Portfolio Update 4/01/22 6:30AM
It’s been a month since I posted my last portfolio update found here;
https://discussion.fool.com/retirementdough-portfolio-december-2…
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 3/31/22.
Change since 2/26/22 -11.1% YTD -19.5%
VTI Monthly +10.0% YTD -6.3%
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 Monthly Stock
Current Previous Portfolio Cap (B) Price change
UPST 63.0 72.8 -9.8 9.2 -25.0%
TCNNF 0 23.7 -23.7 4.0 +4.0%
MNDY 7.7 2.3 -5.4 7.1 +0.8%
CASH 29.3 1.2 +28.1
New positions since last portfolio update: NONE
Exited positions since last update: TCNNF
Trades between 2/26-3/31
Bought: MNDY 3/7 138.75
MNDY 3/10 129.99; 129.01
UPST 3/25 101.60
Sold: UPST 3/7 125.59
TCNNF 3/31 between 20.70-20.90
Thoughts on trades and companies for the month.
The turbulent year continues. Upstart took a downward path this month which is reflected by my negative returns for the month. Additionally Trulieve reported earnings. I had high expectations (pun intended) but their results were hot garbage in my opinion.
I increased my position in Monday this month. The stock has been trading sideways. I most likely will buy more since I have a lot of cash to deploy after selling out of Trulieve. I have put my commentary on selling out of Trulieve below.
Upstart UPST
MC 9.2B
TAM 1.4T https://www.nasdaq.com/articles/upstarts-%241.4-trillion-mar…
Monthly performance of stock for March was -25%
https://ir.upstart.com/news-releases/news-release-details/re…
Red Rocks Credit Union, a not-for-profit financial cooperative in Colorado with more than 16,000 members and $360 million in assets partners with Upstart
https://ir.upstart.com/news-releases/news-release-details/be…
Bellwether Community Credit Union, a not-for-profit, New Hampshire-based credit union serving approximately 30,000 members, recently announced its partnership with Upstart (NASDAQ: UPST), a leading artificial intelligence (AI) lending platform, to offer AI-powered personal loans
https://ir.upstart.com/news-releases/news-release-details/su…
Upstart, today announced it is now certified as the first partner in the new ‘Build and Price’ category in the Subaru Certified Digital Tools Program.
https://ir.upstart.com/news-releases/news-release-details/vo…
Upstart Auto Retail product was selected by Volkswagen as one of its preferred digital retail providers to modernize dealerships through an omni-channel car buying experience.
https://ir.upstart.com/news-releases/news-release-details/up…
Upstart today announced its new mobile-first Upstart Auto Retail online platform
Monday MNDY
MC 7.1B
TAM 55B https://www.grandviewresearch.com/press-release/global-workf…
https://ir.monday.com/news-releases/news-release-details/mon…
Monday and KPMG International, the audit, tax and advisory firm, announce a strategic alliance to empower enterprises to boost digital transformation.
Why Monday? Well last month I mentioned it is well followed by Saul’s board which I like as it make it easier to keep up with. Additionally it is a SAS company, which is predicting 55% Y/Y growth for 2022 and it has a 90% margin. I have found in my investing career that revenue growth coupled with high margins usually makes for stock price appreciation.
Additionally the stock is down over 60% from its all time high’s in November of last year. Very similar to UPST in that I believe the amount of price correction is overdone. It has predicted slower growth this year than last year. However 50% revenue growth with 90% margin and trading for 7B market value with 380m quarterly revenues seems like a good opportunity. I do think this is a very competitive space and I do believe each and every quarterly report should be evaluated closely.
Trulieve TCNNF
MC 4.0B
TAM 62.5B (US) https://thedeepdive.ca/bofa-global-cannabis-market-currently…
Monthly performance of stock for March was +4.0%
I have been invested in Trulieve for a better part of last two years. However after this last earnings report I have decided to sell my position.
Here is why.
Q4 revenues were 305.3m. Revenue is decelerating, most likely from competition in Florida. The is no way of knowing that for sure as they do not break out sales per state. However we know that other companies have targeted growth in Florida this past year. Trulieve’s margins are decreasing as is the rate of revenue. Not a good combination, not a combination I look for as an investor.
Here are the numbers that I present in a previous post, with Q4’s number added in:
Q4 2020 Q1 2020 Q2 2021 Q3 2021 Q4 2021
Revenue
Trulieve 168.4 193.8 215.1 224.1
Harvest 69.9 88.8 102.5 91.9
Trulieve + Harvest 238.3 282.6 317.6 316.0 305.3
Q/Q growth
Trulieve 24% 15% 11% 4%
Harvest 13% 27% 15% -10%
Trulieve + Harvest 20% 19% 12% -1% -3%
Y/Y growth
Trulieve 106% 102% 78% 64%
Harvest 85% 101% 84% 49%
Trulieve + Harvest 103% 100% 80% 37%
Since Trulieve did not break out revenue numbers by Harvest vs. Trulieve we have to make some assumptions to evaluate. The previous quarter we know that Harvest revenues were down -10% Q/Q. Now I had assumed that some of that lost revenue was do to transitioning stores over to Trulieve stores which may have hurt the Harvest numbers and help the Trulieve numbers for last quarter. There is no way of knowing.
I am going to just assume that Harvest decreased another -10% Q/Q. This assumption really make the Harvest acquisition look like not such a great buy. However this decrease would leave you with 9.2m less Q4 revenue for Harvest which would equal 82.7m in quarterly revenue. That number would represent a 18% Y/Y growth rate for Harvest business.
Continuing with this assumption, that would leave 222.6m for Trulieve revenue. 305.3m minus 82.7m equals 222.6m. That would represent a slightly negative Q/Q revenue growth rate. This number would also represent a 32.2% Y/Y growth rate for historic Trulieve business.
Company reported combined revenue numbers and a 80% Y/Y revenue growth rate. Talk about putting lipstick on a pig! Now I had mentioned in my previous prediction post that i would be looking for 2022 year revenue forecast of 1.8B. They are forecasting 1.3-1.4B in revenue. If we look at 2021 combined revenue for both companies we see that this years revenue was (282.6+317.6+316+305.3) 1.22B. So they are forecasting a +15% Y/Y growth rate.
I think the company is positioning itself to be successful in the future. I will continue to watch it and I may even buy back into the company in future. However risk/reward currently for me is not what I am looking for. I do believe with Friday’s More Act most likely getting approved in the House, that the stock may climb for next few days.
However I took the opportunity to unwind a rather large position on the OTC with this positive momentum caused by the More Act. If the More act does not get passed I could see the stock going downward for a while. The problem is if this stock has to stay on the OTC with no retail investors, most likely it is dead money for a while. I do not mind waiting and being patient when my company is growing revenue +80% year over year. However when it is growing 15% y/y it is not as interesting.
YTD return of portfolio for each month
January -30.4%
February -9.4%
March -19.5%