Portfolio Adjustments: 5/23

Investing Strategies Abandoned Arctic Outpost #13
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My general thinking is that the continuing drama over the Debt Ceiling will continue to push thing down nicely; with the expected last minute Hail Mary Touchdown agreement sending stocks soaring. Of course the timing is tricky but clock management is just part of it. So with that in mind this is what I’m doing:

  1. Sold out of CRWD today. Why? Well…I have both CRWD and S and since they basically do the same thing I decided I didn’t need both. And - because CRWD has been on a great run and I wanted to take advantage of that. If it drops back enough I will most likely buy it back.

  2. Sold TTD - same general situation as with CRWD only not so much.

  3. Added to MNDY Looking to add to BILL.

  4. Joined the AEHR fans with a Scout Team contract but I am not all that sure its going to take.

Thinking about:

MDB
MELI
SMCI
UPST

Here are their recent game stats:

  1. MDB

Price $272.81
About 30% Off its 52 Week High.
5 Day Momentum: -3.99%
1 Month Momentum +17.98
Revenue Growth Last Report: +35.6%
Valuation EV/S (fwd): 12.84
Revenue Beat Last Report: 6.92%

Has been on a two week run from 220.52 to as high as 289.72. Judged to be a pretty solid long term investment and worth a Bench Level investment.

  1. MELI

Current Price: 1,299.83
About 5% Off its 52 Week High
5 Day Momentum: -2.28%
1 Month Momentum: +1.91%
Valuation EV/Sales (fwd): 5.19
Revenue Growth Last Report: +35%

MELi popped after a nice report - reversed/unpopped then regrouped and repopped, then today gave it all back again. I love these guys. If they sink further tomorrow I will re-enter.

  1. SMCI

Current Price: $161.91
About 6% off High.
5 Day Momentum: +3.48%
1 Month Momentum: +62.57
Valuation EV/Sales (fwd): 1.26 (Trying to verify this)
Last Report: Kicked off an SCMI feeding frenzy based solely on guidance and the scent of AI potential.

A nice 3-4% continuation drop tomorrow would be really nice - if the market would just cooperate. Sigh!

  1. Upstart

Current Price: $25.70
About 52% off its High
5 Day Momentum: +14.49% (Note: Today trimmed off -6.04%)
1 Month Momentum: +73.94%
Valuation RV/Sales (fwd): 5.51
Last Report: Nothing matters here except the fact that UPST announced they had found buyers for their loans. The surged and I decided that the portfolio should surge with it. And it did until I sold out around $24.70.

Now waiting for it to come back a bit and then perhaps re-enter for a joy ride to a vast fortune - or something like that.

I have no idea if I will enter these companies or not: If the bottom really is in then we are in a Buyers Market ripe with high value targets. Happy Days?

Anyway - before today I was really fat with cash - now I am borderline obese with the stuff.

All the Best,

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I prefer to look at it on a PE basis, which is less than 15… with rapid growth.

FWIW, there are some pretty high analyst price targets ($400 is the latest).

For me, I figure there will be growth from the $11 EPS for their fiscal year that ends in June 2023 and that the PE should be at least 25 with even modest growth. JMO of course.

Rob
He is no fool who gives what he cannot keep to gain what he cannot lose.

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Rob, I respect you a lot…

So will ask you this:

Do you truly believe this increase in SMCI is based on fundamental reasons?

If not, how do you know when the party ends? Because it will end …

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Hi Rob: I’f feel better about it if it would shave off a few more percentage points. We’ll see I suppose.

All the Best,

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From Yahoo Finance and the most recent earnings report:
…2023E…2022…2021…2020…2019
Revenue… 6.7…5.2…3.55… 3.34…3.50
EPS…10.50…5.32…2.09…1.60…1.39

(sorry, I’m not sure how to format with the new boards)

I haven’t researched the history deeply, but I know that there was an issue a few years ago regarding financial reporting. Reading about it, I don’t think it was a matter of fraud.

Now, looking at the numbers above… I can’t see how/why the PE isn’t at least 25 UNLESS there is concern about the sustainability of the growth of the last few years. My thoughts on that: I can’t predict how sustainable it is because I don’t see what their competitive advantage is. However… I can’t argue with the actual performance, which is pretty good from 2021 to 2022 to 2023 for revenues… and a longer good track record on profitability.

So… I figure the current PE is too low unless the growth just plain stops NOW. If it only continues to grow revenues and profits at 20% annually (pulling a number out of the air), a PE of 25 would be pretty reasonable… compared to the current PE of a bit less than 15.

So… “Is the recent share price rise reasonable?” >> Absolutely, based on the numbers.

More to the point: “Is a further share price rise reasonable?” >> I don’t see why not unless some solid news arrives indicating that competition is driving down their growth. (shrug) I’m not going to sell because I’m afraid of something that might happen even though the evidence points in the other direction.

The only other thing I recognize is this: I’ve seen other companies grow and do well even if I don’t understand what their competitive advantage is. How will I know when the party ends? It ends when the news changes and everyone will likely notice. It isn’t always reasonable to think: “The party ends when XYZ happens and then I’ll sell before anybody else realizes the party is ending.” Now… if SMCI says at the next earnings report “We don’t see any more growth coming.”… then the party is over. Is that a big risk? Doesn’t seem like we’re on the cusp of that, does it?

Does this mean I’d buy and hold with the idea of owning SMCI for years and years and years? Heck no! I plan to hold as long as I like what I see. If they stumble, I’ll take them out back and shoot them. But I can’t predict when that will happen with this company.

I presume that at some point growth will SLOW, not suddenly stop. Then I might sell.

That being said… I have a very large allocation in SMCI. More than most would be comfortable with. Why? Because… unless sales and profits are about to plummet… it’s undervalued. And there is zero reason to think that will happen unless I’m concerned about some catastrophe (nuclear war, overall economic collapse, asteroid impact)… and I don’t see that as something to worry about. If I’m concerned about global disaster, I’d be buying food and toilet paper. lol

Rob
He is no fool who gives what he cannot keep to gain what he cannot lose.

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Rob,

Here is the graph…Look at the YOY quarterly growth…One could see why it went crzy in 2022…by the same token, one can also see why it should have plummeted after this ER, but didnt…But wait a sec, it did!!! It went down initially, but since the momentum craze on all stocks was truly high pitch by that time, the shorts were caught napping, and had to cover quick big time…

Looking at the graph, it is but a matter of time…My guess, we hear some downgrades just close to the ER…which brings it down by 10% or more…and people DCA/ dip buy, so it doesn’t go too much lower than that…And the ER shows the expected falling growth…and then the obliteration is complete…Of course, if the FOMO in general market doesn’t stop by that time, then, all bets are off!!! Sounds very UPSTART like to me!!!

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Snowflake seems to very likely acquire Neeva for AI applications

Very smart move and timely😀

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SMCI DID release a preliminary earnings report/alert because they had suffered component shortages… which have been resolved: Super Micro Computer, Inc. - Supermicro Announces Preliminary Financial Information for Third Quarter Fiscal 2023

For more SMCI info, check out this thread… no sense me repeating it: SMCI: Supermicro

If it interests you, fine. If it concerns you, stay away… no sense being uneasy about one’s investments. :slight_smile:

Rob
He is no fool who gives what he cannot keep to gain what he cannot lose.

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Rob,

Just wanted to give credit where it is due!!! Well done on SMCI …and looks like it is only looking to go higher and higher…And agree, I now accept that is not a crap stock…Euphoria, momentum sure…but it does have the current craze pushing it, and doubt we have seen the highs …Blimey, every day is a new high!!!

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