BluSuit Portfolio Moves This Week
Earnings season has been volatile. Here are my thoughts on a couple key positions/companies.
First I must say I am grateful for all of you as you follow along with BluSuit’s story and path. I have so many plans for expanded growth and do think this is only the beginning to the brand we are building. My mission remains consistent, I am devoted to helping other people making money in the financial markets.
Lately, the markets have been absolutely crazy. Stocks have fallen 25% - 40% in a single day due to earnings miss. In some cases, beating and raising guidance only to fall on earnings. In this publication, I am going to talk about important updates and within the next few days I will provide all the research I’ve done on these company’s!
More importantly, I want to continue to be as transparent as possible and I will be sharing every portfolio move I have made this week. I have been trading and readjusting my portfolio more than usual. I also made one important add that I want to share with you guys because it could rally big on Friday. This is one you won’t want to miss.
Currently, my portfolio is:
If I broke this down from largest to smallest position it would be:
My year to date returns are still 65%,. I am certain this will expand through the end of the year and as I make adjustment through earnings season. Some stocks go up big and some stocks go down big. Despite the volatility, I focus on the business and the business results and not the stock price. The stock price almost always fixes itself if the business results are good.
Moves I made:
This is my first one because it’s the most important. I want you, the reader, to know about my recent BigCommerce add. I 100% plan on releasing a deep dive for all of you soon, but this company is turning around and firing on all cylinders. Their gross margins are approximately 80% and they’re growing 49% YoY. More importantly, on their call they announced multiple new drivers for growth. Which will be M&A and a multichannel store front. This multiple store front effort means that the same customers can run multiple online stores under one single integration. This tells me that BigCommerce is aggressively investing into growth to capture market share, now. At a $3.5B market-cap and $220m in sales projected for this year, a 16x P/S (20x P/GP) for this year seems like a no brainer. I plan on adding more Friday morning.
Prior to earnings, I sold LSPD (due to valuation concerns and negative sentiment from short report) and I am glad I did. Post earnings sell off, I did re-enter the position following the call. FinTwit is at an all time low right now with LSPD and many’s rationale and “discovery” of this new bear thesis already existed on the last earnings call. What I’m hearing is “slowing growth, contracting gross margins, etc”. If you looked at analyst projections on Yahoo Finance, Simply Wall Street or Seeking Alpha you will notice that their growth is exceeding analyst expectations and they already had them projected for slowing growth. In my opinion, this earnings call is exactly what I needed to re-enter the position. They’re in hyper growth mode and they’re doing everything right to competitively position themselves with a deep moat to be a platform for retail, restaurants, hospitality. More importantly, a major growth driver will be their backend solution. I will dig into this more later, but it’s a big deal. Nobody else is doing this on the market.
Roku, this is a no fly zone for me at the moment. Sometimes you have to let the story develop. My long term thesis with Roku is that they’re a combination between TTD and Netflix. However, this business model change will inevitably create a lot of volatility in the stock. It will be high on my watch list and even though I was going to re-add, I will pass on it for now.
Voyager Digital, I re-added my position. They recently announced that they’re getting into NFT’s and more DeFi products. In addition, the crypto community continues to see increased volume, which means more revenue for Voyager. My long term thesis is evolving here and can quickly change. It looks like it’s something special, but is very early in its growth story. I sold BHG and Coinbase to buy this stock. I think there’s more upside long term with Voyager than Coinbase and they’re similar companies.
ZoomInfo, I added to my position late last week prior to earnings. I am a very big fan of ZI and think this is a buy it, hold it, and let it compound kind of company. They are operating very profitably and growing very fast. They’re creating the platform of choice for sales teams to enable continued sales growth. This is just one of those companies you can’t over think.
Digital Turbine sold off 20% despite beating expectations and, once again, raising guidance. This is the second time they’ve beat and exceeded earnings expectations only sell off. I wouldn’t be surprised to see Digital Turbine reach all time new highs during their upcoming investor conferences in a few weeks. I did not touch my position and have no intent on making any changes. I believe this is similar to LSPD. Investors expectations are misplaced and are potentially misinformed. The long term thesis is strong with APPS and it continues to improve every quarter. Bill Stone continues to execute well and leads Digital Turbine down a path of more synergistic opportunities to be an all in one mobile AdTech platform.
EXP World Holdings, I loved the results and I loved the call. EXP is an under-appreciated real estate tech company with a sustainable, long term, business model. They focus on providing a cloud based brokerage solution by utilizing their platform and EXP World, a workplace “meta-verse”. It appears that this is an acquired taste but it definitely has a place in my portfolio as I expect them to produce market beating returns long term.
Digital Ocean absolutely crushed expectations. Going into it, I was looking to see continued acceleration in revenue growth and expanded customer spend. In addition, I wanted to see continued profitability. It feels a lot like holding a long term compounding winner that will continue to see accelerated revenue growth and may even reach 40%+ YoY. I did not add to my position but I wanted to share this post by Ophir with you guys. I agree with him, it’s a $200 stock.
I sold GitLab. The valuation just doesn’t make sense and I’ve seen this many times with new IPO’s. They always seem to trade very high due to excitement but have a very strong chance on trading down. I love the business, a lot. I think it can be a long term winner. But, if they miss earnings (or even just meet it) it could fall 20-30%, no problem. Think of this as risk management, I used the proceeds to buy $BIGC. I will definitely add in time when the valuation becomes reasonable. Like I mentioned, it’s a game changing business long term but investor sentiment is fickle and should be exploited when opportunity arises.
I began accumulating GLBE. I want to make this a top 10 position because I believe they are positioned to take advantage of the secular trend of international cross boarder e-commerce. My dollar cost average has only risen slightly and I am hoping for weakness on earnings and post lockup. This could create an immense amount of selling pressure. Lockup expiration is on Monday, November 8th, and their earnings are on November 9th.
Added more to my Fubo position. I read the article, below, by Beth. I am already a Fubo bull, this solidifies my thesis. I am excited to see the release of their earnings and a beat can send the stock to $50 or $60. Earnings are next week!
Tomorrow will be DraftKings, I expect a larger than anticipated beat on top and bottom line! I look forward to sharing this update and if I make any moves here as well. It’s been in a steady downtrend since last earnings. A good business update and beat on the bottom line will be more than enough for this stock to continue its uptrend.
Next Articles to Expect
This week has been spent researching a lot of companies, updating thesis, listening to earnings calls and reading investor notes. What I plan on doing is creating a series of highlights from this earnings season and do a few companies like BIGC, LightSpeed and Monday.com as deep dives. In addition, I think it’s very important to do a hedging publication for you as well.
2022, with the end of QE, may position itself to be volatile. The markets are trading at a historically high PE but I cannot lead myself to believe that we are in a bubble, yet. Long term secular trends remain in tact and the macro environment (although rough) is not impossible to improve.
An investor truly finds confidence when they know how to make money when the market goes down, that’s what the hedging publication will be about. I will also share my strategy that I use when I short and hedge my portfolio.
I have a lot planned, stay tuned and stay classy,