StockOpine's avatar
$21.4m follower assets
Buy now, pay later. Is this a bubble?
We came across the article on the link below and we wonder what could be the impact on firms like $AFRM $SQ $PYPL $AFTPY, if any.
Few notable extracts from the article:
“4 in 5 U.S. consumers use BNPL on everything from clothing to cleaning supplies, according to Experian, and most shoppers said buy now, pay later could replace their traditional payment method”
“When people start buying household goods on credit, that signals a problem.” Marshall Lux
“BNPL’s rapid growth is driven primarily by younger consumers, with two-thirds of BNPL borrowers considered subprime” Lux noted
“42% of consumers who’ve taken out a buy now, pay later loan have made a late payment on one of those loans, LendingTree found.”
“The financial watchdog said it is particularly concerned about how these programs impact consumer debt accumulation, as well as what consumer protection laws apply and how the payment providers harvest data”
Credit card companies and BNPL companies are already beating inflation
What's the average interest rate for a credit card or a "buy now, pay later" loan?

For credit cards, it's 18%. For "buy now, pay later" loans, it's 23%.

Inflation is currently above 8%. Many companies' profit margins are below 8%. But for $V $MA $AXP $DFS $AFRM $SQ $PYPL etc., they're already making a lot more on each loan. Many banks envy these fintech companies.

Mortgage rates are surging, but at the same time, their rates haven't been as high as what the credit card companies and BNPL loan providers charge.

As for the % of people that pay their credit card and BNPL balances in full every month, it varies. For credit cards, it looks like 1/3 of users pay their balances in full each month. For BNPL, that number looks to be a lot lower because the credit quality of those that use BNPL is lower too. In general, the majority of their customers accrue interest in those companies. It explains why those companies are highly successful today.
$YETI $MQ $BROS Earnings: What I'm Looking For
YETI Holdings, Inc. ($YETI) - Reporting earnings tomorrow morning (5/11)

Often unmentioned, YETI is one of my "stable" positions. I don't expect them to return 30% growth year after year. That's what makes 2021 curious, as they had 29% growth. Even the 2nd half of 2020 over the 2nd half of 2019 was just 27.3%. 2021 was heavily driven by DTC sales (35% growth), which has gone from 24% of their 2016 revenue (with the other 76% being wholesale) to 72% in 2021.

  • Where does Q1 revenue fall? YETI is highly cyclical with their Q1 sales being the lowest each fiscal year. On top of that, they're lapping some tough comps.
  • What's the DTC revenue growth?
  • The "Other" segment (one of three revenue segments along with Coolers & Equipment and Drinkware) grew 61% in 2021. Granted, that still makes it only 1.9% of full year revenue. Barely affects the bottom line but I'm just curious what it comes in at.
  • International more than doubled in revenue in 2021. Will that continue?

Current position:
Total cost basis: 62nd highest in my portfolio
Time since first buy: 1.49 years
Number of purchases since initial position: 0
Annualized return: (15.4%)
Annualized $SPY return: 7.7%
Annualized $QQQ return: 2.9%

Marqeta, Inc. ($MQ) - Reporting earnings tomorrow afternoon (5/11)

Here's what I'm looking for:

  • Total Payment Volume is a key indicator, obviously. Over $111B flowed through their company in 2021, 85% above 2020. It goes without saying that number needs to keep growing rapidly.
  • They recently announced their new RiskControl solution, "a comprehensive product suite to help its customers better optimize their card programs and take control of end-to-end risk management" to combat card fraud. I love this. Build out a suite of tools to make your network more sticky.
  • Need to see concentration risk start dropping. 90% of their TPV settled through Sutton Bank in 2021, down from 96% the year before. Need to keep that going down. Additionally, 69% of their revenue in 2021 came from Block ($SQ). That's a great customer but if that agreement, which is due to expire in March 2024, isn't renewed, Marqeta will tank. Keep bringing on new business and expand existing relationships.
  • It'd be nice if management began releasing additional KPIs like customer count, customers generating >$100,000 in revenue, etc. At least management gave the DBNER on the conference call for 2021 full year results (they said it was a remarkable 175%).

Current position:
Total cost basis: 72nd highest in my portfolio
Time since first buy: 0.43 years
Number of purchases since initial position: 1
Annualized return: (87.3%)
Annualized $SPY return: (26.0%)
Annualized $QQQ return: (42.3%)

Dutch Bros Inc. ($BROS) - Reporting earnings tomorrow afternoon (5/11)
Ooooh boy, do I love coffee. I still haven't tried Dutch Bros. yet but I will be in a month or so when I make my next trip up to Wine Country in California!

Here's what I'm looking for:

  • Company-operated (co.-op) shops is where it's at. They're moving away from the franchising model (existing franchisees can open new shops but they aren't taking any new franchisees). Revenue has grown >60% for co.-op shops the past 2 years. That needs to continue.

  • Same-shop comps have been all over the place due to COVID. 2021 was 9%. Not sure that can continue. I'll be watching to see where this lands.
  • Did they hit their Q1 goal of opening 30 new shops and will nearly all of them be co.-op shops? From the guidance section of the Q4 earnings press release: "Total system shop openings are expected to be at least 30, of which nearly all shops will be company-operated."
  • Dutch Rewards membership count. They launched it in early 2021 and ended the year with over 3.2MM members. Strong loyalty will keep this chain thriving and membership to Dutch Rewards will be a great indicator of that.

Current position:
Total cost basis: 48th highest in my portfolio
Time since first buy: 0.29 years
Number of purchases since initial position: 1
Annualized return: (8.3%)
Annualized $SPY return: (25.3%)
Annualized $QQQ return: (39.9%)
Samuel Meciar's avatar
$7.1m follower assets
Portfolio changes - update 3
As you well know by now, I'm a huge proponent of transparency. And despite me sharing my portfolio publicly here which gets updated like every 1-2 days, I want to make sure I can tell you what I'm doing as close to real-time as I can. So here we go, shall we?


I put my money where my mouth is, which are my high conviction bets.

There's a few companies I'm still thinking about for various reasons, such as $ETSY $ADSK $TWLO and $PINS. I'll let you know about them when done with my thinking.

Stay strong! Have a great day!
Neil's avatar
$17.9m follower assets
Block (SQ) Earnings Miss So Why Is The Stock Up?
I'll say it for those at the back. BITCOIN REVENUE DOES NOT MATTER.

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Nice vid! It’s all about the long term strategy and the execution of plans over the long run for $SQ . Short term earnings don’t matter as much 👌
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Luka 🦉's avatar
$88.1m follower assets
Tech Investment - Update #2 📉
Another month passed, and I am here to make a quick review of my Tech Investment.
As you are probably aware, I am running an 8-month-long DCA investment on 6 Tech Stocks.


This video is an update after two months, with $9,000 invested right now.


No surprise, my portfolio is RED. 😡

I also take the opportunity to briefly check the Earning Reports on 4 of the 6 stocks.
How do you stay focused on the long term after a pretty rough month? I find it really helpful to get insights into other investor’s psychology
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Growth Portfolio - April 2022
April 2022 performance: -24% (Worst month since March 2020)

Top holdings by weight:
$TSLA 15%
$NET 7%
$U 4%
$SQ 4%
Rest of holdings ~ 30%

Comments:
  • I own a very small position in $PTON. Down significantly by 60%, decided that it doesn't make sense for me to sell. Will see what happens with the new CEO (good reputation) and potential new direction. If I see interesting things, I may keep building. If I still see bad management actions, I may end up selling.
  • $TDOC I own a full position and down also 56%. I am not selling, it doesn't make sense at this point. Once again, another case of management not at the required level. Management and boards can be changed and corrected. Will hold and see what happens in the following quarters.
  • Added new money from paychecks to almost all of my top holdings to keep my cost basis weight.
  • Not trimming $TSLA (probably the only holding I would not trim over 15%)
Hi Alberto

Really appreciate the transparency here. I think keeping a close eye on management and the direction they take is the best course of action at this point for $PTON. What are your thoughts on CEO Barry McCarthy’s recent decision to raise subscription fees while cutting prices for its Bikes and other equipment?
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Fat Baby Funds's avatar
$22.7m follower assets
I bought more $SQ. Excited to see what this company looks like in 5 years. If you look back this is a WAY different company.
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