Buying Medpace Holdings (MEDP) @ $180.73

 

Medpace is a Contract Research Organisation (CRO). Basically allowing entities that are looking to introduce new drugs, treatments or medical devices for FDA approval. 

The FDA filing process is extremely complicated and filing mistakes could mean long delays and big losses.

Medpace allows these companies to streamline the process by providing experts as well as software that the company use throughout the initial development and testing stages and eventually submitting to the FDA.

- Founded in 1992 by Dr. August Troendle, who came from the FDA. He's still CEO today.

- The company IPO's in 2016.

- Dr. Troendle still owns 20% of the company. He also invested $20M in his own IPO..

- The company is 100% debt free.

- Company has $278M in cash and free cash flow is growing annually at 23.4% to $277M last year.

- I like the field the company is working in. Plenty of demand and no serious competition.

- The company is founder led, 'under the radar' with very experienced management. 

- At a P/E of 48 - the company is expensive, but I wouldn't expect to get such quality on the cheap.

Selling Teva (TEVA) @ $10.80 (35.04% Gain)

 Bought Teva in March 2020. The assumption was that Teva had been beaten down way more than it should have. The stock rebounded quickly and has been pretty much flat ever since.

Looking 3-5 years ahead, I don't see any prospects that would make me think this will be a market beater, so I'm taking profits and will be investing in a higher growth potential stock soon.

Buying Trulieve Cannabis (TCNNF) @ $47.86

 Trulieve Cannabis cultivates, produces in-house and distributes it's products to Trulieve branded stores (dispensaries) in Florida, California, Massachusetts, Connecticut, Pennsylvania and West Virginia, as well as directly to patients via home delivery.

I've been following this company for a while. 

The core of it's business is in Florida where Cannabis is only legal for medical use. As the Biden administration is ushered in and with Democrats controlling the entire legislative process it seems next to certain that full state legalisation will follow Federal legalisation. This is tremendous news for the industry and my main basic thesis for increasing my Cannabis investments. 

It should also be considered that states all across the US are going to be struggling with their budgets as Covid has shocked their economies. To find new revenue, states will be legalising (and taxing) Cannabis, in my opinion.

- Cannabis is now 8% of my portfolio.

- Florida is a big weed state and Trulieve has already got 78 dispensaries set up. When weed goes legal, they will have an entire infrastructure already set up.

- The company is well run and profitable (!!) showing me that management is not selling pipe dreams but actually building a viable brand today.

- 4th Quarter revenue grew 23.6% yoy to $168.4M.

- Finished 2020 profitable with net income of $63M

- Management predicts sales will climb to $85M in 2021 compared with $525M in 2020 = 63% growth.

- The company has recently acquired Mountaineer Holdings, giving Trulieve two additional dispensary licensers in West Virginia.  

- The company is in a position to fund it's own growth (Without having to borrow) with $100M in cash from operating activities in 2020.

- Price to Sales ratio is at 11 - fair enough for such a high growth profitable business.

- The stock has risen 640% in the last 12 months so you can expect a bumpy ride, but if the company executes on it's plans and legislation goes favourably as I assume - this should make for a great investment in the following years.

- As usual, starting a position at 2% of total portfolio value.

 

Selling Baozun (BZUN) @ $34.38 (3.95% Gain)

 Baozun is a Chinese e-commerce and social media services company operating in China. The Thesis for buying was the business Baozun was doing with American brands in China.

- After holding for 12.5 months the stock price has remained basically flat. 

- US - China tensions aren't good news as far as future prospects are concerned.

- I was expecting stronger results and growth.

- Selling the position with a small gain and making room for a new investment.

- I will keep looking at China for opportunities but will currently take a 'wait and see' approach with regards to this market.

Buying Zebra Technologies (ZBRA) @ $489.30

 Zebra Technologies provides companies with intelligent solutions in automatic identification and data capture solutions. Basically the company providers barcode readers and tracking software to enable retail and e-commerce companies to efficiently ship and track products.

- Market share of over 40% in barcode printers, while the number 2 player has 12%.

- Ford Motors uses Zebra to locate auto parts, inventory and tools. The NFL uses Zebra to track player's and ball movement on the field and hospitals use it to track patient data and care flow.

- Zebra's opportunity is much bigger than hardware. The big money is in software and analytics.

- The Internet Of Things presents a huge opportunity as more and more devices are using RFID tags and connecting to the web.

- The company is very well managed with Return on Equity at 15%

- As e-commerce has made a huge leap forward over the pandemic, the increase in shipping activity will provide great tail winds for the company's growth.

- Q4 2020 net sales grew 9.7% to $1.31B

- Many companies have reduced their infrastructure spending due to the pandemic. The return to full scale operations should unleash a lot of pent up demand for Zebra's products in the next 12-24 months.

Selling Fastly, Inc FSLY @ $77.80 (5.5% Loss)

 Fastly's troubles begun when it lost TikTok as a customer which was responsible for 15% of revenue.

I would stay in the position if that was the only piece of bad news.

I have spoken to people in the tech space who are familiar with the service. They weren't very impressed, basically saying it's a good service but Akami has closed the gap and now provides a service just as good. With Fastly's high valuation it will have to grow aggressively and to do that it needs new customers and they would have to be impressed.

I'm pretty much break even on the position so exiting.

Selling Blink Charging BLNK @$44.33 (1636% Gain)

 Really bought this on a hunch. Little did I know that all things EV will explode.

Blink has signed some good contracts to operate and install charging stations.

One such contract with Burger King, another with a florida chain of Hospitals.

I held this position for one year for Tax purposes.

As promising as the industry sounds - Blink's valuation is almost ridiculous so I'm exiting the position and making room for a new investment.