2023 Monthly Allocations:
• darker green: started during month
• lighter green: added during month
• yellow: trimmed during month
• blue: bought and sold during month
• red: position exits
• positions >10% in bold
Please note all November allocations reflect IOT’s $27.54 close and not its after-hours move to $31+.
December 2018: Stocknovice's End of Year Portfolio Review - Saul’s Investing Discussions - Motley Fool Community
December 2019 (contains links to monthly reports): stocknovice's 2019 portfolio review - Saul’s Investing Discussions - Motley Fool Community
December 2020 (contains links to monthly reports): stocknovice's December Portfolio Review - Saul’s Investing Discussions - Motley Fool Community
December 2021(contains links to monthly reports): stocknovice's December Portfolio Review - Saul’s Investing Discussions - Motley Fool Community
December 2022(contains links to monthly reports): Stocknovice's December 2022 Portfolio Review
January 2023: Stocknovice's January 2023 Portfolio Review
February 2023: Stocknovice's February 2023 Portfolio Review
March 2023: Stocknovice's March 2023 Portfolio Review
April 2023: Stocknovice's April 2023 Portfolio Review - #21 by qazulight
May 2023: Stocknovice's May 2023 Portfolio Review
June 2023: Stocknovice's June 2023 Portfolio Review
July 2023: Stocknovice's July 2023 Portfolio Review
August 2023: Stocknovice's August 2023 Portfolio Review
September 2023: Stocknovice's September 2023 Portfolio Review
October 2023: Stocknovice's October 2023 Portfolio Review
Wow. That was a lot of earnings reports. I’m glad that’s over.
AEHR – Aehr’s only November news was mid-month participation in a Craig-Hallum investor conference. I unfortunately haven’t been able to locate a transcript, but based on the stock’s recent performance would assume nothing was revealed to reverse management’s shaky commentary from October’s earnings release.
AXON – Axon posted what I thought was a rock-solid report November 7. Sales of its latest Taser model are off to a strong start while secondary products like bodycams and evidence tracking software continue to gain traction. Most impressively, annual recurring revenue (+54% YoY) and future contract commitments (+56%) grew significantly faster than revenue (+33%). That bodes well for durable growth during the quarters and years ahead. Well done.
BILL – Ugh. Bill kicked off November with a terrible Q1 report. Not only were the numbers weak, but management was forced to lower the full-year guide by $60M. I honestly wasn’t a big fan of Q4 either but decided to cut the allocation sharply at the time rather than exit completely. I’m not sure if the correct phrase is “too little too late” or “lesson learned yet again.” Either way, we’re out now.
CELH – I found Celsius’s November 7 report a good one. It once again posted triple-digit growth while gross, EBITDA, and net profit margins all finished at record highs. And CELH is doing all this at the same time it is steadily building out inventory and infrastructure for upcoming international launches with distribution partner PepsiCo. Despite some recent volatility in the stock, the business appears to be full steam ahead. Carry on, guys and gals.
CRWD – CrowdStrike had a busy month. First it was named a Leader in an IDC MarketScape report on vulnerability management platforms (https://ir.crowdstrike.com/news-releases/news-release-details/crowdstrike-named-worldwide-leader-risk-based-vulnerability). Next, it obtained Leader status in cybersecurity channel sales growth according to independent channel analyst Canalys (https://ir.crowdstrike.com/news-releases/news-release-details/crowdstrike-emerges-leader-cybersecurity-channel-sales-growth). The report notes CrowdStrike’s channel sales are outgrowing the cybersecurity market as a whole. Then it released a new Falcon Go product specifically designed to provide small and medium businesses with real-time cloud protection as opposed to traditional antivirus programs in which updates can quickly fall behind the threat landscape (https://ir.crowdstrike.com/news-releases/news-release-details/crowdstrike-revolutionizes-cybersecurity-small-and-medium). Lastly, CrowdStrike received several awards at Amazon’s annual AWS partner event (https://ir.crowdstrike.com/news-releases/news-release-details/crowdstrike-wins-multiple-2023-aws-partner-awards-aws-reinvent).
These releases were all prelude though to CRWD’s November 28 earnings report, and I’ll admit to some nervousness given the AWS awards announcement was the morning of earnings. My experience has been most of these fluff announcements in conjunction with earnings are nothing more than ineffective attempts to soften the blow of spotty results. It turns out I needn’t have worried. After raising almost all its long-term operating targets in September, CrowdStrike posted a quarter which seems to be growing right into them. There was strength in not only the top line numbers but the underlying drivers as well. Even with the appropriate amount of macro prudence, you could hear management’s confidence in CRWD’s performance and opportunity. I see no reason not to keep CrowdStrike as one of our top holdings.
DDOG – Datadog posted what I thought a respectable report November 7. It included DDOG’s biggest beat and raise in quite a while with hints customer optimization is finally relenting. The bump to the FY guide (ironically enough, back to just above the original number which previously had to be stated down) and surprising jump in Remaining Performance Obligation have led a huge rebound in the stock. I’m not sure how sustainable it might be given the dreaded “next year’s guide” will have to be issued next quarter, but congrats to everyone who has held for the recent ride.
Datadog followed earnings with a couple significant partnership expansions. First was an arrangement with Google Cloud giving customers more monitoring and security options (https://investors.datadoghq.com/news-releases/news-release-details/datadog-expands-strategic-partnership-google-cloud-and). Next was a deal expanding observability and security support for Amazon serverless workloads (https://investors.datadoghq.com/news-releases/news-release-details/datadog-expands-observability-and-security-support-aws). I believe deeper integrations with major cloud providers are never a bad thing, so these announcements were nice to see.
ELF – e.l.f. Beauty started its stretch in our portfolio with what I thought was a great report. Not only did ELF deliver a strong beat and raise with a record gross margin, but it continues to rapidly gain market share in the US market and with the younger demographic. That’s a testament to both its pricing power and marketing machine, which is a nice combo to have in sync as ELF heads into its seasonally strong second half of the year.
IOT – Samsara’s quiet month sure ended with a bang. I thought its November 30 report was excellent. We got a top line beat and strong raise with new records scattered all over the supporting metrics. Even better, all IOT’s trends are moving exactly how you’d like to see them at scale. Even with a Q4 guide padded slightly by an extra week this fiscal year, Samsara is firing on all cylinders. In fact, I’d say other than TransMedics this was our portfolio’s strongest report of the season. I had trimmed a small amount on the run into earnings since IOT’s allocation had grown larger than my comfort level, but the rest of our shares aren’t going anywhere. In fact, I’d have no problem adding those trimmed shares back if the opportunity presents itself in the future.
TMDX – As suggested above, I thought TransMedics’ November 6 report was excellent. Coming into it, the market seemed to be focused on two aspects of TMDX’s recent move into purchasing its own aviation network:
- Would this move be accretive to its core business?
- Would the additional transportation capacity allow management to resume its usual large beat and raise cadence?
Fortunately for shareholders, the answer to both was a resounding yes. Management sounds very confident about the early returns and more importantly its opportunity to continue torrid growth in 2024. As a shareholder, that’s exactly what I was hoping to hear. It appears the market agrees as the stock has rocketed this month.
TransMedics followed earnings with the November 9 purchase of another plane (https://investors.transmedics.com/node/9291/html). At least we now know it will likely be put to good use…
TTD – The Trade Desk delivered a good news/bad news report November 9. The good news was the quarter fell well within my personal expectations. The bad news was I failed to notice my expectations were a little short of the street’s. Unfortunately, the street holds a lot more sway.
Much of the initial 30% haircut has since been clawed back as many realize TTD’s long-term thesis remains very much intact despite the short-term blip. While we might not know when this advertising downturn reverses, all signs point to TTD coming out on the other side in an even stronger position.
ZS – Zscaler issued quite a few November updates. First it announced two hires specifically bolstering its AI efforts (https://ir.zscaler.com/news-releases/news-release-details/zscaler-accelerates-ai-innovations-appointments-two-prominent). Claudionor Coelho Jr. joins as Chief AI Officer and Mohamed Shabar joins as EVP, Data & AI Platforms. Both have considerable experience in the space with Coelho having spent time at Google and Palo Alto Networks while Shabar comes over from Salesforce.
Next, ZS released upgrades to better secure Zero Trust workloads (https://ir.zscaler.com/news-releases/news-release-details/zscaler-announces-industry-first-zero-trust-innovations-secure). Most of the technical details are well above my pay grade, but the gist is the enhancements “radically simplify and improve cloud workload security by eliminating lateral movement, [reduce] operational cost and complexity, and [ensure] consistent threat and data protection.” Sounds good to me.
As with CrowdStrike though, this month’s early news was simply prelude to Zscaler’s November 27 earnings. I wouldn’t label it a bad report, but I personally don’t see it as a clear enough win to totally justify the stock’s recent run. While current revenue and leverage were strong, a softer showing in billings, RPO, and $100K+ customer growth don’t leave much room for second half outperformance. The fact a new CRO and CMO were announced in conjunction with earnings shows ZS is proactively addressing this issue (just like it did when billings sagged in late 2019). However, it also implies there might be something to address in the first place. I trimmed this position a couple percent during the 20%+ November rise into the report. My first impression coming out is I’m not immediately inclined to add those shares back. The question becomes whether I want to keep ZS battling for our top spot or bump it back a tier. We’ll see.
My current watch list in rough order includes monday.com (MNDY), MongoDB (MDB), Super Micro Computer (SMCI), and Snowflake (SNOW).
And there you have it. Well, that was certainly interesting. I probably couldn’t ask for a better gift after a -13.8% October than a +22.0% November. The beauty of that math though is if I’d just gone to sleep for two months I would have experienced a languid, leisurely 5.2% gain. Oh well. Live by the concentrated high-growth sword, die by the concentrated, high-growth sword. On to the next battle…
Thanks for reading and have a great December. Oh, and have a Happy Whatever-It-Is-You-Might-or-Might-Not-Be-Celebrating. Hope I got everyone.