working, in spite of what the media is saying. This company is at the nexus of a few powerful trends WFH, globalization, and emerging market adoption of the internet. All of which is accelerating and the companies that can take advantage, and FIVRR is a company poised to take benefit.

Roku (ROKU)
Rumors about them getting acquired appear to be greatly exaggerated?

ROKU is my number one connected TV advertising pick. The last ER was amazing. Highest growth rate since IPO. Total net revenue grew 79% year-over-year (YoY) to $574.2 million. This stood out to me in the earnings report, Average Revenue Per User (ARPU) grew to $32.14 (trailing 12-month basis), up 32% YoY.

It appears that the shift to advertising is having the expected impact, and advertising should continue to recover this year accelerating Roku’s growth. Here are some notes from the ER regarding advertising.

  • Advertisers continued to follow audiences and move budgets into TV streaming, with Roku’s monetized video ad impressions more than doubling year-over-year.

  • In April, we completed the acquisition of Nielsen’s video automatic content recognition (ACR) and dynamic ad insertion (DAI) team and technologies, which will accelerate our launch of an end-to-end linear ad replacement solution in partnership with programmers.

  • Additionally, we launched our advertising brand studio to help marketers tell their stories using the unique benefits of a streaming platform: marketers can go beyond the traditional 30-second TV ad spot to amplify big moments through advertiser-commissioned short-form TV programs, interactive video ads, and other branded content on The Roku Channel.

  • In Q1, total TV streaming ad impressions delivered through OneView nearly tripled year-over-year, while total impressions on the Roku platform (sold by Roku or its publishers) more than tripled.

Sea (SE)
Now my biggest position. I loved the ER. They had a monster quarter, as revenue soared 146.7% to $1.76 billion in the quarter. Sea’s digital entertainment division, known as Garena, posted 117% growth to $1.1 billion, while e-commerce sales continued to skyrocket with sales up 250.4% to $922.3 million, and strong growth in its marketplace and indirect sales. Sea held its guidance for the year, calling for $4.3 billion to $4.5 billion in digital entertainment bookings and $4.5 billion to $4.7 billion in revenue for e-commerce.

I think this company is uniquely positioned and has competitive advantages in South East Asia that are hard to duplicate, such as tech optimized for old and cheap mobile phones.