GolfCaddy4PLynch Portfolio Update

Portfolio Summary March 2021

YTD by Month:
Jan: +20%
Feb: +28%
Mar: +1.6% (ouch)

Well, this month sucked. It was difficult to watch all those gains from the first two months disappear. But I just keep reminding myself that digital transformation is real. These companies are not 1999 concept stocks. They are revenue-generating beasts riding huge waves of growth. A shakeout like we’ve just had is a good reminder of what it takes to be a high-tech growth investor. You need to be able to ride out volatility, and this requires unwavering confidence in your positions. Besides, I am still in the green for the year.

Current Portfolio:

Magnite (MGNI) 20%
Crowdstrike (CRWD) 15%
Sea (SE) 15%
Twilio (TWLO) 13%
DataDog (DDOG) 9%
Asana (ASAN) 7%
Fiverr (FVRR) 7%
Roku (ROKU) 5%
Dermtech (DMTK) 4%
Fubo (FUBO) 3%
SoFi (IPOE) 2%
Cash 0.15%

Sold

Clover Health (CLOV)
I was excited about this stock as I was interested in expanding into health-related sectors but was disappointed with guidance. They guided revenue growth in 2021 to slow significantly to 20% to 25% off a sub-billion-dollar business. Not a stock I want to own.

Cloudflare (NET)
I had bought some Cloudflare at the peak in January and it was at a loss so I decided to sell it to offset my gains from selling Square (SQ) and Snapchat (SNAP) in January. I have nothing against Cloudflare, I just wanted to lock in a loss and use that cash for other investments.

I also trimmed a bit of Crowdstrike (CRWD) when it popped on earnings.

Bought

Roku (ROKU)
I am very bullish on connected TV and believe there will be a rebound in advertising and a massive switch to digital in 2021 as the remaining linear TV budgets get reallocated. The recent announcement from Google that they are going to remove cookies from Chrome and they are going to put more restrictions on DV360, their ad buying exchange, means that Google will be creating a bigger opportunity for third-party advertising technology to thrive as they double down on their own ecosystem. Roku should benefit as they now own their exchange and have access to high-quality connected TV inventory that ad buyers will want access to.

Companies
I will keep these short and try to provide analysis that hasn’t been often repeated on this board.

Magnite (MGNI)
I believe the tremendous growth of Hulu’s free streaming service coupled with the move from linear TV advertising to digital will greatly accelerate Magnite this year as advertising booms with the reopening. The last earning report showed the growth (46%) in the connected TV business. Also, the changes at Google’s DV360 may actually drive more businesses to Magnite’s traditional ad platform as publishers look for an alternative to Google.

Crowdstrike (CRWD)
There has been a lot written about this board favorite. The only thing I can add is they seem to be able to scale across SMB all they up to major enterprises. Not every player in security can do that. They usually serve one sector or the other.

Sea (SE)
What isn’t discussed enough is that in order to get exposure to Asia and emerging markets it’s hard to find a high-growth tech company that’s domiciled in Singapore. It is one of the few foreign markets where I trust regulatory practices. I do not invest in Chinese domiciled companies.

Twilio (TWLO)
I love Jeff Green and I am excited that to see the business reaccelerating. I have held this for a while and will continue to. I love the acquisitions they are making and I am betting that Twilio will be one of the long-term cloud winners.

DataDog (DDOG)
This is a great product and I know techies personally who love it. As many have said, the expectation is for this to pick up post-pandemic as it should make sales easier for them. If it doesn’t I may cut this back.

Asana (ASAN)
With revenues in 2020 at $227 million, they grew 59% year over year and I think there is a lot more room to grow. With 93,000 paying customers and 1.5 million paid users they should be able to easily monetize their massive user base. Some have compared them to Slack, but I think Asana provides more value. Slack messaging can easily be duplicate as we’ve seen with MS Teams. A project management tool, like Asana, once set up is much harder to replace.

Fiverr (FVRR)
They finished 2020 with revenue growth up 89% active buyers up 45% for the year. And they guided for revenue growth to remain in the 50% to 60% range. I believe the WFH trend will continue to accelerate the gig economy in 2021. Fiverr, like Airbnb, will dominate because of a marketplace network effect, where the review history of the verified pro accounts will be hard for others to duplicate at scale.

Roku (ROKU)
Already covered above.

Dermtech (DMTK)
A microcap that’s developed a skin cancer test that doesn’t require a biopsy. I expect the business to pick up post-pandemic as direct sales into the doctor’s office is the preferred sales approach. DermTech’s revenues rose about 74 percent year over year to $5.9 million from $3.4 million in 2019. They declined to provide guidance, so this is a high-risk bet and is a small portion of my portfolio.

Fubo (FUBO)
With total revenue was up 83% YoY to $268.8 million I think this is a clear winner for 2021. And with 547,880 subscribers, up 73% YoY, they can easily hit a million subs this year. The return of a full season of professional sports in 2021 should help accelerate both subscriber growth and revenue from ads. With the gambling angle, while it will be challenging to execute, I think only increases the long-term potential of the business.

SoFi (IPOE)
They got a big boost of confidence with the former Twitter chief operating officer, Anthony Noto now signed on as SoFi’s CEO. He has a fantastic reputation. They guided for revenue growth to be 58% in 2021 reaching $980M, just shy of a billion. My only hesitation is there are a lot of FinTech companies out there. I think the market opportunity is tremendous, and they can all easily take market share from traditional banks, for now.

If you’re curious here is the link to the SoFi investor deck.
https://www.dropbox.com/s/ffybqu77l1z4wxu/SoFi%20Investor%20…

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Correction.

Jeff Lawson is CEO of Twilio, not Jeff Green. He is CEO of The Trade Desk. They are both great CEOs, that happen to have the same first name. I have ad-tech on the brain. Thx.