gjangal
-
Posts
220 -
Joined
-
Last visited
Content Type
Profiles
Forums
Events
Posts posted by gjangal
-
-
I have also been looking at Paychex but the industry does have low-ish barriers to entry. It does not seem like a large value-add although I will admit there is stickiness.
PAYX I am still going through the numbers, they still have low double digit growth, good roic and looks like they are using their balance sheet well, cons are obviously they are skewed towards small and medium sized businesses which are going to take a hit. Maybe stock already reflects that.
I do a general check of numbers and take a judgement call as to whether the business can maintain competitive position, market opportunity. .Growth/fall in revenue usually reflects that. Asset light business models are very attractive . I also willingly will pay up to 40 pe for good growing businesses in this rate env
-
Looking to buy ANET, PAYX, BKNG. Haven’t sold anything yet, but I feel this is going to prolong for a while, so buying slowly and in small quantities .Especially valuations may not return to where they were as markets have to price in second wave and 3rd wave scenarios in the absence of a vaccine. Good time for people with substantial cash as they can accumulate slowly
SQ and TTD look risky to me as small businesses and ad budgets return slowly. Better to buy stronger players. Thinking about that
-
And I should add very low investment need for future growth if the duopoly persists
-
Buying V at a forward pe of 20. For all those who have been waiting for V , this looks like a good chance. Once the case curve flattens, economic activity should return to normal slowly. Given where rates are , this seems like an good price for a good company
Where are you getting the forward earnings #? Is that consensus earnings? Your estimate of future earnings?
Analyst estimates for 2021 before this corona virus situation. In my view next year earnings may be impaired but earning power is not. Betting this will be the first ones to recover when things go back to normal. I see this and MA as a royalty on GDP and Inflation. Terminal growth is nominal GDP + any pricing power they may want to exert
-
Buying V at a forward pe of 20. For all those who have been waiting for V , this looks like a good chance. Once the case curve flattens, economic activity should return to normal slowly. Given where rates are , this seems like an good price for a good company
-
The government should come out and send checks to everyone ( at least low wage / gig workers / need based ) . After all that’s what they are doing for the rich people who own assets in terms of QE and lowering interest rates.
Small businesses and honest hard working people who serve the community and are not able to do so now because of an act of god shouldn’t suffer
-
- Bill Gates 4 years ago on the biggest high probability risks
-
Planning to add DDOG during this correction
It's kind of funny in these Fed liquidity-driven times for a couple of down days totaling about -4.5% return to be considered a correction.
I ll take whatever I get, I can see this being close to 80 in a few years. Maybe it goes to 30 first and then 80 it doesn’t matter. If the thesis is intact I will add. it has enough addressable market size to grow 40% pa for some time,
-
Planning to add DDOG during this correction
-
Bought some SAVE, think it’s worth around 60
-
Making WORK a ~5% position
-
Added to BERY and SAVE the other day below 45 and 40 and took at small position in GUD
SAVE is interesting here. Cheap and has some growth in it. It is / has opened flying to a wider set of people. Probably has also increased the frequency of flying for some people. Looks cheap with growth. Plane problems in the future be damned, people wanna fly
Thanks for the idea
-
Added DLTR and AMZN
-
Sold UNH, CVS, GS. They were mostly valuation plays
-
I would say we are still growing in all things digital
Digital advertising
Cyber security infrastructure
Online dating
Digital payments ( as you mentioned )
Personal care products in an instagram world
Content creation software
E-commerce
Software is eating the world ( Digitization of industry workflows) . I believe it’s still early days
Cloud computing / infrastructure
Travel and tourism/experiences is still growing
Trend towards urbanization
-
Thank you Lakesider
-
Does anyone know what the correct short interest for slack ( WORK) is? Shortsqueeze shows it as ~47 mn.
-
48.08% XIRR for the year.
I have a 10 year record now of 17% CAGR total return. I have been lucky with some picks. I use no leverage whatsover. Only compounder type stocks and mostly buy and hold till thesis holds true. If i make a mistake or thesis is wrong i sell out. I also don't do very deep analysis, a few basic checks and some research around the managers. I typically like founder run stocks
Good amount of learning in this decade, i am thankful for this community for helping me learn. Hope to contribute more than i do now
2019 - 48.08%
2018 - 2.34%
2017 - 26.38%
2016 - 0.09%
2015 - 11.71%
-
Some compounder bro type picks for the year
FTNT
- Tailwinds in the security industry, industry itself is growing at a decent clip. Gaining market share from other players. Spend seems to be uncapped for now
- Very large customer base, around 300k customers and growing
- Potential for more add on products
- High margin service/support contracts
- High founder ownership ~12%
MTCH
- Large runway outside of the US
- 19% unit growth in users, monetization can come later as long as engagement is there
- Some amount of network effects
-
It’s quite likely that this maybe a steep price to pay or cheap depending on future performance. Watching performance closely is warranted. If revenues 3x or 4x in five years and margins are around ~30%, this will be a cheap price to pay, maybe around 20% pa return.
If revenues grow slower than that, stock price can be cut in half from here.
-
WDAY + NOW have 18650 employees from the latest 10-k, with around $4 billion of gross profit.
That is just $214 K per employee for salaries, rent, health insurance etc. This is why they have been public for 8 years and are not profitable. That is simply not enough to pay Silicon Valley employees. According to ValueLine, these two companies have added the following share counts between the end of 2012 and 2018:
NOW - 54 million new shares
WDAY - 66 million new shares
These two have a combined market cap of $90 billion. This process works very well:
Offer services to customers at a low price.
Pay employees in stock who then sell it in the stock market.
Claim non-GAAP EPS.
I'll take the other side of the argument for NOW and WDAY. These are growing companies with low to no marginal cost for maintaining the next set of customers. Agreed that gross profit of 215k is less, but it is growing at 25% and its highly integrated into the company's day to day operations. Over time gross profit should grow faster than expenses and operating leverage should kick in
WDAY - Maintains benefits, payroll, tax , org data , onboarding, recruiting functions ( this part is not that great) . It also has integrations into the ledger, cost center data etc. Once you install this product it is very difficult to uproot without significant cost. Even if you do, you end up arriving at the same place. I doubt there would be any big cost savings. It makes sense to acquire customers while they can. ARR of 1m or so for such a product is not a lot for medium to big companies. I would posit that there is some pricing power also left. They are also going after the financial management and planning market which is adjacent to where they sit in the HCM space. They are competing with Oracle , its a newer code base. They have tie ups with Deloitte,/consulting firms which have a Workday practice for implementations (HCM and financials) . This lowers risk of implementations for firms adopting these SAAS solutions. The drawback i would say is as they go lower down the enterprise ladder, the more price sensitive it becomes and they have to get their pricing right
NOW - Maintains incident workflow, change management, tech services work flow, project costing and planning, allocation of resources, time management. maintains inventory of assets, integration into ledger and reporting to senior management. Again i would say that they have some amount of pricing power left.
Very sticky, only chance of doing away with these solutions is if the company implementing these solutions is going through a tough time. I think the NOW is more richly priced than WDAY
-
WORK - I have a one liner thesis for Slack. Corporate facebook with a $85 ARPU. Just need to get to 50 mn paid subs which is is doable i think.
MTCH - Huge addressable market still left. Network effects. Promising customer segmentation strategy. 22% unit growth in subscribers.
Facebook has already a corporate Facebook version. Work looks more like Discord to me. I actually heard that some upstarts use Discord.
Spek,
To clarify i meant it as a comparison. Slack’s growth and engagement has been as viral as facebook. Adoption is better than corporate facebook in terms of paying users. I believe they have a long runway. Timing of my buy couldn’t have been worse given today’s price action
-
WORK - I have a one liner thesis for Slack. Corporate facebook with a $85 ARPU. Just need to get to 50 mn paid subs which is is doable i think.
MTCH - Huge addressable market still left. Network effects. Promising customer segmentation strategy. 22% unit growth in subscribers.
-
Some more companies that might be good compounders with no or high PE’s
FTNT - tailwinds in the network security space, market growing nicely. Company is also taking share. Founder owned
EPAM - will grow 20% pa for some time to come. Founder owned
SPLK,ESTC - Growing end markets , will grow for some time to come. Founder owned
WDAY - Although HCM market maybe slowing , they are getting into enterprise financial management SAAS . It’s a huge market and growing. Aneel Bhusri and Dave duffield have done a great job so far and are conservative with guidance.
NOW - same as above , growing end market but valuations are high, even adjusting for growth and margins
TTD - They have customer. concentration risks but have long runway
SQ/SHOP and WIX to a lesser extent - Long runways
DG - Best of breed dollar store, will be around for a long time to come
gjangal, if you like EPAM check out DAVA. Smaller and arguably growing faster. 1H20 is going to be weird because Worldpay bought them out of their JV, but underlying growth should still be pretty good.
Broeb22, Thanks for idea, i ll check it out. What do you think they can grow in terms of CAGR after the buyout ?
Why is D&A usually taken as a proxy for Maintenance CAPEX?
in General Discussion
Posted
In my view, it’s a just a proxy for maintenance capex. This can be used to figure out incremental capital invested in the business and what kind of return are they getting for this incremental invested capital. It’s not very useful nowadays if a lot of the investments are funneled through the income statement rather than capital expenditure