NOW - ServiceNow Inc | Commonstock

Michael Szumielewski@caridinacapital May 7

$1.6m follower assets

Weekly market review (week/YTD)

$SPY -0.16%/-13.39%

$QQQ -1.28%/-22.27%

$VTV +1.28%/-3.13%

$VUG -2.06%/-23.53%

$ARKK -3.18%/-51.76%

Portfolio -1.28%/-16.28%

A volatile week ends roughly where it started leaving everybody confused.

Once again, investors who are invested in boring big cap value companies look very smart right now. Kudos to them! We will see how it turns out. Over the long-term, a value ETF like $VTV is underperforming the S&P 500 and especially the Nasdaq 100.

Indices are down five weeks in a row, it’s not unreasonable to assume that we bounce next week. On the other hand, nobody can predict the market. As an investor looking for quality companies, I would actually be more than fine with getting a few more buying opportunities.

My portfolio got hit like everybody else. However, I took advantage of lower prices and increased my positions in $SPGI, $KEYS and $NOW. Still patiently waiting for even lower prices on a few quality companies from my selection.

Check out my public eToro portfolio to follow all my investments:

➡️ https://bit.ly/3tn7Poy

bit.ly

Michael Szumielewski@caridinacapital May 6

$1.6m follower assets

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.

Highs & Lows Newsletter@stocksthatgoup April 28

$1.5m follower assets

Top Gainers Today @ 10am

Top Gainers Today: $FB, $TMO, $QCOM, $NOW, $SU, $UMC, $TYL, $PINS, $PTC, $KEP, $FCNCA, $LECO, $PPC, $OPCH, $AMED, $AVT, $AIT, $ABG, $HAYW, $MXL

Visit highsandlows.substack.com to see more

Sachiv@passiveinvestor April 28

$421.1k follower assets

B2B SaaS shows resilience…$NOW results were consistent and unsurprising, yet for a few weeks I was unsure why the market was discounting it! Looking forward to some others soon, namely $SNOW $DDOG $MDB $TTD (2 in May, and 2 in June)

I suppose FUD takes everything with it! This has refreshed my confidence in the already strong management team. Link to Quartr app for the concall and report below(hope it works!):

https://qcast.page.link/?ibi=cato%2Eqcast&st=ServiceNow%20Inc%20%2D%20Q1%202022&si=https%3A%2F%2Ffirebasestorage%2Egoogleapis%2Ecom%2Fv0%2Fb%2Fqcast%2D81705%2Eappspot%2Ecom%2Fo%2Fimages%252FUSA%252FJuni%25202021%25202%252FServiceNow%2520logo%2520dark%2Epng%3Falt%3Dmedia%26token%3Dfb728a4a%2D7547%2D4eca%2D84d5%2D0a6d92d4b074&isi=1552412128&apn=se%2Equartr%2Eandroid&link=https%3A%2F%2Fwww%2Equartr%2Ese%2Fevents%3FeventID%3DxcY1DhhHigFJPsFg8MBp

ServiceNow Inc - Q1 2022

qcast.page.link

Michael Szumielewski@caridinacapital April 24

$1.6m follower assets

HUGE earnings week incoming! Reports from my selection of quality companies:

Tue: $GOOG $MSFT $V $TXN $CMG $EW

Wed: $FB $NOW $ADP $ALGN

Thu: $AMZN $AAPL $MA $KLAC $DPZ $TMO $MCD $YUM

Rihard Jarc

@rihardjarc March 31

$153.6m follower assets

$PATH earnings findings

So looking at the earnings numbers and earnings call from $PATH here are the things I found interesting:

The results for Q4 were remarkable. ARR grew 72% YoY, dollar based net retention rate was 145% and total customers spending over $1M in annual ARR was up 78%.
Obviously, the stock fell today by 25% on the back of worse than expected guidance for Q1 2022. While many people stated the reason for the lower than expected guidance was because of tighter competition from companies like $MSFT and $NOW management on the earnings call dismissed that option:

"We are not seeing really any increase in the competition. On the contrary, we are seeing less competitive pressure in the deals. We are -- so we can comment if you are interested on various major players that we are seeing in the business. And in terms of the -- our traditional specialized competitors, we are really seeing less and less of them. We are replacing Blue Prism and Automation anywhere in many customers. And speaking about the new entrants like Microsoft and ServiceNow, we are -- we really -- we are not seeing them that much. I can comment on both specifically, if you are interested.

And then just on the numbers basis, I think it's really important. We see -- when you look at our win rates, we continue to look and analyze win rates between where Microsoft and where some of these large players are playing and where they're not. We don't see them a lot. But even when we do, our win rate has no difference compared to where they are not playing. So we're really -- the trend of continuing to feel us is the dominant player in the industry. Right now, that is continuing from the data that I see and that we see as a team."

The reason for the lower guidance is because of headwinds caused by the war and the freezing of clients in Ukraine and Russian and Forex-related headwinds because of the war. Management stated the Russian revenue loss in the effect of 15M and FX headwind in the range of 20M-25M. According to the call, another headwind for the short-term revenue impact is the continued transition of clients from on-premise to cloud, which affected revenue expectations by -4%.
What was surprising to me, given the stock price reaction, is that the guidance for 2023 still expects ARR revenue growth in the range of 30.8% (without the Russian headwind, it would be around 35%). So the company is still growing at a high level.
I don't own the company yet, but at these valuation levels, after the dust settles, I might start a position as I like and know the RPA industry very well, given that I also founded a startup that is directly linked to the fast growing RPA industry.

The key thing for $PATH, in my view, is how they compete with $MSFT and that they still keep a dominant position. Watching Google trends and recent job listings, it seems like $MSFT's RPA offering is catching up to $PATH but seeing management today receiving a point-blank question regarding this competition and answering the way they did gives me more confidence in the company and the stickiness of the platform.

Strat Becker

@strat March 31

Maybe the business is good but that doesn't mean the stock has to be imo. Even after the massive drop today it trades at over 8.5x forward sales. Such a multiple can only really make sense if it's a highly profitable firm, but the forward EV/EBITDA is over 200x. Until they can prove a scale to profitability while also growing today's move isn't unreasonable by any means

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Sean

@jiggy March 1

$89.9m follower assets

End of February 2022 Portfolio

Entered: $SHOP $MU $IGV $SMH

Added to: $GOOG $TEAM $WCLD $NOW $CRWD $SNOW $FRSH $DLO $MDB $SPT

Trimmed: $DOCN $SOFI

Exited: $ZEN $ZS $SEMR $BRZE $TWLO $NET $INTU

Django Brooks@django_brooks March 1

I would have thought this is a good time to add to $NET given that they are playing a role with the Ukraine situation but I could be wrong! Would love more on that decision 🙂

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Austin Lieberman

@austin February 18

$451.2m follower assets

February 2022 Portfolio Update. 70% Dividend Growth 30% Tech/SaaS = 100% Awesome (and less stress)

Will share more details later, but wanted to jump back on the portfolio sharing train.

I haven't been able to share my portfolio or individual stock commentary publicly because of restrictions from my previous job.

I set this account up last week in M1 Finance (which I'm a big fan of). I did this for two reasons.

#1 I've always wanted to share my portfolio, transactions, and performance completely transparently.

#2 I've done a ton of research into dividend growth investing over the last several months and realized I was foolishly dismissing it as a strategy for people in their prime accumulation years.

My portfolio allocation is now 70% dividend growth stocks and 30% tech/SaaS. I realize I might give up a bit of upside, but as I think about investing over the next 20 to 30+ years, this will minimize the stress, emotional/behavioral mistakes, and keep investing fun because I still have exposure to exciting tech companies.

Austin, why the heck do you own dividend stocks?!?!

Great question. I own dividend growth stocks because I think they'll encourage a longer-term mindset and behavior which is something that I know will lead to better outcomes for me.

Also, sustained dividend growth can lead to some incredible compounding.

Here's a look at the 1-year, 5-year, and 10-year average dividend growth rate of these stocks from SimplySafeDividends.

Here's what a portfolio with $500 monthly contributions, 4% stock price CAGR, 13% dividend growth CAGR, and a 1.98% starting yield (the average dividend yield of the companies in my portfolio) would be with dividends reinvested after:

10-years:

Total Contributions: $60,000

Annual Dividend Income: $3,320

Portfolio Value: $87,850

Portfolio Annual Rate of Return: ~8%

20-years:

Total Contributions: $120,000

Annual Dividend Income: $30,942

Portfolio Value: $362,058

Portfolio Annual Rate of Return: ~10%

30-years:

Total Contributions: $180,000

Annual Dividend Income: $463,054

Portfolio Value: $2,533,758

Portfolio Annual Rate of Return: 14.5%

As you can see in the numbers, it takes a while for the dividend growth to kick in, but at the 20 and 30-year mark, the dividend income and portfolio value start to exponentially increase.

These are just baseline calculations so the results will definitely be different, but the point is that this type of investing is very sustainable for someone who has a job and other responsibilities outside of managing their portfolio.

It requires monthly (or even quarterly) reviews of their stocks to make sure the businesses are performing well, pay-out ratios are staying in range, and the dividend growth rate is staying on track.

There are definitely ways to outperform these examples (I think I was being a bit conservative to be fair changing the dividend growth rate to 14% from 13% drastically improves the results.

I also have 30% of the portfolio allocated to tech and SaaS names which will give me exposure to more upside with less overall volatility and stress than being 100% invested in tech/Saas.

What I've realized over the last year is that I need to remember WHY I invest. I invest to compliment my life, not consume it. This strategy will help me focus my time on what's most important. My family, my health, my job, etc while still building long-term wealth.

In the coming weeks, I intend to share a lot more detail and full write-ups on this strategy and the companies I own, but this is a good starting point.

If you want to see where I got those calculations from, check out this Youtube video (I subscribed to his Patreon to get the spreadsheet so I won't share it publicly)

Here's why I decided to use M1 Finance for this portfolio. It allows me to build "slices" or buckets of stocks, then allocate to each of them.

Here's a look into the Dividend slice which makes up 70% of the portfolio. 13 holdings, 1.98% dividend yield, with targets of 7% - 8% (these are each 4% or 5% of the entire portfolio) $FNF, $ZTS, $SNA, $TSCO, $ABBV, etc

Here's the Growth slice which makes up 30% of the portfolio. 10 holdings that I believe are dominant long-term companies allocated at 10% each (~2.5% of the overall portfolio each). $SHOP, $NOW, $COIN, $UPST, etc

The next feature is pretty cool. M1 allows me to turn "auto-investing" on which will invest any contributions or dividends according to my target allocations. To my knowledge, it won't sell securities down if they are overallocated.

This is a pretty cool feature because it takes so much emotion out of the equation for me.

I have no affiliation with M1 Finance but I have really enjoyed the platform so far.