Portfolio Update 7/31/21 8AM
It’s been a month since I posted my last portfolio update found here; https://discussion.fool.com/retirementdough-june-portfolio-updat…
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 7/31/21. Change since 6/30/21 -6.1% YTD +8.8% VTI Monthly +1.7% YTD +16.5%
I have decided to just benchmark versus the VTI which is Vanguard Total Stock Market Index Fund, which is probably what I would put my money into if I did not want to spend time researching stocks. VTI includes all 3600 stocks traded in market.
Stock % Portfolio % Portfolio % Change Market Current Previous Portfolio Cap (B) TCNNF 35.9 37.0 -1.1 4.2 TDOC 16.4 15.3 +1.1 24.9 DOCU 14.6 13.5 +1.1 58.7 UPST 13.4 15.3 -1.9 9.5 DDOG 9.8 8.6 +1.2 34.3 CASH 6.4 6.4 0 SKLZ 1.7 0 +1.7 5.6 GAN 1.6 0 +1.6 0.6 INTZ 0.3 0.4 -0.1 0.08 CRWD 3.5 0 -3.5 58.7
New positions since last portfolio update: SKLZ, GAN
Exited positions since last update: CRWD
Trades between 6/30-7/31 Bought: UPST 7/7 115.70 7/26 119.99 7/27 115.46 INTZ 7/7 12.44 7/12 10.14 7/20 4.55 GAN 7/14 15.36 SKLZ 7/16 14.71; 14.78; 15.08 TCNNF 7/27 32.00 TDOC 7/7 157.66 Sold: UPST 7/26 121.84 7/28 120.90 CRWD 7/7 265.38; 267.33 DOCU 7/26 306.89
Thoughts on trades and companies for the month.
Largest holding is Trulieve (TCNNF) at 35.9% which has been going negative since the beginning of Feb. I continue to accumulate shares into my overly sized position. It is the one company that I feel is most undervalued currently of any that I follow. Market Cap of 4.2 billion and add another 2.1 billion for the buyout of Harvest health and recreation (which they are doing with shares). With the buyout combined revenues for 2021 will be 1.2B. Trulieve and Harvest have both been growing revenues +100% year over year organically. A few posters have asked on the board where can you find smaller companies that are rapidly growing revenue, well here is one. You can read my deep dive on it here: https://discussion.fool.com/trulieve-update-34714389.aspx
Yes cannabis still has some challenges with federal legalization. However many states are legalizing medical uses and some are legalizing recreational usage. This company is the most profitable cannabis company in the U.S. They have a great leadership team focused on return on investment. CEO just recently bought one million dollars worth of shares on open market. https://www.sec.gov/Archives/edgar/data/1754195/000175419521…
If I ever have banged the table for a company this is it at current valuation.
TAM in 2028 84B https://www.prnewswire.com/news-releases/legal-marijuana-mar…
Q revenues 193.8M 102% yoy
gross margin 70%
96 locations nationwide
recently approved for Georgia cultivation and sales
reports 8/12 8:30AM
Teledoc is my second largest holding at 16.4%. They recently reported earnings which was surprisingly not well covered on our board. It tanked after hours but managed to finish slightly higher than the open the following day. I personally think TDOC the stock has bottomed and we will see it climb going forward.
The Teladoc the business is doing well, subscription revenue is up and that is increasing the adjusted gross margin. The announced that they are about to close some big deals but did not give specifics. I read the transcript and I found the leadership to be confident in future growth. Interesting because I just read a great post on first movers on this board https://discussion.fool.com/perhaps-this-should-be-a-rule-of-sau… They are a first mover in telehealth. The total addressable market is absolutely huge. This company in early innings and is posed for potential massive growth. I like the risk/reward as it is currently priced.
TAM in 2026 475B https://www.globenewswire.com/news-release/2021/06/29/225464…
Q Revenue 503m
109% yoy; 41% yoy organic (excludes acquisitions)
Visit fee revenue flat, access fee (subscriptions) revenue up 138% y/y
3.5m visits 28% yoy
Living suite members 715,000 45% yoy
52m members increase of 500k over Q1 (that is 500k new members in one quarter!)
Adjusted gross margin up from 62.3 to 68.1 yoy due to increase in subscription fee revenue
My third largest holding Docusign is doing very well. The Covid pandemic accelerated their business and since it is a subscription based with usage they are growing revenues at an accelerated rate because of the shift in the way business is conducted. The one thing I do not like about the stock is the TAM is supposedly around 50B and market cap is 58.7B. I think they have a lot of international growth ahead of them and I really like the business, just which it was valued a bit lower if I was a current buyer (I am not; I already own and trimmed a bit this month).
TAM in 50B https://www.nasdaq.com/articles/docusign-has-a-massive-untap…
Q revenue 469m 58% y/y
earnings early september
Upstart is an interesting business that is seemingly doing no wrong. I think the market cap, growth rate and TAM make this a very interesting business to invest in. Only thing that trips me up is what happens during a prolonged recession? Even in their 10k they talk about their A.I. has not been tested during recessionary periods. They are paid based on loans being paid back by borrowers, if borrowers stop paying how badly does it hurt Upstart? That thought process led to me lightening my position at the end of the month. I still hold 13.4% so I obviously am not too concerned.
TAM 161B https://www.tipranks.com/news/article/sofi-technologies-vs-u…
Q revenue 121m 90% y/y
earnings 8/10 4:30
Datadog is my fifth largest holding just under ten percent. It reports earnings this week. It should see a reaccelerating of revenue as it comparable y/y were negatively impacted by Covid. If revenues do not accelerate I will be looking to sell. This stock is not cheap. I have been thinking hard about trimming my position but earnings were close and I expect good results.
TAM in 2025 45B https://www.marketsandmarkets.com/Market-Reports/it-operatio…
Q revenue 199m 51% y/y
earnings 8/5 8:30
I recently bought small positions in GAN which has been brought up on the board previously. I bought GAN because Bert Hochfield recommended it and bought some for his portfolio recently and his write up peaked my interest in the company. It is a very small enterprise gaming software company that acquired coolbets a B2B gambling company and has rapidly growing revenues.
TAM 3B growing to 20B per company https://seekingalpha.com/article/4429526-gan-limiteds-gan-ce…
Q revenue 28m 260% growth y/y
I also bought Skillz (SKLZ) which has been brought up on the boards. I have been researching it more since my purchase and I am not sure I will continue to invest in this company. I could see selling my shares and putting the money to work somewhere else.
Intrusion (INTZ) is an extremely small speculative company someone brought to the board but the post got deleted however the post peaked my interest in learning more and I dug into the company. The CEO got fired recently sending the stock price down over 70 percent. I tried to catch the falling knife a bit before the announcement. Thankfully I only invested a very small amount of my portfolio.
I do think this company has a data set that would be very valuable for developing or utilizing artificial intelligence software. They say they have a software that works with a.i. and is easily installed. The CEO got fired over the lack of results on selling this software. This is a total speculative investment or what Saul would call a story stock. I would not recommend it to anyone on the boards. I may buy more if the price were to get lower because I am in the financial position to do some speculative investing.
I currently am holding eight positions with majority of money in five positions. I tend to range between 6-10 at any given time with 7-9 being the “norm”. The older I get the more I am thinking about only holding five. It takes a lot of time to research stocks and why not put your money to work on your best ideas. If you want diversification invest some of your money in a broad fund like VTI.
Percent gain/loss for company for month & year.
July % YTD % TCNNF -12.8 +3.4 UPST -3.3 +196.3 CRWD +0.9 +19.7 DOCU +6.6 +34.1 DDOG +6.4 +12.5 TDOC -10.7 -25.8 INTZ -70.5 -74.2 GAN -6.9 -24.6 SKLZ -35.2 -29.6
Trulieve, Teladoc and Upstart are three of my top four holdings. Those three were down this month which led to my portfolio being down this month. My smaller speculative holdings were down as well. I feel confident that my portfolio will be back on the upswing next month after earnings are reported.
As always any suggestions or questions on portfolio structure feel free to email me. Any questions on why I like or dislike certain companies post it to the board with exception of Trulieve or Intrusion(just email me on those).