Monday, February 22, 2021

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.

Friday, January 15, 2021

Buying Semler Scientific (SMLR) @ $85.95

Semler makes diagnostic products that help people with peripheral artery disease.
Peripheral artery disease is a narrowing of the arteries due to the progressive buildup of fat, called PAD.
If you have PAD, blood is not getting to to your extremities and you are 4 times more likely to die of heart attack and 2 times more likely to get a stroke.
- There are many treatments for PAD but the problem is with diagnosing the disease which requires a cardiovascular technician to perform the test.
- Semler invented a product called QuantaFlo which is a little clip that goes on your fingers and toes that measures the flow of blood to your extremities, giving your physician a diagnosis within a few minutes.
- Semler plays into the trend of the shift from treating to diagnosing.
- The business model is NOT selling the devices - it's the software. Rather than charging for the clip, users pay per report they produce. This creates 92% (!!) gross margin.
- $10.7M in revenue and $4.8M in net income - a 40% net margin.
- The company has showed profit for 12 quarters in a row.
- Very strong company financially. $16M in cash. No debt.
- Current Market Cap $611M. Very small cap with endless room to grow.
- The company has plans to grow with new product lines.
- TAM: Semler says that 80 million Americans should get screened every year.
- Semler's marketing strategy is to work with insurance companies, which seems like an effective way to reach doctors at a relatively low cost.
- The biggest risk: Their 2 biggest customers (Health plans) are responsible for 70% (!) of revenue. This is not a very unique risk for a small cap / new company.
- The company trades OTC.
- P/E ration is 63 - very reasonable.
- Profit margin 32.08%
- Return on Equity 63.32%
- Stocks held short of float very low at 2.84%
- Free cash flow - $7.56M
- I see nothing standing in the Semler's way to keep adding customers and keep growing for strong future returns on this investment. 

Thursday, December 10, 2020

Selling GILD @ $60.51

 Bought this on the chance that Remdisivir would be a cure for Covid. Thesis hasn't played out. Exiting to make room for more promising investments.

- Lost 29.1%

Buying AcuityAds (ACUIF) @ $7.08

 Acuity Ads is an Israeli / Canadian based advertising platform that brings together advertisers and publishers. The company offers a programatic marketing platform that enables advertisers to connect with their audiences across online display, video, social and mobile campaigns.

- This is a small Cap company - $300M

- Founder: Tal Hayek - this is his second venture. First wan was a lead generation company sold for an undisclosed amount in 2006.

- Several talented ex-8200 employees.

- The programatic company market is ripe for M&A. Acuity Ads is the smallest player in the business and seems to be growing at a nice clip - which could make it an acquisition target for a company like The Trade Desk (TTD).

- The company has been hit hard by Covid as approximately 1/3 of their customers are from the travel industry.

- Company is seeing explosive growth in Connected TV - Revenue jumped 353% Yoy.

- Connected TV is 30% of TV viewing but only 1% of TV ad spending so there is a lot of potential here.

- In the beginning of October 2020, the company released Illumin - an advertising automation platform that allows advertisers to see how their ads are performing in realtime. This allows for quick decision making and helps raise ROI.

- AcuityAds competitors don't have a competing product.

- AcuityAds plans to list on Nasdaq next year - this will raise visibilty and valuation.

- AcuityAds is worth approx. 1% of Trade Desk - clearly there is plenty of room to grow.

Wednesday, November 25, 2020

Buying Jfrog LTD $FROG @ $62.16

 Jfrog's mission is "to power a world of continuously updated, version-less software."  also known as  "Liquid Software." Basically, Jfrog allows software to be continuously updated.

"The Company has developed universal package repository, JFrog Artifactory, to fundamentally transform the way that the software release cycle is managed. Its package-based approach to releasing software enabled the category of CSRM, allowing software releases to be continuous and software to always be current. It enables organisations to store all package types in a common repository where they can be edited, tracked, and managed. Its unified platform connects all of the software release processes involved in building and releasing software, enabling CSRM."

- The company is Israeli. Run by Shlomi ben Haim. Founder led. 

- Growth is outstanding:

Subscription revenue grew 63% Yoy to $117M

Free cash flow grew 61% yoy to $13.3M

Customers spending over $100K/Year grew 68% Yoy to 286.

- Jfrog is facing possible competition from Amazon, Microsoft's GitHub, IBM's Red Hat and Google's cloud platform, But I feel this environment will favour the non exclusive player plus, Jfrog has a huge head start over the others.

- Also, since Jfrog actually packages Google, Microsoft and Amazon software.. will Google be happy letting Git Hub (Microsoft) package it's code?

- The most compelling argument to buying Jfrog is my conversations with tech people who actually use this product daily, and they say it's something the can't do without - that's all the 'Buy' signal I really need.


Tuesday, November 17, 2020

Deep Dive: Fiverr International (FVRR)

 Fiverr is an Israel based company that owns and operates a platform connecting contract (GIG) workers with employers.

- I bought Fiverr June 8, 2020 at $58.43. Current price: $178 - Up %200

- The world is moving in a very fast clip to the Gig economy. Companies would rather outsource many more services than they used to.

- This trend, enhanced by the Covid pandemic will not stop once the pandemic is done.

- Employers seeking services increased this quarter by 37% Yoy.

- Average spending per buyer increased 20% to $195.

- Buyers spending more than $500 account for 57% of core revenue.

- Revenue is up 88% (!) Yoy.

- Gross margin - 83%

- Fonder led: Micha Kaufman and Shai Wininger own together more than 20% of the company.

- The growing platform is creating a positive feedback loop - Buyers who come in to find a designer, can engage further services such as SEO, Marketing etc.

- CEO Micha Kaufman has a 96% CEO approval rating on Glassdoor.

- Maket cap is $6B - looks like there's plenty of room to grow.