Portfolio update 4/30

Portfolio Update 4/30/20

It’s been a month since I posted my March portfolio update found here; https://discussion.fool.com/portfolio-update-33120-34458954.aspx…

I have found doing these updates is helping me keep better records of my investing thought processes over time. Much like keeping a journal in life when you re-read in the future it helps you remember what your thoughts were at the time of writing. Hopefully others find this helpful as well.

Current Portfolio as of 4/30/20.  
Change since 3/30/20  +18.6%	YTD     +32.4%. 
YTD  S&P 500 -11.8%   Nasdaq -4.1%   Dow -16.9%

Stock		Current	 	% of Port	      	% Change 		        Market	
		% of Port		on 3/31	   	in port since 3/31	   	Cap

AYX		       37.2		36.3			+0.9		        7.2B
CRWD		       23.9		22.7			+1.2			14.6B
LVGO		       13.7		11.3  			+2.4			3.4B
ESTC		       14.2		 9.8			+4.4			5.1B
DDOG		        8.7		 7.8			+1.1       		13.4B	
CASH                    2.3		12.1			-9.8


New positions since last portfolio update: None

Exited positions since last update: None

Trades between 4/1-4/30

Bought: 	AYX		4/6		86.03
		ESTC		4/20		61.50

Sold: 		AYX 		4/6		88.66

Thoughts on trades and companies for the month. I added some quotes from 10-K’s and 10-Q’s that I thought provided a little insight into how the companies may perform during CoVid times.

Not alot of trading. ESTC seems undervalued. Put my cash back to work as the blueberry season over in Florida and I know where I stand financially more now after CoVid 19.

Still number one AYX 37.2%. Favorite stock. Rock solid financials. No real competition. I am sure that CoVid 19 will have an effect on many of our companies. Some on the board have expressed concern for AYX. I will be interested to see the effect but I do not imagine it will be too great due to the structure of payments that AYX receives from customers.

From 10-K: Our platform has been adopted by organizations across a wide variety of industries and sizes. We derive a large portion of our revenue from subscriptions for use of our platform. Our software can be licensed for use on a desktop or server, or it can be deployed in the cloud. Subscription periods for our platform generally range from one to three years and the subscription fees are typically billed annually in advance. We also generate revenue from professional services, including training and consulting services.

Subscriptions are generally non-cancelable during the subscription term and subscription fees are non-refundable. We recognize a portion of subscription revenue upfront on the date which the platform is first made available to the customer, or the beginning of the subscription term, if later, and a portion of revenue ratably over the subscription term.

I just do not think the Covid is going to slow them down much, possibly, but they have already collected in advance. If anything I could see some companies that had license on desktops at offices, getting an additional license for deployment in the cloud for their employees to work at home.

Number two holding CRWD 23.9%. Killed its earnings report. From 10-K: At this point, the extent to which the COVID-19 may impact our financial condition or results of operations is uncertain. Furthermore, due to our subscription based business model, the effect of the COVID-19 may not be fully reflected in our results of operations until future periods, if at all.

We have a low friction land-and-expand sales strategy. When customers deploy our Falcon platform, they can start with any number of cloud modules and we can activate additional cloud modules in real time on the same agent already deployed on the endpoint. This architecture has also allowed us to begin to offer a free trial of our Falcon Prevent module directly from our website or the AWS Marketplace, and we plan to extend this capability to additional modules in the future. Once customers experience the benefits of our Falcon platform, they often expand their adoption over time by adding more endpoints or purchasing additional modules. We also use our sales team to identify current customers who may be interested in free trials of additional cloud modules, which serves as a powerful driver of our land-and-expand model. By segmenting our sales teams, we can deploy a low-touch sales model that efficiently identifies prospective customers.

Low touch sales model. I would think that is good in this times.

Number three holding LVGO 13.7%. Bert did a good write up on the company. A few others on the board own the stock and they have posted good overview of the company recently as well.

From 10-K; In December 2019, a novel strain of coronavirus was reported in Wuhan, China. The extent of the impact of the coronavirus outbreak on our operational and financial performance will depend on certain developments, including the duration and spread of the outbreak, impact on our clients and our sales cycles, impact on our marketing efforts, and effect on our suppliers, all of which are uncertain and cannot be predicted. At this point, the extent to which the coronavirus outbreak may materially impact our financial condition, liquidity or results of operations is uncertain. Due to our subscription-based business model, the effect of the coronavirus outbreak may not be fully reflected in our results of operations until future periods, if at all.

Our solutions include a smart, cellular-connected device and related testing materials, if applicable, that are sent directly to the member, and member access to a suite of personalized feedback and remote monitoring and coaching services on our platform. We invoice our clients monthly on a per-member or per-solution basis, depending on the solution, and may also charge an upfront fee for the devices. We do not sell member support services separately. As a result, member enrollment and continued usage drives our revenue and we primarily generate revenue not through the upfront fee for our devices, but from the ongoing subscription revenue for our members to access to our integrated solution.

I think this is the one company that could be impacted due to the monthly subscription and the fact that the customer base has higher percent chance of dying if contracting CoVid19.

Number four holding ESTC 9.8%. From 10-Q: Our financial performance depends on growing our paid customer base by converting free users of our software into paid subscribers. Our open source distribution model has resulted in rapid adoption by developers around the world. We have invested, and expect to continue to invest, heavily in sales and marketing efforts to convert additional free users to paid subscribers. Our investment in sales and marketing is significant given our large market opportunity and our large and diverse user base. The investments are likely to occur in advance of the anticipated benefits resulting from such investments, such that they may adversely affect our operating results in the near term.

Calculated billings exclude the effects of deferred revenue and unbilled accounts receivable acquired through acquisitions. For annual contracts, we generally invoice customers at the time of entering into the contract. For multi-year contracts, we generally invoice customers for the first year at the time of entering into the contract, and then annually prior to each anniversary of the contract start date. Some Elastic Cloud customers purchase subscriptions on a month-to-month basis, which are usually invoiced monthly in arrears. Training and consulting services are invoiced either at the time of contract or at the time of delivery, based on the arrangement with the customer. Our management uses calculated billings to understand and evaluate our near-term cash flows and operating results.

Number six holding DDOG 7.8%. I like the numbers. From 10-K:

Our SaaS platform integrates and automates infrastructure monitoring, application performance monitoring and log management to provide unified, real-time observability of our customers’ entire technology stack. Datadog is used by organizations of all sizes and across a wide range of industries to enable digital transformation and cloud migration, drive collaboration among development, operations and business teams, accelerate time to market for applications, reduce time to problem resolution, understand user behavior and track key business metrics.

We generate revenue from the sale of subscriptions to customers using our cloud-based platform. Our paid subscriptions are available in Pro and Enterprise tiers. The terms of our subscription agreements are primarily monthly or annual. Customers also have the option to purchase additional products, such as additional containers to monitor, custom metrics packages, anomaly detection and app analytics. Professional services are generally not required for the implementation of our products and revenue from such services has been immaterial to date.

We employ a land-and-expand business model centered around offering products that are easy to adopt and have a very short time to value. Our customers can expand their footprint with us on a self-service basis. Our customers often significantly increase their usage of the products they initially buy from us and expand their usage to other products we offer on our platform. We grow with our customers as they expand their workloads in the public and private cloud.

I think the cloud companies are all going to benefit from the movement of remote work and school out of the home. Everything was moving to cloud anyway, this just hyper sped it up. I believe most of our companies discussed on the board will benefit from this trend.

Out of the companies I own, I believe CRWD and DDOG are in best position because it seems the product sells themselves and does not require as much person to person sales interaction. Out of my five stocks I could make a case that LVGO might get hurt the most because of the monthly collection versus annual collection. However another movement of this CoVid issue has been general health. Coronvirus is killing mostly older people with other health factors. These factors need to be addressed to try and minimize the potential interaction with Covid19. Kinda makes LVGO even more important possibly. I could see it argued either way.

I sure would not want to be invested in energy company or manufacturing company or a restaurant, barbershop, etc. right now. Overall I think we are in the right place as investors. Cloud and data.

As always any suggestions or questions feel free to email me.


Thanks for the great update, retirement dough!

Here’s my take on some of your stocks which I also hold:


I just do not think the Covid is going to slow them down much, possibly, but they have already collected in advance. If anything I could see some companies that had license on desktops at offices, getting an additional license for deployment in the cloud for their employees to work at home.

I appreciate this perspective. AYX is still my top holding although less than before. It was killing it just before the pandemic. But it has been noticeably weaker in the bear market than our other favorites. This does concern me. I think the market is assuming that AYX is less essential than other tech and most susceptible to decreased recessionary spending. I hope that your take is correct. Regardless, this is a short term issue and AYX seems significantly under priced for its longer term growth trajectory with no real competition. I anticipate volatility. It may slip to recent lows again but should rocket higher once there is any hint that its prior growth is resumed. Its best to just stay long, not look at it in the short term and maybe add on weakness.


Low touch sales model. I would think that is good in this times.

I’m very bullish on CRWD. I’ve added as it has risen. It’s my #2 position. It was killing it before this pandemic and now should be even stronger! Cloud security is now a primary issue and CRWD is the king.


I think this is the one company that could be impacted due to the monthly subscription and the fact that the customer base has higher percent chance of dying if contracting CoVid19.

This is another company that was just killing it before the pandemic with triple digit annual revenue growth and again, should become stronger! Its expertise plays directly into the current shift towards telemedicine. As a physician, I see this as a long lasting shift benefiting a company like LVGO. It has a massive opportunity ahead. It’s not a surprise that LVGO raised guidance during this pandemic. I’ve added to it on the rise and its my #3 position. I’ve only limited it due to uncertainty about competition and a more novel business model. But it seems to be the top dog with unique advantages and its model seems well proven. Increased unemployment also might be a drag on growth in the short term.


This is #4 for me. This company was also just killing it before the pandemic. I’m basically neutral on how the pandemic will impact business. Any negatives should be temporary and there might be a longer term lift to its business. I owned ESTC as well before but decided to settle on just one of these two.