Samuel Meciar's avatar
$7.7m follower assets
Portfolio changes - update 10
Hello friends, I got an update for you, now with a rounded number

I decided to sell $AFRM + $PAYC, and here's my thinking:

  • I get a pretty decent exposure to $AFRM anyways through $SHOP, not only are they a sole processor for Shop Pay installments but are also invested in $AFRM, own about 7% of the shares (Class A+B combined)
  • I recognize the power of $SQ's Afterpay in combination with CApp and Square after I watched Block's Investor Day, it's just one well put ecosystem. Afterpay is also a bit larger in terms of GMV and has superior margins.

My overall plan is to just add to $SQ and $SHOP and chill.

When it comes to $PAYC I recognize the power of Square Payroll and HR solutions in combination with the whole ecosystem especially as they move more into Mid market, that's going to be interesting. Therefore it just makes sense for me to consolidate here.

I'm also selling $ZI $DOCN, no specific reason really, just want to move my capital into my highest conviction names.

Instead I went on a buying spree and got some $QCOM $RBLX $TWLO $SQ $SHOP $COUR $FVRR $HIMS $ADBE and $COIN.

Wrapping up, all $AFRM $DOCN $PAYC $ZI are great companies in my view, but like I said, it makes sense for me to consolidate, especially as I favor optionality over specialization at this point in time, while still maintaining an exposure to those players/spaces without further fragmentation.
Shared Research Screens:
Value Line Top 100 Highest Growth
I’ve always seen excerpts in books touting Value Line as a valuable source of research analysis, but had never looked at subscribing. They’d always mentioned it was available at local public libraries free of charge. I don’t pay for investment advice like I don’t pay for women, so off to the library I went. I was shocked when the librarian showed me the giant binders of already crunched numbers of everything I’d ever wanted and more!
I said I was going to start sharing research screens weekly, but due to the backlog, I need to spit a few out a little quicker while valuations are still accurate & relatively attractive.
This first list started with a list of Value Line growth companies, 100 of them. I had to narrow the list somewhat, without my bias, so I used their provided statistics to cull the best investable options from the original list of their Top 100 Highest Growth Stocks.
The reason this quality growth screen jumped out at me in the first place was the qualifying criteria, eliminating most of the risk of making a bad decision (based on emotion or hype).
Value Line quote: “To be included, a company’s annual growth of sales, cash flow, earnings, dividends, and book value must together have averaged 10% or more over the past 10 years and be expected to average at least 10% in the coming 3-5 years.”
That says a lot about the stability, strength, & trajectory of a company and that’s the type of near zero risk, sleep well at night (SWAN) stocks I like to own. Especially when they’re undervalued or out of favor, just reported a bad quarter, or trading at historically low valuation multiples for any other myriad reasons.
Statistical categories included in this Value Line table include 1) Timeliness Rank, 1 being best time to buy, 5 being the worst, 2) Safety Rank, 1 being safest, 5 being the riskiest, 3) current P/E ratio, 4) estimated 3-5 year price appreciation, and 5) the company’s industry rank. I’ve chosen to personally eliminate all fortune telling/future predictions/economic forecasts, etc. from my analysis, therefore will exclude forward looking estimates whenever possible. To narrow the list from the top 100 to a more manageable list of the cream of the crop, I chose to look for company’s with a Timeliness & Safety rank of 1-2 to ensure highest quality & fair value/positive outlook, a P/E ratio below 30 to ensure I’m not paying too high a price, and top 10 rank in their industry to hopefully provide additional quality/moat/competitive advantage strength to the final contestants on #INVESTWITHDEEBO. Ensuring quality first, and value second, hasn’t failed me yet.
Turns out, only 2 companies met such high standards, so I had to relax criteria just a tad. Those two companies were Google and Microsoft ($MSFT just barely, with a P/E of 30.xx) Google was the sole company with an absolutely perfect score; 1 on Timeliness & Safety, P/E ~20, ranked #3 in their industry. And had +100% 3-5 year estimated price appreciation to boot.
So, relaxing the standards, I was able to get almost 25 company’s I think provide higher probability of outperformance going forward, although I don’t believe there’s a bad company on the list.
Value Line Top 100 Highest Growth Stocks; additionally screened for my 4 additional quality & valuation hurdles (timeliness, safety, P/E, industry rank) produced the following:
Hitting a perfect 4/4 parameters:
An exceptional 3/4 Parameters:
Still great 2/4 Parameters:
Couple Honorable Mentions that narrowly missed the expanded standards:
The reason I love screens like this is because every one of these 100 companies is a strong company. Starting with a high quality list, then further screening for quality & valuation from there, has drastically reduced the probability of making a bad investment. Unless I get my emotions involved, then I take an L occasionally. So I try to keep it as near 100% mechanical as possible. I understand the voting machine vs the weighing machine; price will always follow performance, may just take a bit for the herd to catch up😉
Sorry again for the forward looking estimates, I’m keeping them at a minimum, promise.
After doing this for hours today, I wanted to score them to give more of an idea on which I thought might provide the most upside. So I spent hours today developing a point system based on the quality & valuation metrics already discussed, plus quality, profitability, valuation metrics & margin of safety estimates from 3 of my most trusted & accurate data sources. The primary reason I wanted to do this, was because to take advantage of the most irrationally priced stocks, doesn’t always require us buying the best companies. So this scoring system gives points ranging from 5-25 per category, for 6 additional categories of quality, value, & MoS. Higher quality rank= more points, larger margin of safety=more points. This scale (admittedly with 100% personal emotion and bias) was intended to reward the companies that 1) hit the most parameters, and 2) had the largest margin of safety, therefore minimizing downside risk to an absolute minimum, while simultaneously increasing the probability of outperformance. So here is the same list, in order of points scored, on my totally made up point scale, to hopefully provide some context as to the level of undervaluation.
The points for all criteria equaled a possible total of 165 points. This would be a dream stock at a dream price. Google is the ONLY company to pass every single criteria every single step of my analysis today. Taiwan Semiconductor only scored slightly higher because the estimates for MoS were much deeper for $TSM than $GOOG. So even though they got 0 points on one indicator, they made up for it with more points for MoS. Google scored points as a top ranked candidate (top 25% of companies at time of comparison) in every single category. I’d have to dig through an entire notebook to count the data points that went into this 10 hour waste of a day, but Google scored perfect at every step. But with MoS estimates of only 6%-16%, this is a classic Buffet, “wonderful company at a fair price”. So here is my totally biased list of quality companies trading at fair or below fair value.
$TSM 125
$GOOG 120
$LAD 120
$NFLX 110
$SWKS 110
$MSFT 100
$ON 95
$LOW 95
$TMO 95
$MA 75
Remember, this is not a quality ranking. This list weights margin of safety equally with other metrics. The companies at the bottom of this list are great, just not as much probability of upside compared to more undervalued/out of favor stocks at the top of the list.
Hope this provides some SWAN stocks for other value, or growth at value, investor’s out there🤙
PS: Craziest part of seeing the results of this list, since it was just made today, is that I have actually opened positions in $TSM, $GOOG, $NFLX, $MSFT, $AVGO, $NVDA, $KLAC, & $LRCX in the last 30 days, based on my own analysis of what’s important. I don’t feel 100% confident just because any specific source agrees; but I feel comfortable trusting my outside data sources as 2nd opinions based on the experience I’ve had using them over the last few years. Never hurts to find more reasons to want to buy, or maybe avoid, a specific company.
This is one impressive post! Really appreciate all the time and effort you put in. Nice to see $GOOG make it to the top list but also there any a few companies that I need to check out since I never seen this tickers and maybe there some hidden gems for myself to explore more on!

Appreciate all the work you put into this
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Samuel Meciar's avatar
$7.7m follower assets
Portfolio changes - update 1
So I already made some changes on Thursday and Friday.

  • Sold $ZM - not a bad company by any means but since I'm doing some consolidation I decided to cut due to heated up competition with $GOOGL's Meet and Chat + $MSFT going straight after not only Zoom's core offering but even after their growth parts (take Zoom Phone vs Teams Phone as an example), but with one problem - Microsoft is including Teams into Win11 by default and including all the good stuff Teams has for businesses into Microsoft 365 packages which businesses already pay for, therefore the value proposition should be better than paying for additional service. So those are the headwinds I'm seeing.
  • Sold $DOCU due to troubled execution of Agreement Cloud, I was looking for an improvements this quarter, but since it's been a while now and they just recently hired a new president of global operations which should help them do just that, I don't expect any significant improvements this quarter really. I'll consider adding to my $ADBE where I see a pretty good execution of the Document Cloud and great relationship with Microsoft which already uses their solutions and integrates well within Office package.
  • Sold $KIND simply due to other ad-tech names coming down substantially, I see them as more lucrative and proven than say Nextdoor in the current context. Simply a consolidation decision.

  • Added to $HUBS and $MELI after stellar execution and fantastic results. They definitely are the winners I consider a core part of my portfolio.

I'm thinking of some other changes at the time though not yet decided, mainly around streaming services, so think $NFLX and $DIS. I've been also rewatching Tony Seba's notes on Energy, Transportation, Agriculture and Food: brilliant mind, go check it out, it's bonkers!!, and also watched the RethinkX film which explains all the fundamental shifts coming this decade in a perfectly understandable and fascinating form -

I definitely want to adjust my portfolio to that too, so there's some more thinking going on inside my head.

Have a great rest of the weekend!
Lots of high quality companies came down to more reasonable price levels in recent months, like $GOOG, $NVDA, $ADBE, $NOW, $SPGI.
This shows once again, that apart from identifying excellent companies and doing your research, you also need the patience to wait for a good price.
Samuel Meciar's avatar
$7.7m follower assets
Hot seats update
$PYPL off of my "hot seat"

Okay earnings, loved Venmo and BNPL growth in particular. In addition to 256% YoY growth of BNPL installments, PayPal explicitly mentioned $ABNB $DASH among my holdings, so I expect those to be pretty strong.

$DOCU and $ZM left on hot seats.

$DOCU - I'm looking for progress on Agreement Cloud and will be comparing their performance to $ADBE's Document Cloud

$ZM - I'm seeking visibility into how Zoom Phone is doing, how they are competing with Teams and Meet as I'm seeing Microsoft leveraging Teams into Win 11 and in 365 packages and Google too pushing their Google Meet inside Google office tools package with a pretty good results of Google Chat lately too in the App Store.
The Devastation Continues
Here are a ton of stocks at lows and appear to be headed lower:

$JPM - JPMorgan Chase & Co. - Banks - Diversified - $386.69B

$BAC - Bank of America Corporation - Banks - Diversified - $317.55B

$ASML - ASML Holding N.V. - Semiconductor Equipment & Materials - $257.15B

$VZ - Verizon Communications Inc. - Telecom Services - $221.35B

$NKE - NIKE, Inc. - Footwear & Accessories - $211.96B

$ADBE - Adobe Inc. - Software - Infrastructure - $204.90B

$CRM - Salesforce, Inc. - Software - Application - $187.74B

$PYPL - PayPal Holdings, Inc. - Credit Services - $112.45B

$BLK - BlackRock, Inc. - Asset Management - $106.91B

$WBD - Warner Bros. Discovery, Inc. - - Entertainment - $58.36B

$ILMN - Illumina, Inc. - Diagnostics & Research - $53.47B

$ADSK - Autodesk, Inc. - Software - Application - $44.78B

$A - Agilent Technologies, Inc. - Diagnostics & Research - $38.87B

$ALGN - Align Technology, Inc. - Medical Devices - $33.79B

$COIN - Coinbase Global, Inc. - Software - Application - $33.18B

$STT - State Street Corporation - Asset Management - $27.92B

$TWLO - Twilio Inc. - Internet Content & Information - $24.68B

$HUBS - HubSpot, Inc. - Software - Application - $20.53B

$SWKS - Skyworks Solutions, Inc. - Semiconductors - $20.04B

$PAYC - Paycom Software, Inc. - Software - Application - $19.25B

$KMX - CarMax, Inc. - Auto & Truck Dealerships - $14.95B

$DPZ - Domino's Pizza, Inc. - Restaurants - $14.26B

$PINS - Pinterest, Inc. - Internet Content & Information - $14.23B

$ETSY - Etsy, Inc. - Internet Retail - $14.15B
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THIS is what i’m talking about, very aesthetically pleasing post, thanks for putting this together 💪🏼
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Highs & Lows Weekly #7
Commentary on Current Trends
  • There are almost no stocks showing up on the strong short term list. The market is indiscriminately selling almost everything, even the industries that had been holding up well in recent weeks.

  • The weak short term list is more than 10 times larger than the strong short term list. Again, long duration equities (biotech, software, internet, etc) dominate the list. Note also that industries that had been strong in recent weeks are turning negative - Gold, resources, oil and gas, etc.

  • Defensives - Utilities, REITs, Consumer Packaged Goods - remain in strong long term uptrends despite recent near term selloffs. The market has fled into these names as a defensive reaction to a risk off environment.

  • The selloff in debt markets has weighed substantially on financial stocks. The yield curve has flattened significantly, which has led investors to begin selling bank stocks. Also, the recent increase in mortgage interest rates bodes poorly for mortgage origination and refinance at major lenders.

  • Some of the largest and most well thought of companies in the market now sit atop the weak long term trend list. This includes: $FB, $TSM, $JPM, $HD, $BAC, $DIS, $CSCO, $ADBE, and $CRM. The market has finally “come for the Generals” of the market after selling small and midcap stocks for nearly a year.

For more insight into what stocks are trending up/down be sure to check out our latest edition of Highs & Lows Weekly!

3 Reasons to own $ADBE
Eigth-day of my "3 reasons to own" series, today with a SaaS king: Adobe.
1st reason: Look at those margins! Adobe has some of the highest margins out of my companies. SaaS businesses are great.

2nd reason: Adobe has a dominating market position in some key markets for the future. I believe that the gig economy will transform work and Adobe will provide the software.
The graphic software market is dominated by Adobe with 90%+ market share for example. Most design jobs will require you to know how to work with Adobe products. That's a deep moat right there.

3rd reason: Even though the company doesn't pay a dividend, they are buying back a lot of shares with their massive Free Cash Flows

So that was Adobe, tomorrow is gonna be spicy, with $RICK
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