Week in Review -- November 13, 2020
Week in Review -- November 13, 2020
$VEEV, $SE, $PTON, $PINS, $MELI, $ETSY, $BABA, $DIS, $RSG
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What a weird and wacky week, with (potentially) great buying opportunities!
A lot of names were at or near all-time highs last Friday. Then, on Monday, they started going the wrong direction!
But in truth, I kind of like it.
Because it means shopping time!
As our homeboy Warren B says, “be fearful when others are greedy, and greedy when others are fearful.”
Let’s get into it.
In the following chart you’ll see what I was looking at on Monday:
A lot of my names dropping from Friday’s highs
Taking out the checkbook to do some shopping
How they’ve been performing since (and in total)
*I purchased VEEV and SE on Monday and again on Tuesday. “Price paid Monday” is the average cost of both transactions for each company.
*BABA was only purchased on Tuesday.
$VEEV
I like Veeva and think this could be a core position. It’s worth a deep dive to understand fully, but it has many traits I find attractive:
✅ Enterprise software (for an industry I have little exposure to—pharma/life sciences)
✅ $1B+ sales
✅ Revenue growing 30% Y/Y
✅ $40B Market Cap
✅ Free cash flow approaching $500M
$SE
Sea Limited is just a monster in the making. E-Commerce + Gaming + Payments in growing Southeast Asia. Hard to not be enamored. ABA—Always Be Adding.
$PTON
Don’t overthink this.
$PINS
The appetite for “wholesome” social media isn’t going anywhere. And Pinterest’s recent partnership with Shopify is only scratching the surface of what Pinterest can mean for e-commerce.
$MELI
I published a Deep Dive on MercadoLibre in September. My reservations are unchanged, but the mini sell-off felt like a good opportunity to add to the position.
$ETSY
Etsy is new position for me. It deserves a closer look, but if your wife says it’s a good idea, it’s probably a good idea.
$BABA
I’m conflicted about Alibaba. I’m conflicted about China. I’ve got a little $JD and $TCEHY in some smaller accounts but only $BABA in Mazwood. And it’s not acting well of late.
Bloomberg put out a piece “China Clampdown on Big Tech Puts More Billionaires on Notice” (h/t DLS).
“Beijing on Tuesday unveiled regulations to root out monopolistic practices in the internet industry, seeking to curtail the growing influence of corporations like Alibaba Group Holding Ltd. and Tencent Holdings Ltd…
While Xi’s government has been steadily tightening its grip on the world’s second-largest economy, it has until recently taken a relatively hands off approach toward businesses that dominate China’s burgeoning internet, e-commerce and digital finance industries. Authorities are concerned the companies have become too powerful, according to Ma Chen, a Beijing-based partner at Han Kun Law Offices.
I posed the question on Twitter.
Responses were mixed. On the one hand, regulation is certainly not a new concept. Stocks from the U.S., Europe and around the world are subject to government regulations. Why should China be any different? On the other hand, China is clearly less transparent and less predictable. Will be interesting to watch.
While a lot of these high growth names were getting squadooshed on Monday, other names that had been laggards had a nice little pop. I thought it was a good time to say goodbye to two in particular, Disney and Republic Services.
$DIS
I’ve spoken about Disney at length. I’ve long been a fan of the company, the brand, and the stock.
A few thoughts on $DIS: I'm on the record for liking $DIS (the company very much) but being very concerned with the stock. (Screen grab from mazwoodcap.substack.com/p/week-in-revi…)
But Disney is just not built for COVID (Disney+ notwithstanding). Pfizer can say whatever they want, but COVID is still very much here, and affecting every part of Disney’s business. Such a bummer.
$RSG
I picked up some Republic Services on March 6 of this year. As the world was on the brink of shutting down, trash seemed like a good, reasonable, safe play. Right?
Well, not exactly. People not going anywhere = people not producing trash. Whoops. I took a small gain and am shifting the proceeds into names that better reflect my current investing philosophy and goals.
Thanks to everyone for giving this weekly review a read. Please hit the like button/comment/share so I know which posts you enjoy! ~MazwoodCap
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