Stock Breakdown: Cyber Security Overview
For the full article check it out here.

Macro Minute:
The previous CPI print was 8.3% year over year for the month of April. Supply chain issues and increased fuel costs persist in the US and globally and these costs do not seem to be decreasing. The FED did raise interest 50 basis points which has made for an interesting time in the stock market. Most of the market has been relatively stagnant and somewhat stabilized. I do not see a scenario where continuing to raise interest rates will be a good thing in the short term for the market, but for the long term I believe it will benefit. As my good friend 3 aces (@notabigdeal111 on Twitter) has hammered home, it seems like it is the end of the business cycle which is usually followed by a depression.

Sector Description: What is the Cyber Security Industry?
Cyber security by definition is the practice of defending computers, servers, mobile devices, electronic systems, networks, and data from malicious attacks. Cyber security is a rapidly growing industry and is in high demand as more companies acquire data from their customers and have an online digital presence. The cyber security market was valued at $139.77 billion in 2021 and is projected to grow to $155.83 billion this year and $376.32 billion by 2029. This would lead to a 13.4% CAGR growth of the entire industry from 2022 to 2029 which is double the rate of the rise of the market from 2019 to 2020 (7.7% rise in CAGR). This industry looks to continue to grow and the growing digital environment will continue to benefit many of these cyber security companies.

Large Public Companies in the Sector
CrowdStrike Holdings (Ticker: $CRWD) - Market Cap: $65B
Zscaler (Ticker: $ZS) - Market Cap: $42B
Okta (Ticker: $OKTA) - Market Cap: $40B

Opportunities for Broad Exposure
The are many ETF options for the cyber security industry, but the one I will break down in a few weeks is the First Trust Nasdaq Cybersecurity ETF (Ticker: $CIBR). You can learn more about this ETF here.

Key Metrics and Considerations
Data Boom: It seems in almost every industry, data has become compared to gold. More and more companies are using data to help with their growth and further analyze their business and customers. Along with data, there is always some sort of digital aspect to almost every business at the moment and cybersecurity will be needed to protect businesses. It is a must for every business to have some sort of cybersecurity to help avoid malware attacks and as more businesses come along and businesses grow, the demand for cybersecurity will increase. This will look at how they protect customers and the company’s customer growth.

Both Retail and Industry Customers: Not only do cybersecurity sell the protection from attacks to major businesses, but also to retail consumers as well. If people want protection from attacks from specific bank accounts or other personal information that may lie on their at home computers. Everyone needs some sort of protection from digital attacks and cybersecurity seems to become the new car insurance and will increasingly become more of a necessity. I will look for both major clients as well as retail to ensure that these cybersecurity companies are not relying on one major client but diversified to keep their business running strong.

Chips in Everything: As mentioned in my breakdown of the semiconductor industry, there is an increasingly digital aspect to almost every industry. Semiconductor chips allow for an aspect of digitization or a “smart” aspect to seemingly every device, but that also has the potential to open up products for hacks. As more devices have an online presence, more devices as well as people will need some protection against potential hacks.

Opinion of Sector
I am bullish on the sector because everyone and everything is digital and online. Not only are more people and products getting online but cyber attacks are increasing at a rapid rate. According to the Identity Theft Resource Center, data breaches through the first 9 months of 2021 exceeded the amount of attacks in 2020 and some experts believe that the amount of attacks may have doubled year over year. Increasing attacks point to a larger need in cyber protection and that is where this entire industry will come into play. I am currently not an investor in any cyber security company but after doing a dive into some of these businesses I may consider doing so.

For the full article check it out here.
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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%)
Steve Matt's avatar
$1.2m follower assets
1 of 2
My $OKTA trades
Re-allocation of XYL funds.

Transaction Journal Entry:
Same underlying business but valuation being dragged down by The Great Revaluation.

Metrics I track on each buy:
P/S - 13.48
Forward P/S - 7.33
PSG - 0.14
P/FCF - 200
Samuel Meciar's avatar
$7.7m follower assets
Brief news 20/4/22
$AAPL retail workers seeking unionization, demanding to be paid at least $30 per hour, better retirement options, more accessible vacation time, and more.

$AMD $NVDA prices for graphics card plummeting in April, down as much as 30% in the last 3 months amid supply likely catching up.

$AMZN announced 37 new renewable energy projects around the world, accelerating progress towards 100% renewables use from original target of 2030 to 2025. This increases Amazon's renewable energy portfolio by 30%. Amazon says they expect to produce about 42k GWh of renewable energy each year once everything operational.

$ASML the Dutch government looking to create a champion similar to $ASML in the next-gen photonic technology, with the investment of $1,2B. The European Commission placed photonics technology which communicates information via light instead of electronic signals as one of their 6 "key enabling technologies".

ASML also released results, here visualized:

$DASH reportedly considering cannabis deliveries, after verifying age through an ID.

$MELI and Brazilian airline Gol Linhas Aereas Inteligentes SA announced a 10 year long logistics partnership for cargo transportation in Brazil. Under the deal, they will exclusively use six Gol-owned Boeing 737-800 BCF aircraft, with the option to add another 6 to the operations by 2025. Operations are scheduled to start in H2 2022.

$NFLX also reported earnings, visualized here:

The CEO of Netflix, Reed Hastings also admitted they are working on ad-supported lower cost subscription tier as tough comps and slowing growth weighs in. See more of my thoughts here in my little Twitter thread: https://twitter.com/SamMeciar/status/1516642385782091779?s=20&t=XIdUAqa2M67NHshWqdDqBQ

$OKTA says Lapsus$ breach lasted only 25 minutes and impacted only 2 clients. This statement further clarifies their previous statement where they said as many as 366 customers may have been impacted.

$QCOM signed contract with Stellantis, will provide brands like Peugeot and Citroen with vehicle connectivity starting in 2024. This platform should provide the vehicles with OTA capabilities (as seen in Tesla's) and 5G connectivity for telematics.

$PYPL IMG to relaunch MADE in collaboration with PayPal - MADE was conceived in response to the 2008 economic crisis as a platform to give emerging designers resources, support and venue space to showcase their collections. Some of the most innovative fashion talent and creators known today began their careers during a MADE fashion week, event or cultural program.

$SNAP launched Snap Ramadan Mall, the first-ever AR-powered virtual mall in the North Africa - Middle East region in collaboration with brands like IKEA, L'Oreal, Namshi or Samsung. Snap has also launched new AR art experiences in partnership with The Los Angeles County Museum of Art and made 3 new AR monuments available to the users of Snapchat.


$TSLA is reportedly no.1 of top 10 publicly traded companies in hiring new employees, 5x-ing their headcount since 2016.

$WDAY Asda, one of the largest supermarket chains in the UK chose Workday for their digital transformation including solutions ranging from HCM to Learning for employees and Recruiting.
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Samuel Meciar's avatar
$7.7m follower assets
Hot seats
As Q1 earnings arrive, I have my set of holdings I'll cut or will be looking to cut depending on the performance and results posted by those... I was thinking about a bit of a consolidation in my corporate enterprise allocation, and decided to:


There seems to be nothing wrong with those names, I just thought like there's a pretty substantial overlap between them and so I decided to cut some and strengthen those other names.

And then on the other hand I have $DOCU -- I'll be really closely watching the execution of Agreement Cloud, as this is a substantial part of my thesis and they seem to have some problems there for a couple of quarters already... If I'll see just another underperformance on that part I'll be selling for $ADBE or one of the other names I want to add to my portfolio but yet didn't buy any.

Secondly, there's $ZM. Still a leader in this market, but I'm seeing some evolution of competitors in this pretty competitive space, and so I'll be closely watching what they have to say about the competition and put their numbers into a perspective. Will decide then what to do.

Notably, I'll be looking to listen to $OKTA's earnings call to see the effects of their breach and how they answer questions on their reaction to the fact.
Samuel Meciar's avatar
$7.7m follower assets
Some nice meltdown towards the close on $QQQ, closing in the bear market territory. I'm looking for some new entries next week - $OKTA $MDB $AMZN $ZI and $ROKU, but we'll see if we form/retest some bases there or not.

Still yet to add to some of my existing positions, although most of them are fully built as I desired. I'm overall pretty happy with what I have here. I do believe I'm set up well for good returns over the long run.

Have a great weekend everybody!
Upcoming Earnings Calendar (Feb 28th - Mar 4th)
Hey guys! Here's the upcoming earnings calendar! Two of my holdings, $SE and $SOFI report next week, so I'll be paying significant attention to both. Other than that, I'm also interested in seeing what retailers like $TGT $BBY and $COST have to say about supply chain issues and inflation.

Good luck to everyone!

If you'd like an easier way to track earnings dates, you can automatically sync your portfolio's earning dates to your personal calendar with just a couple of clicks here.

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TUE:


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THU:


FRI:
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