My portfolio at the end of Jun 2018
Here’s the summary of my positions at the end of Jun. As usual, I figure as of the last weekend of the month. This month it came out to be five full weeks, and ends this weekend. Note that any PE’s that I give are always based on adjusted earnings, which very rarely may have small modifications of my own.
I feel very fortunate about my current portfolio. I have stocks in ten remarkable companies, most of which I have very high confidence in, and each of which I feel dominates a market, is a disruptor, and has a long runway and a great future.
As you know, last year (2017) was an extraordinary year, in which I was up an incredible 97.0% at the end of November, and finished the year up 84.2%. At the end of the year I begged everyone not to expect that this year would be anything like that.
Well, last year at the end of June, I was up 38.1%. This year in June I hit a high of up 62.6% on Monday the 18th! That was just since Jan of this year, with no leverage at all, just plain modified buy-and-hold, and was truly ridiculous. And now, even after the tech meltdown of the past couple of weeks, at the end of June I’m up 44.3%, which roundly beats where I was at the end of June last year.
Look, I know that that is crazy and that it can’t continue this way, it really, REALLY, can’t (!) but that’s the way it is, as of now.
The three indexes that I’ve been tracking against closed Friday as follows. The results are given from Jan 1st to date:
The S&P 500 (Large Cap)
Closed up 1.3% for the year. (It started the year at 2684 and is now at 2718).
The Russell 2000 (Small and Mid Cap)
Closed up 6.5% for the year. (It started the year at 1542 and is now at 1643).
The IJS Small Cap Value ETF
Closed up 6.3% for the year. (It started the year at 153.6 and is now at 162.2).
These three indexes
Averaged up 4.7% for the year so far. And just for fun, you can throw throw in the Dow, which is down 1.8% and the Nasdaq, which is up 8.8%, and you get up 4.2% for the five of them. So it’s clearly a raging Bull Market that’s accounting for our large gains. As the skeptics have said, “Anyone can be a genius in a raging Bull Market!”
I have to ask: “What Bull Market?” The three indexes I follow are up an average of 4.7% so far this year. Last year the three indexes averaged up 14.4% while many of us were up 60% to 85%. If we look at the last 18 months since Jan 1st of last year, the indexes are up all of 19.8% while many of us are up well over 140% in the 18 monts, and anyone with a hand calculator can calculate that I am up 166% in these last 16 months (1.842 times 1.443 = 2.66). It’s hard to explain a 166% gain as due to the market being up 20%.
How can we explain the disparity between our results and the averages? I have to say again that we seem to have caught a secular wave, in which our companies are exploding in function and importance as well as in revenue, which is mostly recurrent. It’s the wave of big data, the cloud, artificial intelligence, and all the rest. I had some big winners outside of that area, but it’s been that big wave that has carried us. Here is a great summation by JAFbrblev on our board:
The sweet spot of transformation is turning information into actionable intelligence.
Never before has so much data been available
Never before has so much data been stored
Never before has so much data been retrievable
Never before could data across systems be assembled into information at a speed that supported decision making
Never before have we moved past “can we relate the data” and into the world of “how should we relate the data”
Hence, we are moving from the age of information into an age of actionable intelligence and we still don’t know how best to do that.
But the companies here are all support that wave, remove the technical obstacles, make it simple, and and turn all the information into cognitive, actionable intelligence.
You may ask, “Why these three indexes?” When I started this board I started comparing my results to the S&P 500, because that’s what the MF uses. Then, to be fair, I added the Russell 2000, a small and mid-cap standard. Then we were told that the IJS, which tracks the S&P 600 Small Cap Value Index, has the best long term results. So I added the IJS. This gives me 500 large caps (the S&P), 2000 small and mid caps (the Russell), and 600 small cap value stocks (the IJS), which combined ought to give me a very representative set of standards to compare against. I’m sure some people will say “Why not drop this index and add that one?” but these are the three indexes I compare against currently, and I will probably continue to do so. I think they give me a pretty good approximation of how the market overall is doing.
(The averages would be very slightly higher if you use the S&P with dividends added, but I’m continuing to use the straight values for consistency with past results. I consider the roughly 0.1% per month that the average of the three indexes would be changed by including S&P dividends to be irrelevant considering the magnitude of the differences between our results and the results of the indexes.)
Let me remind you that I’m no good on timing the market, and I don’t try. If I did, I would probably have exited all my positions at the end of April 2017, when I was up 26% in four months and was “aware” that “it couldn’t continue” like that. At that time, in just four months my results had already dwarfed those I had in the entire years of 2015 and 2016. Back at the end of April 2017, up 26% seemed like a ridiculously ENORMOUS amount to be up in just four months, and my stocks seemed way “over-bought.”
But if you or I had sold out then, because we “knew” the market was overpriced and we decided that we could wait for a pullback to buy back in, we never would have bought back, because the market kept going up and our stocks never came back even close to where they had been, much less given us a pullback, and we would have thus missed all the rest of this enormous rise. And that’s the problem with trying to time the market!!!
I continue to believe that intelligent stock picking with a modified buy-and-hold strategy can beat any index or average? How could it not? When an “average” is just that: an average of good, mediocre, and poor companies?
Here’s a little table of the monthly progress of my results so far this year:
**End of Jan +16.9%**
**End of Feb +21.4%**
**End of Mar +29.1%**
**End of Apr +25.8%**
**End of May +38.3%**
**End of Jun +44.3%**
The stocks I’m still in since the beginning of 2018 are Alteryx, Nutanix, Shopify, and Square. They include four of my five largest positions and they make up 56.5% of my current portfolio.
Current positions that I’ve added since the beginning of 2018 have been:
**January Pure, Twilio, and Okta.**
**May Pivotal, and MongoDB (which I had sold out of in April)**
**June Zscalar (which I bought mostly on Monday of this past week)**
Here’s a last four months review:
March: I decided to take a full position back in Nektar, and also took a much smaller position in MongoDB. To raise money to buy them I trimmed some Hubspot, Talend, and Nvidia. (Remember that I have no new money coming in and when I want to buy something I have to sell something). Then when the market collapsed (and especially Nvidia collapsed after a great investor conference, and Shopify collapsed after another short attack), I sold the rest of my Hubspot, and the rest of my Talend, and about half of the Mongo that I had bought, and added to Nvidia, Shopify, Nutanix, Twilio, and Nektar.
April: During April I sold out of my small position in MongoDB, back in and then out again to buy more Twilio, Okta, Pure, and a little Nektar. I also net trimmed Nvidia and Shopify to buy more Twilio and Okta. (I really like Twilio and Okta).
May In the beginning of May, when Arista sold off, I added a lot of at about $243. Later in the month, when I wanted money to buy other things that I felt had a longer runway, I sold off a very large part of my position at about $258. Have I ever been back and forth on MongoDB! I’ve changed my mind so many times this year I can’t keep track of them. I finally started a new position in June at about $43.48. I believe I’ll keep this one. I also took a small to medium position in Pivotal, after reading Steppenwulf’s great write-ups and researching some myself. Finally, I sold out of the remains of my Nvidia position at $248, for cash to buy other things. It had been in a trading range between $215 and $250 for 20 weeks, which is a long time for a company which is supposed to be conquering the world. (As I write at the end of June it’s still at $240, five more weeks later). I know everyone loves it, and it controls the future and all that, but it’s still a huge company that would be difficult to double or triple in size, and mostly a hardware company at that. I used the funds to buy more stock in other companies which looked better to me. Please remember that companies that I sell often continue to go up, and some stocks I buy go right down. God knows I make mistakes regularly.
June I sold out of Arista early in the month. I was reducing Nektar all month, but planning to keep a token position, but sold out of the last this week to buy Zscalar. I took a small position in Wix early in the month, but sold it this week also (sorry, Bear), to buy Zscalar. I reduced Pure Storage to buy Zscaler.
Here’s how my current stocks have done in the first six months of the year. I’ve arranged them in order of percentage gain. I’ve used the start of the year price for stocks I’ve been in all year, and my initial buy price for stocks I’ve added during the year.
Twilio from 25.70 to 56.02 up 118.0%
Square from 34.67 to 61.64 up 77.8%
Okta from 29.95 to 50.37 up 68.2%
Alteryx from 25.27 to 38.16 up 51.0%
Nutanix from 35.28 to 51.57 up 46.2%
Pure from 16.72 to 24.27 up 45.2%
Shopify from 101.0 to 145.9 up 44.5%
Pivotal from 19.18 to 24.27 up 26.5% bought 6 weeks ago
MongoDB from 43.48 to 49.63 up 14.1% bought 5 weeks ago
Zscaler from 35.84 to 35.75, down 00.3% bought 4 days ago
My big stars have been Nutanix, which at $51.57, is up 140% from when I bought into it nine months ago at $21.50, Twilio and Okta, up 118% and 68% from when I bought them just over five months ago in January, and Square, up 68% this year so far, and up 252%, more than tripling (!) since I bought it at $17.50 just a year and three months ago, in March of last year.
Exited positions this year showing my gain or loss from the beginning of this year, or from when I first bought if it was during the year, and my average exit price.
Nvidia from 193.5 to 248.0 up 28.2%
Nektar from 59.7.0 to 76.0 up 27.3% 1st time
Talend from 37.48 to 47.50 up 26.7%
Hubspot from 88.4 to 108.0 up 22.2%
Arista from 235.60 to 274.0, up 16.3%
MongoDB from 38.00 to 43.50 up 14.2% 1st time
Wix from 102.5 to 98.1 down 4.3% 2nd time
Mime from $32.34 to 30.85 down 4.6%
LGIH from 75.0 to 71.0 down 5.3%
MongoDB from 41.00 to 38.65 down 5.7% 2nd time
Wix from 69.2 to 61.8 down 10.7% 1st time
Nektar from 103.0 to 54.0 down 46.6% 2nd time
Well-intentioned people have been warning us constantly that another bear market and/or recession is coming. “The bull market is too old.” or “The market is too high.” or “This technical indicator proves the the market is in a bubble.” All of their charts and indicators proved it in 2010, 2011, 2012, 2013, 2014, 2015, 2016, and again last year in 2017. I’m hearing convincing stories about bond yields now fortelling a crash, and interest rates rising, but I’ve heard similar convincing stories about other technical indicators every year. Eventually they’ll be right, and they will think “See! I was right all along!”
Of course a marked correction or bear market will come eventually. Part of this last week sure was scary and looked like a correction. And rising interest rates, tariffs, and trade wars do eventually stop the market rises. Look, the next Bear could start next week for all I know! But we never really know when. And what a price those people have paid in “keeping their powder dry” and staying out of this market for the past eight years, waiting for the big correction that never came.
Picking good stocks makes much more sense than trying to pick good stocks AND trying to time the market too.
Now let’s look at my position sizes. I’m still trying to keep my portfolio concentrated and streamlined. I’m down to 10 positions, each of which I feel good about, which is a pretty good place to be. By the way, keeping my number of stocks down really makes me focus my mind and decide which are really the best and highest confidence positions. Here are the 10 positions in order of position size.
**Alteryx 15.1%**
**Nutanix 14.2%**
**Twilio 13.9%**
**Shopify 11.5%**
**Square 10.9%**
**Okta 9.2%**
**Pivotal 9.1%**
**MongoDB 7.4%**
**Zscaler 5.8%**
**Pure 2.5%**
It’s a very concentrated portfolio. With 14 positions, an “average position” is about 7%, but with just 10 positions, an average position is a 10% position. My top three are still my top three, although Alteryx has moved up slightly. They next three are still the same three, in the same order. Mongo has doubled it’s position size to 7.4% and Zscaler is brand new at 5.8%
Earlier I wrote that I have stocks in ten remarkable companies, each of which I have high confidence in, and each of which I feel dominates a market, is a disruptor, and has a long runway and a great future. I thought that this month I’ll give you the stocks alphabetically and I’d try you just a capsule of what each company does, and then a capsule of its recent earnings report, to give an idea why I like it.
Alteryx was a new position for me last December. It started this year at $25.27 and finished June at $38.18, up 58% for the year to date. I sort of understand what it does, which is to lease a software platform which allows techie’s and non-techies alike, to analyze and use the torrent of data coming in easier and more quickly. Here are the March quarter results
Revenue was up 50% (but growth slowed from 61% a year ago)
The dollar-based revenue retention rate was 132%. This was the 6th consecutive quarter that it was above 130%.
Adj gross margin was 90%, up from 84% a year ago.
Adj operating loss of $1.3 million, improved from a loss of $3.6 million.
Adj operating margin was minus 3.0%, improved from minus 12.5% !!!
Adj net loss was $0.6 million, improved from a loss of $3.7 million.
Adj net income per share was a loss of 1 cent, up from a loss of 6 cents.
Cash was $206 million, up $8 million sequentially.
Op cash flow for the quarter was positive $12 million, up from $5 million a year ago.
They had 3,673 customers, up 43% yoy. Added 281 net new customers in the quarter, up from 237 a year ago.
New customers included some well-known companies such as 3M, Intel, Merck, Waste Management, Barclays Bank, Under Armour. And they emphasize that they are seeing larger “lands”.
Alteryx seems to be doing what it does very well.
MongoDB I started a small position a month ago, for the third time this year, at an average price of $43.48. They are trying to disrupt and replace a 40 year old database paradigm with something more flexible and adaptable to the modern cloud and big data environment. They are growing very fast but haven’t really started shrinking losses yet. Here are April quarterly results:
• Total revenue was $48 million, up 49%
• Subscription revenue was $45 million, up 53%
• Adj gross profit was $35 million
• Adj gross margin was 72.6%
• Adj loss from ops was $22 million, worsening from $15 million
• Adj net loss was also $22 million, worsening from $15 million.
• Adj net loss per share was 43 cents.
• Cash was $272 million
• Op cash flow loss was $8.0 million and $0.4 million in capital expenditures, leading to
• Free cash flow loss of $8.4 million, compared to a loss of $12.4 million a year ago.
With $272 million plus a cash raise they just did, they are obviously not going to run out of cash at $8 million a quarter. Their goal is to keep growing as fast as they can, and accumulate customers and recurring income, and disrupt their market. Sounds good to me.
Nutanix was a new position last September. I entered at about $21.70 with a fairly good sized position. It closed Friday at 51.57, so it’s up 140% in nine months. Sure, stock picking doesn’t work. We’ll all return to the mean some day. Statistics prove it! Hah!
Nutanix’s area is “hyper-converged infrastructure” in data storage. I don’t have a clue what that means, but Gartner rated Nutanix first on completeness of vision, and first on the ability to execute. It is doing away with the pass-through zero-margin hardware that it was selling, and pivoting to be a pure software company (also moving towards a SaaS model). This makes their revenue growth look deceptively slow because the hardware sales are no longer being counted, and because of subscription revenue being counted only month by month, even if all paid in advance. (Pretty odd to talk about revenue growth of 41% looking deceptively slow, isn’t it?). Nutanix apparently just won a $45 million contract with the Air Force, its biggest contract ever.
Nutanix has a Net Promoter Score of 90 !!! (For those who aren’t familiar with it, NO ONE gets a Net Promoter Score of 90 !!! It means just about all your customers absolutely love you.)
Here’s what their April quarter looked like:
• Revenue: up 41%, but this is with the elimination of the pass-through hardware revenue that they are no longer counting. If you compare apples to apples, revenue was up 65.5%. That’s extraordinary revenue growth!
• And for a little consensual validation, Bert called this a blow-out quarter and came to the same 66% real revenue growth figure that I did. And he’s value oriented and conservative.
• Software and support billings up 67%
• Adj Gross Profit up 57%
• Adj gross margin of 68.4%, up from 61.2% !
• Adj Net Loss of $34.6 million, improved from a loss of $45.7 a year ago.
• That’s a loss of 12% of revenue, down from a loss of 22% a year ago, as well as the dollar loss decreasing.
• Adj net loss per share of 21 cents, improved from a loss of 32 cents.
• Cash was $924 million
• Deferred Revenue: $540 million, up 62% !
• Positive Operating Cash Flow of $13 million, improved from a loss of $16 million
• Free Cash Flow: A loss of $1 million, improved from a loss of $29.2 million !!!
Just read that over again and you’ll see why I don’t have to know what hyperconverged infra-structure is to know that Nutanix is a disruptive category leader. Start with this enormous growth (billings up 67%, gross margins up 7%, deferred revenue up 62%, operating cash flow of positive $13 million, improved from a loss of $16 million, etc), add on Gartner rating them #1 in two categories, and tack on that unbelievable Net Promoter Score showing that their customers are beyond satisfied. That’s enough for me.
Okta was another new position in January, a small cyber-security firm. They IPO’ed in April, 2017. What they do is called Identity and Access Management, or IAM. They are a SaaS company, and are still racking up big losses in net income and even in cash flow. Their TTM revenue is $294 million, which is up 62% from $181 million a year ago. Here are some of the data from the April quarter results. It’s hard to even imagine a better quarterly report than this one:
• Revenue up 60%
• Calculated Billings also up 60%
• Operating cash flow margin up 23 percentage points (!) yoy; It was positive $4.0 million, or 4.8% of revenue, up from a loss of $9.7 million, or 18.5% of revenue.
• Free cash flow margin up 24 percentage points (!) yoy. It was a loss of 2% of revenue, up from a loss of 26%. In dollars it was minus $1.6 million, up from minus $13.3 million.
• Subscription revenue was up 59%, and was 92% of total revenue.
• Adj op loss was $11 million, improved from a loss of $19 million
Adj op margin was up more than 22% to a loss of 13% of revenue from a loss of 35% of revenue the year before.
• Adj net loss was $9.4 million, improved from $18.8 million.
• Adj net loss per share was 9 cents, improved from a loss of 21 cents
• Cash was $547 million.
Total customers grew by a strong 40% to over 4,700.
Customers with over $100,000 of Annual Recurring Revenue grew even faster at 52%, to 747.
• Dollar-based net retention rate continued at a healthy 121%
• Subscription gross margin was 80.7%, up 2.4% yoy,
• Prof services gross margin was minus 1.6%, up from minus 44.3% last year.
• Total gross margin showed continued improvement and was 74%, up 5%.
• Gross profit was up 72%.
Guidance was so cautious it was silly. When asked about it they said, “We feel like this is a very prudent guidance, but we are very bullish on the business.”
If you remember I took this position back in January at $29.95 and I kept adding all the way up to $43.00. It closed Friday at 50.37, up 68%.
Pivotal was a new position this May, having IPO’ed in April. Steppenwulf brought it to the board and he eplains what it does better than I ever could:
Pivotal is a cloud solution for me and other application and enterprise architects. It is like a machine that automatically builds a cloud application for me. I give it the design, and the latest version of the code. I tell it to build it on AWS, or Azure, or Google, or on my own machines. 10 minutes later - it is done, tested, verified, and running. I don’t even need to tell it - it checks my systems, and knows when I’m ready for a build, knows where I want it, and builds it for me. It speeds up my productivity immensely, and let’s me avoid any sort of vendor lock-in - and I no longer even need to know how to spell “server”… This is another technology that has already won, now it is just a matter of enterprises expanding it to all their IT, as they move to the cloud, maximize the productivity of their developers, automate their processes, and avoid vendor lock-in.
This was another hidden growth story, like Twilio was. Pivotal’s subscription business is growing very rapdily while their legacy service and consulting business has been very slow growing. But the subscription business is now more than half of the total revenue and the legacy, lower margin business will become less and less important. Here are the April quarter results.
Subscription revenue up 69%, and up 20% sequentially.
Subscription revenue is now 58% of total revenue, up from 44% a year ago.
Subscription gross margin was 92%, up 3% from a yr ago
Total revenue grew 28% year over year.
Total gross margin for was 64%, up 10% from 54% a year ago
Subscription customers up to 339; up 20% from a year ago
Dollar-based net expansion rate of 156%. Has been over 150% for seven quarters!
Adj net loss was $23 million, improved from a loss of $43 million a year ago.
Adj net loss per share was 10 cents, improved from a loss of 20 cents a year ago
Operating cash flow was $4.5 million improved from negative $4.4 million a year ago.
Free cash flow was $2.6 million, their first positive.
Cash was $646 million.
I bought my position at $19.18 in late May, and it closed June at $24.27, up 26.5% in just over a month.
Pure Storage was another new position that I took in January at $16.72. It’s now at $23.88, up 43%. It’s busy right now replacing spinning disc data storage for enterprises with flash arrays, as I understand it. And once that’s through they will replace first generation flash arrays with NVMeoF-enabled flash storage. And then the next advance, and the next. And meanwhile the demand for data storage will be expanding exponentially. At least that’s the investment thesis. And Pure is the leader in the leader’s quadrant on Gartner. But keep in mind that I am a tech illiterate. I don’t really understand much of all that above, and I am relying on other people’s advice. Here’s the kind of thing I do understand: It’s a little from the Apr quarter results.
Key quarterly highlights:
• Revenue: up 40%
• GAAP operating margin: -24%, improved from -32%%
• Adj operating margin: -6%, improved from -14%
Operating cash flow: $18.6 million,
Free cash flow $8.6 million, up from -$27 million !!!
Net Promotor Score of 84 !!!
Net Promotor Score of support team is in the 90’s.
Shopify is next alphabetically. I do understand what Shopify does. It helps merchants set up websites for ecommerce. After four years of compounding 100% revenue growth (you read that right) they “slowed down” in 2017 to grow revenue by just 73%. Here’s a little excerpt of what they reported for their March quarter:
Total revenue was up 68%.
Subscription revenue was up 61%
Monthly Recurring Revenue (MRR) was up 57%.
Shopify Plus revenue (big companies) was up 103% in dollars, and made up 22% of MRR, up from 17% a year ago.
Merchant Solutions revenue was up 75%.
Gross Merchandise Volume was up 64%
Gross profit was up 71%
Adj operating loss was 0.1% of revenue, up from a loss of 3.4% a year ago.
I bought Shopify in 2016 at about $27. It closed Friday at about $146, so in spite of the short attacks, it’s at about 540% of what I first bought it for about a year and ten months ago, (more than a 5-bagger, for those who count that kind of thing). As I wrote above, Sure, stock picking doesn’t work. We’ll all return to the mean some day. Statistics prove it! … Hah!
Square is another company where I understand what they do. They started helping merchants to accept credit cards with their cell phones, and then started adding a lot of other services, like lending money to their customers based on their knowledge of the customer’s business, etc. I started my position a year and a quarter ago in March 2017 at an average price of about $17.50, and the price is now 61.64, up 252% since then. Yes, you read that correctly, up 252%, more than tripling.
Square is growing revenue like mad. For the last five quarters it grew revenue at 39%, 41%, 45%, 47%, and 51%. Revenue growth has been accelerating! And they guided to 49% for next quarter, which they obviously expect to beat. Subscription and Service revenue, the good stuff, was up 95% for the year, and up 98% last quarter, and up 22% sequentially(!) and obviously becoming a larger part of adjusted revenue. Square also has a lot of recurring revenue. It has been adjusted profitable for the past eight quarters (two years), but not a huge amount. And they raised their GAAP net income guidance for this year up to breakeven at the high end (which I assume they plan to beat). They have an 80% self-onboarding rate. They have a net promoter score of 70! Square is amazing! The only fly in the ointment for me is the CEO’s fascination with bitcoin, which I don’t share, but I guess I can’t have everything.
Twilio is the dominant force in communications (call centers and customer/company interactions. It closed Friday at $56.02, which is up 118% from my original purchases at $25.70 in January. That’s up 107% from January of this year!!! Remember that when they tell you that intelligent stock picking doesn’t work and that whole books have been written to prove it.
This position was a new small position I took in early January. It’s grown as my conviction has grown, and as the price has risen. It’s a wonderful example of not price anchoring, as I added to my position with rising prices, instead of looking for sell-offs. For an explanation of why I bought in January, see my April month-end summary.
Base Revenue was up 46%, and 12% sequentially!
Base Revenue was up 61% excluding Uber
Dollar-Based Net Expansion Rate of 132%, and up 145% excluding Uber
Adj loss from operations of $3.9 million, down from a profit from operations of $0.1 million a year ago.
54,000 Active Customers, up from 40,700 a year ago.
Unveiled Twilio Flex, the first cloud contact center application platform that’s programmable at every layer of the stack, giving businesses complete control of their contact center experience. They seemed very excited about Flex which is for big call centers of 1000 or more seats.
The December quarter was the toughest comparison for Uber results, so this drag should lessen in future quarters.
My take: They turned the corner on growth, Dollar-based Retention Rate, etc. Raised guidance a lot for the full year. This is a great stock to hold
Zscaler is last alphabetically and the last position I’ve taken (I took it just Monday of this week at $35.84). It’s also a recent IPO. Zscaler is disrupting a 20 year old paradigm of enterprise security with a new cloud based paradigm.
“Our results reflect the strength of our security cloud platform and the momentum we’re seeing as our customers embrace and accelerate their cloud transformation… We have the opportunity to dramatically change the legacy security market and to significantly reduce the costs of networking and security infrastructure.”
It’s quite expensive on a valuation basis as analysts and investors seem to feel the same way about it that I do. Here are some tidbits from their April quarter.
• Revenue Up 49% to $49 million
• Calculated billings up 73% to $55 million
• Deferred revenue up 61% to $125 million
• Raised $205 million in IPO.
• Adjusted operating loss was $2.9 million, or 6% of revenue, improved from a loss of $5.0 million or 15% of revenue.
• Adj net loss was $2.6 million, or 5% of revenue, improved from a loss of $5.0 million or 15% of revenue
• Adj net loss per share was 2 cents, improved from a loss of 5 cents.
• Op cash flow was $8.1 million, up from $0.2 million
• Free cash flow was $3.7 million, or 7% of revenue, compared to negative $1.8 million, or 5% of revenue, a year ago.
• Cash was $288 million.
These are a bunch of great companies. But that’s just my opinion, and I can’t say often enough that I’m not a techie and I don’t really understand what most of them actually do at all ! I just know what great results look like. And I listen to smart people about the prospects of these companies.
Finishing up. When I take a regular position in a stock, it’s always with the idea of holding it indefinitely, or as long as circumstances seem appropriate, and never with a price goal or with the idea of trying to make a few points and selling. I do, of course, eventually exit after months, or sometimes years, but I’m talking about what my intention is when I buy.
I do sometimes take a tiny position in a company to put it on my radar and get me to learn more about it. I’m not trying to trade it and make money on it, I’m just trying to decide if I want to keep it long term. If I do try out a stock in a small position and later decide that it’s not what I want, I sell it without hesitation, and I really don’t care whether I gain a dollar or lose one. I just sell out to put the money somewhere better. If I decide to keep it, I add to my position and build it into a regular position.
You should never just try to follow what I’m doing without making up your own mind about a stock. In these monthly summaries I’m giving you a static picture of where I am currently, but I may change my mind about a position during the month. In fact, I not infrequently do, and I make changes in the position. I usually don’t announce these changes until the end of the month, and if I’m busy or have some personal emergency I might not announce them even then. And besides, I make mistakes sometimes, even big ones! Don’t just follow me blindly! I’m an old guy and won’t be around forever. The key is to learn how to do this for yourself.
Since I began in 1989, my entire portfolio has grown enormously. If you are new to the board and want to find out how I did it, and how you can try to do it yourself, I’d suggest you read posts #4 through #8 at the beginning of the board, and especially the Knowledgebase that Neil keeps for us, which is a compilation of words of wisdom, and definitely worth reading (a couple of times) if you haven’t yet.
I hope this has been helpful.
Saul
For Knowledgebase for this board,
please go to Posts #17774, 17775 and 17776.
We had to post it in three parts this time.
