Samuel Meciar's avatar
$7.7m follower assets
Portfolio changes - update 9
Hello friends, today I moved further with my portfolio consolidation process.

  • I sold out of $S, there's nothing specific wrong there, but I stay stunned by just how Microsoft's position throughout all kinds of enterprise software is strong. Crowdstrike, Microsoft and SentinelOne usually score the best in all sorts of 3rd party research, therefore it makes sense for me to consolidate.

SentinelOne is great, but we are entering a very unkeen environment for companies heavily spending instead of bringing cash flows, which I'm fine with, but when looking at the optionality, profitability and growth, I'm very much fine with $MSFT here. Many maybe don't know, but $MSFT is growing its CyberSec division by 50%, or at least did YoY, pulling about $15B in sales last year, which is just INSANE! So, from now on my coverage of CyberSec will be through $GOOGL (soon to likely buy $MNDT), $NET $DDOG $MSFT $ZS and $SNOW.

  • I also sold a position in $SE as I'm beginning to be very concerned about their tempo of cash burn (about $1,9B in Q4 and additional $1,6B in Q1) despite management's encouraging comments regarding coming profitability. So for now, no $SE for me. $MELI in this condition looks like a better R/R now to me.
  • I added significantly to my $MSFT position, should be visible by tomorrow. I also added to my other favorites such as $AAPL $TTD $TSLA and $NVDA.
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I like the stable growth companies with a long track record of success. So I’m definitely with you on the $GOOG, $MSFT, and $NVDA. Analyzing the newer companies is out of my wheelhouse. I like the valuation of Microsoft and Google especially, but bought Nvidia for both kids’ custodial accounts. Personally, I don’t think there are two better companies on the planet than Google and Microsoft to own. When my safety of principle is considered. Especially after they were the sole two companies standing after last weeks research. Impressive.
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Giro Lino's avatar
$2.8m follower assets
Posts Recap
I write a lot of stuff, so the idea is to offer a filter to what you cannot miss. Enjoy it.
The ranking is based on unique views, free/paid new subscribers, and open rate — all relative.
### Top 5🌟
#### 30 Days
  1. MercadoLibre ($MELI)
  2. Food for Thought #16 (FED and China)
  3. Food for Thought #17 (About Stone)
  4. Stone's Biggest Moat
  5. Brazil April Wrap-Up
#### 7 Days
  1. Food for Thought #17 (About Stone)
  2. Stone's Biggest Moat
  3. $SE 1Q22: Upside Risk on Monetization
  4. $NU 1Q22: The Purple Wave
  5. Expert Interview - Sinqia

> 🌟 Top Percentile on Unique Viewers

5-min recap on what we wrote this week
--------------------------------------

Food for Thought🌟
------------------
  • Since Thursday, the market has been speculating that BTG Pactual and Stone would be negotiating an M&A.
  • What is in there for BTG Pactual? Stone is one of the top five players in the industry, with a considerable capillarity, good tech resources for scaling its operations, and top-notch logistic capabilities.
  • The market still has a high consideration for Street, so he returned and joined meetings with crucial investors — we had access to a person who joined one of those meetings and took a few notes.
  • We believe Esteves knows that his name associated with Street's would fully restore investors’ confidence in management and probably would use this to convince Street.
  • What is in there for Stone? Even though Stone isn't facing a liquidity issue, the company could use more resources to accelerate its strategy and resume its credit operation.
  • With BTG, Stone could strengthen its position as a payment gateway for merchants using BTG's capital to leverage the existing operation.
  • Also, we wrote yesterday about a new player gaining market share in the Brazilian Payment Industry that faces a new threat to market participants.
  • Stone could leverage its platform to gain stickiness with its clients by offering complex products, such as lending, insurance, investment, etc.
Keep Reading 🔽🔽🔽

Big Piece on Stone 🌟
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  • In the past years, we’ve heard that the most significant competitive advantage Stone had was its tech, though it always sounded like an empty speech.
  • Tech is important, indeed. It enables the company to expand over a smaller structure, minimizing the growth friction and improving sunk costs over time.
  • However, we see tech as an enabler, not a competitive advantage. If you had Stone’s software, you would not be able to compete against them. Stone’s most significant competitive advantage relies on distribution due to its hub strategy.
  • Stone’s strategy is looking for cities with +500k inhabitants in Brazil as a possible spot for a hub. Usually, they place ten sales representatives, three logistic employees and one leader for 100sqm rented spaces.
  • The sales team's goal evolves to increase the number of clients, lower the churn, solve daily routine problems, such as malfunctioning POS machines, and, mainly, sell pre-payment to customers.
  • Also, Stone offers to franchisees most of the back-office needed for the operation (HR, Accountancy), reducing the back-office costs for the business owner.
  • There is a substantial competitive differential having franchises in smaller locations. First, incumbents, such as Itaú (Rede), and Cielo, will never (ever) sell franchise licensing.
  • Second, franchises allow Stone to offer a last-mile solution in smaller regions. For instance, imagine you own a restaurant and operate under Cielo. It’s 12:30PM, the restaurant is full, and your POS dies.
Keep Reading 🔽🔽🔽

$SE 1Q22: Upside Risk on Monetization🌟
---------------------------------------
  • We’ll go briefly on Sea’s earnings and its highlights in this post. Then, we intend to extend to a discussion about the company’s operation in LatAm.
  • Sea Limited ($SE, “Shopee”, “Shopee Brazil”) reported 1Q22 results, largely in-line on the top line and much better than expectations on cash burn level.
  • The eCommerce segment delivers GMV growth of 39% YoY, while its cash burn also lowers QoQ. We welcome the message from management that Sea may achieve profitability sooner than expected.
  • Also, management reduced its GAAP revenue guidance to US$8.5-9.1bn from US$8.9-9.1bn reflecting the growing uncertainties in macro conditions, which could impact the spending power of consumers.
  • We believe that the guidance now implies that the GMV growth outlook for 2022 is now +30-40% YoY for the consolidated company, with LatAm growing 100% YoY.
  • Management reaffirmed that they focus on profitability over growth, which is an encouraging message. As a result, we believe Sea could deliver high double digits growth without cash burn, which, in our view, would be great.
  • The positive highlight was the monetization increase in the eCommerce operation, as the GAAP marketplace revenue as a percentage of total GMV rose to 7.2% during the quarter compared to 5.7% last year.
  • As expected, gaming faced pressure in 1Q22, with bookings down 24% QoQ. However, the company started to see the monthly user trend showing early signs of stabilization towards the end of 1Q22.
Keep Reading 🔽🔽🔽

$NU 1Q22: The Purple Wave
-------------------------
  • Nubank reported a $45mn net loss vs. the company-provided consensus of a $77mn loss. Similar NPL rises to the incumbent consumer segment, but without payroll and mortgage to smooth the hit.
  • We see the quarter with solid credit balance growth. Specifically, total loans rose 122% YoY. In addition, consumer loans, an investor focus, rose to $2bn and now represent 23% of total loans vs. 21% in 4Q21.
  • Card TPV rose to $15.9bn, up ~112% YoY and ahead of GIROe's $14.8bn. Interchange revenues increased 127%, with flattish yields at 1.19%.
  • Asset quality did not erode as most buy-side analysts expected, with 90-day NPLs up 70bps QoQ vs. Bradesco’s consumer segment’s 60bps and Itau’s 30bps, although this comparison tells only half true (keep reading).
  • While fast loan growth helps NPLs, we see Nubank’s figures as substantially better than other neobanks. Provisions rose 287% YoY, driven by loan growth. Overall, Nu presented a strong beat vs. our expectations.
  • Under IFRS9, Nubank has to front-load the recognition of credit loss provisioning whenever a loan is booked. So, the faster Nubank grows the credit book, the more short-term pressure it brings to our gross profit margin.
  • We must consider how interest on cash balance hurts the short-term PnL. As interest rates go up, Nubank earns more money on our large pool of cash balance, even if it is partially or wholly offset by higher funding expenses.
  • But it drives our revenue up and leaves our gross profit essentially unchanged. This pushes down our gross profit margin as it enlarges the denominator of the gross profit formula.
  • We ran a few tests assuming stable growth (only to offset churn) and rates at 6%-8% and found a 55%-65% range for gross profit (versus the actual 34% in the 1Q22).
Keep Reading 🔽🔽🔽

Expert Interview - Sinqia
-------------------------
  • Giro: The market had problems related to the registration of receivables, which impacted TAG (Stone), and some players, such as N26, are still having difficulty putting the PIX on the street, while others face problems related to latency or settlement. Why do you believe that players are having difficulties? Is it related to the design proposed by the regulator, or is there another reason?
  • Saldanha: Every innovation has advantages and difficulties. If you take Open Banking, why didn't it pop and Pix went? The Open Banking concept is a road that needs to be built.
  • Pix is transactional. The market was not prepared for this. It's a 24/7 model with an SLA (“Service Level Agreement”) ready for it. The banks were not ready for that. The provider may be ready, but he needs to connect it all to the legacy.
  • The bank needs one year and two more to implement to carry out a legacy structure, although they only had two years to prepare.
  • The Central Bank protected itself a lot in the regulatory environment. Of course, there was a problem with timing the distribution of Central Bank regulations, but it was always very clear and transparent about the rules.
  • In fact, he always gave options, such as indirect and direct Pix. If you don't have the conditions to perform, you can opt for indirect and pay a fee for it. Banks have been able to adapt, while others opt to switch to software.
  • Perhaps the PIX is the most sensitive topic. However, with over 12 months on the road, Pix is a huge success in P2P transactions, even if retailers are still not convinced about him.
Keep Reading 🔽🔽🔽
Down 86%, I'm broke
Hi all, I am new to commonstock and have joined the platform to get some quality advice.

To tell you about my full investing experience: I started investing in June 2020 with around 100k in savings. Being a twitter user I went for advice there. I rapidly made big gains and my portfolio went to 180k in september. Back then I started taking debt to invest, I could borrow an extra 150k. Between september and february my portfolio was obviously in the green every day, I quit my job, started going to expensive restaurants, invited my girlfriend on ski trip in the best hotels. The sky was literally the limit. Mid february came the first market pullback, something completely new to me... however after some margin calls I was able to get through june 21 with a portfolio worth 400k minus 123k in debt. Over the summer I remained invested in the high flying tech names $ZS $CRWD $FSLY $UPST $SOFI $TSLA $LSPD $SE and so on I guess you know the music too. To keep a long story short and not to bother you too much, my portfolio is now down 86% from its peak and I am hugely indebted... I got margin call after margin call, my mortgage application got rejected and I still have 100k to pay back. I am basically broke as even if I sell all I still have today I cannot even pay my debt back. And I don't even talk you about the $SOFI shares I added on margin before its earnings release... All of this to say I really don't know what to do, I just want to liquidate my whole portfolio and get back to March 2020 where I did not know anything about the stock market and I still had my job. So basically I don't expect a lot from commonstock but would be grateful to hear your thoughts. Thanks for reading till the end. #bullsneverdie
Head up man. LEARN from your experiences and you will thank yourself years from now for going through this and being better for it. You came to the right place to learn. Commonstock has an exceptional community and like minded investors with QUALITY conversation. I’d personally avoid Twitter for any investment advice. Without the verified portfolio and trade activity visibility, there’s a lot of a bad actors over there and hardly any accountability. Glad to have you on board here, I’m confident you will really like what you find!
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$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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Hedge Vision's avatar
$105m follower assets
Kora Management Files Q1 13F Form
Kora Management just released its Q1 holdings.

Two total positions:

  1. $SE 93.85%
  2. $STNE 6.15%

The fund first purchased Sea in 2018 and purchased 9,200 more shares during Q1. Crazy conviction.
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Top Losers Today @ 11am
Visit highsandlows.substack.com to see more
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Tomorrow I will be publishing the findings of my research into $SE and the structural reasons behind its future operating underperformance in the medium and long term.

Stay tuned!
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.