Another candidate that I own.

Stem, Inc., STEM

In reality, a SaaS company hiding under hardware sales blanket. Multiple revenue streams.

246% revenue y-o-y
101% backlog
229% sales pipeline
40% bookings

12% Q-o-Q software revenue ---->57% compounded

But 12% GAAP, 17% non-GAAP Gross Margin. This turns off the growth investors and reminds of NTNX or PSTG with hardware + software products. The hardware is not the business. The business is software. The hardware is there to create the renewable energy source and batteries for the Athena software to manage. STEM is the largest owner of battery storage in the world, larger than TESLA. But the contract duration of the hardware cycle is measured in a year or two. The SaaS contract goes on 20 years plus.

Again, investor relations do a better job of presenting:…

My history is first purchase in August, 2021, around $24 followed by 5x larger purchase on (gasp) November 12, 2021 (market PEAK) at $25.42 (not bad)… Sale of all on !2/14/21 for $18.30–at least I didn’t ride it down to $6.27 in June. Bought it back at $14.78 in August this year, but less than 10% of what I had last year. Currently at $17.42. STEM is much less than 1% of the portfolio. This represents my current approach of identifying 30 or so companies and getting fully invested over time. How much time? I don’t know. 6months? 1 year?. Broken toys don’t jump in in one or large steps. Might sell cheap puts or place low-ball, good for 60 days, orders. POMO.



STEM would have been great to buy at May or June low…up almost 200% since.
So a worthy candidate if the lows are retested, for sure.

The GM you hit on is something I noticed when looking at them last year.
The Software growth is slower than I think most like or expected.

If I recall, I feel like mgmt really backloaded guidance in 2021, and then missed, which turned me off. I am not sure the rationale for their spike since May/June outside of being smaller cap.


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I am not sure the rationale for their spike since May/June

Macro. Legislation.

On August 16, 2022, President Biden signed the Inflation Reduction Act (IRA) into law. The IRA is a $370B clean energy and climate investment over the next 10 years.

At Stem, we view the investments within the IRA as transformational for our country, the energy industry, and our many partners and customers. As we continue to accelerate the clean energy transition, we anticipate the legislation will create significant new opportunities for clean energy, storage, and solar projects.

Market forward looking.