The Coming Week in Earnings
Woooo boy, this week will be fun for my portfolio.

Monday (5/2)
  • $BIGC^ (On my Sell Watchlist)

Tuesday (5/3)

Wednesday (5/4)

Thursday

Friday

Anything with a ^ indicates I read the 8-K and 10-Q/10-K and track their financials along with KPIs on a spreadsheet I have.

So basically, this will be me next week...
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Hedge Vision's avatar
$103.9m follower assets
13D/G Filings Received Today
  • $APPN CEO Matt Calkins increases his stake by 2.44%.

  • JP Morgan takes a 7.7% stake in $BMBL. Also increases its $AZO position by 10.48%

More ⬇️
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@hedgevision are you able to tell if the increase in Calkins' stake was due to stock grants or vesting options as part of his comp? Or was he buying stock on the open market?
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Hedge Vision's avatar
$103.9m follower assets
$3 Billion Hedge Fund with 10 Holdings
Colin Moran founded Abdiel Capital Advisors in 2015 with $205.8M in initial capital, growing his holdings value by $2.9B in less than 6 years. Moran is an activist investor, much like Bill Ackman.

Abdiel has returned 719.40% since their portfolio inception in Q4 of 2015, compared to the S&P 500’s gain of 102.64%. In fact, Abdiel averaged an annual return of 66% from 2015-2020, with an outsized return of 123.9% in 2020.

74.6% of Abdiel’s portfolio is invested in the technology sector, giving them a bullish stance on the industry. Abdiel prides themselves on being a concentrated, high-conviction fund and has never held more than 13 positions since their inception.

“Our ten largest investments frequently comprise more than 75% of invested capital. “
-Abdiel Capital “About” Page on their website

Abdiel reduced their holdings value in Q1 of 2021 by $430M, or -12.2% of their holdings value in Q4 of 2020. They reduced their positions in 2 holdings, $APPN and $AXON.

Abdiel’s largest holding is $FSLY, a CDN provider that utilizes the edge cloud platform. Fastly experienced an outage on June 8th, and in response, the stock actually closed higher on the day. This was due in part to Fastly’s extremely quick response time paired with widespread media recognition; several global websites were affected, such as Amazon, Reddit, eBay, and Spotify. Fastly is up 15.3% since the outage.

"We detected the disruption within 1 minute, then identified and isolated the cause, and disabled the configuration. Within 49 minutes, 95% of our network was operating as normal. This outage was broad and severe, and we're truly sorry for the impact to our customers and everyone who relies on them."
-Nick Rockwell - Fastly's Senior VP of Engineering and Infrastructure

Abdiel decided not to completely liquidate any positions in Q1, instead choosing to trim APPN and AXON. Both positions were originally acquired in Q2 of 2017.

APPN Estimated Purchase Price - Q2 2017: $26.35
Price Today: $138.86
Gain: 426.98%

AXON Estimated Purchase Price - Q2 2017: $39.31
Price Today: $158.76
Gain: 303.87%

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"The Market" Stock Pitching Game Recap
Thanks everyone for coming to "The Market" game last night! We had 30 people show up and had 7 separate stock pitches.

The stock pitchers really brought it last night- I was impressed all around with the ideas.

I thought the pitches were so good, I decided to upload them on Youtube so more people could see them. Be sure to check them out down below!

If you'd like to receive a calendar invite for next month's game, shoot me a DM with your email and join the group channel here: https://share.commonstock.com/share?invite=FIkFbJ

Here is a recap of the picks, links to the video, and the Commonstock users who pitched them, in case you want to reach out to them and learn more:

Round 1
Igli Laci @equitybreakdown

Alex Sharp @ajsharp => Most Votes

  • Vision Marine Technologies $VMAR
Arjun Banerjee @ban3rg

Round 2
  • Small Cap Growth Fund $SLYG
Brad Thibeau @brad

Jon Gall @jongall45 => Most Votes

  • Lineage Cell Therapeutics $LCTX
Albert Kim @tenderquark

Aaron Kettl @aaronkettl

See you all next month!
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Why Low Code is Interesting as a Concept and as a Business Model
'Low code' is the trend towards building software with a minimal amount of code.

It's more prevalent than you might think. For example, Xcode, the iOS development platform lets you see the canvas you’re building for. You can drag-and-drop the UI components you need directly. When you're trying to visualize what 'Low Code' is, this is a pretty good mental model:

Low Code is a way to turn a business process into a competitive advantage. Here's what I mean by that:

Have you ever been to one of those mini-conferences where the speaker promises to teach you how to make money in real estate by profitably flipping houses? No? Just me? It's ok, let me save you $2,000. The main advice is:

  • Work ON your business, not IN your business.
  • Turn everything into a repeatable process.

This is actually pretty good advice for people as well as companies. It jives pretty deeply with with one of my personal values: Lifelong learning.

Working on automating processes helps you keep pushing your life/business forward because you:

1) Learn to do something new
2) Then learn how to automate it so you can free yourself up to:
3) Do step 1 again

Low Code is a way to turn a business process into a competitive advantage because if you invest the time to build a machine that solves your problem for you, you can move on to solve harder problems, while your competitors are stuck a couple steps back solving the same problem over and over again.

'Low Code' is A Way to Think About Getting Ahead of Your Problems
Low Code is actually a long-term approach to problem solving. It's long-term because the thing you're always tempted to focus on right now is the current problem. You actually have to sacrifice the short-term for a couple of iterations so that 5 steps down the line you can step out of the process and let it run without you.

Building a tool that builds the tool you need is inherently meta.

It goes another step meta when your business IS helping other businesses automate their business.

And that is what Appian does. $APPN .

This is a powerful business model, because as Appian helps its customers gain a competitive advantage, those customers are able to accelerate their business and... use Appian more to automate their next project.
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Glide Apps (Private) is personally my favorite no code tool. https://www.glideapps.com

I’ve built a couple projects on there and will be launching a business which leverages Glide in the next couple of months!

The no-code space is certainly exciting because it opens up the paths of entrepreneurship to so many more people. Excited to see the continued growth of this space!
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Appian down -27%: Volatility is Normal
It's a tad disconcerting if you celebrate loudly when your stocks are up and are silent when they are down.

My most recent memo on Appian noted that Appian's stock was up 200% in the last month. (Side note, with a market cap of $11 billion, Appian is not a penny stock, lest you think I am dumpster diving)

Today, Appian dropped 27%. This is likely due to the short squeeze playing out as well as the market having a down day.

And to be fair, as pointed out by @gregxfund , Appian is not considered to be in the highest echelon of SaaS stocks, so the run-up was arguably irrational.
Days like today remind me of this Long Term Mindset meme by Brian Feroldi:

I'm definitely not trying to compare Appian to Mercado Libre.

The point I want to make is companies that offer a 'new way of doing things' are highly volatile, because the market is constantly trying to price the likelihood that the 'old way of doing things' gives way.

By definition, the 'new way of doing things' is more risky. It's new and unproven after all.

Big ups and big downs are part of the journey if you are a long term investor.

While I'd love to be able to say I sold Appian at the top when I posted my memo two days ago (@gregxfund even suggested as much), the true story is much more boring:

I bought into Appian once in mid 2018 and I haven't sold or bought more since. I didn't know the last month was going to be so amazing, and I didn't know today was going to be a 20% drop.

In the short term, I have no ability to predict what the market will do.
If I had sold on a day that $APPN was up 10% in order to lock in some gains, then I would be sitting on 10% gains instead of 60% gains.

One way to deal with uncertainty is to give yourself guidelines for selling. For me, one guideline is to not sell simply because of price action.

The most recent earnings report showed Appian's business was improving, not getting worse. So I have held on, accepting the volatility, and yes, also the risk that I could end up losing money.

Exposing yourself to risk is necessary if you want to realize gains.

Would love to hear from any others on this- do you have a point where you start selling to lock in gains?
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Very well written and great broader insight into investing behavior. I appreciated this rule: "Not sell simply because of price action." Great words of wisdom.
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Appian
The very first memo I wrote on Commonstock was a cursory muse mentioning Appian.
Today, Appian eclipsed Square as my largest holding. It's been on a huge run in the last month.

What Does Appian Do?
Appian helps businesses make apps. They are a leader in low-code automation.

Why is That Special?
Businesses need a mobile presence, but mobile app development is expensive and time-consuming. Appian allows corporate and government customers develop their own apps and software with minimal in-house tech resources.

How Long Have They Been Around?
A lot of people think Appian is new because they only went public in 2017. But they were founded in 1999, and founder Matt Calkins still owns 45% of the company. They are not a baby startup by any stretch of the imagination. Their market capitalization is at $13.5 billion after a massive run-up in the last month.

Tell Me Something About Management's Decision Making Abilities
Matt Calkins and the other co-founders chose to self-fund the growth of the company through most of its history (1999-2017). Instead of looking for a big exit, they are building a company they see as their life's work. To get a sense of Matt, watch this video.

Who Are Appian's Customers?
A wide variety of big businesses. 10% of the Fortune 500 are Appian's customers. Some well known customers include Deloitte, Major League Baseball, Sprint, KPMG, and Enterprise. The US government is also a customer: Homeland Security, the Treasury Department, the Food and Drug Administration, Army, and Air Force are all Appian customers.

Why Do Customers Love Appian?
Appian "guarantees" that it can train its customer's employees to use the software in just two weeks and guarantees a working app in eight weeks at a cost of $150,000. That sounds like a lot, but if you were to develop your own app, its a steal.

What Does the Business Model Look Like?
Appian makes revenue two ways: services (one time jobs) and subscriptions. Subscriptions are more important. While services revenue has 32% gross margins, the subscription revenue has margins of 90%. The higher margin subscription revenue is growing a lot faster than services revenue.

Ok, Why Should I Invest In Appian?
Investing in Appian is a bet that businesses will continue to move towards more flexible, app-centric software. You invest in Appian if you believe Appian can get new businesses onboarded quick and then convert them to an ongoing subscription.

Essentially, you're betting that Appian's predictable, consistent subscription revenue will continue to grow. Appian has proven it can do that. Existing customers are paying more to use Appian's platform as time goes on, with a 117% subscription revenue retention rate.

How Does Recent Performance Look?
Appian just had a quarter where they beat expectations. Their third-quarter revenue was $77.3 million, which was an increase of 17% from the year-ago quarter. This beat analysts' consensus revenue estimate by 9%. They also had break-even earnings per share which beat Wall Street's consensus estimate of a loss of $0.17 per share.

So Is Now A Good Time To Invest In Appian?
Time to change gears a little. Appian's stock is up almost 200% in the last month. The stock started performing well going into earnings, and attracted a lot of short interest.

Shorting a stock is when people bet that the share price will go down, so they borrow shares and sell them. When the share price goes down, they buy shares back at a lower price. Then they return the shares they borrowed and pocket the difference.

But Appian's shares didn't go down. They went up. When Appian's performance surprised to the upside, a lot of short sellers had to buy shares at that higher price in order to return the shares they borrowed. Their scramble to buy shares and forestall greater losses added to the upward pressure on the stock's price. This is known as a short squeeze.

The point is, Appian's performance lately has been great, but part of it is due to the short squeeze, and once that dynamic plays out, you could see a sharp drop.

Essentially, all I'm saying is that I don't know if right now is a good time to buy or not. I bought in mid 2018 and have been holding ever since. I am not adding to my position right now. Now that you know more about the company you might add them to your watch-list and look to buy in on a dip.

Personally, as long as it appears businesses are using more app-centric software, and Appian does a good job of signing up new customers and converting them to subscription users, I am a happy investor.

Have you ever heard of Appian $APPN before this? What are some questions you have after learning about them?
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Thanks to you, I bought some Appian back when it was $33! Seeing it get over $200 today was pretty crazy. I'm considering selling to try to get out at a high point but I'll probably just hold
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Appian currently out of favor
Appian helps companies deploy new business applications fast using low-code app development.

$APPN stock keeps getting rejected at around $60. Bounced back from Coronavirus lows of about $31 to that level but has since fallen all the way back to $46. Long term thesis seems to be intact, but curious as to what caused the trend reversal since May 26th, and if this could be foreshadowing for other software companies.

Also, note for developers: I was able to like my own memo.
Commonstock is a social network that amplifies the knowledge of the best investors, verified by actual track records for signal over noise. Community members can link their existing brokerage accounts and share their real time portfolio, performance and trades (by percent only, dollar amounts never shared). Commonstock is not a brokerage, but a social layer on top of existing brokerages helping to create more engaged and informed investors.