It has only been a few weeks since my mid February portfolio review, but I have been quite active in buying and selling stocks over this time that I wanted to give a brief update at the end of the month.
In early February my portfolio looked like this:
APP - 22%
ALAB - 16%
SMCI - 15%
NBIS - 12%
OPFI - 11%
CRDO - 9%
NVDA - 9%
PGY - 6%
At the end of the month, as of now on March 3, it looks like this:
SMCI - 19%
NBIS - 19%
OPFI - 11%
APP - 11%
NVDA - 10%
CLS - 8%
PGY - 8%
ALAB - 7%
CRDO - 7%
What I did in Feb:
The short answer is too much! I don’t usually like buying and selling as much as I did in such a short amount of time. But of late the market has felt like it has been in free fall and I have been losing all of the gains of January so that at the end of Feb I was down -2.5% and as of right now, March 3, I am down by -7.3% YTD and falling.
Trying to take advantage of the drops in share prices, when almost all of my stocks have been going down daily for the last 2 weeks has been a pretty disheartening experience once again to see them continue falling after new purchases have been made.
However the drops cannot continue forever and market sentiment will once again turn positive as my companies continue to (hopefully) turn out great earnings and numbers. It is at times like this that we need to focus on the companies themselves and not the fear in the market at large.
My recent returns:
2024 +70%
2025
Jan +14%
Feb -15%
YTD -2.5%
SMCI
As I stated in my update last month, I did buy back in again in early Feb to take advantage of the statements that the company were putting out about the fact they expected to file their 10Q and 10K’s by the final deadline of Feb 25.
I did sell over half of my holding just 2 weeks later on Feb 19 after it risen 90% (it turns out I did manage to sell at the recent high of $65) as I explained here:
I figured that at that price, even if they did manage to file on time, that the upside % increase would be smaller than what it had been due to the significant increase in price. But then I bought back in again at $51 a few days after they filed on time. That buy turned out to be too early and the stock has continued to drop, even after they filed on time, as the market has digested the report and as momentum holders sold out.
The fact that the risk of de-listing has gone and that BDO have audited the accounts, and that SMCI are working on sorting out their internal controls, as well as their excellent guide for $40B for next FY, means I am happy to keep holding this company. I am sure that once the selling stops, then the price will stabilise and the market sentiment will return. If that revenue guide of 40B is reached, which Charles Liang keeps saying is very conservative, then I can see this stock going much much higher than it presently is.
NBIS
I thought their ER was mixed as I said here, NBIS Reports 4th qt 2024 - #5 by jonathan1 but I am happy to keep holding. Indeed I have been buying more of NBIS recently as the price has been dropping. The most important thing in their CC was that they reaffirmed their ARR of 750m- 1B. They still have almost 2.5B in cash and cash equivalents, so the fact that they are losing a lot in EBITDA is not too concerning. This is a new company in hypergrowth mode. It is, and will be, volatile.
But I think that they have a very bright future ahead. I think that AV ride itself has the potential to be a massive growth area for them. I think their food delivery robots, and the autonomous vehicles in South Korea, are exciting. I also think that they will benefit from Coreweave’s forthcoming IPO. They are nowhere near as big as Coreweave - but they are the second largest player in the AI neo-cloud space, and their seasoned and experienced CEO has clear plans to make them a much larger company than they presently are.
APP
I did actually sell all of my holdings in APP at $310 only to buy straight back in again at $312 a few hours later - but at a lower percentage than before. I admit I was initially worried by the short reports and as my cost basis for APP was very low (I had held it for a year or so) I wanted to protect the big gains I had. I now believe the short reports were fabricated, and I was very impressed that Adam, the CEO, came out so quickly to defend his company and to answer the allegations in the report. APP used to be my number 1 holding - but I sold half of it to put the proceeds into SMCI and NBIS. That might have been a mistake - but I am still pleased to have APP as a significant holding for me.
NVDA
I thought NVDA had stellar earnings, but clearly the market expected more. However, as my cost basis is much lower than the current price, and as I believe in the company and in Jensen’s leadership of it, as well as in the insane demand for Blackwell and the seemingly unstoppable desire for AI data centres, then I am happy to continue holding this behemoth of a company. If it keeps on dropping I may actually buy more.
OPFI are due to report later this week. I am expecting a huge increase in the EPS again - and I think that this company will soar again. It is down around 40% from its highs of just a few short weeks ago.
CRDO is reporting tomorrow. I did actually buy a few more CRDO this past month to take it to a 7% holding for me. I think the market is overlooking this company. With a 67% guide QoQ and a 126% guide YoY there is much to like here. And of course it is much, much cheaper than it was before!
ALAB is also a 7% holding for me. ALAB has been my most painful loss in recent months. It turns out I bought this at the recent high in December, and with further purchases, and sales, my average cost basis for this stock is $145 (ouch and double ouch!). At least that is what it would need to get back to for me just to break even on it. It used to be a much larger holding for me, but I reduced it in the last 3 weeks so that I could buy more NBIS and SMCI.
PGY is unloved, and overlooked, by the market. I wrote about it in my last month’s review so I won’t repeat it here, but I really do think it has turned the corner and it is clearly on the road to GAAP profitability now that the impairments have largely been paid off.
So that is it for now - an initially great start to 2025 with a promising first 6 or 7 weeks - then the last 2 weeks of deep drops to take my portfolio into negative YTD territory.
Hoping that March will be a better month for all of us than it has so far started out.
Thanks for reading this far (if you did!)
Jonathan