I have been a silent follower of this board for several months now and appreciate all the great information. One stock that I was surprised not to see mentioned very much recently ( I can’t say it wasn’t brought but a lot last year or earlier this year as the volume of posts make it tough to assess that) is GoPro. I did notice it on Kevin’s spreadsheet where the numbers look very strong with a 1YPEG ratio of .22.
Just curious if Saul and others have looked at it and discarded it or if it just isn’t high on people’s radar for one reason or another.
Regards,
Greg
Community Fool
3 Likes
For my money I like AMBA as a better player in the video space. They are suppliers to GPRO as well as their biggest Chinese competitor. Also they sell into several growing verticals besides the GPRO type of camera such as body cameras, security cameras, and drones. Just my .02 and worth just about what you paid for it. We will soon see how things are going with AMBA on September 1st when they report.
Rob
3 Likes
It’s been discussed, if I recall. I won’t speak for Saul or the rest of the group, but my general consensus is that GoPro is largely a fad in terms of brand name and product. They serve a need, but it’s mostly a fixed market (how many bungie jumpers are there in the world?). Once you sell a helmet-cam and accessories, how often can you sell another one to that same person? The technology difference between a VGA camera and 1080p is striking… but from 1080p to 4k, it’s pretty meh. So I think the largest part of that market is mostly tapped.
I chose to invest in the people making the sensors behind the GoPro (Ambarella/AMBA), as there are and will be other companies using the camera sensors for more than just drone or helmet-cams. AMBA’s been hit pretty hard, but that just created more buying opportunities, and I’ve added more at various points.
1YPEG is one piece of data – remember that. Again, in my estimation, they’ve made a great growth run, but I don’t know that it can or will last. 1YPEG is not a guarantee that next quarter will be better than the previous, either.
All that said, both AMBA and GPRO are “on sale” from a few weeks ago, if you believe the future prospects are good.
1 Like
hlygrail,
Thanks for the response. My initial instinct was also along the line of your thinking that it is a bit of a fad and the growth will rapidly decelerate based on a limited number of potential users and the fact that the biggest improvement in technology has already occurred. Some opposing points of view would say that they are moving beyond just the cameras to create an ecosystem as they expand into editing software, set up a licensing portal, etc. Another potential is do they have a role in the virtual reality space and how big is it. I’m not sure which side I believe at the moment. Meanwhile they continue to churn out fairly good unit numbers and cash.
As for Ambarella, that falls into the pick and shovels bucket which has been a bit hit or miss for me. Quality suppliers to fast growing industries makes sense but then you see what companies like Apple due to their suppliers. So you have success stories like AMBA, Skyworks and INFN and on the other side you have your TTMIs and Ivensenses. It can be tough (at least for me) to discern which will continue to be able to differentiate and maintain competitive advantage/margins.
Absolutely agree that 1YPEG is only 1 piece of data and was just interested in others opinions.
Regards,
Greg
4 Likes
I own GoPro and I’m the one who entered info into Kevin’s speadsheet. I also purchase the Hero 4. I do not plan on jumping off any cliffs. 
I’m taking it on a fishing trip to Alaska next week. My son used it last week when he went tubing. I believe more people will purchase this camera for more everyday events in their lives. So this is a strong buy for me.
I also own AMBA.
Wayne
7 Likes
I have a position in GPRO and I think it will be a very solid gainer for years to come. I don’t not believe it is a fad. I think the numbers speak for themselves. I’m a believer.
Fletch
Long GPRO
5 Likes
I don’t not believe it is a fad.
Please forgive the typo. I do not believe it is a fad.
2 Likes
I was also in the “fad” camp until about a couple of months ago. I am now bullish on GPRO, and I would think people following Saul’s investing methodologies would be impressed by the numbers it is putting up.
But as mentioned, the bias against this company is that it is believed to be a fad. In the past months, I have seen the company do some innovative things to ensure that people continue to buy its cameras, and from my view, the company is in the early innings of creating its own ecosystem. It isn’t as obvious as the Apple ecosystem, but it’s there.
In the end, investors in GPRO are really counting on the CEO, Nick Woodman, to make this happen, much like investors were betting on Elon Musk or Reed Hastings. It is a risk to be sure to invest in a relatively unproven CEO, but I like what I see so far, and each quarter makes me more impressed.
Carl
8 Likes
https://drive.google.com/drive/folders/0B157eUiMCXw-fjlnU0dq…
I bought a GoPro Hero4 this spring before a snorkeling trip. Loved the results. 4 minute collage of videos taken at the link. Doesn’t really make it a good investment, but these videos put any snorkeling pictures I’ve taken in the past to shame.
John
1 Like
I own both AMBA and GPRO. I have more conviction in AMBA for the reasons discussed earlier.
I do believe that the target audience is larger than just extreme sports people so GPRO could grow the pie.
On the other hand, is it more like a car that people purchase every 10 years or more like an iPhone where people buy another one two years later?
If people use the camera in harsh conditions, does that mean it will be damaged fairly quickly to require another purchase?
The numbers from the spreadsheet are impressive.
It was interesting, however, that GPRO did not participate in the massive market rally today.
1 Like
In the end, investors in GPRO are really counting on the CEO, Nick Woodman, to make this happen, much like investors were betting on Elon Musk
Except Elon Musk is a total genius and Nick Woodman is just obnoxious and arrogant and completely in love with himself who definitely doesn’t register on the genius richter scale at all.
GPRO have surpassed my expectations but they are still a one trick pony. At least Ambarella have a stake in multiple industry end points not just selfie sports videos.
A
2 Likes
Posting selfies on the internet is one thing. Posting videos is a whole new level. INFN, NVDA, etc. are making videos on the internet faster and faster right? GPRO gives people who want to get into this, all the tools and those who just want to watch, the content. Wow, really. My favorite stock of at the moment. Bought more today.
lovepeace
1 Like
When I look at the charts for another peice of data, I like AMBA better. To me it show much more institutional support. GoPro has been correcting for a long time. It is not getting much institutional favor. They are both down about 30% from recent highs, but AMBA recent highs were all time highs and GPRO recent highs were a little run up from some longer term lows. AMBA bounced off its 200 dma and GRPO fell through its 200dma and is still below. It may look like a “deal” because its much more off its all time highs, but that does not make it a deal. Enron looked like a better deal every day until it went to zero. (Not saying GPRO goes anywhere near that). GPRO had a high volume down day today while the market was up 4%. There is something to all that. Maybe people are even trading GPRO for AMBA. I say avoid it.
http://stockcharts.com/freecharts/gallery.html?amba
http://stockcharts.com/freecharts/gallery.html?amba
5 Likes
It was interesting, however, that GPRO did not participate in the massive market rally today.
Might be in anticipation of AMBA’s earnings report Sept. 1.
lovepeace
and those who just want to watch, the content.
I think GoPro is going to be a huge winner from cord cutting. Millenials are going to watch something when they’re not watching TV and I think GoPro will figure out how to get the content they want to watch on their channel. Long GPRO - love the valuation and love the story.
Jason
2 Likes
I think GoPro is going to be a huge winner from cord cutting. Millenials are going to watch something when they’re not watching TV and I think GoPro will figure out how to get the content they want to watch on their channel. Long GPRO - love the valuation and love the story.
Sure, everybody wants to watch you ski down a mountain or skydive. Is youtube even making money yet? I have to watch a lot of adds on that, but I don’t know if Google has been able to make them turn a profit. I would not put too much faith in their ability to make big money as a social entity.
1 Like
Hi dovbgood,
If people use the camera in harsh conditions, does that mean it will be damaged fairly quickly to require another purchase?
Unfortunately no. The cameras are rugged and built to last. There are countless videos on YouTube of GoPro cameras falling out of planes, being left at sea, car/boat/motorcycle crashes etc.
Here is a classic one. The first half is a little trippy and disorienting but the camera lands at :40 seconds and the ending is great. Enjoy!
https://www.youtube.com/watch?v=ntGoPCSZTEk
CMFMelange
No position in GoPro.
2 Likes
I blew off GoPro at the time of the company’s IPO and am still not quite sure what to think about CEO Nick Woodman. However, I am beginning to look more closely at shares now that prices have come down to what might be reasonable levels for a starter position.
The company has announced that it is going to introduce a drone. This will require them to compete and also play catch up with DJI and 3D Robotics. Drones are still a new market but the technology required to successfully build a drone is much more involved and advanced than simply building a tiny 4k camera. And this is a product and market that you have to get right the first time.
I am more interested in the opportunities for the company to build and expand the GoPro brand. It was announced in March that GoPro had partnered with Roku, Xbox, LG and Vessel to bring a streaming channel to those respective devices. GoPro has also announced that it will be partnering with the National Hockey League. In July they announced a Premium Content Portal on the GoPro website where advertisers and creatives can license content for various applications. And finally I think there is still a sizable market for GoPro cameras and solutions in the area of live broadcasting.
I guess my point is that the future of GoPro will be much bigger than a tiny 4k camera.
CMFMelange
No position in GoPro yet but I do own the Hero 4.
2 Likes