This is my monthly portfolio update for the month ended April 30th 2021. I decided to start writing these at the beginning of this year, more as a personal tracker than anything else. Links to earlier recaps can be found at the bottom of the post.
I am extremely thankful for this board and the tons of knowledge from various quadrants that are shared here continuously. In the short time I’ve been here, have found out about new companies that weren’t on my radar, reinforced conviction on companies I was already holding, and also found the conviction to get rid of many others. Thanks, everyone.
**Company (Ticker) % April % March** Cloudflare (NET) 23.5% 21.0% Crowdstrike (CRWD) 22.6% 21.4% Datadog (DDOG) 7.9% 8.3% Snowflake (SNOW) 7.9% 8.1% Magnite (MGNI) 6.8% 7.8% Palantir (PLTR) 6.6% 5.8% Fiverr (FVRR) 6.4% 7.0% Roku (ROKU) 6.3% 5.3% Fulgent Genetics (FLGT) 4.8% 6.6% EXP World Holdings (EXPI) 4.2% 6.6% Lightspeed (LSPD) 1.6% 1.6% fuboTV (FUBO) 1.4% 0.6%
Not a whole lot of movement this month, as you can see there was no change in positions, still holding the same twelve companies I had at the end of last month. My portfolio has gradually evolved from around seventy positions six months ago, to the current twelve.
The 12 can be split into:
* Top Conviction or Tier 1 - Crowdstrike, Cloudflare, Datadog, Snowflake, Palantir, Roku.
Unless something goes horribly wrong with company performance, I expect to hold the Tier 1s for a long time and keep adding to them as I think they are executing well and have good chances of becoming gigantic in the future. This month I’ve added a little bit to Palantir and Roku.
* Tier 2 - Magnite, Fiverr, EXP, Fulgent, fuboTV, Lightspeed
Tier 2 are companies I believe in, am happy with their results so far and happy to hold them for now, but have doubts on whether I’ll be holding past this year. No plans to add significantly at this point, although I added a little bit to FUBO this month.
Aside from the small PLTR, ROKU, FUBO purchases, no other additions this month. And no sales. Looking back now, this was the month where I took the least action since I opened the brokerage account last August, with a total of four purchases in a full month.
Some days I toy with the idea of selling the whole tier 2 and reallocating that cash into Tier 1. Although some of my biggest gains so far came from Tier 2 companies, I’m on my first year of doing this. I believe, with time, the returns from Tier 1s will outweigh the Tier 2s. For now I’ll wait for earnings reports, half of my portfolio will report on the 6th and a few others the following week, so May might be a busier month in terms of trades.
COMPANY STOCK EVOLUTION YTD
For positions started this year, starting price is where I first bought it.
For companies I was already holding in December, starting price is Dec 31 Close.
**Price 04/30 Starting Growth** FLGT 77.02 52.1 47.8% MGNI 40.05 30.71 30.4% LSPD 69.81 58.5 19.3% NET 84.74 75.99 11.5% EXPI 34.36 31.56 8.9% FVRR 208.07 195.1 6.6% ROKU 342.97 332.02 3.3% CRWD 208.51 211.82 -1.6% PLTR 23.04 23.55 -2.2% DDOG 85.77 98.44 -12.9% SNOW 231.59 281.4 -17.7% FUBO 20.16 28 -28.0%
PORTFOLIO RESULTS YEAR TO DATE
End of Jan +24.7%
End of Feb +14,0%
End of Mar -6,9%
End of Apr +0,5%
So, I’m half a percentage point up from where I started the year. 8 months to go.
I’ve been consistently adding a chunk of my salary each month, and plan to keep doing so for the foreseeable future.
NOTES ON MY POSITIONS:
From NET’s website: Cloudflare started as a simple application to find the source of email spam. From there it grew into a service that protects websites from all manner of attacks, while simultaneously optimizing performance.
They now have offices in 15 cities across the globe, more than 3.5M total customers, and are performing at a high level, with 50% CAGR over the past five years. Cloudflare’s mission is to Help Build a Better Internet.
Cloudflare will announce their First Quarter 2021 Financial Results on May 6th.
For FY21, they guided for total revenue of $589-593M, with Q1 standing at $130-131M.
In FY20 their revenue totaled $431M, an increase of 50% yoy. Q4-20 revenue totaled $126M, also an increase of 50% yoy. Dollar-based net retention of 119%, so current customers seem happy.
In April Cloudflare had another Innovation Week, the Developer Week, where it seemed to me they announced more stuff than some companies do in a full year. A quick look at their blog and we can see announcements for:
• Cloudflare Images beta: simple service to store, resize, optimize, and deliver images at scale.
• Build your own private network on Cloudflare today - Cloudflare’s private network combines IP level connectivity and Zero Trust controls.
• Introducing workers.new, custom builds, and improved logging for Workers
• Zero Trust terminal in your web browser
• Cloudflare for SaaS for everyone (previously only available to Enterprise customers)
• Cloudflare Workers support for NVIDIA GPUs
• Cloudflare Pages now generally available (beta had been announced in December) – Pages is a fast, secure, and free way for frontend developers to build, host, and collaborate on Jamstack sites.
• Introducing Cloudflare Canada - Toronto will be home to Cloudflare’s first Canadian office and team.
• Cloudflare Named a 2021 Gartner Peer Insights Customers’ Choice for Web Application Firewalls
• Jonathon Dixon appointed VP and GM for Asia Pacific (previous experience in IBM, Cisco, Amazon Web Services, in his latest role he was in charge of the enterprise segment for AWS in Asia Pacific region
Whew. The above are just some selected articles for this month, there’s even more in there, their innovation pace is relentless.
I’m holding shares and LEAPs on Cloudflare, it’s currently more than 20% of my portfolio, but as with Crowdstrike, rather than trimming, feel like I should be buying more, don’t want to sell a single share. (Not thinking of buying more right now either, as it’s already a very large position, just saying that’s what it feels like)
In the 90s when we had our first PC in the house I remember my brother showing me Norton AntiVirus, and McAfee’s Viruscan. I know it’s oversimplifying it and their business is a lot more complex, but I tend to think of CRWD as a protector, with Falcon being an evolution of those products for the cloud era.
I also think it combines very well with Cloudflare in a portfolio, when you consider Internet and online data growth over the next decade. CRWD has been my largest position for a few months now, overtaken by NET just this week.
Don’t have much to add here – they’re doing phenomenally well across all metrics, as we could see in the Investor Briefing this month. Look forward to the next earnings report.
Fiverr is an Israeli company, developers of a marketplace that connects freelancers with clients. The first time I heard of the company was when my nephew, a data scientist, told me he was making some money on the side by creating spreadsheets for people on the internet. He was using Fiverr. They offer digital services in over 300 categories including logo design, web and mobile design, translations, video editing, you name it.
Fiverr will announce their First Quarter 2021 Financial Results on May 6th.
They have had seven straight quarters of accelerating growth since their IPO in 2019.
In Q4 2020, they reported revenue of $55.9 Million, +89% YoY growth.
Their active buyers surpassed 3.4 Million, +45% Yoy.
Full year, they grew revenue 77% in 2020.
They’re guiding for 2021 revenue growth of 46-50%. For the first quarter, they expect to make $63-$65 million, or 84-90% YoY.
Here’s some QoQ historical data below.
**Revenue $M** Q4 FY20 55,9 6,9% Q3 FY20 52,3 11,0% Q2 FY20 47,1 37,7% Q1 FY20 34,2 15,5% Q4 FY19 29,6 6,5% Q3 FY19 27,8 7,3% Q2 FY19 25,9 9,1% Q1 FY19 23,8 14,7% Q4 FY18 20,7 5,7% Q3 FY18 19,6 6,6% Q2 FY18 18,4
Active Buyers (Millions)
Q4 FY20 3,4 9,7% Q3 FY20 3,1 10,7% Q2 FY20 2,8 12,0% Q1 FY20 2,5 4,2% Q4 FY19 2,4 4,3% Q3 FY19 2,3 4,5% Q2 FY19 2,2 4,8% Q1 FY19 2,1 5,0% Q4 FY18 2 0,0% Q3 FY18 2 5,3% Q2 FY18 1,9
Avg Spend per buyer ($)
Q4 FY20 205 5,1% Q3 FY20 195 5,4% Q2 FY20 185 4,5% Q1 FY20 177 4,1% Q4 FY19 170 4,3% Q3 FY19 163 3,8% Q2 FY19 157 4,7% Q1 FY19 150 3,4% Q4 FY18 145 2,8% Q3 FY18 141 4,4% Q2 FY18 135
I hold Palantir much for the same reason I own Snowflake. The ability to extract valuable, actionable information from sources that only become more diverse and enormous with time will become more and more valuable and necessary in order to compete in the years to come.
Palantir’s promise is to become one of the most important software companies in the world over the next decade. Their business hangs on two main products: Gotham, for public institutions, mostly governments, where their client list features several branches of the US Government (including military/intelligence), and the UK and Japanese national health services; and Foundry, their commercial solution, where they’re working with Rio Tinto, BP, 3M, Airbus, among others.
The company has been around for several years, working mainly with US agencies on covert projects. Last year they IPO’d and moved out of Silicon Valley and into Denver, Colorado. CEO Alex Karp (I called him Peter Karp in one of my last recaps, guess I fused him with Thiel) doesn’t miss a chance to trash talk his former Silicon Valley neighbors, always raising questions on key topics like privacy.
Shortly after the IPO they seem to have upped their Marketing & PR game, as several key investor concerns are being addressed:
«Too secretive?» There have been several product demos and Q&As (actually there’s one live now for their Earnings call on May 11th, where you can still ask questions if you’re interested - https://app.saytechnologies.com/palantir-2021-q1 ). They’ve launched Double-Click , a series of events where they show how their products can be useful for various types of industries.
Now, I’ve watched the demos, but have no idea if their products are any better or worse than their competitors. What does Foundry do that you can’t get from others? What I take from the demonstrations is Foundry helps humans make better decisions, so I expect it’ll suggest courses of action based on the data it analyses, but… how does that compare with others? I don’t know, but I like their client list and they seem happy, as contracts are getting renewed. And I particularly liked the performance of the UK NHS Covid vaccination campaign, it’s a global best case.
«They were only getting contracts because they’re friends with Trump» Palantir’s work with the US government has spanned 4 or 5 presidencies now, and they’re still getting contracts under the Biden administration.
Their commercial performance isn’t good, it’s all government contracts, very concentrated client list, etc. They’re focusing on Foundry, and as I mention above, polishing their marketing assets – website and videos are slick, informative, and becoming more regular. Also, as mentioned on a previous recap, they partnered with IBM who will act as an external sales force to help them reach new clients (the company used to pride itself of not having salespeople, mind, so there’s a shift happening here).
Stock based compensation. Well, this worries me too. There’s still a lot of this going on, curious to see what they’ll say about it on the earnings call, as some of the top voted questions are about this topic, and there’s been recent news around Karp’s and other execs compensation.
Also worth mentioning, Palantir have been doing some investments in other companies via SPACs: Lilium - Munich-based Lilium is competing with other aviation companies to deploy battery-powered aircraft that can take off and land vertically, offering a new way for travellers to beat traffic and hop between cities. (from a Reuters release); and Sarcos Robotics – Enabling the Industrial Workforce of the Future through Robotics: Sarcos Robotics is a global technology leader designing and producing dexterous robotic systems that prevent injury, save lives, and create new possibilities. (from Sarcos’ website).
Regarding Palantir’s financials:
Market Cap $43Bn
FY20 revenue was $1,093Bn, approx. 60/40 split between Gotham and Foundry respectively
For Full Year 2021, guided for revenue growth in excess of 30%
For Q1 2021, guided for revenue growth 45%, adjusted operating margin 23%
Guided for revenue of $4Bn or more by 2025
I plan to keep growing my position and hold for a long time. No idea where the price will go in the short/medium term, though, just loading the truck while it’s below $25.
Fulgent are a genetic testing company, founded in 2011 and based out of California.
From their website: «Fulgent began with two simple ideas; flexibility and affordability. Today, we strive to create the most effective and wide ranging tests on the market.»
When Covid hit that flexibility was put to the test and they passed with flying colors, rapidly developing the capacity for mass testing. Fulgent won a few contracts including New York City Dept of Education Test and Trace for Covid in 2020, renewed since for the 2021 school year.
Fulgent will announce their First Quarter 2021 Financial Results on May 6th.
- Revenue $295M (over 3,400% yoy, beats by $95.5M)
- approx 3.2M tests delivered, 230x volume Q4 2019
- Gross margin improved over 8% sequentially and approx 26% yoy
- Cost per test improved 36% sequentially
- Non-COVID Revenue grew 43% yoy
- Non-GAAP Income $167.5M ($6.20 per share, beats by $2.15)
- Adjusted EBITDA $230.1M
Full year Revenue $421.7M , increase of 1,200% from 2019.
Non-GAAP income $218.9M, or $9.10 per share
- projects $800M in 2021, +90% yoy
- within these, $70M expected to come from Next Generation Sequencing testing, representing 92% growth yoy
- expects non-GAAP income of approx $12.5 per share in 2021
Q1 2021 Outlook:
- Revenue of at least $325M
Ming Hsieh, Chairman and Chief Executive Officer, said, “Our record fourth quarter results capped off a transformational year for Fulgent Genetics. While we did not envision 2020 to unfold in the way that it did, I am proud of our team for supporting the pivot of our business to rapidly scale to become one of the top providers of COVID-19 testing in the country. The results we achieved were possible because of our differentiated technology platform built over the ten years since our founding. While the majority of our business this year was from COVID-19 testing, we believe we have laid a very strong foundation for continued growth in the years ahead. This year we made inroads with numerous new customers, established new reimbursement agreements, expanded our capacity and commercial capabilities, and have grown our direct-to-consumer genetic testing platform, Picture Genetics. We have also begun utilizing our NGS based COVID testing capabilities to aid in identification and screening of potential new strains and mutations of the virus. And finally, we have taken a novel approach to licensing our lab management software solutions and are offering a new COVID vaccine management software platform, which will continue to aid in recovery from the pandemic. I believe we are extremely well positioned in the years ahead as vaccine rollout continues and our lives return to a state of normalcy.”
Thanks for reading - wishing everybody a lot of green numbers in the rest of the year.
My Previous recaps:
March 2021 Update
February 2021 Update
January 2021 Update