What are you buying today?

[cubsfan]

More APTS 9.50

[fareastwarriors]

More APTS as well

[StevieV]

On 5/6/2021 at 1:21 PM, SafetyinNumbers said:

I added more ATTO on the post earnings sell off. I think intrinsic value ($80+) is higher post these results off of the strong sales but the market is selling ATTO off based on a perceived disappointment in margins in Q1. Full year EBITDA margin guidance is unchanged and with stronger sales, should end up higher than previously anticipated. 
 

 

Well, me too.

[Agrippa07]

covered some shorts as well, and added to: Baba, Naspers, ATM (A2 milk),FGNA Warrents  and Ubisoft

[RichardGibbons]

Bought some YALA. It's a Middle-Eastern voice-centric social media company that grew the top line by 40% since last quarter and 240% YoY.

When you look at valuation, the company has a run-rate PE in the low-20s based on Non-GAAP Income (which just excludes share-based compensation) or the 40s based on GAAP income. And it has an EV to run-rate sales ratio of about 10.

I'd guess that, because of the voice-centric nature of the business, the pandemic may have provided a tailwind. But, even if tailwinds are potentially going away, I'm still happy to buy a company at a 20 PE that has a moat based on network-effects and is growing the top line by 100%+.

[Gregmal]

Added a few shares of CPNG after hours. Still not really a material position and I still think tech has some ways to fall, but after spending a bit of time on it, I also think this is a very promising company and a reasonable proxy for SK growth. At the least its worth keeping an eye on. 

[MattR]

Added Baba. Now more than 15% of my portfolio

[Broeb22]

22 hours ago, RichardGibbons said:

Bought some YALA. It's a Middle-Eastern voice-centric social media company that grew the top line by 40% since last quarter and 240% YoY.

When you look at valuation, the company has a run-rate PE in the low-20s based on Non-GAAP Income (which just excludes share-based compensation) or the 40s based on GAAP income. And it has an EV to run-rate sales ratio of about 10.

I'd guess that, because of the voice-centric nature of the business, the pandemic may have provided a tailwind. But, even if tailwinds are potentially going away, I'm still happy to buy a company at a 20 PE that has a moat based on network-effects and is growing the top line by 100%+.

Thank you for posting, because now I can say this. Yalla yalla bills, y’all.

[Castanza]

GRBK

[fareastwarriors]

Nibbled at some more BABA

[RetroRanger]

1 minute ago, fareastwarriors said:

Nibbled at some more BABA

Me too ! BABA!

[Lakesider]

Just now, RetroRanger said:

Me too ! BABA!

Me also

[rkbabang]

Everyone seems to be buying BABA.  I bought more of something almost as risky.   BTC

I know, I know, Munger likes one and hates the other. ¯\_(ツ)_/¯

[Xerxes]

On 5/10/2021 at 11:07 AM, John Hjorth said:

Added further to BAM today.

[I'm now "maxed out" [in the sense of being basically fully invested, without any use of any kind af leverage, except deferred taxes on taxable accounts]].

John, i must say, i was a bit surprised to see you start a position on BAM. I always saw you as sticking with the devil-that-you know-like story (yr long term holding on BRK). That said, glad to see you joining BAM.

[fareastwarriors]

23 minutes ago, rkbabang said:

Everyone seems to be buying BABA.  I bought more of something almost as risky.   BTC

I know, I know, Munger likes one and hates the other. ¯\_(ツ)_/¯

Long BTC!

I have been averaging down on BTC since Elon's tweets.  

[John Hjorth]

23 minutes ago, Xerxes said:

John, i must say, i was a bit surprised to see you start a position on BAM. I always saw you as sticking with the devil-that-you know-like story (yr long term holding on BRK). That said, glad to see you joining BAM.

Xerxes,

I've been long BAM since the old format BAM website [and the quarterly reports] showed BAM AUM 130 B. [<- That is actually some time ago!] Never, ever sold one share, no matter what.

Perhaps I should have the inner parts of my head examined meticously.

[lnofeisone]

Bought some BABA, PCYO, CIBR, and a tiny bit of AYX. 

[Gregmal]

On 3/26/2021 at 12:58 PM, Gregmal said:

 

sold remainder MX. Go private at $29. $26 is good enough for me.

Rebought some MX. ~21.50

[DooDiligence]

TYL

Sizable TAM (company estimates $18B at recent call) providing SaaS to small & medium sized governmental agencies, many of which are still operating on systems that were written in dead languages, and are still accessed using old green screen CRT's. Rip & replace prospects.

Just completed the purchase of NIC which should give them a leg up on targeting larger organizations. This is the biggest acquisition they've ever done and it's being funded with a combination of cash on hand & debt issuance. They have a history of slamming down debt quickly.

Slowly converting clients from perpetual on site licenses to subscription based solutions. Governmental agencies are notoriously slow to adopt new fangled stuff. Partnered with AWS. Margins steadily increasing as they achieve more scale with "off the shelf" software. Maintenance is a huge portion of revenues. R & D significantly below industry averages. Great FCF.

Got hit by ransomware last September but it appears to have only affected internal operations / support capabilities (phones, email, etc.), but didn't infect their clients operations. They fixed things quickly (probably by paying the ransom) and subsequently have begun hardening their systems (effectiveness remains to be seen). Estimated losses from business disruption range from $1.5m to $4m for the quarter. This and the inability to attract talent are the 2 biggest threats, IMO.

Definitely not cheap, but I love the offerings & can't resist a business with "switching costs". I funded the purchase with proceeds from the sale of GPC & am still maintaining a 20ish% sack of FOMO cash. I'm not looking to get rich quick on this and plan on holding for the next decade or more.

Roast my shallow assed dive.

Edited May 15, 2021 by DooDiligence

[lnofeisone]

3 hours ago, DooDiligence said:

TYL

 

Slowly converting clients from perpetual on site licenses to subscription based solutions. Governmental agencies are notoriously slow to adopt new fangled stuff. Partnered with AWS. Margins steadily increasing as they achieve more scale with "off the shelf" software. Maintenance is a huge portion of revenues. R & D significantly below industry averages. Great FCF.

Roast my shallow assed dive.

I've been tracking TYL for a while looking to buy but shy to pull the trigger at these valuations. Few comments:

I like software that they have in place. That will provide a stable revenue/profit base for years. However, I think their margins will start compressing and there will be opportunities to buy it cheaper. Maybe 50% cheaper than it is today. 

TYL bought Socrata in 2018 and the platform is clunky and somewhat outdated by 2021 standards. Underinvestment in R&D clearly shows. 

Partnering with AWS is nice but really is not distinguishing. AWS will partner with anyone as their margins are close to 90% and they sell AWS and don't have to worry about the low margins on services. In many cases AWS will partner with several vendors bidding on the same contract and just go with the winner. 

ACN, BAH, Deloitte et. al have been making massive inroads into state and local. State and local in the US is not a sophisticated buyer at all (as compared to the Federal gov't) and high margins are very common. This naturally attracts competition. ACN has been extremely aggressive at developing and partnering to develop pseudo-products for digitization (and digitalization), modernization, etc. Deloitte has been somewhat aggressive buying innoWake few years back. The buying cycle is about 1-3 years for state and local so I think 2021-2022 we will start seeing results of other consulting firms entering the market.  

If I remember correctly, ACN partners with TYL but that's an interesting relationship. Some of the other partners are low quality staff augmentation shops that only exist because of all the small business requirements. At some point, low staff quality shows. 

[Spekulatius]

I would buy BAH before I would buy TYL.  BAH is more federal government consulting , I think @Inofeisone gave some interesting insight that they can leverage this to get more business from states and cities.

BAH is a consulting business model  that in some way looks similar  like my cherished defense contractor stocks, but perhaps with better organic growth prospects. BAH stock has seen some multiple expansion but it is not close to being valued like TYL (for good reasons) but if they can compete against them in the future, this could become a different story. It is a great business as the business relationships last often many decades.

That reminds me to do more work on BAH (I put it in the maybe pile a while ago.)

[DooDiligence]

25 minutes ago, lnofeisone said:

I've been tracking TYL for a while looking to buy but shy to pull the trigger at these valuations. Few comments:

I like software that they have in place. That will provide a stable revenue/profit base for years. However, I think their margins will start compressing and there will be opportunities to buy it cheaper. Maybe 50% cheaper than it is today. 

TYL bought Socrata in 2018 and the platform is clunky and somewhat outdated by 2021 standards. Underinvestment in R&D clearly shows. 

Partnering with AWS is nice but really is not distinguishing. AWS will partner with anyone as their margins are close to 90% and they sell AWS and don't have to worry about the low margins on services. In many cases AWS will partner with several vendors bidding on the same contract and just go with the winner. 

ACN, BAH, Deloitte et. al have been making massive inroads into state and local. State and local in the US is not a sophisticated buyer at all (as compared to the Federal gov't) and high margins are very common. This naturally attracts competition. ACN has been extremely aggressive at developing and partnering to develop pseudo-products for digitization (and digitalization), modernization, etc. Deloitte has been somewhat aggressive buying innoWake few years back. The buying cycle is about 1-3 years for state and local so I think 2021-2022 we will start seeing results of other consulting firms entering the market.  

If I remember correctly, ACN partners with TYL but that's an interesting relationship. Some of the other partners are low quality staff augmentation shops that only exist because of all the small business requirements. At some point, low staff quality shows. 

Thanks for the comments. I remember reading in the last 10K about them having to compete with integrators. I'm assuming that's what Deloitte, etc., are.

[DooDiligence]

6 minutes ago, Spekulatius said:

I would buy BAH before I would buy TYL.  BAH is more federal government consulting , I think @Inofeisone gave some interesting insight that they can leverage this to get more business from states and cities.

BAH is a consulting business model  that in some way looks similar  like my cherished defense contractor stocks, but perhaps with better organic growth prospects. BAH stock has seen some multiple expansion but it is not close to being valued like TYL (for good reasons) but if they can compete against them in the future, this could become a different story. It is a great business as the business relationships last often many decades.

That reminds me to do more work on BAH (I put it in the maybe pile a while ago.)

Thanks, I'll look at BAH.

[Gregmal]

These are all pretty great businesses, or at least to this point in time, have been. I have investors who were Arthur Andersen Consulting(current day Accenture) and man, you want to talk about a compounder, Accenture is a total beast. Totally changed their lives owning those shares pre IPO; granted being an ACN partner means you're making like $700k a year minimum...but many of those dudes ended up with 7/8/9 figure fortunes. My understanding now is that growth is declining(almost negative in many areas) and also there's some cultural stuff as the older guys dont really carry their weight anymore. BAH has always kind of been the red headed stepchild. Definitely more government focused...pretty sure this was Snowden's company. Random small cap honorable mention would be to check out CRAI. Like that business and growth trajectory a lot although I dont own any unfortunately; took my eye off it for a bit and its run up. But still seems OK-ish in terms of valuation. 

[lnofeisone]

I think CRAI is riding the wave of COVID work and bump in all the work that came with it. There is a very healthy backlog of work as municipalities, states, countries are looking for specialized support. CRAI doesn't really compete with TYL or BAH and they have specialization moat that the likes of PWC, EY, and Deloitte are unable to overcome mostly because Audit/Tax can't talk to consulting and all consultants are basically kids out of college that know how to do Excel/PowerPoint but no other real skill.