My second monthly portfolio update after October
update. It was a very eventful month with a lot of
news, sentiment changes and sudden accelerations,
especially from some of the recent IPOs and small
caps. The main theme for this month appeared to
be focused on when and how much to discount a post
peak COVID world. I resisted temptation from
making drastic changes to my portfolio and perhaps
erred on the side of COVID benefited companies
to continue to outperform and/or to wait for proof
in actual performance or guidance numbers.
Overall, although I’m still a bit below my ATH
from Oct 14th, I’m satisfied with this month’s
numbers with recovery right at the end of
the month.
End of November YTD - Up 138%
Portfolio Stocks Review
Month YTD vs S&P
Jan 8.02% 8.02% 7.98%
Feb 1.76% 9.92% 18.19%
Mar 14.19% -5.67% 13.93%
Apr 19.27% 12.51% 21.80%
May 18.60% 33.43% 38.39%
Jun 19.90% 59.97% 63.05%
Jul 15.55% 84.85% 82.47%
Aug 6.50% 96.86% 85.12%
Sep 5.96% 108.59% 103.86%
Oct -2.79% 102.77% 101.32%
Nov 17.37% 138% 126.51%
Stock Nov Oct 1st Buy
ZM 9.30% 10.29% 6/2/2020
SE 8.89% 9.13% 2/19/2020
TDOC- 7.00% 8.80% 1/22/2019
DOCU 8.19% 8.53% 11/4/2019
SHOP 9.22% 8.26% 11/26/2019
CRWD 8.64% 8.19% 2/25/2020
SQ 8.17% 7.04% 9/20/2019
TWLO 7.44% 6.92% 11/26/2019
DDOG 5.57% 6% 5/27/2020
ROKU 7.24% 5.86% 10/15/2019
PTON 5.28% 5.67% 6/18/2020
MELI 5.47% 5.62% 2/28/2020
ETSY 5.89% 5.05% 5/28/2020
SNOW 1.61% 1.16% 10/14/2020
FTCH 1.79% 0.53% 10/21/2020
SOLD
API – Agora. My initial conviction in Agora was its
ability to remain a high growth company, especially
of a small revenue base to capitalize on the real
time video-based trends in China and in SE Asia.
However, once their Q3 showed a second consecutive
quarter of revenue deceleration, it was an easy
sell. It gave up on ~40% gains while I held it from
August through November when I sold out of my ~1.6%
position for almost flat.
U – Unity. After reading more about it and going
through Q3 earnings call, it feels like a company
that needs to be bought and forgotten for a few
years and not be judged on quarterly results basis.
Unity along with Epic appears to be leading the
platform play in 13+ age gaming and 3D immersive
experience industry. Since it may take a few
years for all the pieces to come together and
allow these companies to fully monetize their
investments, I sold out of a trial <1% position
right after earnings to limit my portfolio
companies to high growers. Market appears pleased
with its first quarter as a public company as
it rose 50% since announcing Q3 results when I
sold at ~110.
FROG – Jfrog. Another <1% trial position for me
and I was looking for some impressive Q3 growth
and guidance numbers from their first quarter
as a public company. However, it’s last six
quarter revenue growth rates were
70%, 66%, 56%, 55%, 46%, 40% and along with its
Q4 guidance for 36% show it probably won’t be
a 50%+ grower for now even off of a small ~38M
quarterly revenue base. Think they need to go
beyond their core Artifactory product offering
for higher growth. It fell 15% post earnings
but since recovered to my sold price of ~70.
Other Companies in Portfolio
SE – Nothing negative stood out from their
Q3 results as they continued their overall
revenue grew 99% YoY and 37% sequentially
led by their Ecommerce division which grew
by 174% YoY with a lot of runway left.
SHOP – Shopify. Stock price has been grinding
in a range for over 5 months now while they
have gone through two impressive earnings
reports, so clearly market priced in those
results way back in summer. Going forward,
not sure what is already discounted by
the market with Shopify given even the
typical holiday season Ecommerce trends are
well known in advance but along with
TDOC, ZM, DOCU – SHOP has been holding back
my portfolio since a few months. Since I
can’t find anything fundamentally wrong
with this company and like their product
release cadence and constant positive vibes
from their leadership, I plan to leave SHOP
untouched for now after adding tiny bit when
it dipped around ~900 mid-October.
SQ – Square. They reported another good quarter
in Q3 while increasing their footprint with
their Cash App Ecosystem products. With their
Seller Ecosystem products, they should be
able to continue their revenue growth in a
post vaccine world when small businesses
return in full scale and probably why the
stock shot up 35% in a month when most
exclusively COVID beneficiary stocks struggled.
ETSY - Etsy. I had a relook at the numbers
after seeing some posts on the board pointing
to their weakness in sequential numbers but
felt management was being open about
acknowledging their revenue boost from
mask sales these past few quarters and
their absolute need to execute a strategy
that goes wide and deep than they had gone
before to justify their place amongst the
elites of Ecommerce like Amazon, Shopify.
Decided to stay-put for now.
MELI – Another solid quarter with 85% YoY
growth in USD, up from 61% last quarter.
I’m particularly very impressed with
their CEO Marcos Galperin in some of
the publicly available videos and ER
call and he appears to be fully aware
of how to steer his company for Amazon
like glory in LATAM.
SNOW – Snowflake. Market has very high
expectations from them right from the
beginning, would be interesting to
watch their ER this week. A starter
position for me.
DOCU – Docusign. Another company that
has been grinding in a range since a
few months except for that one day
right after Zoom Q2 earnings when it
shot up to 290 before dropping back
to its range. Probably market is looking
for signs from the company that they have
the execution capability to go beyond
eSignatures in 2021. Their ER this week
should help in assessing if this company
has further legs.
ZM – Zoom. Market seems to be doubting
their ability to go beyond COVID as a high
growth company. Will need to go through
Q3 report in detail and re-work my conviction.
TWLO – Twilio. During their Investor Day
event in October, they said that they
expect 30% organic growth for next four years,
so with frequent beats they should be a
comfortable 40%+ grower for the foreseeable
future which is pretty impressive confidence
portrayal from the leadership.
DDOG – Datadog. If not for the postings on
this board by several smart folks, I wouldn’t
have been able to decipher the Q3 report
the way it was laid out in some of the
postings. They all make sense and planning
to hold with no intention of adding for the
time being. I understand the value of their
technical offering and they seem to be the
clear leader in their space, so that helps
in maintaining conviction.
CRWD – Crowdstrike. An easy company to hold
conviction with their numbers and product
offerings. Waiting for their ER this week.
PTON – Peloton. I do see Apple Fitness+ as
a challenger for Peloton’s value proposition
around its subscription services which when
materializes may dent Peloton’s prospects
in a very big way. Also given the nature of
fitness content, it may be relatively
straightforward for Apple to pull this off
as compared to them never being able to make
any significant inroads into digital
entertainment content. Apple has the biggest
network of users in the world, deep pockets,
world class marketing capability, their
devices are already in peoples’ hands –
in case they pull it off, it won’t be a surprise.
Peloton is currently 15% off its ATHs,
will hold it as a Tier 3 position with
3-5% position size.
Roku – My only pure play in programmatic/CTV
advertising area and Roku continues to shine
along with the CTV and digital advertising
secular trends. I regretted selling TTD back
in August and so one more reason to hold tight
onto Roku unless it shows some weakness in
its numbers.
TDOC – Teledoc. Another stock that’s been
grinding sideways since July even with solid
quarters but like Roku, my only pure play in
an industry with tail winds i.e., in digital
healthcare space in this TDOC’s case.
But I’m more worried about TDOC than other
stocks in my portfolio that have been range
bound and wonder if market understands something
that I’m failing to see. Looking for another
high growth company in this space to spread
my risk.
FTCH – Farfetch. With 71% YoY Revenue growth
and 62% YoY GMV growth, they are currently
a 18B market company looking to expand
aggressively into luxury goods market in
China with an investment from Alibaba that
was announced in November. Will look to add.