Hey Everyone, been a little quiet with posting about companies and my April EoM review because I have been making adjustments over the last few weeks and we can’t discuss until two full market days have past.
At the end of April I was up 53% YTD and the only significant change was selling out of SQ.
Okay so on to The Trade Desk. Bottom line, I am as confident as ever in this company and I think Jeff Green is taking the extremely long view. If he wasn’t they would not be approaching China right now in the manner that they are. This shows me they are confident about their business and what the future holds.
I trust them.
My TTD position over 23% of my portfolio before earnings and sold down to 15% before ER at around $220 because I was just uncomfortable with a position that large. The way I see it is a major loss at 23% could be crushing, and if the company is a mega-winner, then a 15% - 18% position will be plenty.
The day of the release, I bought back 40% of the shares I sold at $188. I wasn’t planning on doing that, but I felt it was too good of an opportunity to pass up. Now I’m sitting at around an 18% position give or take. Won’t be adding, but also won’t sell unless the story changes or it runs up to around 25% again.
Green was just on Cramer tonight. Here’s a link and my rough notes. Quick takeaways are Green sounds pretty humble, but very confident. I like that combo. He does not seem worried and I had forgotten that TTD has such a high “Rule of 40” ratio – see below.
https://www.cnbc.com/video/2019/05/14/trade-desk-ceo-we-brin…
Cramer Intro:
Stock down over last 2 weeks – is it a buy?!? (THANKS CRAMER!)
Cramer said the company reported very strong earnings, management guided conservatively as usual.
Cramer: How much would investors have made if they bought IPO?
Green: IPO priced at $18 and was in mid 20s at end of day — up 1,000% in 3 years
Cramer: How does platform work?
Green: If you want to buy google or facebook, you go there. But they don’t do the rest of the internet. What we do is help companies figure out…should I buy ads on NYT.com, CNBC, HULU, etc?
We help them use data to figure out where to advertise.
Cramer: What is the Rule of 40
Green: Rule of 40 — trying to figure out the right multiple of R&D and growth
— TTD is number 1 of any software company. TTD is double that.
Cramer: You are willing to try China when everyone is running from China. Why is that smart?
Green: What we have done well is being able to partner with anyone because we don’t own any media. We’re the only company in the world that can partner with everyone. We did something unique which most companies don’t do in China. We brought money into China vs out of China. It made it easy for us to go into China when everyone else is running out.
China 2nd largest ad market in the world, growing twice as fast as US. We’re hoping to go into every other country too
Cramer: Comcast gave HULU to Disney. How do you feel about that?
Green: CTV is one of the greatest transitions we will ever see. Most consumers can’t afford another subscription. So ad-funded model is the way to go
Green: TAM is growing from $725B to $1T in 7 years, growing at 1.5x GDP
)