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Stock Thread (8 Viewers)
- Thread starter St. Louis Bob
- Start date
CR69
Footballguy
Lomez
Footballguy
BassNBrew
Footballguy
Don Hutson
Footballguy
What’s to stop the company who makes the drones from marketing them right to the restaurants? DoorDash is currently valued at $120k for every restaurant in the US. Beyond rich for me especially since I don’t believe they are anywhere close to be the company that figures out automated deliveries. When Amazon has it for their packages, what stops them from offering it to restaurants as a service?
BassNBrew
Footballguy
Tesla has a bit more of a moat and a lot more cult followers. DoorDash isn’t in the same area code as Tesla who I think could be overvalued as well.
BassNBrew
Footballguy
Not really because people seem to confuse work from home and cloud stocks. It’s funny because DoorDash is way more tied to work from home that say OKTA or MDB. It’s Ok, helps to create more value. No worries, I knew things were overheated and I’m a long termer.
McBokonon
Footballguy
$OZON, Russian Amazon (more or less, it's not their biggest e-comm site yet but it's growing) has pulled back nicely these last two days. Been thinking about a trade here, too. I don't think I wanna hold it long term because Russia but it's an interesting idea, fairly recent IPO.
beef
Footballguy
Lomez
Footballguy
Yes, including JPM.
"Citing their high current valuations, Auty today cut his ratings on CrowdStrike (CRWD), Okta (OKTA), Cloudflare (NET), Zoom Video ( ZM ) , Docusign ( DOCU ) , Avalara (AVLR), Veeva (VEEV)."
Don’t laugh, but based on market cap, they could basically sell the company give every restaurant in the US two Model 3s. Every fast food restaurant, every sit down steak house, every restaurant. Seems like that would take care of the need for deliveries. Man, it’s so absurd every time I write that their market cap equals $120k for every single restaurant in the US.
Lomez
Footballguy
"Last year at this time, we were saying that the economic outlook really hinged on the outcome of China trade negotiations and that we wanted to stay cautious on cyclical names," he writes in this morning's report. "That turned out beneficial because of Covid 19. Now we believe that the economic outlook hinges on Covid-19 vaccine efficacy and availability, but we are turning bullish on cyclically sensitive software."
Auty notes that the stocks he covers rallied on average 62% for the year through the end of November, versus a 12% gain for the S&P 500.
"It has been another tremendous year for software, as demand held strong throughout the pandemic and valuations expanded significantly with capital coming in from other sectors," he writes. "Looking ahead, there is a scenario where improving economic expansion could motivate capital to rotate back out of software in favor of lower valuation cyclical segments that will benefit from economic improvement. Much of that will hinge on the success of vaccines to effectively open up the economy more broadly."
Auty advises investors to snap up cyclically sensitive software stocks, and upgraded seven stocks on that basis, including Altair Engineering , Autodesk ( ADSK ) , Cadence Design Systems (CDNS), PTC (PTC), VeriSign (VRSN), Wix.com (WIX) and Intuit (INTU).
"The economic expansion is expected to be driven by the manufacturing sector, and that should favor the design software names in our coverage, " like Altair, Autodesk ( ADSK ), Cadence and PTC, he says. "On the SMB front, we have already started to see increasing business starts that could continue into 2021 on the back of favorable interest rates and the potential for a more open economy post COVID-19," and he sees that boosting stocks like VeriSign, Wix and Intuit.
His top two picks, meanwhile, are Varonis (VRNS), a data security and threat detection company, and RingCentral ( RNG ) , which provides cloud-based unified communications services. "Both companies have the potential to show accelerating revenue growth, Varonis on the back of its subscription transition and healthy demand for data protection solutions and Ring from the increasing contribution of the partnership agreements signed over the last 12 to 15 months," he writes.
On the other hand, Auty is downgrading an assortment of high-valuation stocks. He writes that in 2009-2010, coming out of the economic downturn, "the highest-multiple names as a group underperformed the software industry." He contends that happened because "the good news on performance had already been factored into premium valuation stocks, while an improving economy offered potential to boost fundamentals and create a reversion to the mean trade."
Citing their high current valuations, Auty today cut his ratings on CrowdStrike (CRWD), Okta (OKTA), Cloudflare (NET), Zoom Video ( ZM ) , Docusign ( DOCU ) , Avalara (AVLR), Veeva (VEEV).
He also cut ratings on Check Point Software (CHKP), Palo Alto Networks (PANW), and Fortinet (FTNT), reflecting his view that "[an] increasing percentage of cybersecurity budgets will likely shift to cloud security at the expense of on- premise network security and messaging security."
And he also reduced his ratings on SecureWorks (SCWX), Pluralsight (PS), Model N (MODN), and SS&C Technologies (SSNC). "These names are likely to have 1-2 or more quarters of revenue deceleration that could hinder stock price performance,"
Auty notes that the stocks he covers rallied on average 62% for the year through the end of November, versus a 12% gain for the S&P 500.
"It has been another tremendous year for software, as demand held strong throughout the pandemic and valuations expanded significantly with capital coming in from other sectors," he writes. "Looking ahead, there is a scenario where improving economic expansion could motivate capital to rotate back out of software in favor of lower valuation cyclical segments that will benefit from economic improvement. Much of that will hinge on the success of vaccines to effectively open up the economy more broadly."
Auty advises investors to snap up cyclically sensitive software stocks, and upgraded seven stocks on that basis, including Altair Engineering , Autodesk ( ADSK ) , Cadence Design Systems (CDNS), PTC (PTC), VeriSign (VRSN), Wix.com (WIX) and Intuit (INTU).
"The economic expansion is expected to be driven by the manufacturing sector, and that should favor the design software names in our coverage, " like Altair, Autodesk ( ADSK ), Cadence and PTC, he says. "On the SMB front, we have already started to see increasing business starts that could continue into 2021 on the back of favorable interest rates and the potential for a more open economy post COVID-19," and he sees that boosting stocks like VeriSign, Wix and Intuit.
His top two picks, meanwhile, are Varonis (VRNS), a data security and threat detection company, and RingCentral ( RNG ) , which provides cloud-based unified communications services. "Both companies have the potential to show accelerating revenue growth, Varonis on the back of its subscription transition and healthy demand for data protection solutions and Ring from the increasing contribution of the partnership agreements signed over the last 12 to 15 months," he writes.
On the other hand, Auty is downgrading an assortment of high-valuation stocks. He writes that in 2009-2010, coming out of the economic downturn, "the highest-multiple names as a group underperformed the software industry." He contends that happened because "the good news on performance had already been factored into premium valuation stocks, while an improving economy offered potential to boost fundamentals and create a reversion to the mean trade."
Citing their high current valuations, Auty today cut his ratings on CrowdStrike (CRWD), Okta (OKTA), Cloudflare (NET), Zoom Video ( ZM ) , Docusign ( DOCU ) , Avalara (AVLR), Veeva (VEEV).
He also cut ratings on Check Point Software (CHKP), Palo Alto Networks (PANW), and Fortinet (FTNT), reflecting his view that "[an] increasing percentage of cybersecurity budgets will likely shift to cloud security at the expense of on- premise network security and messaging security."
And he also reduced his ratings on SecureWorks (SCWX), Pluralsight (PS), Model N (MODN), and SS&C Technologies (SSNC). "These names are likely to have 1-2 or more quarters of revenue deceleration that could hinder stock price performance,"
I meant “Not really” as in “it’s not really helping me”. I was agreeing with you. The announcement is not really helping me.
Lomez
Footballguy
I got it. I'm right there with you. More DOCU than I should still be holding, but I really don't know where I'd put it if I sold it and feel better about it.
McBokonon
Footballguy
Oh, holding Russian stocks is terrifying to me - I trust them less than China and I won't even own BABA or JD. But it could be a decent trade. Haven't done it yet, want to see if there's more tree-shaking this week first.
Lomez
Footballguy
If I had a dollar for every time someone said money was rotating out of tech this year then I’d be rich. These dips have literally happened almost every money after April. The thing is that these companies were already growing like weeds and they haven’t stopped. His call is akin to saying that LCD TVs have done so well that we think people are going to go back to tube TVs. He recommended WIX which has been a huge flier this year. I would put them right into the cloud based arena. Same with RNG which is similar to TWLO and Varonis which isn’t all that different from the other cloud based security software.
If you are holding long term then DOCU is fine. With all the Fintech companies, EV companies and Clean energy companies, would you rather own Wells Fargo, Ford and Exxon Mobil? I like investing in growth companies, just my opinion. They’ll fall out of favor here and there but I feel better about trying to beat the market. Go look at the old school telecom company returns or the Time Warner’s compared to Apple for mobile phones or Netflix and streaming. I don’t think DOCU is going to hurt you in 5 years.
Lol. Their chart looks almost identical to OKTA just not quite the same YTD return.
Looking more closely. OKTA grew 35% over 2019. VRNS revenue dropped from 2018 to 2019 and went up 8% in 2020 (same revenue as 2018). OKTA’s P/S is double VRNS but it’s also growing 4 times as fast and hasn’t ever has a revenue drop. It wasn’t a pandemic when VRNS’s revenue dropped in 2019 and OKTA’s went up 60%. VRNS had more revenue than OKTA in 2018. In 2020, OKTA’s revenue is triple VRNS and growing much faster. That’s why OKTA is worth a lot more.
VRNS may be poised to do well but it’s smack dab in the same sector as the others he downgraded.
eaganwildcats
Footballguy
ConstruxBoy
Kate's Daddy
Bamboo Bill
Footballguy
Lomez
Footballguy
That is a good read. I want to look through the comments more, but I have to run. This one jumped off the page, though.
"I was the former Head of Innovation at Grubhub, so I have seen the truth behind many of these claims first hand. Sadly, I invented a lot of the food delivery technologies that are now being used for evil. There were so many great points made here, and I’m glad people are finally paying attention to this. I will try to only add to a few.
COVID-19 is exposing the fact that delivery platforms are not actually in the business of delivery. They are in the business of finance. In many ways, they are like payday lenders for restaurants and drivers. They give you the sensation of cash-flow, but at the expense of your long term future and financial stability. Once you “take out this loan” you will never pay it back and it will ultimately kill your business.
In the case of restaurants, these platforms slowly siphon off your customers and then charge you to have access to them. They are simultaneously selling these same customers to your competitor across the street, but, don’t worry, they are also selling their customers to you.
For drivers, they are banking on a workforce that is willing to mortgage their assets, like cars and time, well below market value, in exchange for money now. They know that most delivery drivers are simply not doing the math on the actual cost of providing delivery (time, gas, car maintenance, payroll taxes...etc). If they did, drivers would realize that they are actually the ones subsidizing the cost of delivery.
Delivery platforms are “hyper-growth” businesses that are trying to grow into a no-growth industry. Food consumption really only grows at the rate of population growth, so if you want to grow faster than that, you have to take market share from someone else. Ideally, you take it from someone weaker, who has less information. In this industry, the delivery platforms have found unsuspecting victims in restaurants and drivers.
The competition for customers has not gone away. It has simply moved online. Many restaurants have been too slow, or unwilling to adapt. Delivery platforms and other restaurants are taking advantage of this to gobble up market share. Restaurants need to realize that they are now running e-commerce businesses and they need to act accordingly. Being proficient on Google, Yelp, Facebook and the dozens of other platforms is no longer optional, it is essential.
My team is trying to do everything we can to help restaurants transition, but restaurants have to be willing to change. You can learn more about what we are doing to fight back at zero.eatgeek.com. Stay hungry."
Lomez
Footballguy
The Ref
Footballguy
Give it a few weeksSaw JP Morgan had Tesla at $90 a shareTalk about missing the boat. Even if that’s what you believe it’s worth there is almost no way it’s heading there.
I remember reading this article. It’s one of the reasons that when I google a restaurant I try to make sure I go to their web site. Almost all of the restaurants I pick up at have their own apps or web site for ordering so that I just pick it up. I guess there are still people who don’t want to even do pick up, but Five Guys is expensive enough. I couldn’t imagine how much it costs through DoorDash. At least I save on drink costs now.
If I had balls, I would short DoorDash. Not right now because it’s not driven based on earnings yet, but they aren’t worth close to their current cap.
Capella
Footballguy
90? Ok. Sure it can and probably will go down but come on. They’re just giving bad advice to their customers.
KGB
Footballguy
McBokonon
Footballguy
Also added some $BFT - merging with Paysafe, digital wallet with customers like Draftkings, Fortnite, Spotify, Roblox, and Youtube.
Bobcat10
Footballguy
Glad to see someone mention this after I've tried the past couple days! I'm clearly not as seasoned as you guys are here, started messing around 10 months ago with limited funds, so it at least makes me think I may have made a good choice.
I still have to figure out how the end game works with this merger stuff as this will be my first. Hoping MVIS is my 2nd soon.
McBokonon
Footballguy
I missed the mention but see your post from yesterday. The end game is they finalize the merger and the ticker changes to the new, permanent ticker and then it’s just a normal stock. Sometime in the first couple months of 2021 they’ll have a shareholder vote to approve the merger and then it will trade as $PSFE. I’m not sure I’ll hang around that long because I’m just trading and have SQ for my fintech exposure, but I liked this because it’s not way above $10.00 and it’s an established company in a rapidly growing segment.Glad to see someone mention this after I've tried the past couple days! I'm clearly not as seasoned as you guys are here, started messing around 10 months ago with limited funds, so it at least makes me think I may have made a good choice.
I still have to figure out how the end game works with this merger stuff as this will be my first. Hoping MVIS is my 2nd soon.
NajehHejan
Footballguy
Anyone own GLSI? Was up 2,900% at one point today.
https://markets.businessinsider.com/news/stocks/greenwich-lifesciences-stock-price-rally-single-day-breast-cancer-data-2020-12-1029878976
https://markets.businessinsider.com/news/stocks/greenwich-lifesciences-stock-price-rally-single-day-breast-cancer-data-2020-12-1029878976
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