relative price

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

9 Likes
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
14 Likes