Leon's avatar
$17.9m follower assets
My portfolio: Evolution AB $EVVTY ($EVO.ST)
The next company of my portfolio i will shortly present is Evolution AB.

Evolution AB:
  • develops, produces, markets and licenses fully integrated B2B Online Casino solutions to gaming operators
  • has developed into a leading B2B provider with 500+ operators among its customers like DraftKings ($DKNG), Penn National ($PENN), Leo Vegas ($LEO), Rush Street ($RSI), Betsson ($BETS), and many more
  • employs about 10,000+ people in studios across Europe and in North America
  • has built a platform with high operational efficiency and scalability
  • has been named Live Casino Supplier of the Year 10 times out of 10 possible at the EGR B2B Awards thanks to it's innovative games and fantastic management
  • The games of Evolution are the most popular in every Live Casino which leads to the need for an operator to also offer Evolutions games, otherwise, the player would change the operator. Evolution's games and their broad network of studios build a high moat
  • Revenue CAGR (18-21) of 44 % and Net Income CAGR of 64 % and an EBITDA-Margin of 69 %
  • Long way of growth as Live Casino is the fastest growing Casino segment and Online Gambling will be regulated in more and more countries / states
  • NTM EV/EBITDA of 17 and NTM P/E of 21

This is a quick overview of what Evolution is doing. If you're interesting I will share more about what "What moves this stock" tomorrow. Stay tuned!
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Nick's avatar
$93.8m follower assets
Learning from my mistakes
I wrote a pretty long post not too long ago about all the rookie mistakes I've made in my journey. I've been trying to learn from those and not repeat them. As part of my #neversell, I rode $PENN from 22 to 140 back to the mid 30s. My thesis never changed, but the market did, and it got way overheated and I didn't sell. I think we'll get back there someday, but I had a 7x in under a year and didn't even consider taking capital off the table.

Insert yesterday's decision to trim $CELH. I'm an avid user of the product, I love the stock, but it ran from 28 when I started buying to 112 and once again, I just watched and held. After some trips to the 40s and 50s, they finally announced a distribution agreement with Pepsi! Amazing news!! Distribution is the name of the game, and they now have a giant behind them. It skyrocketed the stock back over 100, and I decided to take a little more than half of my capital off the table. Still believe in the story long term, still believe that they can be a great long term holding, but in my opinion, their biggest catalyst just hit, Pepsi has the right to buy at 75, a pretty large discount from today's price, and by every fundamental metric they are extremely overvalued right now (seriously, their p/e is in the hundreds lol and p/s in high double digits in THIS economy).

They're growing like crazy, and just added a fire hose to their distribution capabilities, but I think they need a little time to grow into the valuation. Just because they have distribution doesn't mean they can fulfill a sudden increase in capacity, and at this lofty of a valuation, the first slight of weakness/miss in a quarterly is going to send the stock flying down. Maybe I miss some upside, but at the end of the day, I'm playing with mostly house money because I drew down my initial investment. Time will tell if this was a good sell or not, but I just can't see what news could continue to push them higher, and I see plenty of ways they can come back to earth valuation wise (and I'll be ready to buy back for the next run!)

Glad I took a few minutes to journal this one for myself, because it feels like a solid step in my growth as an investor, and also because I've missed this community haha life has been extremely hectic, and I'm dealing with some real estate nightmares (note to self: just buy a reit next time), but I'm going to do my best to get more active in here, and hopefully work on more concise writing lol.
Can never feel too down about making such a great return in a short space of time. Taking profits might not be sexy, but is cements $ in the bank.

Think of this way, imagine you had held the stock for 5 years, and it generated a 20% CAGR over that time period. That's a fantastic return, and you just generated a superior CAGR in one fifth the amount of time. Opportunity cost.

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August Watchlist Update
Below is an update on my watchlist for August in preparation of my Birthday Buys in January! I am targeting to add 1 to 2 positions in each portfolio. Some of the great July Ideas recommendations have made their way onto my watchlist 👀
Taxable
Removed:
$COST - I have a number of other very strong alternatives that I would add ahead of Costco, so I removed it from my watchlist.
Added:
$DE - Jumped to a 5/6 to tie $DMLP as an Industrials option.
$F - Potentially breaking one of my rules by choosing not to invest in auto manufacturers. This was a July Ideas rec, and ranks as a 5/6 to tie $DMLP as an Industrials option.
$CAT - Jumped to a 5/6 to tie $DMLP as an Industrials option.
Roth IRA
Removed:
$WM - Dropped from a 5/6 to a 4.5/6 over the course of July. Added $AY, which has a higher ranking at 5/6.
$ALL - Dropped from a 5/6 to 4.5/6 over the course of July. Still have $OZK as strongest potential Financials picks ranking at 5.5/6.
$AFL - $OZK increased from a 5/6 to a 5.5/6, which is now my strongest potential financials play. $AFL has therefore been removed.
Added:
$RICK - July Ideas rec. Ranking at a 5/6 and strong Sin Stock option.
$AY - July Ideas rec. Ranking 5/6 as a Utilities option.
$CAH - Jumped up to a 5/6 in July to tie $AMGN as a top Healthcare option.
$REGN - umped up to a 5/6 in July to tie $AMGN as a top Healthcare option.

​My predicted picks in July were $PENN in my Taxable account and $AMGN in my Roth IRA. Now in August, my picks have changed to $CAT in my Taxable and $OZK in my Roth IRA.
I'd love to hear your thoughts on my picks and thought process!
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Nick's avatar
$93.8m follower assets
Rookie Mistakes
In my intro post, I mentioned that I've only been an active investor since 2020. I did have a brief stint in 2013, where I debated buying this penny stock patent portfolio company (basically, they buy patents, litigate violators, collect royalties from winning cases, etc) and tesla. Yep, we all know which one I picked. The ironic part is it was part of my plan to pay off my student loans (I only needed to double my money 7x in a row, how hard could it be??). Had I invested in tsla and sold at ATH, I would have had enough to pay off those loans. I apologize for the length of this post in advance, but I get long winded and have made lots of mistakes 🤣

Now hindsight is 20/20, and I just as likely would have sold tesla up 100% since my plan was to keep doubling my initial $1k investment, but after losing $987 of my investment, I stuck to funding my 401k and pretending the stock market didn't exist, missing one of the best bull runs (if not THE best) of all time.

Having been scared out from penny stocks 7 years ago, you'd have thought I'd stick to safe investments this time around. Apple, Microsoft, etc, right? Nope. I invested my first dollars into $TTOO and $AYTU, two penny stock covid test kit plays. I knew nothing about either company, other than they claimed to be leading the pack on these test kits. Ironically enough, from what I can tell I actually made money on both of these stocks (could have made a LOT more on TTOO but held too long).

In anticipation of this post, I downloaded all of my transactions out of Webull since inception, filtered for all positions that had a net 0 shares and calculated my gains/losses. It shows my successes, but also forced me to confront my biggest failures with dollar figures associated. I'm going to break it up into a few different posts, because I believe there is enough content there, but from what I can tell, there are a few recurring themes and lessons that I've gotten over the past two years.

Let me know which ones resonate with you, or which ones you want to hear more about! I've got specific stocks and stories for each one of these to expand on later, but I want to know who else had made these, and which stories people would like to hear first.

1) Penny stocks - the thought of buying lots of shares for cheap and selling them higher (To the moon!) is too enticing to new investors. If I have 100 shares, and the price goes up $0.50, I made 50 bucks! Fifty cents is easy, apple goes up or down that amount every day! Silly me, the accountant, not factoring in percentage increases and only looking at dollar increases.

2) investing outside competencies - I'm a former auditor, I've worked in and audited manufacturing companies, local governments, insurance companies, etc, so I feel that I have a wide variety of businesses that I can conceptually understand. I'm also a techy, so I felt comfortable investing in that world as well. Knowing that, it's comical looking back at how many pharmaceutical companies I've owned (I think that's probably a rookie lesson in and of itself, the difficulties of that sector), and how badly I've been burned on them. I have no edge there, I'd have been better off buying Pfizer or an ETF.

3) Following the herd - this one's hard not to, right? Substacks, Fintwit, cnbc, everybody is shilling their book to anyone who will listen. Hell, even friends and family will tell you what to invest in. I mentioned in point 2 above, that I have owned a disproportionate amount of biotech for the amount of knowledge I have in that space. My former boss can be blamed for some of that, as he was a former biotech auditor and had grown his account to seven figures trading biotech. When he made a rec, I listened. But either I'm unlucky, or his edge was gone by the time he made his picks, because I lost more than I won, and the winners didn't pay for the losers 🤣

4) SPAC city - my investing almost perfectly begins with the great spac boom. If there was a popular spac you saw on Twitter, chance are I knew it or owned it (or in the case of $FSR, still own it). In fact, my biggest dollar loser is a former spac, which I averaged all the way down from its high of $13 into the $1s before I finally threw my hat in. I'm stubborn though, and have it still on my watchlist to potentially restart my position at a cost basis in the 1s once the wash sale period expires.. Stay tuned!

5) Water the Flowers - building off that last point about averaging down, I have a VERY bad habit of watering my weeds, watering the flowers and raising my cost basis gives me a lot of anxiety, and I actually convinced myself to do it with $PENN, and now I'm underwater in that one. I feel pretty good about a rebound, and I'll be buying more next week, but cutting losers to add to winners is something I need to get better at.

6) Team Neversell - I bought PENN for the first time in 2020 at around $22 bucks per share. It ran all the way to $140, basically in a straight line up. Having no context or experience, I thought this behavior was normal, and instead of locking in a 7x, I'm now holding some Gucci bags for them.

7) Serial Acquirers and Turnaround plays - these are two special situations that require a lot of patience, a lot of research, and extremely competent management teams. Why did I choose to put investing dollars in there, rather than my core competencies? Idk, you'd have to ask 2021 me that question, but it's something I'm trying to recognize and improve on.

8) Buying Options - getting the stock pick right is hard enough; nailing the timing of the move is a different beast altogether, and to make matters worse, I liked to play options on quarterly earnings!! Here I am, a novice investor, trading derivatives on a gut feeling with no experience in the market. What could go wrong?

There are others, and I'll get in to them as I expand on the points above in future posts, but the themes that keep showing up are:
  • Need to get rich quick
  • Not knowing when to hold em and when to fold em
  • Investing in shiny objects without fully understanding
  • Investing without a plan
  • Impatience

The last theme, impatience, has actually been the biggest psychological effect on my portfolio. I have the stomach for volatility, which is great, but I also have the stubbornness to refuse admitting mistakes at time, and the impatience to let a turnaround story play out tells me I shouldn't be investing in them.

Take $PTON for example, a stock I lost some money on in my IRA. They are now a turnaround play, and it could take years to turn around, if they don't run out of cash first. While this type of investment satisfies my craving for volatility and getting rich quick, I have learned that I don't have the patience to hold such a position, at least not at a meaningful enough size that it would generate enough reward to make the risk worth it.

I look forward to exploring my rookie lessons, your rookie lessons, and the psychology behind all of these (as well as how to develop guardrails to prevent repeat mistakes). I'm never gonna bat 1.000; hell, I probably won't bat Ted Williams' .406 either, but if I can be right 3 out of 10 times instead of 2 out of 10 times, I should have enough alpha there to retire someday, and I'll have this journal of all the things I did wrong to share my son, and perhaps give him a head start in this journey.
Nice post! I appreciate the transparency and sharing your mistakes. Acknowledging your failures in the past is a huge step forward. I think all of us have had similar experiences - I know I have.

I am a big proponent of having a plan and continuing to execute. I am interested to see your thoughts on your Investing Plan in coming posts!
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Watchlist - Birthday Buys for 2023
Each year I make Birthday Buys as a way to slowly diversify. With about half a year to go, I decided to update my Watchlist on Commonstock to reflect the companies I am tracking for this upcoming January.
I have a long Watchlist in each portfolio that I rank using the same Scorecard methodology as my active portfolios. This helps me make educated decisions on which positions to add. I use a combination of the Scorecard score, portfolio sector/industry weighting, and existing underperforming holdings in specific sectors/industries.
Below is my current Watchlist and a breakdown on each:

Taxable
I have exposure to all of my target sectors, so future additions are to continually improve portfolio and add great companies.
$DMLP - This is the highest ranked company in my Watchlist at a 5/6. It has outperformed the S&P over the past 3 years, has a P/E under 25, Dividend Yield in the top 5% of my current portfolio, and I am underweight in Industrials. One concern is that the current dividend is more than 100% of their FCF. I need to do more research on this company in the next few months to understand it better.
$PENN - I have tracked $PENN for a long time. I am a huge fan of Barstool, which introduced me to the company. Additionally, with the expansion of legalized gaming in the US, I think there is a long runway for this company. $PENN has had a sharp sell off and is at a much more palatable valuation. My current "Sin Stocks" are $CRON and $BUD, which have been less than underwhelming. Therefore, I am looking to add a stronger position to this sector. $PENN scores a 4.5/5 on my Scorecard - has outperformed the market over the past 3 years, but has underperformed recently. Has positive FCF, but no dividend. Has a P/E less than 25, and is an underweight industry in my portfolio.
$COST - $COST is a strong, defensive play. I currently hold $TGT in the Retail sector of my portfolio. $COST currently has a higher ranking in my Scorecard than $TGT with a 3.5 vs 3. This would be an opportunity to incrementally improve. $COST has outperformed the S&P over the past 3 years, has a dividend payout less than 50% of FCF, and is a company and business I believe in.
Roth IRA
I am continuing to build a balanced portfolio and initiate positions in unrepresented sectors - Consumer Discretionary, Defense, Financials, Healthcare, Sin Stocks and Utilities.
$AMGN - Highest ranked Healthcare company in my Watchlist with a 5.5/6. $AMGN has outperformed the market, has a dividend payout less than 50% of FCF, dividend yield in the top 5% of my current portfolio, and has a P/E under 25. The only thing holding $AMGN back from a perfect score is I have only given it a Medium conviction rating. I will continue to research this company and potentially bump my conviction to High prior to January.
$LMT - Highest ranked Defense company in my Watchlist with a 5.5/6. $LMT has a dividend payout less than 50% of FCF, has a dividend yield in the top 5% of my current portfolio, has a P/E less than 25, and I have High conviction in this company. The only thing preventing $LMT from a 6/6 is underperforming the market in the last year.
$AFL - Tied for highest ranked Financials company with a 5/6. $AFL has a dividend to FCF ratio of less than 50%, has a dividend yield in the top 5% of my existing portfolio, and has a P/E less than 25. I will need to continue to research and compare to the other Financials companies in the watchlist to differentiate the companies further.
$ALL - Tied for highest ranked Financials company with a 5/6. $ALL has a dividend to FCF ratio of less than 50%, has a dividend yield in the top 5% of my existing portfolio, and has a P/E less than 25. I will need to continue to research and compare to the other Financials companies in the watchlist to differentiate the companies further.
$OZK - Tied for highest ranked Financials company with a 5/6. $OZK has a dividend to FCF ratio of less than 50%, has a dividend yield in the top 5% of my existing portfolio, and has a P/E less than 25. I will need to continue to research and compare to the other Financials companies in the watchlist to differentiate the companies further.
$WM - Highest ranked Utilities company in my Watchlist with a 5/6. $WM has outperformed the market, has a dividend to FCF less than 50%, has a dividend yield in the top 5% of my portfolio. P/E is currently a little high at 34.
If I were to make a gut decision right now, I would be adding $PENN in my Taxable account and $AMGN in my Roth IRA.
Would love to hear from anybody who currently holds any of these companies or has read/written any research on them.
Other alternatives in these industries are welcome as well!
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Where would I be able to read more about your scorecard process? I have been trying to develop one myself to make sure that I really know what I'm buying and am sticking to my strategies (and not, as I call it, buying the new shiny object in front of me).

As for the specific companies, I am a huge $PENN bull for the reasons you laid out, and my background is in the waste industry. While you can't go wrong with $WM, I'd encourage you to look at $WCN as well, as they are some of the best operators in the space, and have a little more room for growth, as they are not treated as one of the big dogs, despite their size. I personally have made my bet with $GFL, but I'm comfortable with less dividend right now and more volatility, because I think they will be able to keep making acquisitions to get to the size of the other big 3 over the next few years.
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Alex Biestek's avatar
$16.9m follower assets
SELL
Sold all shares of $PENN. Will be repositioning that money into some other position.
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
Ian Gray's avatar
$42.9m follower assets
Penn National Gaming $PENN Podcast
The newest CCM Not So Deep Dive dropped today. We discussed Penn National Gaming.

There's a lot going on with this business. From a couple of key acquisitions (Barstool Sports and theScore) to a shift to online gambling and changing regulations, this episode has it all.

I have no position, but this is a fascinating company to watch because of the personalities involved and the high aspirations of the management team.

Best case scenario, $PENN's omni-channel strategy works brilliantly, and it mimics Disney's dominance in entertainment by making money off its customers in more ways than its competitors (in-person gambling, digital gambling, hospitality, media).

Check it out and let us know what you think!

Love this! I had a massive position in theScore dating back to 2018 when it was still an OTC penny stock. Traded on Toronto Stock Exchange and then Nasdaq as it prepped for acquisition. Was swept up by $PENN and shareholders were dealt half cash and half $PENN shares for the deal. Turned into a 10x bagger for me.

Admittedly, I've been conflicted holding the $PENN shares ever since, as it is still a sizable position in my portfolio and has fallen off a bit since the deal (what hasn't?). That being said, with a cost basis now literally below zero for this one I'm okay weathering the storm. I do have faith in their omni-channel strategy working out well for them, but need some cleaning up of their balance sheet and overall market sentiment to turn to more risk-on before I think this play returns back to levels witnessed in 2020/early 2021. Really has a chance to become a Medusa with so many avenues it will operate and bring $ in from.
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So $PENN got downgraded again…
…and I’m worried that I’m starting to agree. My case below lays out an aggressive expansion plan, but that’s predicated on them, well, actually expanding. And they live and die on the reputation of a lightning rod possibly more extreme than $TSLA’s: Dave Portnoy. I just don’t know about this one anymore https://www.makingamillennialmillionaire.com/post/casino-s-sports-books-and-portnoy-a-dig-into-penn-national-gaming
One of my biggest concerns about $PENN is the nature of the gambling industry. Gambling sites are competing on price (lines). As gambling has been digitized it makes it easier for gamblers to shop lines, thus, compressing margins. Penn has a better shot at differentiating itself due to barstool but it still seems like it would be tough to pull off given the ease to change apps.
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