Saul’s Portfolio at the end of Oct, 2023.
As I often do, for my own convenience, I am finishing the month on the last weekend of the month
MY RESULTS MONTH BY MONTH FOR 2023
Here’s a table of the monthly year-to-date progress of my portfolio for 2023. I’ll present them as starting from 100% of my starting value and figure from there. As Major Fool wrote in his summary, this has been a tough three months. While I’m still positive on the year, most other posters have higher results than I do, so don’t follow me!
End of Dec 100.0% starting point
End of Jan 109.7%
End of Feb 107.0%
End of Mar 105.8%
End of Apr 91.9%
End of May 106.3%
End of Jun 119.0%
End of Jul 127.5%
End of Aug 124.5%
End of Sep 116.5%
End of Oct 101.3%
MY POSITIONS
Here’s what my positions looked like a month ago (end of Sept).
Aehr Testing 19.5%
Samsara 18.6%
Monday 15.6%
The Trade Desk 15.2%
Global-e 14.3%
Axon 11.9%
Remitly 3.1%
And here’s what they looked like at the end of Oct:
Samsara 17.7%
Monday 14.1%
The Trade Desk 13.8%
Global-e 13.3%
Axon 12.9%
ELF 11.0%
Celcius 8.0%
Remitly 4.3%
Tesla 2.7%
As you can see, the position which was largest last month, Aehr, is gone. I explained this in a mid-month summary which already has about 35 replies and 700 likes so I won’t go through the explanation again, but for a quick summary, I’d have to say that it was about the total uncertainty I felt about their future. I must admit that I had no advance knowledge that the share price would fall off a cliff so quickly, but I don’t find the stock action surprising. It closed Friday at $29.70, down 25% to 30% in the past two weeks, depending on where you are counting from.
If you look past Aehr my next five positions are still right there, and in the same order, so I’m not bein flighty in exiting Aehr. To replace Aehr I’ve added ELF and Celcius, and a very small position in Tesla.
I have kept a permanent safety fund out of the market that I could live off for several years if necessary, and I feel everyone who does not have a secure regular source of income should do the same. I have gradually added to it over the last year or so, moving some funds gradually from my investing pool to my out-of-the-market pool. Given our advanced ages, my wife and I probably have enough to live for the rest of our lives with our out-of-the-market pool, with a little left over for our children, even if our investments went to zero (which is an unlikely scenario).
MY TOP POSITIONS
Samsara
What they do is provide companies with a software platform, and sometimes with hardware as well, that will help their customers manage their moveable, and sometimes not moveable, assets to save lots more money than the service costs them. They have the advantage of offering a huge and rapid return on investment to their clients. Something like “If you pay us $450 a year to monitor this truck we’ll save you $2500 a year just in reduced idling expenses alone.” How can any business refuse that offer?
Their revenue this quarter grew by 43% and ARR grew by 40%. Their gross margin was a record at 75%. Totalling their FCF for the past two quarters gives you positive $3M. That was improved from a LOSS of $89M in the same quarters a year ago! That’s a $92 million swing. They added a record number of $100k customers this quarter, and their total number of $100k customers was up 53% yoy, and grew by a record number both yoy and sequentially. Not bad in this economy!
Now if any of this interests you I’d recommend the many good posts on the board as well as muji’s extraordinary deep dive that he sent out to his subscribers.
Monday
Some people feel that companies in Monday’s field can never be successful. Well, here are their most recent results:
- Revenue was $176 million, up 42%.
- Adj Gross Margin is 90% !
- Adj Op Inc was positive $16.6 million, up from a loss of $15.4 million a year ago.
- Adj Op Margin was positive 9%, up from negative 12%
- Adj EPS was positive 41 cents, up from a loss of 33 cents.
- Op Cash Flow was $47.6 million, up from minus $14.1 million
- Free Cash Flow was $45.9 million up from minus $19.3 million
- Free Cash Flow Margin was $26% !
- Cash was $989 million, up from $936 million sequentially
- $50k customers was 1,892, up 63% yoy from 1,160.
Revenue growth the last six quarters has come down with the law of large numbers and high interest rates, as follows: 84%, 75, 65, 57, 50, and now 42%.
However six quarters ago we wondered if they’d ever reach positive FCF, but this is how the FCF has turned out: -$16M, -$19M, +$14M, +$30M, +$39M, and +$46M.
And Adj EPS looked like this: -96¢ -33¢ +5¢. We wondered if the +5¢ was a fluke, but they continued with: +44¢ +14¢ and +41¢ (so notice that they went from EPS of -96¢ to +44¢ in three quarters).
Right now the stock price is down because one of their headquarters, the main one, is in Israel, which is in the midst of a war, even though most of their business is in the US.
I have learned long ago that sticking with great companies wins out in the end, and beats market timing, but living through the 2021/2022 decline was very difficult.
FINISHING UP
Let me remind you first, that I have NO IDEA what our stocks will do next month. I’m terrible on predictions. But I know that the businesses of our companies will do just fine for the most part.
When I take a regular position in a stock, it’s always with the idea of holding it indefinitely, or as long as circumstances seem appropriate, and never with a price goal or with the idea of trying to make a few points and selling. I do, of course, eventually exit. Sometimes it’s after months, and sometimes after years, but I’m talking about what my intention is when I buy.
I do sometimes take a tiny position in a company to put it on my radar and get me to learn more about it. I’m not trying to trade it and make money on it, I’m just trying to decide if I want to keep it long term. If I later do decide that it’s not what I want, I sell it without hesitation, and I really don’t care whether I gain a dollar or lose one. I just sell out to put the money somewhere better. If I decide to keep it, I add to my position and build it into a regular position.
You should never try to just follow what I’m doing without making up your own mind about a stock . First of all, you may have a completely different financial picture than I have. Different age, different income, different assets, different debts, different expenses, different financial and family responsibilities, etc.
Besides, in these monthly summaries I’m giving you a static picture of where I am currently, but I may change my mind about a position during the month. In fact, I not infrequently do, and I make changes in the position. I usually don’t announce these changes until the end of the month, and if I’m busy or have some personal emergency I might not announce them even then. And besides, I sometimes make mistakes, even big ones! Don’t just follow me blindly! I’m an old guy and won’t be around forever. The key is to learn how to do this for yourself.
THE KNOWLEDGEBASE
Since I began in 1989, my entire portfolio has grown enormously. If you are new to the board and want to find out how I did it, and how you can try to do it yourself, I’d suggest you read the Knowledgebase , which is a compilation of my “words of wisdom”, and definitely worth reading (a couple of times) if you haven’t yet. It’s on the panel to your right.
I hope this has been helpful.
Saul