Every now and then there I come across a stock where the story fits with our investment strategy as well as a familiar sector domain and the story is as clear as day.
Red Hat has been acing it for a while now. It has re-accelerated revenue growth hitting the 20%+ rate whilst adding subscription revenues at an even higher rate and with leverage blowing out the bottom line (certainly on a GAAP basis).
https://seekingalpha.com/symbol/RHT/earnings
I have friends who work for them who remind me how fast things are growing at Red Hat over here in Asia whenever I see them.
Even Bert holds this stock and has covered it of late.
The stock has practically doubled in a year and the chart is work of art and the market cap is still only $27Bn.
https://seekingalpha.com/symbol/RHT/analysis-and-news?analys…
There weren’t really any excuses, however now the P/E is 80 and the PEG has gone from below 1 to well above 1 perhaps we have missed our chance. Nonetheless it is a reminder to not be blinded by obvious candidates staring at us in plain sight.
Ant