Saul,
I’ve recently started following your board; which is an excellent resource for investors and your track record is very impressive! Congratulations!
I have a question about Splunk; which I note you no longer own.
Do you think this business has a ‘moat’ and will continue to grow rapidly OR do you think too many companies are competing in this area?
Thanks
Here is what Saul said in his End of January 2018 post.
During Dec I sold out of my positions in Ubiquiti and Splunk, and also the one I had taken in Varonis, when I decided to take a full position in Alteryx. I exited Ubiquiti because it was one in which I had lower longterm confidence, Splunk because I liked Alteryx better, and Varonis because I preferred Alteryx’s 50% growth rate and low cost of customer acquisition to Varonis’ 30% growth rate.
Got it; thank you!
I think Splunk is a very interesting company and it is on my watchlist - I am waiting for a better valuation.
This is a very specialized company - it pulls information out of the reams of machine generated comments and code, so it is very unlike most other data companies. I’d say it’s closest rival would be New Relic - which does monitoring of the same machines that Splunk collects the logging from - they both get into each other’s business.
The reason I’m really interested in Splunk is that it seems to have won as the enterprise logging solution. The reason I’m hesitating on price is that I think its moat isn’t huge yet, and I am only willing to pay a high price for companies I see having a huge moat. You see, Splunk has won the logging title recently, and it could yet be upended by a new upstart. I’d like a little lower price to give me some extra security against what I perceive to be increased risk.
Thank you very much; I appreciate your feedback.
For what it is worth, I took a position in the business today.