relative price

Investment Analysis Clubs Saul’s Investing Discussions
1

When deciding to sell a stock with plans to redeploy that capital, it’s the relative price that matters. If you were thinking about selling NTNX and reinvesting the proceeds into another SaaS company, today is a better day to do so than Friday was. Not only is the relative change in stock pricing favorable, there’s a benefit when selling NTNX in a taxable account (a lower profit or a bigger loss is helpful for tax purposes).

I sold the rest of my NTNX shares this morning and redeployed some of the cash into shares that were down more than NTNX was down today.

Chris

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2 
I have a simple relative valuation formula I use to help me with days like today.
 
Relative value = (TTM Growth Rate * Gross Margin) divide by P/S 

I divide TTM growth rate times gross margin by the P/S from last earnings and using today’s stock price.

From this, I added to SAIL, TTD and ESTC.

Sym	G/[P/S]
PSTG	5.59
NTNX	3.33
SAIL	3.28
TTD	2.99
ESTC	2.65
AYX	2.36
NEWR	2.12
OKTA	1.84
SHOP	1.72
TWLO	1.69
MDB	1.68
DOCU	1.64
ZS	1.43
PAYC	1.43
SQ	1.38
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