WSM's June 2023 portfolio update

June has been a good month again - it’s up and to the right. I’m up 31.2% for the year vs 23.4% end May and 15.9% for the S&P.

1 Jan 2023 to YTD Return
30/6 31.2%
31/5 23.4%
30/4 2.1%
31/3 15.1%
28/2 17.3%
31/1 7.2%

Portfolio 30 June

I re-opened a position in Samsara (IOT) and opened a new position in Axon and a small, try-out position in Enovix (ENVX). I sold out of SentinelOne (my reasoning is here) and Digital Ocean (DOCN), although I’m tempted again at DOCN’s current price.

Ticker 30/6 31/5
BILL 15.8% 15.7%
CRWD 12.7% 11.5%
CELH 11.5% 10.3%
ZS 12.7% 11.1%
PSTG 11.3% 3.6%
AEHR 11.9% 3.0%
ENPH 8.1% 7.1%
AXON 7.5% -
IOT 5.3% -
TMDX 3.4% 3.7%
ENVX 2.8% -
MNDY 0.3% 8.1%
S - 15.3%
DOCN - 6.4%
Cash -3.4% 2.6%


Bill remains my largest holding as it has a rule of 40 of 76% (based on operating margin), just grew at 63% yoy (albeit only 4.8% qoq)and guided for 40% yoy next Q. Yes, qoq growth has really decelerated - but this is to be expected given the exposure to SMB’s and transaction revenue. But subscription revenue (+8.5% qoq) and Divvie revenue (up 14% qoq) were strong and the overall revenue numbers mask the underlying strength. The stock is up only 7% ytd - less than the S&P which does not seem deserved imo.


Crowdstrike has emerged in my mind as the next gen winner in endpoint security with a strong platform play. And they have kicked SentinelOne squarely in the teeth. They partner extensively with Zscaler, which has also proven their mettle. Rule of 40 is at 59%, most recent quarter growth was 42% yoy / 8.7% qoq and they are guiding for 36% growth yoy next q. With a >30% fcf margin that’s pretty awesome.

Celcius Holdings

Still no signs of slowing down here. Recent Nielsen data seems to suggest that they have even been accelerating, which is pretty crazy given that they just grew revenue by 95% yoy in the last quarter. They sport a rule of 40 of 114% (which is about double CRWD’s, at a similar revenue run-rate market cap multiple). I may increase this one.


Zscaler and its CEO clearly have their collective tails up. In recent conferences he could not have sounded more confident, and he articulated how they are winning against the point solutions of newer competitors and against the older tech of incumbents. They also have none of the sales force issues that some of their competitors (Cloudflare…) have, quite the contrary. They have a rule of 40 of 61%, just grew by 46% and guided for 35% next Q and are valued at a similar RR multiple to CRWD. Solid winner here.

Pure Storage

Pure storage had this to say in their most recent results:

This slide says it all.
#1: the subscription part of their business is growing nicely (revenue was -5% yoy but sub revenue was +28% yoy and is now almost half of total revenue)
#2: their new product, which is now price-competitive in all segments of the market (vs only the top end previously) is selling like hotcakes
#3: they keep on investing in their software
#4: And this is the big one for me - they should benefit greatly from accelerated AI infrastructure rollouts
#5: order size seem to point to acceleration coming
#6: cash flow positive with a fcf margin >20%

Like AEHR, I’m betting on acceleration from here on vs the performance already being visible in the current numbers. Revenue was down 5% yoy, rule of 40 is only 17%, but the valuation is undemanding at under 5X RR revenue if the acceleration does indeed play out.


Much has been written about this company on the board. It is the smallest company of all of my holdings; the company has less than 100 employees and is almost as old as me…so why invest in this company now? I think that the current CEO, who took the helm from the founder in 2012, had a more compelling and accurate vision for the company, which is now playing out. This enabled them to successfully build products a couple of years ahead of the current demand for EV’s. He built for where he thought the puck would go, and it did. It feels to me like we are at the exact moment in time when his vision is going to be validated. Their products are ready to capitalise of what will be a massive and generational shift in how we commute. They are the go to place for testing the SiC chips that will go into most EV’s in the next decade (in addition to other markets which others have discussed). The potential is not in the current numbers, but in what is coming down the line. They only grew revenue 10% yoy last Q. But their in quarter bookings was $33.3m - about double the $17.2m in quarter revenue. Bookings was up from $6m a year ago and $10.8m a quarter ago. And that was before all of the recently announced bookings and before any of their 3 relatively new SiC customers have really started to ramp up. I think their biggest challenge is going to be keeping up with demand. I may increase this one too.


Enphase had strong results, but got clobbered for their qoq revenue slowdown and relatively lacklustre guidance. Still, they just grew 65% yoy and guided for 41% next Q. They sport a rule of 40 of 97% and are set to increasingly benefit from the IRA benefit in quarters to come. The punishment meted out seems overdone. The stock is actually down 34% YTD which doesn’t sound right for these types of results.


I added a position in Axon this month. They have a new version of their Tazer product out - the Tazer 10, and this seems so successful that it is pulling forward some of the replacement cycle orders, in addition to landing new orders. They also have a number of other products including a fleet and sensor business which is growing very fast - dashcams in cars, sensors, drones and of course the body cams with all of the data pulled together, visualised and managed via proprietary software. Rule of 40 of 42%, revenue growth of 34% most recently but importantly ARR growth of 50%, with subscription revenue making up an ever larger part of total revenue. The subscription revenue feels very much like a Samsara-type IoT business but then growing even faster (Samsara ARR grew 41% in the most recent quarter vs Axon’s 50%) and with a virtual monopoly for law enforcement customers. But whereas Samsara is for sale at just under 18 times RR revenue, Axon can be bought for less than 11.


I’m back in Samsara having missed the big run-up. However I’m worried that the IOT fever may be a bit high on this one, so I don’t want to have too large of a position. It now has the dubious honour of being the 4th most expensive stock on Jamin Ball’s list of top valued SaaS stocks. Samsara is essentially a tracking business done right with workflow automation and other asset monitoring thrown in. I know I’m over-simplifying, but they’re doing all of the things that 27 year old competitor Mix Telematics is also doing, but then much much better, without all the legacy tech and at much bigger scale. Perhaps I’m being too cautious, but still, 5% is a decent size position. Revenue growth was 43% with a 36% guide, rule of 40 was only 32%, but the company is on the cusp of turning op margin and fcf positive, which will boost this metric. And as @PaulWBryant pointed out, the real excitement is in the rapid pace of large customer additions - which came in at 53% yoy/11% qoq. Whereas other SaaS business seem to be slowing down, their customer adoption is certainly not.

Other small positions

Transmedics, Enovix and Monday are positions which I may expand or close, but I want to think about them a bit more. Transmedics has a capex heavy business model heading their way which I don’t like. Enovix is extremely exciting, but there are very few numbers to go by and Monday…well maybe it’s once bitten twice shy here for me on this one.

Finishing up

It’s been a good month and first half of the year. The NASDAQ 100 is up 39% for goodness sake! More than many on this board including me. Let’s hope the second half of the year is equally good.


Previous reviews

May 2023

Mar and April 2023

Feb 2023

Jan 2023

Dec 2022 full-year

Dec 2021 full-year

Dec 2020 full-year


PSTG is the stock I want to have, and in addition to AI, the launch of the new product FlashBlade//E is likely to trigger a direct replacement trend.

The CEO stated, “The E line is the first and only all-flash storage system that can address the secondary storage market, at competitive prices to 7,200 RPM hard disk systems, but with only 1/10 the power, space, cooling, and labor requirements. But beyond the benefits of the E product line itself, it enables Pure to now compete for our customers’ entire storage environment.”

This might well be a significant growth driver in the second half of the year and the coming years.


I just listened to the latest two conf calls of PSTG again, and I have to agree. I think your quote from the CEO is spot-on.

What also struck me is the difference in tone in the two calls. In Q4 last year they were cautious, spoke of macro headwinds, lengthening sales cycles etc and then guided for mid to high single digit growth and flat growth in Q1.

Then in Q1 they were decidedly more bullish. The tone was very different. And yet, they didn’t raise their full-year guidance, so didn’t really pull the Q1 beat forward. They stuck to “mid to high single digit growth”. And there were a couple of things that they made explicit about the guide which had the distinct feeling of further de-risking to me.

First was that they spoke about the record traction that their new Flashblade//E product - which only launched end April - was getting. But they didn’t pull any of this higher than expected traction through in their guide. They stuck to a “modest revenue ramp in the second half of the year” in their guide. And yet this was their commentary about that product:

“Early interest in FlashBlade//E is off the charts for a new product.”

And in the Q&A:

“I’ve been in front of dozens of customers now and the excitement with customers around this product line and with the prospect of replacing their disks, which are troublesome, with all flash products has been very high. And as I mentioned, I think what’s most exciting is that we’re seeing customers appreciate the fact that we can address the majority of their storage needs and to be able to do that with the simplicity, the power, the ease and the reliability of Pure products. So that’s – I have to say the enthusiasm that when any one of us go in with the new pitch, if you will, to our customers, that we feel coming out of it is really palpable.”

And in relation to a question about AI:

“[…]frankly, we are at least as excited that customers now more and more are going to want to put their data that is in cold, hard-to-reach hard disk systems and make that available for analysis by putting it in much more higher performance flash-based systems. And both FlashArray//C and FlashBlade//E are perfect repositories for that. So we think it’s coming out at a perfect time.”

→ I cannot see, given the extremely bullish remarks from the CEO about how groundbreaking this product is, that there will only be a modest ramp, and only in the second half of the year. I believe this product will overdeliver handily vs what they have promised/guided to.

Second, they made explicit that they did not include any new orders from Meta in the guide (although two different analysts had to drag that tidbit out of them). And yet, the CEO had this to say about Meta:

“We continue to have an excellent relationship around AI with Meta. They recently fully turned on the first 2 phases of their research supercluster, which they announced a few weeks – a few weeks back, and we look forward to continuing to work with them on that project as they continue to build it out, but also on other projects that they are contemplating in the other parts of the company.”

→ again that does not sound like there will be no orders from Meta this year…

The other thing I noticed was just how much progress they are making on the subscription revenue side (which grew 28% yoy last Q vs -5% for the company overall). This is the progression of % of revenue which comes from subscriptions:

Sub rev % total Q1 Q2 Q3 Q4
2021 32.8% 32.5% 33.1% 30.2%
2022 39.4% 34.6% 33.4% 30.5%
2023 35.3% 35.9% 36.2% 32.7%
2024 47.6%

Now clearly this number has fallen back in the past when the hardware component of the business started firing, but it’s still the highest it’s ever been. So this shows me three things: 1) the extent to which hardware sales were curtailed in Q1 2) the progress that they’ve made on growing this part of their business and 3) the potential for revenue growth acceleration, should hardware sales pick up in later quarters.

It felt like they knew the solid beat on Q1 was enough (it sent the stock up quite nicely) and subsequently they felt they didn’t need to layer on their excitement in the full-year guide. Which is a nice setup for the remainder of the year.