Thank You!
I’m relieved to report my first positive month (Up 3.11%)—Though I am still down 22.12% YTD. I am enjoying this investing journey and thankful to everyone who has contributed to my education. Thanks to the Board—Saul and company—Bear, CloudL, Muji, StockNovice, jonwayne, and everyone else who has dared to contribute. Sincerely, this is my fellowship and I appreciate you all.
I made a number of changes in February and imagine it will take some time for me to sort through whether or not they are right for me or not.
February delivered so much volatility and news it is nearly impossible to make heads or tails of the market’s reaction to all of it—Inflation and rate hike fears drive the market down, looming tension in Russia / Ukraine drive it down further—War actually breaks out and—the market rallies? Maybe this has to do with expectations that rate hikes will be tempered—or maybe not. We will have more news to digest this week with the Fed minutes and inflation data, as well as some attempt at diplomacy near the Belarus’ border—however fruitful that may turn out to be—in the end it just reminds me what Saul always says—to paraphrase—it’s hard enough to find great companies, let alone guess when the market will go up or down or has bottomed or topped—Time in the market beats timing the market.
My Portfolio
When I look at my portfolio I recognize it is quite different from many on the board, and that is ultimately “OK” with me for now. As I’ve said before, I imagine the more well educated I become in this world the more similar it will become to yours and yours—but it remains my portfolio and I firmly believe we have to invest the way in which we understand to sleep well at night.
My portfolio consists primarily in sectors I believe in and often companies growing much slower than many of the board members’.
Portfolio Moves
I made a few relatively major changes once again—In January of this year I completely sold out of my largest position MNDY (20%) at $263 and built a position in S, as well as… gulp FUBO—which I ended up selling in late February.
In February I completely closed my position in UPST and DOCN after they ran up following earnings. I discovered I felt better after selling DOCN and MNDY, but when UPST pulled back again I thought of all the UPST board posts I wouldn’t be able to really enjoy next earnings season and decided to buy back in for a 10.2% position—down from 13.4%. I also bought first a starter position in a new company, KNBE, then moved it to a full position because I’m an impatient Millennial who can’t sit on his hands for very long. I’ll discuss the new position below a bit—
Here’s how my portfolio changed from January to February.
January EOM Positions
PATH 14.7%
BILL 14.5%
S 13.8%
UPST 13.4%
PLTR 12.6%
VERI 11.7%
DOCN 10.5%
FUBO 8.8%
February EOM Positions
BILL 17.5%
VERI 16.5%
S 16.3%
PATH 14.6%
PLTR 14.6%
UPST 11.6%
KNBE 8.9%
Rather Than post too much on many of the widely held companies, I though I might do better with my time posting in more depth on one or two of the holdings I have that differ from many on the board.
BILL: 17.5%
Covered well by CloudL here:
TMF: Re: Bill.com | Q2’22 Priors / Saul’s Investing Discussions (fool.com)
UPST: 11.6%
PATH: 14.6%
Founder-led, debt free, $1.9B in cash. Revenue Growth 40% YoY Gross margins 83% DBNRR 144%
UiPath is the leading RPA provider in the world—What is RPA? I’m glad you asked—
“Robotic process automation (RPA) is a software technology that makes it easy to build, deploy, and manage software robots that emulate humans actions interacting with digital systems and software. Just like people, software robots can do things like understand what’s on a screen, complete the right keystrokes, navigate systems, identify and extract data, and perform a wide range of defined actions. But software robots can do it faster and more consistently than people, without the need to get up and stretch or take a coffee break.”
PATH had very positive earnings in December—ARR grew 12.5% QoQ and revenue grew 12.9% QoQ. Guidance was even more impressive with Revenue guidance for 28% Sequential growth. PATH has announced recent partnerships with SNOW and CRWD, and continues to dominate the RPA space. With nearly $2.0B in cash and no debt, this founder-led company is the market leader in the space. The conference call was very bullish and guidance, even at 28% is almost guaranteed to be soft as they repeatedly emphasize they only “guide” for contracts they already have in front of them. I’m looking for sequential growth of 33+%, but wouldn’t be surprised to see 35% and $300M in revenue. PATH has grown ARR by 10-14% sequentially for the past 8 quarters. I like the RPA space and think with the R&D in AI and ML there could be yet another runway for growth over the coming years.
I know there is some concern with PATH’s revenue structure related to licensing, but the ARR remains strong and well-defined. I have only seen positive sector news related to RPA and UiPath’s product offerings. With the on-going overhaul of the workforce and workplace, I see RPA as a natural and inevitable development and like the opportunity in the space. I also appreciate my companies with less debt and stronger financial positions in the current environment.
The RPA market is projected to demonstrate continued expansion going forward and PATH continues to expand market share–
IRS Implements Robotic Process Automation Technology from UiPath Within Its Finance and Procurement Divisions | Business Wire
VERI: 16.5%
Founder led. Market cap under $1B YoY Rev Growth 44% Gross Margins 82%
“Veritone is a leading provider of artificial intelligence technology and solutions. The company’s proprietary operating system, AIware, orchestrates an expanding ecosystem of machine learning models to transform audio, video and other data sources into actionable intelligence."
Veritone continues to build partnerships and gain more analysts’ attention in the growing AI / ML space. There are some interesting opportunities here in the metaverse space (speculation), as well as the entertainment / movie / tv industry as producers pursue the opportunity to produce a movie and through the use of speech / language technology translate that technology to multiple languages. Veritone’s technology will even translate using the actor’s voice, essentially removing the need for voice over actors and maintaining the authentic tone and speech patterns of the original actors.
Veritone’s earnings report is later this week and I’m interested to see where their growth and guidance lies— they have experienced a lot of growth in contract awards and a move into profitability. Veritone’s aiWare recently won a DoD contract worth $249Million which I’m interested to see more details on.
Veritone Selected by Department of Defense in $249 Million BPA to Accelerate AI Capabilities of Joint Artificial Intelligence Center | Business Wire
Veritone Launches AI-Driven Intelligent Distributed Energy Resource Management Solution (iDERMS) Proven to Enhance Reliability, Maximize DER Investments and Meet Decarbonization Targets | Business Wire
https://seekingalpha.com/article/4477376-veritone-underappre…
https://seekingalpha.com/news/3783949-digital-turbine-fathom…
https://www.businesswire.com/news/home/20211214005004/en/Ver…
https://podcasts.apple.com/us/podcast/predictions-pod-2022/i…
Q1’20 Q2’20 Q3’20 Q4’20 Q1’21 Q2’21 Q3’21
REV.$M 11.9 13.27 15.72 16.82 18.3 19.21 22.6
QOQ -4.2% 11.51% 18.46% 7.0% 8.8% 4.97% 17.96%
YOY -1.82% 8.13% 22.75% 35.11% 53.96% 44.75% 44.13%
Veritone, Inc. - Home
PLTR market cap Growth: 41% YoY Gross Margin 78%
“Palantir Technologies Inc. builds and deploys software platforms for the intelligence community in the United States to assist in counterterrorism investigations and operations. The company provides Palantir Gotham, a software platform for government operatives in the defense and intelligence sectors, which enables users to identify patterns hidden deep within datasets, ranging from signals intelligence sources to reports from confidential informants, as well as facilitates the handoff between analysts and operational users, helping operators plan and execute real-world responses to threats that have been identified within the platform. It also offers Palantir Foundry, a platform that transforms the ways organizations operate by creating a central operating system for their data; and allows individual users to integrate and analyze the data they need in one place. Palantir Technologies Inc. was founded in 2003 and is headquartered in Denver, Colorado.”
PLTR is a software / AI company with heavy government exposure—They recently went public and are expanding into the commercial / enterprise world— I look at PLTR as a leading AI and software company trusted by the most powerful entity in the world (U.S Government) with nearly two decades of R&D and Innovation to create the leading technology funded by the U.S government, which is now available to the commercial market. I believe there is a massive runway for growth as highlighted by the recent commercial expansion listed below. PLTR is founder-led with nearly $2.5B in cash and zero debt.
Palantir is a very high conviction name for me—they are not growing as fast as many of our stocks, but I’m looking for acceleration going forward—particularly in the commercial realm.
Here’s my attempt at an unpublished “deep-dive” into Palantir for anyone who’s interested……
https://docs.google.com/document/d/1WpLB9-4GTbYCdAomRcS5OKZ-…
Where do Russians get their milk?
……From Mos-cows….
Holding for Applause
What do you call a Russian with Tourette’s Syndrome? ……Yukanol Fukov.
Peace-Health-Prosperity.
MillennialFalcon
https://docs.google.com/document/d/1WpLB9-4GTbYCdAomRcS5OKZ-…