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ParrotStock's avatar
$246.2m follower assets
Ad Tech
Not a good start to my ad tech heavy portfolio…

Is the $SNAP miss a reflection of the economy, or just poor management?

They guided for 20% growth, and missed by half. They could have guided to a modest 5% growth and beat by double.

What some people are missing is that they still had 10% growth. So did online advertising slow down, or did management just miss the guide? Oh yeah, and the CEO sold $400M at the top. 🤔

Also, a lot of companies getting sold off with SNAP have already reported. This seems like a bit of an over reaction. But then I’m definitely biased.

It feels like everything short of nuclear war has been priced into growth. Likely not true, but it sure feels that way.

I think this sell off in ad tech will be short lived. I’m staying the course.

Thoughts? 👇

🦜
I’ve always thought $SNAP was B-tier social media. Tik-Tok and Instagram have more reach with video and since Snap added all that content the app has just become messy. Barely anyone I know uses it anymore - and this was an app we used a lot 6-7 years ago when it was just a way to quickly send pictures. It feels like a trend that is running its course. Plus I find it hard to believe that Snap is some kind of leading indicator when all these Ad Techs beat and maintained guidance just 2 weeks ago.
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Re: Rebalance
The time has come.

Not to be overly dramatic, but my portfolio today looks like an absolute cesspool of fluctuating garbage. I began a near total rebalance this morning and I gotta say, it feels great.

Call it the investing version of spring cleaning. Prior, I had >15 positions, some of which were companies I knew nothing about besides the fact that they’re stocks were off ~20-70% when I bought. For a long term investor, that’s no good.

Unfortunately, I have no charts or complex models to back this feeling up, but I think this current moment, for me, is a great time to rebalance and prepare for the long term. I view my brokerage account as a heavily risk-on, essentially venture portion of my investments. I want the risky-ass names that might just hit $100bn or $1tn someday.

Call me crazy, but we’re all about keeping it simple over here. My theses are little more than this: these companies have unbelievably solid management teams, strong financials, large TAMs, compelling narratives, and are heavily discounted in my view.

A few names I entered (in the interest of transparency):
$NVDA $ABNB $SPOT $BABA $SNOW $SOFI

Other names I’m considering:
$SHOP (increasing) $PYPL and $POTX

What names are you looking at? Are you holding off on buying the dip? For what reasons? As always, let me know where I’m wrong.
Holding yourself accountable. Very important. Appreciate the transparency
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Benjamin Buchanan's avatar
$6.6m follower assets
Just linked my portfolio, can everyone see it?
Not sure how the portfolio tool works, but I've linked my portfolio (new account I set up on Robinhood specifically for CS). Starting allocation:

  1. AMZN 25%
  2. SMH 25%
  3. GOOGL 21.75%
  4. FB 12%
  5. MSFT 4%
  6. AAPL 4%
  7. TSM 1%
  8. KLAC 1%
  9. QCOM 1%
  10. AMAT 1%
  11. LRCX 1%
  12. TXN 1%
  13. TSLA .5%
  14. LOW .5%
  15. HD .5%
  16. ATVI .5%
  17. U .25%

100% invested. Will be adding new dollars as time passes. Let me know what is visible and what you think!
Leandro's avatar
$114.1m follower assets
Leading indicator of a recession?
Yesterday, I went to the supermarket close to my house and they told me that days of inventory are 100 days now and they would prefer to have 90 days. A recession is upon us.

Of course, the above is false, but everything gets treated as a leading indicator of a recession nowadays, $SNAP is a clear example. I think it's fair to say that it was a clear missmanagement. How can a company guide 20% above the street only to guide down one month later? Too much ego?

It's also pretty amazing that a 20 billion company can bring the market down, but that's just a reflection of the current market.

Btw, I have no clue if a recession is upon us, and I don't plan on spending my time on predicting it. If a recession comes, other variables to predict are the timing, the impact and how much it will last. Not an easy game.
I was just telling someone at work today, every time this happens, people want to focus on interest rates, recession indicators, inflation, and whatever else can distract them from INVESTING. My plan as an investor was to buy wonderful companies at fair prices; bear markets/recessions just give me an opportunity to do that at even better prices.

People tell me Lynch and Buffet over simplify investing; I think everyone else just over complicates it🤷‍♂️
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Edmund Simms's avatar
$7.9m follower assets
For your consideration, my interview with Conor of Investment Talk
I had the great privilege of being interviewed by Conor of @investmenttalk this week. I am grateful to have had the opportunity to share some of my thoughts, ideas and background with him and his discerning readers.

I'm sure readers will disagree with some of my ideas while agreeing with others. But at the least, I hope you find it interesting and entertaining.

You can read the interview here on Commonstock and on Investment Talk itself.
sam stribling's avatar
$99.1m follower assets
Mistakes made on this road to wealth
This is $ROKU a stock I fell in love with at IPO and really before that when I got my first smart TV from them. The lesson here is to not let love of an asset blind you. I rode this all the way up and apparently all the way down. My high water mark was +1000% or a “Ten Bagger”. I am currently sitting at a 15% gain.

Hind sight is 20/20 but boy did this one hurt. I should have not been greedy / blinded by the light of the gains and been prudent and cut half off the table at least.

“Smart people learn from their mistakes. Brilliant people learn from the mistakes of others.”

Be brilliant and let my lesson teach you so you don’t have to learn it the hard way.

P.S. still long $ROKU but if/when it returns to it’s highs I will be taking some profits to avoid this mistake again.
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Love this post - I think the idea of buying stock because you and others love a product can be a great idea and is one I use a lot. But as you point out, can’t win ‘em all! Appreciate your openness and transparency 🙏
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ThomasFJE's avatar
$2.4m follower assets
$ROKU amongst the most sold stocks on this platform for the week! Quite interesting since I’m bullish on Roku at current prices.
In the high $70s just yesterday, ROKU was a $10 billion market cap with $2.2 billion in cash. Between that and the amount of stock Anthony Wood has sold over the last 2 years, they could repurchase 30% of the company at current prices.
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Managing Mindset
As I get closer to adding cash to my portfolio, I find myself starting to cheer for red days

I don’t try to buy the dip, but if I’m making my routine buys and can stretch my dollar a little further, I’ll take it!

$ABBV is currently at the top of my list - hoping to add another share at the start of next week
Mindset is pretty much the same, cheer green days for the gains, cheer red days for the buying opportunities
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STOP BUYING DOWNTRENDING STOCKS
Your weekly reminder as I’m seeing lots of dip buyers and so many dip buyers have become bag holders very quickly.

You or I will never time the exact bottom, but buying downtrends is not a smart strategy as it often results in further losses unless you get lucky catching the bottom.

Be patient. I want each of you to be incredibly successful with a true strategy to buy the dip.
I'd say if you have enough cash, buy and hold works fine and you don't have to time the market.

If you don't have cash on hand for future "dips"... be careful catching these knifes, they might be sharper than they look.
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Derek Spartz's avatar
$2m follower assets
Celebrating a win on $XOM
Sold equivalent shares to get back my initial 2020 investment in $XOM - all remaining shares are pure profit. Stock is trading at 5 year high and don’t see too much further upside from here. I’ll happily hold the rest and collect those dividend payment for the foreseeable future 🎉
Conor Mac's avatar
$319.5m follower assets
Greggs PLC Set to 2x Revenues and Expand to 3,000 Stores
A thing of beauty, Greggs, the nation's favourite pie-joint has ambitions to expand store count to 3,000 and 2x revenues to £2.4B within the next 5 years $GRG.

CapEx is expected to be ~£600M over the next 3Y, nearly 3x prior 3Y.

Assuming all else equal, if the multiple (using earnings here) stayed flat and earnings as a % of sales was roughly the same as it has been historically, then somewhere between 55% to 95% ish over 5Y.

Naturally, the multiple could go the other way.

Currently writing something up on Greggs, so will have some longer form thoughts soon. Anyone own this one?
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Greggs seems to have a pretty low CAPEX. Do they not own the stores?
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A lot to unpack from the $NOW investor day. The main takeaway: ServiceNow is doing exceptionally well and has lots of growth potential. This is reflected in raising the FY24 & FY26 targets. FY24 subscription revenue target is $11B+, the current TTM revenue is $6.26B
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Something to take into account here is dilution though. 20% SBC/revenue TTM. I try to use FCF margin ex SBC to calculate the rule of 40. That would drop it down to 30% growth + 11% FCF margin.
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Hedge Vision's avatar
$105.7m follower assets
Bought more CRWD and CROX
Added:

$CRWD @ $138.70
$CROX @ $48.50

Is this the bottom? I have no idea, and judging from sentiment, we have a ways to go.

However, I will continue to DCA on names I find attractive as I have a long investment timeframe.

The market can keep going down, but history has shown that it always returns higher
An interesting combo! Good luck, I didn’t buy today. Preoccupied with wiping tears
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Eric's avatar
$10.5m follower assets
Bought more $GOOGL
Now at 27% of portfolio. Who cares if ads are cyclical in planning on owning Google for a long long time.
Me three; funny to me the companies people will buy when companies like a Google are trading at these valuations. It seems too many people look at $13 vs $2,000 and miss the point entirely.
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Conor's avatar
$2.6m follower assets
DCF on $FB
Good morning! Has anyone here done a recent DCF on Meta? At the price today $176.88, I am getting the IV price of over 320 dollars a share.

I am not a DCF expert by any means. Can someone put what their intrinsic value is in the comments?
ThomasFJE's avatar
$2.4m follower assets
“In markets, as in life, so much hinges on our ability to survive the dips”.
Clearing Up Analysts Mistakes for $SNOW
This needs to be cleared up for $SNOW. Many people are claiming that they missed their operating margins by 66%. Analysts are comparing GAAP results to non-GAAP guidance. Snowflake reaffirmed its year-long operating income guidance and raised its FCF guidance by 1%.

Other analysts are comparing $SNOW product revenue to total revenue guidance and claiming they missed. Snowflake actually beat total revenue guidance by ~2%.
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Austin Lieberman's avatar
$450.6m follower assets
SNOW Earnings Prediction > $156/sh: Horrible idea but I'm doing it anyways
I'm 95% this prediction will be wrong.. everything is down pre-market and every time any tech company reports, the stock automatically goes down...

SO I HAVE THEM RIGHT WHERE I WANT THEM.

As you can see in my connected portfolio, $SNOW is my largest position. I'll actually be adding to it this morning before they announce earnings after the market closes today.

I fully intend to hold (and probably add to) my position for years so this poll is just for fun.... maybe it will teach a good lesson in how hard earnings reactions are to predict!

Here's why I think $SNOW is coiled and potentially ready for a strong bounce....over the next 8 years

At their Investor Day in 2021, management established FY29 targets $10billion in product revenue and 1,400 customers spending over $1billion

In FY29 management expects to be growing product revenue 30% YoY, with 75% gross margin, 10% operating income, and 15% non-GAAP free cash flow.

The stock has sold off a ton and next-twelve-months EV/R has come down from 58 in July to 18 now. A lot of people will say "you idiots are never going to make any money investing in unprofitable companies at 18x revenue"

But in FY27, analysts expect $10.14B in revenue, with $913.0 million in net income, and EPS of $1.99

Here's a graph showing what the return could be through FY 28 if Snowflake hits analyst expectations for revenue (I think these estimates could prove to be very conservative) and has a blended P/S ratio of 10.0 down from 27 today...

Shares would be $380.0 which is a 193% total return an a 21% annualized return.

The question then becomes will they execute? There's obviously no way to predict what happens through FY28, but we do know Fran Slootman and his executive team are proven exceptional operators.

They were excellent at Servicenow $NOW and already have $SNOW tracking above their ambitious 2021 Investor Day targets.

Here's a quote from CFO Mike Scarpelli at the JMP Securities Tech Conference on March 7, 2022 that shows how they're already exceeding expectations.

At the 2021 investor day they were targeting $1.68 billion in revenue in 2023. After last quarter they have adjusted that to $1.9 billion, 13% higher than their initial target. They also ended FY21 with a Q4 Adjusted free cash flow margin of 27% and full-year Adj. FCF margin of 12%... well ahead of their previous target which was break-even.

So the company is out performing management and analyst expectations. We've seen strength from the public cloud providers and $SNOW's multiple has come down drastically.

For my personal portfolio, all of this equates to my highest-conviction position with a 3+ year holding period. I will monitor execution along the way, but I think we COULD see a nice jump after earnings with the strong caveat that the entire market is currently in meltdown mode so who knows.
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Prediction:
$SNOW will be over $152/share on 5/27/2022
16 Votes
90% Investor
My profile claims I am 90% Investor / 10% Trader.
My experience in the 10% is relatively limited but I have enjoyed the ups and downs while documenting lessons learned and understanding the variety of strategies. Thus far, my posts have been devoted to this 10% because it is new & exciting for me... but what about the other 90%??

On this side of things, it's pretty quiet.
Before going majority cash, I bought solid/established/quality names ($MSFT, $JNJ, $TGT, $T) or index/thematic ETFs ($QQQM, $SPY, $BUG) and forgot about them. Boring, right?
I look forward to when the market bottoms and starts to turn the corner to put 90% of my money back to work.

With that said, I would like to briefly touch on 2 high conviction holdings that have survived my move to cash.

1) $ZIM (sea-freight shipping/logistics company)

With all the supply chain challenges, shipping rates have soared and ZIM has been a FCF monster. They IPO'd in early 2021 and have been rising ever since. The company recently held their Q1 results announcing a 10% increase in full-year 2022 EBITDA guidance and a $2.85/share dividend. Perhaps most importantly, the company believes this environment will maintain throughout 2022 (and may extend into 2023):

Fairly volatile price action which makes it appealing for buying/selling shares or options (only CSP's or CC's for me!).

2) $ASTS (Satellite 5G direct to smart phones)

This one is more speculative.
In a nutshell: they are launching a large satellite array (named Bluewalker 3 - BW3) soon ("this summer") that will test 5G service from space directly to existing smartphone hardware. I believe the recent price action (current price ~$7.00) is partly due to the expectation that a date was to be announced at their Q1 earnings call (it wasn't).

Following successful BW3 launch and testing, a series of "BlueBird" satellites are planned that will provide service to actual customers.

I may be wrong on this but, for the 1st time, I noticed new names (Scotia Bank & Morgan Stanley) on the Q1 call. Looking into it, Scotia Bank actually released a May 9th report titled "Space Mobile: If Successful, BW3 Could Disrupt Global Tower Industry Within 20weeks". Deutsche Bank is one of the first banks to cover the company and recently adjusted their price target to $31.00 (down from $32.00). I expect Morgan Stanley to initiate coverage in the near future.

Additionally, the company seems to be making good progress on all fronts:
  • Backed by American Tower & Rakuten
  • Allegedly on track to complete their "Site 2" facility this year (designed to manufacture 6 "BlueBird" satellites per month)
  • Granted experimental license by the FCC for BW3 launch / testing
  • MOU's with strategic telecom providers ($TEO, $T, $LILA, $TEF, $AMX, $TIGO, $VOD, $MTN.JO, $ORAN)

Keep Treading!
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Eugene Ng's avatar
$3.9m follower assets
Value.
Always go back to basics.

Ask how, where, what and when value is created.

Ask if it is sustainable, repeatable and scalable over the long-run.

Keep asking these questions, and eventually you will get a rough enough answer as to if a business is worth investing in.

#invest #investment #investments #stocks #stock market #business #wealth #finance #success #investinginyourself #personalfinance #wisdom #wisdomquotes #quotes #visioninvesting #visioncapital
Bradley Freeman's avatar
$119.4m follower assets
U.S. Dollar
A strengthening dollar has been a pain in the neck for global firms -- on top of all of the other pains in the necks they've had to deal with over the last several months.

Companies with hefty non-dollar-denominated businesses were hit by the soaring dollar making exchanges from foreign currency to greenbacks ultimately worth less on an apples to apples basis. For a company like $MTCH specifically, this was set to shave 5% off of their Q2 revenue growth rates while just a few months ago, the impact was neutral. It's a big deal.

The recently weakening dollar would be extremely welcomed news from Match and countless other companies, and it's beginning to (long way to go) fortunately cool off. We'll take all of the macro tailwinds we can get this year.
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So, the market is tanking because of a stupid photo app for teens with no income? Ok, thanks for the cheap shares.
Just bought a little bit of $FB, $GOOG, $AMZN, $VEEV and $PINS for the public portfolio. This is crazy.
I think the R word has more to do with it, but yes adtech is tanking alongside $SNAP…falling consumer spending, rising capital costs, and lower overall growth expectations continue to help near term valuations compress. 🤷🏾‍♂️
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Inventory Glut
  • Managing supply chains is hard.
  • It looks like big retailers over shot on the upside in terms of inventory (both cost and price paid).
  • $TGT $WMT $BBY $COST $HD
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Neil's avatar
$18.3m follower assets
Nvidia Earnings
Were Nvidia (NVDA) Earnings Bad or An Opportunity?

Beat for the Q but as expected, miss on Q2.

Main reasons -- China lockdowns and Russia.

$NVDA
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Definitely not game over. Buying opportunity. #2 position for me. NVIDIA is def the company you wanna hold for a while they are touching every sector for the next 30 years.
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Erick Mokaya's avatar
$87.9m follower assets
Sequoia: The markets is focused on who is profitable not who is growing:
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Makes sense due to all the macro events going on. I was actually looking into buying some decent insurance companies to follow this trend.
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So, this sucks.'s avatar
$80.9m follower assets
NVDA was my last hope. I can no longer be a bull until market changes. Good luck fellas
$CVT Write Up
@tlginvestor and I did a collaborative post on $CVT. We discussed the long runway the events industry has, how Cvent is the industry leader, and whether or not Cvent benefits from network effects. The post is below.

Would also highly recommend following @tlginvestor if you are not already. It was great working with him on this write-up.

Gen Z will power $SNAP in the long run
According to Insider Intelligence, the platform with the most Gen Z users is Snapchat.

While most people use it for its augmented reality features and its filters, I believe that as Gen Z grows its earnings power, Snapchat will have an easier time monetizing its users outside of advertising.

For those unaware, Snapchat has a virtual shopping feature. While that feature has been highly underutilized, as I said earlier, as Gen Z's earnings power rises, they will utilize Snapchat's virtual shopping feature more often.

Also, Snapchat's in-app games mini-programs (aka Minis) are all part of Snapchat's effort to create an economy within its platform. Developers will develop games that they can monetize with Snap tokens. Snapchat makes money from the success of its developers and from the growing use of its tokens.
I completely agree ..if it’s valuation needs to be corrected..so be it..accumulate ..

It’s growing back or getting acquired ..
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FANG Multiples
Below are the FAMG NTM EV/EBITDA multiples since 2007. Either consensus estimates still have a long way to fall or long-term investors are getting a deal on $FB $AMZN $MSFT and $GOOG.

The current avg FANG NTM EV/EBITDA is 12.9 while 2007-2021 avg is 14.9.
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Best time to invest
The best time to start building positions in good companies is now, profits are made on the way down $TSLA $NU $U $UPST
Eugene Ng's avatar
$3.9m follower assets
Results & Expectations.
Investing outcomes are driven not just by business results, but business results within the context of expectations.

The time frame also matters.

The shorter time frame is more volatile, less relevant, the longer time frame less volatile, more relevant.
The Change in Investors dealing with Volatility with Nikki Dunn, CFP - SSST ep. 15
@greencandleit Really enjoyed this video, a great set of questions asked in this interview!

@shetalksfinance it was really interesting to learn how you started your journey as in technicals as a trader and then moved to the fundamental side of analysis.

Lovely to see you both collaborate :)
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Bradley Freeman's avatar
$119.4m follower assets
Sprout Social $SPT
Calling on the bright Commonstock community. Do you have any negative or positive feelings about Sprout Social.

Do not hesitate to rip into this company or to praise it depending on how you truly feel. Open to any & all opinions. 🙂

It seems like an interesting product. Salesforce ending their competing offering to partner is wildly encouraging to me. Love it? Hate it? Meh?
For anyone like me who has never looked into Sprout Social, the Chit Chat Money guys coincidentally released their weekly Not So Deep Dive podcast today and it's... Sprout Social! I'll be listening on my run today so I may have feelings afterwards.
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Leon's avatar
$841.1k follower assets
$SNAP vs. $FB
Is the weak $SNAP guidance really an indicator for other Ad companies?

$SNAP was a beneficiary of the IDFA changes. They are more for brand marketing which imo don‘t rely that much on exact conversion figures. But now $META was able to improve their CPMs again after IDFA. So maybe now advertising dollars are getting back to companies like $META where you can better measure the success of your campaign which is probably more important in times of cost savings everywhere? 🤔
Hello , my first post here , would love to find an account who's charts fancy as I am too
Leon's avatar
$841.1k follower assets
How do Small Caps vs. Large Caps perform during a recession?
I just read 2 interesting studies regarding this topic and i want to share the most interesting parts. The study from L.N. Switzer (2010) is about Canada and US, but i will focus on the US:

I think most of you know, that small caps oupterformed large caps over time. In the 84-year holding period from 1926-2010 the difference amounted to over 2.03% per year.

The table below shows how small caps vs. large caps performed during different economic cycles.

Only between 1983 and 2000 the large caps performed better than the small caps.

But how exactly does the small-cap premium behave over the business cycle?

In the year prior to the peak (the year preceding the onset of the recession) small caps often lagged and large caps performed better as we can see in the table below. Especially in all the recessions since 1990.

But in the recovery period (12 months period subsequent to an economic trough) small caps provide substantially higher returns than large caps during this time frame.

But 12 months is quite a short time, so let‘s have a look at what Erik Norland found out for CME where he compared the Russel 2000 & S&P 500.

He found out, that small caps often outperformed during periods of economic distress.
  • 1979-82: high inflation, swings in interest rates & double-dip recession Small cap outperformed by 76%
  • 90-93: recession & slow recovery; +48%
  • 99-2013: Dot-com, 9/11, two wars, global financial crisis; +114% outperformance but with periodic interruptions

In contrast large caps often outperformed small caps during periods of economic expansion:

  • 83-90: during 80s boom S&P outperformed by 91%
  • 94-99: 90s expansion; +92%
  • 2013-2020: +29 % until end of 2019 and then additional 20% during the first three months of 2020

We are not yet in a recession, but it looks like we are going into a period of economic stress.

Will small caps again outperform large caps during this time?

I don‘t know. History never repeats itself, but it rhymes. If you‘re interested to dig deeper i‘ll link the studies below:


Erik Norland
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Sachiv's avatar
$510k follower assets
Profits are made on the way down…
Agree with the ⬇️ philosophy /approach. Here are my names to add to that list:

$QCOM - growth in every sector of chip use, with a lot capex model helps this company remain low risk with high interest rates…a global talent pool and legal strength, and partnerships across industries makes this company important to governments

$TXN - a shift away from China Mfg will help lower geographic risk. 40% of revenue currently from China. Very strong capital allocators and generates tons of OCF/FCF…no need to look at BS “adjusted” metrics

$TSLA - strong supply chain management(batteries,
Minerals, and components) and in house problem solving vs using consultants to maintain strong margins and operating leverage, in an increasingly difficult world, & uses leverage from other related companies like SpaceX, and has built positive reputations in Europe Asia and the Americas already…

$SWAV - a small company relatively, it’s basically using a razor and blade model to serve the cardiovascular calcification issue globally. It’s recently won permission to serve the China market, and a randomized study has just been released where patients after two years of receiving their treatment are doing better than those who underwent regular angioplasty (stents, etc). At these valuations and improving topline, bottom line, and OCF/FCF numbers & having no debt, I find a global reopening scenario (regardless of economic trend for the next 12-18 months) a great time to relook at $SWAV

Thanks to @osayawe_terry for his post, jogging my thoughts…and these are just a few of the top of my head. Hope to add more as the storm continues to brew! Thanks for following!

Interesting, Undervalued Stocks: $VEEV, $BRLT, $CNSWF, $MAGT.TO
Interesting, undervalued stocks that we recently wrote bullish articles on:

Veeva Systems $VEEV (life sciences software)
Brilliant Earth Group $BRLT (high-growth, profitable jewelry retailer)
Constellation Software $CNSWF (software company with an excellent history of acquisitions)
Magnet Forensics $MAGT.TO $MAGTF (profitable, Canadian high-growth cybersecurity play)

Check out our most recent substack article below!

$WEN Good News
Largest Shareholder Trian expands stake in Wendy's to nearly 20%.

Also exploring deals for merger/acquisition for the company.

Wendy's was a company I talked about and thought was quite interesting but I definitely
agree with Trian's comment about how the company has "lost its way after the founder died."
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Jennifer's avatar
$5.9m follower assets
What's Up With Whitecap?
Lately I have been seeing some frustration regarding the lack of upward movement in Whitecap’s share price; dividends aren’t large enough to satisfy shareholders, share buybacks are completed in large blocks and seemingly followed by additional share issuances, resulting in the share count not substantially decreasing. Combine this with recent insider sales and the returns seen elsewhere, and I can understand why some shareholders are frustrated. However, I believe Whitecap offers a unique opportunity that will reward longer term shareholders far greater than companies who are focused on returning cash in a more immediate fashion. Sometimes it’s worth zooming out and looking at the big picture, and you’ll get a better idea what the future of Whitecap holds.

I initially hoped to find a reasonably comparable case so that I could analyze why Whitecap has been lagging some of its competitors in share performance. I concluded that Whitecap is a standalone company, and it would be too much of an ‘apples to oranges’ comparison. Perhaps a better example is to look at the incredible story of Tourmaline Oil, and one can gain a glimpse into what Whitecap’s promising future may look like.

Tourmaline Oil: How a Natural Gas Giant Rose to Power

Founded in 2008, Tourmaline is now the largest natural gas producer in Canada as of 2021, and the fifth largest in North America, however, Tourmaline’s success did not happen overnight. In its early years, the company rapidly bought up very small producers and owners of mineral rights. By the end of 2010, it was one of the largest property owners in the Alberta Basin, and a major Montney producer. The company then quietly absorbed its acquisitions and brought new wells online in 2013, and the following year purchased Santonia Energy’s Deep Basin assets for $189.1 million. To pay for the deal, Tourmaline issued 3.23 million new shares. This brought 221,000 acres of new land under Tourmaline’s control. The company continued its significant growth, including a 2014 joint venture project with CNOR and an acquisition of Perpetual Energy in 2015. Tourmaline gained mineral rights by giving Perpetual 6.75 million shares. The following year, Mapan Energy was purchased for $106 million in stock.

Tourmaline was a steadily growing and successful corporation, but the real game changer was a major acquisition in 2016, with the $1.04 billion purchase of Shell’s non-core mineral assets. The company now gained access to 61,000 acres in the Gundy area, as well as 145,000 acres in the Deep Basin. In 2020, Modern Resources was acquired in a cash and stock deal worth $144 million, and an all-stock deal for Jupiter Resources worth $626 million. Following three other acquisitions worth $1.53 billion, Tourmaline became Canada’s largest natural gas producer, just as natural gas prices doubled. Numerous other assets were purchased in the Montney Formation, the largest being the takeover of Black Swan Energy for $869.5 million. In 2021, a deal was signed with Cheniere Energy to ship natural gas to Cheniere’s LNG plant in Texas beginning in 2023.

Tourmaline’s use of technological developments, including the drilling of horizontal multi-stage fracture stimulation wells, allowed access to the thickest, highest pressured and highest deliverability fine grained sandstone reservoirs of the Montney in the NEBC play area.

The company’s share price rose six-fold between March 2020 & October 2021, and Tourmaline announced a major debt reduction plan, paying a $223 million special dividend to shareholders.

(Source: https://en.wikipedia.org/wiki/Tourmaline_Oil, prices listed are $CAD)

Whitecap Resources: An Oil Giant in the Making

Whitecap was founded in 2009, rapidly growing its daily production from 275 boe/d in 2009 to 14,052 boe/d in 2012. Acquiring Midway Energy for $550 million in 2012, Whitecap followed up with a purchase of Husky Energy’s oil assets in SW Saskatchewan for $595 million. In a deal expected to increase Whitecap’s production by 25%, the company purchased a 62% interest in the Weyburn oil project for $940 million from Cenovus.

Primarily focused on light, sweet crude oil, as opposed to heavy oil or natural gas, Whitecap has amassed a large land position in the Cardium light oil play in central Alberta. The Cardium is among the largest light oil plays in Canada and is generally considered to be a top-ranked candidate for CO2-based enhanced oil recovery (EOR). Much like Tourmaline used horizontal drilling technology and multi-stage fracturing to increase production and profitability, Whitecap has extensive CO2 EOR operating experience from its operations in southeastern Saskatchewan, which should be directly applicable to its extensive Cardium light oil asset base in Alberta. Aided by a regulatory/fiscal climate supportive of CO2 capture and sequestration, Whitecap is well positioned to substantially and sustainably grow its Cardium light oil production via CO2 EOR.

Whitecap’s Weyburn project is backed by years of extensive scientific research and CO2 EOR commercial operating experience, and today is recognized as the world's largest CCUS project for EOR in the world using anthropogenic CO2. EOR generates higher recovery rates than would be achieved otherwise, extracting 30% to 60% more of a reservoir’s oil. Onshore EOR has paid in the range of US$10-16 per tonne of CO2 injected for oil prices of US$15-20/barrel. With oil prices at around US$90/barrel, the economic benefit is ~US$70/tonne. In addition to significantly increasing the amount of oil recovered, it extends the productive life of a maturing field like Weyburn and it is estimated this will extend the life of the field by over two decades. To date, Weyburn has safely sequestered more than 31 million tonnes of CO2.

As one can gather from the success story of Tourmaline, growth requires making multiple strategic acquisitions, either through deploying cash or the issuance of shares. In May of 2021, Whitecap closed its acquisition of Kicking Horse Oil & Gas Ltd. for $300 million (4.5 million Whitecap common shares and $56 million in cash). Kicking Horse’s assets primarily consisted of a condensate rich Alberta Montney development at Kakwa, with current production of approximately 8,000 boe/d (~32% liquids, ~90% of which is condensate). Whitecap continued its long-term strategy of selectively consolidating high quality assets in core operating areas, with these assets well positioned in the liquids-rich portion of the Alberta Montney.

In late 2020, Whitecap formed a strategic business combination with TORC, significantly increasing Whitecap’s scale and core area dominance, making them a market leading light oil player. TORC’s asset base fit directly into Whitecap’s core areas, creating one of the largest pure play conventional light oil producers in Canada with over 100,000 boe/d (78% oil and NGLs) of corporate production. Under the terms of the agreement, shareholders of TORC received 0.57 Whitecap common shares in exchange for each TORC common share held. With a focused Western Canada asset base exhibiting lower production declines, high operating netbacks and strong capital efficiencies, Whitecap continued its positioning as an industry leader.

In early 2021, Whitecap closed its acquisition of NAL Resources Limited (a wholly own subsidiary of Manulife), in an all-stock transaction valued at approximately $155 million. NAL’s oil and gas operations in Alberta and Saskatchewan were producing approximately 27,000 boe/d (55% oil and NGLs). Whitecap issued roughly 58.3 million of its common shares to Manulife Financial Corp. for all issued and outstanding shares of NAL. The deal to acquire NAL, which produces oil and natural gas in Alberta and Saskatchewan, furthers Whitecap's strategy of consolidating assets in its core Western Canada operating areas. The all-stock transaction further improved upon Whitecap’s strong financial position, decreasing Whitecap’s leverage ratio by 25% in 2021.

I found this morning’s poll results rather surprising, given the rumblings I have seen about Whitecap’s short-term share performance. It’s worth noting that Tourmaline spent several years completing strategic acquisitions through the deployment of cash and common shares. Whitecap appears to be employing the same strategy, wisely accumulating a strong asset base in the best producing formation in Canada which will perform exceptionally well in the long term. They do so while completing NCIBs as promised, issuing a decent dividend to shareholders, and reducing debt. If shareholders are disappointed in a lack of short-term profit, they would be better to invest in “Company A”. It’s all a matter of personal preference of course, but if oil ends up in a multi-year bull run as Eric Nuttall suggests, Whitecap stands to reap the rewards of taking a long-term view. Rather than deploying cash directly to a shareholder’s pocketbook in 2022, they are increasingly positioning themselves to remain a top producer with slow-declining, ESG-friendly, exceptional assets. When that day arrives, I will be glad I purchased my shares sub $10, just as Grant Fagerheim did recently – because Tourmaline torque is within the realm of possibility.

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Irish Born Investor's avatar
$7.8m follower assets
24th May 2022 - Trading Journal
I have decided to move my Daily Trading Journal from DayOneApp to Commonstock. I hope that this may be useful to others in both it's format and the content. Writing a trading journal is a very good habit to get into and enables the writer to reflect on their thoughts, mood and bias. I will attempt to post this journal each day that I trade or study the markets in real time.

I have only just begun looking to trade actively again after a hiatus due to market conditions. I have spent all of this time studying styles that I hope will suit me. Mainly along the lines of Minervini, Weinstein & O'Neill. I have consumed a huge amount of information in the past few months and feel confident in my ability to weather this storm and be well equipped when the market eventually sees sunshine again. This is a generational moment in the markets and I want to be one of the bubble class of 2020 left standing.

  • Situational awareness:

Situational awareness represents my feelings and awareness of the bias of the market going into the day. Clearly today that bias was bearish. We are in a strong bear trend, the SNAP results last night seemed to kick off a reverse to the downside. I suppose this was a bellwether or possibly some leveraged whale just blew up! Who knows...

  • Pre Market Work:

I am in no rush to place trades and I have no intention of placing new trades each day. I will be selective especially in these conditions. I spent the morning doing the same routine I have for the past few days. Looking through charts on longer time frames and highlighting anything that came up that looked like it was ready. The only sectors primed for moves are Aerospace/Defence, Shipping/Transport & Commodities (Oil, Gas, Coal). I am reluctant to dive heavy into commodities as the trade is a bit long in the tooth and everyone and their auntie is trying to trade them. Once participation reaches peak then the trades will begin to fail. That said there are setups and they are worth considering with tight stops.

Mainly, I would like to spend my time identifying the stocks in Stage 1 that may move to Stage 2 as the market turns. Tech is still being decimated but there are a couple of very early signs of bottoming in $ZM also interesting bottoming forming on weekly charts in $AMPL & $JOBY. These could just as easily leg down again, only time will tell.

  • Trading Day:

Once the market opened I used my sector lists to indentify what was holding up. $NOC was a clear RS name today and was already on my focus list with a nice VCP (Minverini) setup. My entry was more anticipation than breakout but I like the setup and the solidity in the name and sector. Also the Moving averages all converged suggest a strong setup in my favour. With a minimum 2.5:1 Risk:Reward I opened a 5% position which is quite small but I am starting slowly.

  • End of day Thoughts:
I am still trying to structure my watchlists better at the moment they are a bit messy apart from the focus lists. I need to work on these. Also I have updated my TraderSync so that it is cleaner with better tags and settings. Long overdue.

I had several Shorts on watch today $COIN, $NET, $CELH all of which look like absolute manure and IMO will probably half from here but as volatility gets more crazy I am reluctant to press shorts too much and am uncomfortable holding them multiday and don't want to day trade much.

  • Notes & Open Trades:
$NOG - June 17th Call $30
$NOC - 5% Stock Position : Entry $464.50, Stop $455.50
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This is so insightful! I don't really know much about a trader's routine so it's really interesting to learn what your daily actions consist of. I agree a journal is a great way to record your decision making and your thoughts at times. Really love the format and clarity of the first post. Look forward to next one.
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Economic Update - Lower Home and PMI Data
Stocks opened lower Tuesday morning, reversing the rally seen on yesterday.

As Fed officials have thrown their support behind 2 big rate hikes in future meetings, investors are worrying that FOMC action could spur a recession. It is believed that the next 2 FOMC meetings will both result in 50 basis point increases as Fed officials have already started discussing options for the September meeting.

Looking at economic data today, new home sales unexpectedly plunged 16.6% to an annual rate of 591,000 in April. It is the lowest level since April 2020 & well below forecasts of an increase to 750,000. The median sales price was $450,600, up from $435,500 in March and $376,600 a year ago.

Elsewhere, the May flash reading of S&P Global U.S. Manufacturing PMI fell less than expected to a reading of 57.5, down nearly two points from the previous reading. It was also the lowest reading in 3 months. The Services PMI fell over two points to a reading of 53.5, a bigger drop than expected.

U.S. Treasury yields are lower, with the 2-year Treasury yield down 14.2 basis points to 2.48%, the 5-year Treasury yield down 14.5 basis points to 2.73%, and the 10-year Treasury yield down 12.6 basis points to 2.73%. Long-term advance rates are lower today.
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Paul Cerro's avatar
$18.4m follower assets
Fatigue may threaten long-term growth of ecommerce subscriptions
The onset of the pandemic drove many consumers to adopt subscription ecommerce for essential items—like meal kits and pet food—as well as beauty and hobby boxes for self-care and entertainment. That dramatically propelled US subscription ecommerce sales growth in 2020 and 2021.
  • US subscription ecommerce sales will grow by 15.0% year over year (YoY) in 2022, totaling $33.48 billion.
  • Sales growth will remain steady through 2024, but subscriptions will account for just 3.2% of total retail ecommerce sales during that time.

Digital subscription buyer growth will slow to 3.3% this year, and hover around 3% through 2024.
  • This means companies building subscription models will increasingly have to draw dollars from existing subscribers. As a result, we expect that the average spending per digital subscription buyer will be higher in 2022 than at any other point during the pandemic.
  • The rising average spend per buyer will sustain sales growth in the short term, but subscription fatigue raises concerns. Consumers will eventually hit a ceiling with subscription spending, making long-term sales growth more difficult.
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IMO, the "deteriorating macroeconomic environment" is just an excuse by the incompetent management at $SNAP. The real reason for their decline is TikTok.
Target Corporation $TGT
1. Is the company undervalued?
EV/EBIT: 10.9
EV/Sales: 0.82
Price/Book: 6.62

Tarjay is the #1 big box retailer for middle class women across the United States. The company is also extremely durable with a 120-year history. Notwithstanding $TGT just reported a huge miss and investors are worried this could be a precursor for more pain ahead.
However Target is priced quite reasonably and returning a sizeable amount of capital back to shareholders. Additionally topline growth remains strong, so if profitability concerns abate investors could hit a bullseye by buying at today’s prices!

Link to full writeup here:
Oooh “tarjay” - must be fancy 😂

I’m not too concerned with one bad quarter. Excited to hold this stock for many years to come
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Is $SNAP the canary in the coal mine for ad-based companies like $GOOG & $FB, or are their issues company-specific?
IMO, I wouldn't put too much weight on a company with < $5B in revenue and a history of burning money for the last 10 years.
Pre-Market Mover >50%
$ZVO, Zovio, an education technology service company that partners with higher education institutions and employers to deliver solutions and learning experiences is up >50% pre market.
Powell Speech, New Home Sales: Daily Contrarian, May 24
Good morning contrarians! Stocks are dropping again after disconcerting news for online advertisers after the close…

$SNAP’s news took down the likes of $FB $PINS $GOOG $TTD and others.

Today we look to a speech by Fed chair Jerome Powell and new home sales at 1000.

Also earnings from $BBY $RL $ANF and $JWN to perhaps provide some more intel on retailers, their margins, and the state of consumers.

What to expect from this whole smorgasbord is discussed in today’s briefing and podcast:
If people let $SNAP performance dictate their views of $FB & $GOOGL, that demonstrates why most fail at trying to pick individual stocks.


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Luka 🦉's avatar
$88.6m follower assets
Funny how -30% of $SNAP is a disaster while -30% of $TGT is a market opportunity.
Long $TGT - buy dividends, buy cash flow. 💪
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Sachiv's avatar
$510k follower assets
$ZM posts impressive metrics and product launch details
I bought into Zoom video like so many others in late 2019, and then through 2020…a few investment services “promoted” (sometimes feels like another “P” word but I’d like to keep this post neutral) the stock as a great buy through its ups and downs, even near its all time highs, without actually taking into consideration it’s valuation, growth trajectory or how the alternatives were possible eating into its share.
$MSFT $GOOGL and other startups were all building great coworking and productivity tools, regardless of whether you’re remote or at the office.
Fyi - Www.teamflowhq.com was one of them we tried but it never caught on due to the habits of my team.
**UPDATE - another one www.preciate.com , great for virtual social gatherings or conferences with several tracks and breakouts.

Going forward, I’ll be more cautious in position sizing and checking valuations and euphoria (both upwards and downwards) when listening to recommendations.
$ZM has entrenched itself into enterprises, but it remains to be seen if it can be a “must have” platform of communication services. New product launches this quarter seem interesting but for the retail and SME, they don’t matter much. Here’s a recent article by zdnet that basically tells me that I don’t need a subscription…do you use Zoom, or just use the verb and use another tool?
Since my company implemented Teams over Skype, it has been another world. I don't honestly know how people prefer Zoom to Teams... my wife uses Zoom for her online business (streaming online webinars), and I understand it's good for that. Still, for collaboration tools in the office, Teams is way better, IMO.
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Top 10 S&P500 Companies by 2021 Revenue Growth
What S&P500 company had the highest increase in revenue in 2021 (vs. 2020)?

  • Hint 1: It grew more than 22x

  • Hint 2: It's obvious once you see it

👉 Answer
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Jennifer's avatar
$5.9m follower assets
The Case for the Copper Bull Continues...
"A commodity super cycle has now begun and will carry on for the next 30 years, predicting a 20% rise in copper prices by the end of 2022."

Thank you for the Reuters article, Jon Bond @007

My copper holdings:
$ATX.V
$CDB.V
$FDY.CN
$FIL.TO
$IVN.TO
$KZD.V
$MRZ.V
$NGEX.V
$TECK
$VCU.V
$VOY.CN
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Thanks for the tip I just added 3 copper etfs to my watch list, :) $COPX $CPER and $JJC, :)
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Cameron McFarlane's avatar
$954.3k follower assets
Nvidia Earnings $NVDA
Q1 EPS $1.36 vs est. $1.29
Revenue $8.29B (+46% YoY) vs est. $8.12B

GUIDANCE:
Q2 2023 revenue $8.1B vs est. $8.45B

Revenue is expected to be $8.10 billion, plus or minus 2%. This includes an estimated reduction of approximately $500 million relating to Russia and the COVID lockdowns in China
$NVDA was just added to my kids’ portfolios in the last 30 days, because it of the valuation relative to their historical multiples. With an earnings multiple of 46 at the time, it was still the “most expensive” stock I’ve ever bought. We’ll see how this additional new wrinkle to my philosophy works out. Paying 30x earnings for $V $ $MSFT recently was like pulling my own teeth🤣. High P/E stocks are a risk I usually avoid. Just hope I’m not falling into a risky new behavior. I’ve cut myself off already, will see how the next 2-3 years go.
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A Bunch of Stocks Getting Blown Up
Here are a bunch of stocks getting absolutely blown up over the last couple of weeks/months:

$INFY, $HMC, $UBER, $WIT, $LULU, $DDOG, $TSCO, $ESS, $NU, $XYL, $RCL, $MGM, $UHAL, $CGNX, $PLNT, $LYFT, $NCLH, $BLCO, $GIL, $ATC, $YETI, $AMBP, $DAVA, $AUR, $CROX, $PGNY, $ALGT, $ASO, $GBDC, $HLF, $RKLB, $BOOT, $YELP, $ERJ, $MED, $CVCO, $VCSA, $URBN, $CRCT, $HCM, $ACVA, $INFN, $AGIO, $LPSN, $GPRO, $CDLX, $EGHT, $ARHS, $NUVB, $ATEC, $UIS, $SKE, $WKME, $MRUS, $FLWS, $FARO, $NIU
Visit highsandlows.substack.com to see more
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$INTU delivers on earnings in a challenging environment. High quality, wide moat company that finally came down to buyable levels.
If you are fearing a recession, check out Intuit's performance during the GFC in 2008, it did pretty well.
Edmund Simms's avatar
$7.9m follower assets
Rolling out a fresh sheet
Sit back, strap your thinking cap on, and unfurl a new issue of Valuabl this Friday. Valuabl is my fortnightly journal of the financial markets. It helps value investors buy low, sell high, and make heads-or-tails of our global capital markets.

Amongst the usual pleasures, subscribers will gulp down missives on:
  • Current capital costs and my valuation of the S&P500
  • Why governments shouldn't bail out naughty crypto-gamblers
  • Central banks and how they're lubricating the economic machine
  • Is there value in a $3bn bakery chain?

Markets are tanking and investors are afraid. Get ready. Get prepared. Subscribe now.
Giro Lino's avatar
$2.9m follower assets
AWS is Unstoppable
Followed by my first post on Amazon, the discussion about Amazon extended from the eCommerce to the cloud business.
It was personally shocking to see people mocking AWS on Twitter. After years of following companies and talking to industries expert, AWS is one of the very few genuinely admired in the industry.
Regardless of the stock price, the business performance it’s admirable, especially considering how large the company already is.
So, I decided to write this post to explain why I believe that AWS enjoys a long-term sustainable competitive advantage versus its primary peer, Azure.
A fundamental characteristic is its architecture, making AWS a unique player in the PaaS industry. I hope you enjoy the reading.

### AWS, Azure, GCP?

When it comes to selecting which cloud service provider your company will hire, you’ll probably go for all of them.

Most companies and enterprises are multicloud, to begin with. Definitely two, and actually, quite a number of them are using all the big three: AWS, Azure, and Google.

However, there is a misconception about how the client switch between platforms. It doesn’t happen like this: “wow, today I’m going for Azure because we used AWS yesterday.” Usually, when your workflow is in the cloud, it stays there.

The companies' decision depends on the workflow they have to deal with. So, going forward, we’ll avoid mentioning GCP.

Some customers decide to go to GCP for their marketing analytics because GCP tends to have more developed, mature solutions for analyzing data from a marketing perspective.

Of course, they got the whole Google Ads and all those services. Some customers are already leveraging that. So, therefore, they'll move their entire marketing workload to Google.

Therefore, we see GCP as a way of strengthening Google’s dominant position in the Ads market, not necessarily competing against Azure or AWS.

Both Microsoft and Amazon have their own Ads manager platform. Even though they’re inferior to Google in many senses, processing the campaign data in a different cloud provider could jeopardize the company’s dominance.

### Clash of Titans
Except if the company is processing analytics related to marketing when they first make that move to the cloud, that's when they decide whether it's AWS or Azure.

Then, in our opinion, we have to sort of clients: enterprise, others. So let’s go over an enterprise in this topic. In some cases, they have complex SAP, then they'll look at which cloud provider provides that exact specification for their SAP environment in terms of actual memory configuration.

That would be a good fit for them and at a reasonable price point. They'll take AWS over Azure or vice versa, depending on what they have on-premise and the workflow they’ll allocate on each.

We frequently heard that the cloud is about pricing, though I’ve never heard it from anyone who used it. Indeed, price is a huge factor, but it’s more complicated than pricing.

Several variables influence which service provider you’ll go for. For instance, who the customer is, who are their clients, and their size as an enterprise?

Size is an underestimated factor. If the client uses an SAP, it is usually very sticky with various workloads. In the majority of our interviews, the interviewee laughed when we asked about how hard it was to move to a different cloud service provider after you’re settled.

So, yeah… Sticky to clients. Of course, if AWS or Azure is willing to give a substantial discount, the CTO will have a considerable challenge ahead.

Also, we noticed a parallel in enterprise clients with existing Microsoft .NET shops. It may sound like a legacy (and it is), but many enterprises are using it. Check out this link if you’re curious.

If you’re from Azure’s sales team and had access to that info — which you certainly did —it’s time to book a new client. Follow us…

If you’re running a .NET shop, your enterprise has a big chance to have a huge Windows 2008 installed somewhere there, even though you should have migrated a decade ago.

If you’re Microsoft, is there a better way of squeezing the client by telling him that you’re cutting his Windows 2008 support unless he picks up Azure?

Even though AWS may win the whole process, the enterprise will have some commitment to Azure and share the spending.

So, instead of going all-in AWS, let’s spend an amount on Azure and then move to AWS. This makes Microsoft a beast selling to enterprise clients and differentiating itself from AWS.

### So, Why AWS?
As we mentioned previously, considering its applications, Azure is focused on enterprise, and also because of its sales effort.

There are two general uses of clouds. One is what's it's called infrastructure as a service (“IaaS”), which Microsoft is an exceptional player.

That's more where the focus is on basically setting up VMs in the cloud-like storage. There are a few types of VMs, such as compute-focused, network-focus, and memory-focus.

So, if the solution is IaaS-based, it's more along those lines of typical storage, computing, and networking. That was more significant earlier on.

Nowadays, the trend is to leverage PaaS, a platform as a service. This makes the environment more cloud-native and cost-effective if they take advantage of the cloud provider's PaaS services.

That’s the winner model. You could have microservices functions in the case of Azure and Kubernetes. Then, you have the whole container movement where they want to break down an application to various components.

Initially, Microsoft decided to launch Azure Cloud, then came to infrastructure later. They went with the many services, and then they changed the infrastructure much later.

Microsoft focused on creating powerful VMs, alongside storage services for its products, then the microservice functions in Azure, which led to several changes in the infrastructure.

So, even though Microsoft has all the technology, the scalability and the architecture of the AWS platform are excellent.

In our opinion, that’s why AWS is superior. Microsoft did it backward! That’s why they have some challenges around scalability and reliability.

We’re not saying that Azure is not a good solution. We’ve never heard it. However, it is a usual complaint with certain limitations and restrictions in the service, resulting in some trust issues for a few clients.

AWS, on the other hand, every start-up uses its service. So the answer is always easy to use, scalable, and reliable.

The company started with the end goal of becoming a PaaS business, not just an infrastructure provider. Believe this is a brilliant and unique perspective that just a company like Amazon could possibly have.

Let’s remember that AWS was born to support the marketplace, creating microservices to improve Amazon’s business.

So, from ground zero, AWS was built as a microservice platform to solve the issues that a business such as Amazon had – this is possibly the best sandbox ever.

In our opinion, this advantage cannot be replicated. For instance, once Microsoft has spent over $60bn creating and allocating its clients in Azure, they cannot simply create a new one and plug their clients there.

So, we see AWS positioned in a privileged position in the competitive landscape, and considering the industry size, it’ll generate a high yield of durable returns for decades.

### Competition Isn’t a Problem, Yet
We bet there are thousands of ways to analyze the competition in a specific market. But, in our opinion, one of the most simple though effective ways is through a ROIIC analysis.

You can notice there is an incremental “I” in this ROIC. It’s right. The Return on Incremental Invested Capital is calculated by the Nopat generated by a specific growth Capex.

We define Capex as the properties expensed the depreciation plus the net working capital for the operation.

Research Amazon using Stratosphere
So, AWS is yielding an incremental 25% return on all the capital reinvested in operation, ranking as one of the few companies at that size capable of doing so.

This is a strong indication that AWS enjoys one, or more, relevant competitive advantages, agreeing with the fundamental points we disclosed before.

Also, many investors are focused on reported sales and missing the big picture on AWS. Look at the sales backlog. There is an overestimated mismatch between backlog and actual sales that doesn’t matter for a business such as AWS.

Backlogs show information on goods that have been sold but cannot be invoiced yet, and, therefore, is an excellent leading indicator for sales.

Research Amazon using Stratosphere
The industry has barely entered a competitive mode. Seriously, barely. Most companies are presenting growth Capex inferior to depreciation, yielding high ROIIC, which is a sign of no/low, competitive pressure or business exhaustion.

However, we believe that companies are being overly cautious, making all the fine-tuning needed before a higher Capex cycle. In our view, Amazon will debut the next leg up in the cloud industry.

Research Amazon using Stratosphere
Finally, even though we recognize and critique the company ourselves, we must distinguish what noise and information. AWS is an outstanding business with unique competitive advantages.

Going forward 10 years, we have serious difficulties imagining a scenario where AWS will not be thriving.
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Short Sells On Watch
$NET, $BILL, $HUBS, and $CRWD are all showing breakdown on their daily charts.

These companies look ready to extend their next leg down.
@mcd Commonstock should have a Youtube channel and make content like Investor's Business Daily do.

I've got an investing Youtube channel that has over 4k subscribers and has done 129k views.

Let's talk?
Tell me you are a monopoly without telling me you are a monopoly.
Long $AFRM, endure the pain, reap the rewards.

“Monopoly is the condition of every successful business.” - Peter Thiel
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not a monopoly. perhaps a duopoly/triopoly. there's still Block's Afterpay and Klarna.
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Eugene Ng's avatar
$3.9m follower assets
Downturns.
The best way to think about market selloffs is that everything is almost the same as prior, except for valuations, which is significantly cheaper today.

Valuations drive the majority of near-term returns, but business results drive the majority of long-term returns.
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Several moves, and appealing watchlist
$TTD became much too appealing to pass up today. Also increased my position even further in my single highest conviction company, $PL

$APPN also moved way up my watchlist to #1 right now. May likely be my next buy.
I have a very strong urge to add to TTD as well. Just not ready to deploy what little cash I have remaining, but some reallocation may be in order soon.
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Yegor From100Kto1M's avatar
$166.4m follower assets
I’ll be slowly exiting $HII and reallocating money into my other current holdings when opportunities show themselves