Brian Stoffel's Posts

$46.2MFollowers

@brianstoffel02/28/2023

An Update on Zoom $ZM

Since Zoom is part of the portfolio @brianferoldi and I have built here on Commonstock, we wanted to give a brief update following earnings.

The headline numbers were solid across the board

Though the margins contracted somewhat, this remains a company that is absolutely printing cash

Here's where things get interesting. Zoom was NEVER meant to be a consumer-facing tool. The pandemic changed that, and momentarily super-charged business.

But now, consumers are leaving. That's as it was always meant to be. But it can be a drag on results. That's why focusing on ENTERPRISE (read: big company) business is so important.

Not only that, clients are signing bigger contracts that cover a longer cycle

Yes, stock based compensation is pretty egregious (some of this is being phased out), but...

Diluted shares outstanding actually FELL because of buybacks over the past year.

Looking ahead, management doesn't expect much growth (remember, consumers down -- enterprise up) but profitability is expected to come in well ahead of Wall Street's estimates

In valuing the company, it's important to note where in its growth lifecycle the company sits

And while valuation isn't everything to us, it's hard to deny what a good deal investors can get on shares right now

Overall, here's what we're watching moving forward

But enough from us, what did YOU think of the quarter?

Ben

@rpinvestments02/28/2023

Similar thoughts. Once that 600 mil in enterprise revenue growing at >20% makes up 80-90% of revenue then $ZM with 80% gross margins will start to take off

+ 3 comments

Brian Stoffel

$46.2MFollowers

@brianstoffel02/23/2023

An Update on Unity $U

Even though I sold Unity shares in my personal portfolio, @brianferoldi and I continue to hold them in our portfolio here on Commonstock. Here's a review of the company's most recent quarter.

Overall, topline growth was nice, but I was VERY frustrated to have media NOT factor out the role that IronSource played in that top line growth

Operating margins were headed in the right direction on a non-GAAP basis, but the company continues to lose money on an accrual (net income) and free cash flow basis

This was a bright spot: areas outside of gaming continue to adopt Unity Create -- especially digital twins

But my oh my is Stock based compensation big. Acquisitions play a huge role in this

Over just two years, shareholders are going to be diluted by about 30% (the inverse of a 43% increase in shares)

One reason the stock is trending down -- guidance was well short of expectations. Management said they were being prudent in NOT expecting a recovery in in-game advertising during the year

Here's what we'll be watching moving forward

What did you think of the quarter?

Joey Hirendernath

@joeyhirendernath02/23/2023

@investor_from_nepal @interrobangbros @parrot what were your thoughts on this Quarter?

+ 9 comments

Brian Stoffel

$46.2MFollowers

@brianstoffel02/09/2023

Rounding out our final Buys

We're going back to the well for one of our final buys. For all the details, see our recently-released video here and be sure to leave a comment.

https://youtu.be/WjueWzuDGDw

When you see $MELI with a 200+ P/E, you think...

41%Too Expensive

58%Meaningless metric right now

34 VotesPoll ended on: 2/12/2023

Ben

@rpinvestments02/09/2023

PEG of 0.89. P to cash flow 27. 50% revenue growth. 80% op profit growth. ROE 30%. It would would be more weird for this company to trade at a PE of 25.

+ 6 comments

Brian Stoffel

$46.2MFollowers

@brianstoffel01/23/2023

Our Next Stock Purchase: A Small-Cap Stock

We're rounding the corner to home in building out our model portfolio on CommonStock. Many of you have noted that we haven't bought all the companies we've talked about. That's purely because we have to wait for permission to buy them because of our work with The Motley Fool.

As for our next stock, it is Clear Secure $YOU Here's everything you need to know.

And be sure to leave a comment letting us know what you think for a chance to win $ 100

Most people know Clear b/c it helps you skip the ID line at the airport, but it has more uses

And the number of people signing up to use the service has been growing

While retention number are admittedly not stellar, we love the fact that Clear spends next-to-nothing on selling, as it has government-protected real estate inside airports (more on that in the moat section , too)

The moat is straightforward.

Network effect: more users, more incentive for airports, bars, stadiums to use, etc.

Switching: There's no real alternative

Intangible: that government-protected real estate

What's more, the company has some pretty solid financials, especially with cash flows. (stock based comp is the drag on net income)

One more thing on the horizon: an agreement to sell TSA Pre-Check and Clear as a bundle. This is in the test-phase, but could be a HUGE boon moving forward.

Here's what we would watch moving forward

But what do you think? This is a stock that's not on many people's radar...

Beaver Capital

@beaver_cap01/24/2023

Very cool! I did not know they were publicly traded. I have seen them in the airports a few months back and noticed that they all had employees helping people use them and get through the lineups easily - looked like a good product/tech.

I am very curious about how they would combat fraud against age verification? I could see restaurants being a massive market for them with queuing.

I will have to dig further into the fundamentals, so thank you for bringing awareness of $YOU

+ 4 comments

Brian Stoffel

$46.2MFollowers

@brianstoffel12/27/2022

5 Ways Buffet Looks for Moats

Interest rates. Inflation. Recession.

Moats matter more now than ever.

If you invest, you MUST know how to identify them.

Here are 5 financial “rules of thumb” that Warren Buffett uses to tell if a company has one

Buffett’s logic:

A consistently high gross margin signals that the company isn’t competing exclusively on price.

A high gross margin also provides ample gross profit to pay all expenses and still leaves money for shareholders.

Buffett’s logic:

Wide moat companies don’t need to spend big on overhead to operate. Businesses without moats do.

Buffett looks for companies that consistently spend under 30% of their gross profit on SG&A.

Buffett’s logic:

Companies that consistently convert 20% of their revenue into net income likely have a moat.

If this number is under 10%, negative, or volatile, the competition is likely fierce.

(There’s tons of nuance between 10% and 20%)

Buffett’s logic:

Wide moat businesses finance themselves with profits, not debt.

However, stock buybacks can throw off this equation. Adjust for this by adding back any treasury stock to the shareholder equity number.

Buffett’s logic:

Return on equity shows how effectively management is reinvesting its profits. A number consistently over 15% indicates that the business has a moat.

Under 10%, negative, or volatile indicates that the business is struggling with the competition.

There are important caveats too ALL of these

Learning to read financial statements is an INCREDIBLY important skill for investors, managers, and business owners to master

Want help? @brianferoldi and I teach a live course that gets rookies up to speed, FAST

Interested? DM me for a coupon code for the BIGGEST discount we have left between now and the course: https://maven.com/brian-feroldi/financials

maven.com

Financial Statements Explained Simply by Brian Feroldi and Brian Stoffel on Maven

From Rookie to Pro in 6 Lessons.

Brian Stoffel

@brianstoffel12/29/2022

If you want the biggest discount we have left, use the code BBFRIEND300. Note: This code expires on December 31 at 11:59 PM Eastern

+ 3 comments

Brian Stoffel

$46.2MFollowers

@brianstoffel12/24/2022

Only a few purchases left...

With the holidays upon us, I didn't get a chance to load the slides for our latest purchase: Intuitive Surgical $ISRG

You can watch the video here, and leave your insightful comments below for a chance to win $100.

https://youtu.be/7wsY68cZgPU

youtu.be

Enjoy the videos and music you love, upload original content, and share it all with friends, family, and the world on YouTube.

Undefined

@eggplant12/28/2022

Pretty awesome we can watch these in app now!

+ 1 comment

Brian Stoffel

$46.2MFollowers

@brianstoffel12/10/2022

This week's pick: The company that's executed almost flawlessly for a decade

This week, @brianferoldi chose a stock that both of us own: Paycom. While this isn't the sexiest business out there, we both beleive few organizations have executed so well against their mission in the past decade $PAYC

Here's all you need to know about the company

Joshua Simka

@tomato12/16/2022

$PAYC has for sure been an impressive performer as a 20-bagger since coming public less than 10 years ago! How would a recession and potential widespread layoffs affect the business? And if that were to sink the stock, would you consider it a buying opportunity?

Add a comment…

Brian Stoffel

$46.2MFollowers

@brianstoffel11/26/2022

Stock Pick #26: A SaaS Stalwart

We're getting close to rounding out our portfolio with 30 stocks. This week was my turn, and I chose Atlassian $TEAM

Here's why...

The company spends SO LITTLE on sales and marketing. These products sell themselves

Switching costs and brand are obvious moats, but don't sleep on the Atlassian marketplace's network effects, either

And though I don't focus on valuation as much as @brianferoldi, these prices are the best investors have gotten in a LONG TIME

Buying Your Time

@buyingyourtime11/27/2022

Very easy to digest infographs and good information.

Get a good sense of where the business is at in a snapshot!

+ 1 comment

Brian Stoffel

$46.2MFollowers

@brianstoffel11/12/2022

Stock Pick #25: Our Moonshot

This week was @brianferoldi turn to pick and he's shoot for the moon with Novocure $NVCR. We say that b/c this pick is highly reliant on future FDA approvals. Here's what you need to know about this company trying to bring significant advancements to cancer treatment.

In treating glioblastoma, it has clear advantages in prolonging life

Because it is the only TTF treatment available, and has patents, there are switching costs and intangibles to note

Revenue growth has been slow, but mainly b/c all of the glioblastoma patients who want the treatment have it. We're waiting on...

Future applications

There are more than a few risks to note

Overall, here's what we'll be watching. Note: #1 is 10X more important than the other three combined

What do YOU think of this purchase?

Novocure

26%Is too speculative for me

73%Potential makes it worth risk

30 VotesPoll ended on: 11/15/2022

Hilario

@hdyankey11/13/2022

Interesting pick Brians. This is certainly in my wheelhouse as an oncologist. I would say oncologists were (and still are) generally skeptical of the product because of some of the potentially problematic ways their trials were run which were somewhat set up to show the benefit of TTFs. I will admit that with all the caveats of the product's efficacy there seem to be some merit to use especially with the low to zero toxicity. Penetration in their current addressable market is still very low (some papers quote as high as 15%) meaning they are probably facing a lot more resistance in getting oncs on board. They may need to get some visibility on the consumer side as well. When patients hear of live-saving treatment they often push for it without the skepticism of physicians. That said, the potential is big if they can get approval for the other disease sites and if they can get physicians on board. I suspect the adoption rate in those disease sites, if approved, won't be much better than GBMs without better marketing. I know the company says their TAM is 42 billion but realistically I would target 20% of that which is still respectable. I do not own the stock but I am interested in seeing trial results. Good luck.

+ 3 comments

Brian Stoffel

$46.2MFollowers

@brianstoffel10/29/2022

We're Buying One of the Most Polarizing Stocks Out There

This week it was my turn, and I actually chose @brianferoldi's biggest holding. Few companies have as many moats...and few have as many risks. That said, we called out Brian F's favorite valuation metric, and it actually seems pretty reasonable.

Here's everything you need to know about it...

So that's what we think.

But what about you?

Oliver

@odysseus10/29/2022

Tesla’s are the iPhones of electric cars, sure there are other EVs you can buy but Tesla has cultivated a ‘cool’ product following.

I don’t own any Tesla stock partly because I prefer small caps for direct investment but also because it feels like such a bandwagon meme stock and has had so many stock splits that I can’t see the wood through the trees.

+ 4 comments