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The 90/50/40 Club
I was reviewing the margins for Doximity ($DOCS, reporting this afternoon) when I noticed they are sitting at an impressive gross margin of 88.8%, operating margin of 34.3%, and net margin of 47.2%. That triggered my basketball mind to think of the 50/40/90 club (for those unaware, that's a club of players who shoot 50% from the field, 40% from 3, and 90% from the free throw line in a single season).

Then I wondered if any companies are members of what I am now minting The 90/50/40 Club.

There are 9 with a market cap >$1 billion, a list unsurprisingly dominated by REITs. Very surprised to see a small biotech on this list. Has anyone ever done a deep-dive on $VIR? Would be curious to learn more.

There isn't really any special point to this post lol. Just an interesting screener I thought up.

PS: Nice to see two of my positions, $IIPR & $MPW, in the elite club.
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$SE $DOCS $GLOB Earnings: What I'm Looking For
Sea Limited ($SE) - Reporting earnings the morning of 5/17
Sea has a lot of metrics they release, which I appreciate as a numbers nerd. Here are a couple that I'll be looking at:

  • For Digital Entertainment: Game QAUs and QPUs, and Average Bookings Per User.
  • For E-Commerce: GMV and Take Rate
  • For Digital Financial: TPV and Wallet QPUs

I understand the headwinds and the losses are still growing but margins are improving and revenue has more than doubled each of the last three years, and the year before that was 99.7% growth. There has been severe P/S compression (after an admittedly massive run-up). If Sea has a really good quarter and Garena shows improvements, I could see a 20%+ spike.

Current position:
Total cost basis: 47th highest in my portfolio
Time since first buy: 1.38 years
Number of purchases since initial position: 3
Annualized return: (73.0%)
Annualized $SPY return: (1.0%)
Annualized $QQQ return: (12.1)
Doximity, Inc. ($DOCS) - Reporting earnings the afternoon of 5/17
Their penetration with doctors (~80%), nurses (~50%), and physician assistants (~50%) is what brings in the Doximity customers. The app is free to the users and available to companies via subscription fee.
Here's what I'm looking for:
  • Show me a great fiscal year Q4 to cap off the year. Give me >$100MM in revenue for the first time ever in a quarter.
  • >325 customers generating >$100,000 in revenue.
  • Can NRR stay at the incredible highs it's been recently (167%, 173%, 171% the last 3 quarters)?
  • Keep those margins at record levels.

I'm worried there will be underwhelming fiscal year 2023 revenue guidance which will cause severe multiple compressions. A 25%+ drop like we've seen in quite a few companies would not be a huge surprise to me.

Current position:
Total cost basis: 44th highest in my portfolio
Time since first buy: 0.86 years
Number of purchases since initial position: 2
Annualized return: (48.4%)
Annualized $SPY return: (13.2%)
Annualized $QQQ return: (25.7%)
Globant S.A. ($GLOB) - Reporting earnings the afternoon of 5/19
Globant is coming off an incredible 2021. Here's what I'm looking for to start 2022:
  • After 59% in 2021, I genuinely have no idea what revenue growth will look like.
  • What kind of customer growth (both total and >$1MM in revenue) will they show?​

Current position:
Total cost basis: 40th highest in my portfolio
Time since first buy: 0.35 years
Number of purchases since initial position: 3
Annualized return: (57.2%)
Annualized $SPY return: (32.3%)
Annualized $QQQ return: (46.5%)
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$BGRY $NLCP $FIGS Earnings: What I'm Looking For
Earnings season is coming to a close for me. I may have a few more of these posts but they'll become a bit more spread apart (I'll probably do one for $DOCS, $RSKD, $SNOW, $PATH, $OKTA, and $CRWD in the next couple weeks before they report. Follow if you want to see them and comment about what I'm overlooking or getting wrong!
Berkshire Grey, Inc. ($BGRY) - Reporting earnings this morning (5/12)
This is a loooong term play on the robotics automation market. I think there's very little that could make me sell this position before it hits the 5-year mark in my portfolio. Not that I think it'll be a market-beater by then. I just don't think the company's execution can be properly evaluated before then. For Berkshire Grey, I am looking at three things:
  • Revenue growth - Obvious
  • Balance sheet - Don't be on the verge of bankruptcy
  • Backlog - The indicator of whether or not companies are buying into the product
Current position:
Total cost basis: 73rd highest in my portfolio
Time since first buy: 1.09 years
Number of purchases since initial position: 2
Annualized return: (84.4%)
Annualized $SPY return: (9.6%)
Annualized $QQQ return: (19.7)
NewLake Capital Partners, Inc. ($NLCP) - Reporting earnings this afternoon (5/12)
Is this a mini-$IIPR? They are certainly tracking that way, at least early on.
Here's what I'm looking for:
  • It'd be great if management began breaking out Property Expenses in their Operating Expense breakdown (like IIPR does).
  • Can revenue keep growing >100%?
  • Property count and rentable square feet needs to keep growing.
  • Stay at or really close to 100% leased.
Current position:
Total cost basis: 37th highest in my portfolio
Time since first buy: 0.55 years
Number of purchases since initial position: 1
Annualized return: (55.8%)
Annualized $SPY return: (22.1%)
Annualized $QQQ return: (34.5%)
FIGS, Inc. ($FIGS) - Reporting earnings this afternoon (5/12)
I love what this brand is doing. My wife is in the medical industry and anecdotally confirmed how loves FIGS clothes are.
Here's what I'm looking for:
  • Management is guiding for 32% full year revenue growth, which would be a deceleration. Getting a good jump in Q1 will hopefully be an indicator of a full year beat.
  • Gotta stay FCF positive.
  • Can international revenue keep growing at triple digits?
  • I know the demand for scrubs will continue to be there. What about non-scrubs revenue? It accounted for 13.5% of 2021 revenue (an all-time high) and grew at 61% in 2021. Can that continue?
  • I really wish management would updated investors CAC.
  • I also wish management would update investors on Net Revenue per Active Customer and Average Order Value on a quarterly basis instead of annually.
Current position:
Total cost basis: 23rd highest in my portfolio
Time since first buy: 0.93 years
Number of purchases since initial position: 3
Annualized return: (63.1%)
Annualized $SPY return: (10.4%)
Annualized $QQQ return: (17.8%)
$DOCS –LinkedIn for healthcare?🩺💉
Doximity is a high-growth company that created a platform for U.S. medical professionals (80% of all physicians across the US use this!). I see the platform as LinkedIn with tools specifically made for physicians built into the platform (video tools, telehealth applications).

Mission: To help physicians be more productive and provide better care for their patients

What I like:
  • Net revenue retention rate of 171%
  • Low sales and marketing costs – most physicians join because of network effects
Recurring revenue is a majority of complete revenue
  • Revenue growth (67% YoY)
  • High margins (57% GAAP net margin YoY) – understated
  • Extremely high net income and free cash flow growth.

  • 2 out of 3 co-founders are still involved, one being the CEO.
  • Very high glassdoor ratings. (4.8/5).
  • High insider ownership (27%)

What I don’t like:
  • Competition: LinkedIn, Teladoc and basically any other telehealth business
  • VERY high valuation. (EV/Sales NTM: 15.9, P/GP: 26.4x)

Overall a very strong business, but the stock is pricey! I’ll be looking for an entry at more attractive levels. What do you think?🧐

I’ll be doing more short pitches on stocks like $MELI , $PATH , $U , $NVDA , $DDOG soon, so follow me for more! 😁
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