Stocks for the Long Term

[BlueWolf]

I’m adding NVDA to my list. I purchased some this week.

AAPL, AAXN, AMZN, ANET, AYX, DATA, DOCU, EDIT, ISRG, LYV, MTCH, MA, MDB, NVDA, OKTA, SQ, TDOC, TEAM, TTD, TWLO

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[BlueWolf]

DOCU

DocuSign (DOCU) provides e-signature solutions that allow companies and users to make every agreement, approval process, or transaction digital from any device, virtually anywhere in the world, in a secured manner. E-signature technology has now become a standard part of conducting business, for every company drowning in seas of previously paper-based processes. The good news is that DocuSign is one the leaders in this technology arena, and was the first e-signature company to IPO in May of 2018. Leading up to the IPO, their growth was spectacular. Revenue rocketed from $250M in FY 2016 to $381M in FY 2017. For FY2018, they are on track to top $520M. Wow! What about the market? Well, according to Business Insider, the worldwide e-signature market is expected to grow at a CAGR of 3.47% between 2017 and 2023, when it is forecast to top $9B. DocuSign already claims to have 200M users worldwide and is therefore in an excellent position to take a healthy bite out of that growth. I think you can see why I am excited about DOCU.

AAPL, AAXN, AMZN, ANET, AYX, DATA, DOCU, EDIT, ISRG, LYV, MTCH, MA, MDB, NVDA, OKTA, SQ, TDOC, TEAM, TTD, TWLO

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[silverspeck]

What do you make of the huge volume in VCSH ETF - Vanguard ST Corp Bond. Trad 401k's have restrictions on which funds/etfs can be bought, but this volume is telling us something.

[BlueWolf]

EDIT

I admit, this is one of my more speculative choices. Editas Medicine (EDIT) is a genome editing company engaged in treating patients with genetically defined diseases by correcting disease-causing genes. The company was founded by two of the doctors who discovered the Clustered Regularly Interspaced Short Palindromic Repeats (CRISPR) gene-editing process. Financially, there’s not much of a story here ... yet. Revenue is growing rapidly, but it’s paltry in comparison to the other companies I am interested. Revenue was a mere $6M in 2016, doubled to $13.7M in 2017, the year in which they IPO’d, and doubled again to $25.8M in 2018. So why do I like this stock? Well, by now, you probably know that I like stocks that have growth stories. It’s growth that drives share price, and there is a massive growth opportunity with EDIT. I won’t go into all the details, but EDIT has some unique opportunities to apply certain aspects of CRISPR technology because of the patents licensed to the company by it’s founders. Apparently, I’m not the only one who believes in this opportunity. Not only has EDIT entered into strategic partnerships with several other biotechs including Allergan, but they have been bombarded with investment, including a significant investment from none other than innovator Bill Gates. And what is the market for CRISPR technology? Buckle your seatbelts. According to one market report, the CRISPR market is expected to experience 32.04% CAGR for the period 2019-2027. 30% CAGR over nine years? Wow. That’s the kind of growth I like and I believe EDIT is positioned to leverage their way into a healthy share of that market through their own products and through strategic relationships with mega-biotechs like Allergan. It’s very speculative, and early in the story I’ll admit, but I’m a sucker for growth stories.

AAPL, AAXN, AMZN, ANET, AYX, DATA, DOCU, EDIT, ISRG, LYV, MTCH, MA, MDB, NVDA, OKTA, SQ, TDOC, TEAM, TTD, TWLO

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NOTE: I am not pushing investments in any stock. You should always do your own research and invest in stocks that meet your personal criteria, especially your risk tolerance. I’m just sharing some ideas about stocks and companies I like backed by my own personal research. As I have indicated, I have bought all of the above stocks. So far, after my latest round of buying, I am doing quite well with them, but I know this finicky market can roll over at any time, so I am on my toes. I hope to build enough equity to give me some insulation against a pullback(s) so I can hold these stocks for several years, but I won’t hestitate to thin the heard or sell altogether if the market goes crazy south like it did in October. I thinned my long term portfolio considerably when I saw bearish signs in October, but I have to admit that I wish I had sold everything and then just bought back. I did do that for some stocks, but not all. Hopefully, I will still be able to read the tea leaves well enough to see the bear coming again, and hopefully I will be able to tell the difference between the bear and a simple correction. That’s a big part of the game, isn’t it. It’s good to be able to pick solid stocks for the long term, but weathering bear markets is tough business, emotionally and financially. OK, ramble over. I just honestly hope all this stuff is useful on some level to those reading it.

[Louetta]

I have a position in SQ because I wanted to be in that space and it seemed like the most direct way. I went with some January 2020 calls hoping to make a big score but bought the first one at exactly the wrong time. Bought two more recently for a total amount not much more than half what I paid for just the first one. Still think it was a good idea, just
poorly executed.

[BlueWolf]

I like SQ, Louetta, and I will be doing a write up on it soon. Long term, I think you will be fine. Getting those good entries is key to not having stomachs aches and insomnia, though, isn’t it?

[BlueWolf]

Write Up on LYV

LYV

Live Nation (LYV) is the largest event exhibitor in the world. LYV owns, operates, or owns booking rights to more than 155 venues and hosts events ranging from live concerts to specialized motor sports races. LYV began in 2005 as a spin off from Clear Channel Communications (Clear Channel later became iHeartMedia). Their IPO was on 2006, and as such, they are one of the oldest traded companies on my list. Why do I like LYV? Two reasons: Growth and growth. Revenue growth, while not spectacular, has been steady since their IPO. Their revenue was about $5B in FY 2010 and grew to $10.3B for FY 2017. They are on track for $11B+ for FY 2018. One negative is that they have been burning cash, but here’s is where the market growth story offsets this. LYV is a dominant force in the live entertainment and promotions market. It owns Ticketmaster for one, a company that reportedly has an 80% market share for large event ticket sales. It has also been estimated that LYV has captured 60% of the US promotions market alone. Finally, they are also the most powerful artist management company in the world, managing more than 500 artists including Black Sabbath, Rihanna, Aerosmith, Ariana Grande, BB King, Beyoncé, Carrie Underwood, etc. You get the picture, they’re big and they’re dominant. And there is a growth story in live events that they will get a huge share of. According to Statistica, revenue in the event tickets segment alone currently amounts to $71.7B, and is expected to show an CAGR of 9.3% through 2023, resulting in a market of $102.4B by 2023. Some other compelling statistics:
* Most (41%) marketers believe that events are the single-most effective marketing channel over digital advertising, email marketing and content marketing. This reflects a 32% increase since 2017.
* Between 2017 and 2018 the number of companies organizing 20 or more events per year increased by 17%.
* 62% of senior marketers plan on investing more in live events in the future both in budget and number of events.
* 50% of companies allocate over 20% of their marketing budget to organizing events.
Bottom line is that there is a compelling growth story here and a company with a dominant position ready to exploit future market expansion.

AAPL, AAXN, AMZN, ANET, AYX, DATA, DOCU, EDIT, ISRG, LYV, MTCH, MA, MDB, NVDA, OKTA, SQ, TDOC, TEAM, TTD, TWLO

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[antioch6]

I like the company with ticker FONR. It makes a sitting MRI machine and exports it all around the world. The margins are nice and sales have been increasing. Earnings look good. The p/e is Seven and there is no debt. As usual, I'm waiting for the overall stock market to drop before I buy any shares. I've watched this one loosely since it was $15, and recently as it went from $20 to $22. Now this has nothing to do with Chinese economy contracting or debt ceilings in the US. Nevertheless I am waiting to buy shares!

[Louetta]

I like the company with ticker FONR. It makes a sitting MRI machine and exports it all around the world. The margins are nice and sales have been increasing. Earnings look good. The p/e is Seven and there is no debt. As usual, I'm waiting for the overall stock market to drop before I buy any shares. I've watched this one loosely since it was $15, and recently as it went from $20 to $22. Now this has nothing to do with Chinese economy contracting or debt ceilings in the US. Nevertheless I am waiting to buy shares!

Interesting choice. I bought a 1/2 position last week because I was afraid it was going to run away from from me.

[antioch6]

I'm going to bring the stock LPL today. It's a South Korean electronics company. They make great affordable products but have been going through a downturn since last year. The stock is down from $17 in 2017 now at $9.13. The time to buy looks like now and I will be recklessly buying 3,000 shares tomorrow.

[BlueWolf]

Write Up On FB

I added FB today to my long term portfolio today. I like the valuation here, and I wanted to buy it here while it’s still lingering before it broke out (or with my luck, broke down ). FB was one of the positions I sold off back in Oct, when I thinned my holdings, so it was time to add it back. I also bought it with real money because it was my POY and how much could I believe in it if I didn’t really own it. I’ll add it to my list, but the only write up I will do is here. Quite simply I’m buying it for the same reason I did before: its 2B user installed base, the largest in the world. I’m betting they will keep finding ways to monetize that base.

AAPL, AAXN, AMZN, ANET, AYX, DATA, DOCU, EDIT, FB, ISRG, LYV, MTCH, MA, MDB, NVDA, OKTA, SQ, TDOC, TEAM, TTD, TWLO

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[antioch6]

Antioch, I'm buying FB at this level for a long term investment. I've lost before getting in too early but now FB shows signs of being another long term runner.

--------------billy

Billy mentioned facebook back on 8/27/2013 when it was $41.50. I still don't see where they will make money besides ads. No one spends any money on there. I have the same thoughts as before so I'll repost my response at the time.

I'm not sure what to think of Facebook. During the IPO I subscribed to the bear case that they were completely overvalued because they didn't make enough money yo justify their market cap. Now I'm skeptical to the bear case, and wonder if they can monetize their HUGE traffic. Also, I can picture a future where everyone across the world using the internet also uses Facebook. People in America will talk to their friends in Europe and Asia or Australia and post pictures and videos and stuff. I just wish I could see clearly where the money would come from besides advertising. It's on my list for a long term investment, but I want to wait for more evidence before buying. Also, the stock is a little hot right now and the market is overvalued. I'm confident I will get a chance to buy it lower sometime in the next 2 years.

[Louetta]

Billy mentioned facebook back on 8/27/2013 when it was $41.50. I still don't see where they will make money besides ads. No one spends any money on there. I have the same thoughts as before so I'll repost my response at the time.

I'm not sure what to think of Facebook. During the IPO I subscribed to the bear case that they were completely overvalued because they didn't make enough money yo justify their market cap. Now I'm skeptical to the bear case, and wonder if they can monetize their HUGE traffic. Also, I can picture a future where everyone across the world using the internet also uses Facebook. People in America will talk to their friends in Europe and Asia or Australia and post pictures and videos and stuff. I just wish I could see clearly where the money would come from besides advertising. It's on my list for a long term investment, but I want to wait for more evidence before buying. Also, the stock is a little hot right now and the market is overvalued. I'm confident I will get a chance to buy it lower sometime in the next 2 years.

I don't own Facebook because I see the original Facebook utility fading into obscurity and fear Instagram may also at some point taper off and what do they do next? I'm talking years from now.

But right now the amount of data they have on 100s of millions of users is a valuable commodity and they will sell it, methinks, anyway they can as long as the law allows to any app that wants to pay. They are excellent at targeting an audience.

[BlueWolf]

Facebook has the largest repository of sensitive information this side of the NSA and the Chinese cybercrime .... er ... security services. A private collection of this kind of information is unique in all of human history. The difficulty Facebook faces, other than trying to PR their way out of gaffe after gaffe, is figuring out ways to monetize this information. This has always been the challenge for Facebook. Let’s face it, they’re after the holy grail of commerce. Companies have always tried to collect information about their customers in order to shape and target their marketing, but no one has ever collected this kind of detailed information at these scales. This is what makes them unique and differentiates them from other social services like Twitter, Instagram, Snapchat, etc. None of them have access to or collect the breadth and depth of information that Facebook does. Heck, criminals even brag about their crimes on Facebook, and I’m sure law enforcement officials everywhere have their bibs on and wait impatiently at the Facebook table to slurp up the gravy they’re delivering.

Yup, the commodity Facebook sells is information, not advertising, and if history has taught us anything, it’s that people will pay anything for information. The uniqueness of Facebook is not only do they have information, they can cross reference it with a million other pieces of information that we have all willingly given them. Facebook is what Google Analytics wants to be when it grows up. And I don’t care what lies Zuckerberg tells about not selling your information to others. They may not be doing it directly, but they’re still doing it. Don’t third parties harvest information from Facebook now? And don’t they pay Facebook for this privilege? It’s transitive, but the bottom line is that Facebook IS selling your information. It’s just blurry enough to allow Zuckerberg to appear before Congress and claim “I ain’t selling nobody’s information, Congressman.” No, what they’re doing is selling others a way to gather it themselves, and oh, BTW, they just happen to have a snazzy little API to help them collate it all.

The only way Facebook fails, IMHO, is if they get too brazen about what they are really doing and just totally piss off the base. Then, a massive virtual mob will storm the electronic Facebook citadel and demand it be burned to the ground ... until, of course, they see those cute little baby pictures ... ooh soooo cute ... what was I doing? ... never mind ... BIG like. For whatever it’s worth, the cynic in me says Facebook is the goose with the golden egg.

[BlueWolf]

Write Up on SQ

Continuing on (I’m Starting to fatigue, though) ...

SQ

Square (SQ) provides payment processing services to merchants, along with related credit services. Somewhere along your merry little shopping way, you’ve probably encountered a Square reader. The first readers were clever little devices able to process credit card payments using the headphone jack of your mobile devices. Now, however, their offerings include countertop POS terminals as well as a contactless reader. There is no question that the market segment Square serves, i.e., micro merchants, has been craving solutions like those offered by SQ. SQ’s 5 yr 61% revenue growth attests to that. The big question many analysts have about SQ is whether or not it can continue to sustain such a blistering pace as the company approaches profitability. Consider this, however: Only 5% of SQ’s revenue currently comes from outside the US. That alone should clue you in to how much potential their is for continuing growth. Even Morningstar’s somewhat conservative projections have SQ growing revenue at a CAGR of 30% over the next five years. Also consider the opportunities SQ has for penetrating upstream segments. According to Morningstar: “At this point, a little more than half of the company’s gross payment volume comes from merchants generating more than $125,000 in annual gross payment volume. This is roughly where these merchants start to become viable for more traditional acquirers. We believe Square’s suite of offerings, quick start-up time, and simplified pricing will allow it to attract enough merchants above the $125,000 level to scale and reach an attractive overall return.” This is a growth story worth taking note off.

AAPL, AAXN, AMZN, ANET, AYX, DATA, DOCU, EDIT, FB, ISRG, LYV, MTCH, MA, MDB, NVDA, OKTA, SQ, TDOC, TEAM, TTD, TWLO

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