Yegor From100Kto1M's avatar
$166.5m follower assets
Monthly Newsletter 05/17:

Topics: Quote, Portfolio Update, Portfolio Discussion, More Books, What’s your “WHY”, & Monthly Munchies.

A great monthly update as always with insightful personal notes :) I've added Modern Monopolies and The Almanack of Naval Ravikant to my reading list. Also really cool that you found the free version of the book on the web. Thanks for sharing Yegor
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$MITK Earnings Review
Yesterday, $MITK reported earnings. Their earnings were a mixed bag between the two segments: mobile checking deposits and id verification. Mobile deposits accelerated to 24% top-line growth while id verification decelerated to 16% top-line growth.

The mobile deposits had strong growth well above what I or many analysts would estimate. This growth seems to be driven by the Check Fraud Defender product which has been very successful. Mitek’s existing customers are using their services more.

On the ID Verification side, Mitek’s growth slowed to 16%. It was 30% last quarter and it was previously much higher. Management blamed tough comps as a “substantial” project ended and stated that they will have tough comps for the next three quarters.

This could be a very legitimate headwind, but it also makes me worry that they acquired Hooyu because they needed to keep growth on the ID side. Hooyu is going to add ~10 million in revenue and make it appear that they have stronger growth.

The acquisition also pushes back when the ID verification business breaks even. While this could be legitimate, management could also be using the acquisition as an excuse for the underlying business not being as strong as I previously thought.

Overall, it was a very strong quarter on the mobile deposits side and a concerning quarter on the ID verification side.
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Looked it this one once, seemed like a pretty strong foothold in mobile cheque market, outright winner.

ID is a harder racket, why the price reaction?
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Mitek earnings

Fiscal Second Quarter 2022 Financial Highlights

Total revenue increased 21% year over year to $34.7 million in a record second quarter.
GAAP net income increased 88% year over year to $1.9 million, or $0.04 per diluted share.
Non-GAAP net income increased 49% year over year to $10.8 million, or $0.24 per diluted share.
Cash flow from operations was $7.4 million.
Total cash and investments were $93.4 million at the end of the quarter.

Not just online check deposit company…

From CFO Frank Teruel:

“Our acquisition of HooYu continues to expand our digital identity offering allowing for a more seamless and complete customer identification experience at scale while also significantly bolstering our fraud prevention capabilities, we are excited about the opportunity to bring these capabilities to more use cases and industries helping them increase customer acceptance while reducing fraud and operational costs.”
Portfolio Update
Fully out of $TWTR as of this evening. A somewhat disappointing final chapter in the thesis for me. Even 3/4 months ago, when product velocity was noticeably hot, I felt confident of the large stake that the blue bird held in my PA. Admittedly, the last month or two has been disappointing with little noticeable updates or beta testing.

However, things will likely be exciting under Elon and deploying my 13% allocation elsewhere is nice. So far I’ve added to $MITK, $GOOG, $ADSK and $PENN.

Really like Mitek here, see it as undervalued and recession proof with attractive top and bottom line growth. Currently 17% of my pa and plan to let this run over the coming years
Monthly Newsletter 04/10:
Current Holdings: $VMD $IAC $SFM $SPOT $PYPL $LKQ $FF $OZK $CVS $WWE $HII $TWTR $DISCK $OPFI $GOOG $MITK $OPRA (from largest to lowest)

Topics: Announcement, Quote, Portfolio Update, Portfolio Discussion, More Books, Tax Season, & Monthly Munchies.

For this month I (got some courage) and decided to do two types of posts.

One regular with the usual stuff and one with an audio format in the beginning to be used as a companion while reading the post.

I always loved the idea of podcast or making videos on youtube (I actually used to make youtube videos as a teen when I played Call of Duty on Xbox with commentary) but I do not have time to trim and edit video format but when it comes to audio I think its a bit easier to manage so I gave it a go!

If you want regular format without audio you can click here

If you want the new format with audio in the beginning you can click here

Your honest feedback would mean a lot to me, but do give me a bit of a credit and some slack as this is my first attempt and I did it around 10-11pm.

Hope to get some feedback and to keep on trying it at least a few more times (unless everyone will hate it lol)

Thank you!
Quick portfolio update
I wanted to share an update on my current portfolio while I’m working (trying to) on substack post that I’m hopeful to release by Monday.

A few worth mentions are $TWTR $OMAB $DISCK and $C

  • $TWTR as (probably) most of you know that Elon Musk took almost 10% stake in Twitter which skyrocketed the price for me to go from -20-30% to +0-5% which gave me opportunity to trim and add more to $PYPL $SPOT and $MITK . I still like it but EM is a wild card

  • $OMAB I’m trading in and out of (for profit) as I can’t get my self to hold it in my portfolio unless it goes below 50-55 range 🤷🏻‍♂️ I realize I’m just price sensitive when it comes to certain portfolio positions.

  • $DISCK should be becoming WMD soon so keeping dry powder for this one while adding tiny amounts as it goes down.

For $C I have as a sell put option expiring next week into earnings with price or 45. I think it’s cheap and that P/B is getting interesting BUT I also know Citigroup is cheap for a reason and it needs to prove it self in the “turn around play” not touching it via buying stock until below 45.

If you are interested in following my journey follow me on here (commonstock) , Twitter, and my Substack!
$MITK Transition from Checking Deposits to ID Verification
Found these two charts interesting from @investing writeup on $MITK. The first chart shows Mitek's transition from software & hardware to service and others. Their transition accelerated from 2018 to 2019.

The second chart shows the EBIT margins expand as they continue to go through the transition. As the ID verification segment grows and gains economies of scale, EBIT margins also expand nicely coinciding with the transition.
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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.