In Belgium there is a very popular program called the mole. Its a tv show about a group of people who are travelling and during their travels they need to do missions to earn money for the group. In the group is one traitor called the mole. He needs to try to sabotage missions without anyone noticing.
As a viewer its quite possible that you have a prime suspect early in the show. Every next episode you keep an eye on this suspect and everything he does is confirming your suspicions. We call this tunnel vision and it might stop you from seeing the actual suspect.
In my case I was fortunate enough to guess the right mole from episode 2. Every consecutive episode was confirming my bias towards him.
I do have this with most of my stock portfolio. Every earnings report is confirming my tunnel vision towards stocks that might just outperform the index. In that perspective Earnings week is a bit like Christmas, you suspect what is in the presents but you won’t actually know until you open them up.
I went into detail and read every earnings report of my growth stocks, so you don’t have to.
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My highest conviction with a huge tunnel vision holding 38.6% of my portfolio.
Here are just a few of the amazing numbers Palantir reported:
- Total revenue grew 49% year-over-year to $341 million
- US commercial revenue grew 72% year-over-year
- US government revenue grew 83% year-over-year
- Adjusted earnings per share, diluted of $0.04 (on target)
These are pretty crazy numbers, even for a company that just went public, especially given that Palantir is already 17 years old.
What I also really liked during the earnings call is that Palantir was that Alex Karp was really bringing a story. He was reaching out to the investors, all investors small and large, and taking them along on how he plans to make Palantir the best software company in the world.
He suggested also that they considered to accept Bitcoin as payment, I do think he was joking there, and with Elon Musk now having recently announced that Bitcoin will no longer be accepted as a form of payment due to its high energy consumption, I consider this rather unlikely.
He also explained the stock options that employees are getting, claiming that this is keeping the best employees at Palantir and is keeping them motivated to help the company grow. I do follow him somewhat in this reasoning, its not easy to keep good people.
The market reacted well, going from -13% in the pre-market to a stunning +9% by the end of the day! I actually was lucky enough to add another 40 shares at the absolute low point of -13%. I’m still down pretty heavily on my investment, but this does make me feel a bit better!
Ali Baba ($BABA)
In the big Tech sell off Ali Baba has actually held up pretty well. With 14.6% of my portfolio I am happy that $BABA plays such a big part of it.
The only thing I am worried about is the delisting, and I think the fact that this is unresolved is keeping the share price artificially lower.
Main highlights in the earnings:
- Revenue was RMB187,395 million (US$28,602 million), an increase of 64% year-over-year.
- Annual active consumers on our China retail marketplaces was 811 million for the twelve months, an increase with 32 million customers YOY
- Mobile MAUs on our China retail marketplaces reached 925 million in March 2021, an increase of 23 million over December 2020.
- EPS was 1.58$ per share as opposed to the 1.78 that was expected so an 11% miss, related to the fine they got in Q1
What I really liked in the presentation is how Ali Baba, while it has amazing ecommerce growth, it also is expanding in so many other tech areas.
Have a look at this and check out all the areas they are currently investing in:
Pretty crazy right? By doing so they are really mirroring the big tech companies in the Western World who are also investing in a very large range of different growth areas.
I’m very happy with the growth of Alibaba, a 41% growth is pretty amazing considering the size of the company.
I decided not to buy extra shares for now because of the delisting that is hanging above $BABAs head. If $BABA gets delisted this will almost certainly cause the stock to fall. If however $BABA is able to avoid we can most certainly expect a surge in price. For now I am a holder.
I personally do not think $BABA will be delisted. It would not be good for US investors & NASDAQ profits, but that doesn’t mean the stock price will not be affected by this knife hanging over its head.
Ever since the spike on Battery day Volkswagen has known a constant downtrend. Its hard to say how long this trend will still continue. With 10.7% in my growth portfolio, Volkswagen has a big chunk of the pie. Lets check out the highlights:
- Volkswagen had a 13% YOY revenue increase, which is pretty big for such a big company
- The Net income was crazy high with 3.38B an increase of 547%. Even compared to 2019 this is about a 15% increase
- Sales of EVs doubled to 133.300
The earnings report was pretty much what I expected, as the CEO emphatised that their focus right now is on the transfer to Electric Vehicles. In 2027 EV will be cheaper then Gasoline based vehicles and then the shift will happen extremely rapidly, so I’m happy to see VOW keeps up with the trend.
Volkswagen talked about how the chips shortage has affected them, but thanks to well management the effects have been limited so far. They stated the effects would be limited throughout 2021, but could not predict how it would affect them in 2022 yet.
Research & development costs went up to 4 Billion but this is actually a good thing. I like being part of a company that invests in the future.
I had hoped to hear more about autonomous driving, it remained silent there for now, but they did mention they continue to invest in autonomous driving.
Later it was leaked that Volkswagen plans to bring its first level 4 Autonomous driving car to market in 2025 in a partnership with Argo AI.
Not the most impressive car on the photo, however unlike Tesla who has been claiming Autonomous cars are coming this year for the last few years, I have more confidence in the reality of the statement of Volkswagen and I happen to know there is a demand for these types of cars by European Governments who want to automate public transportation.
The race to autonomous driving is on!
I did not buy extra shares for now, but I am happy to remain invested in this great company!
I pretty much saw Unity appearing everywhere a few years back when they first grew and grew more in the gaming market. When there was a chance to invest in the company under the IPO price I happily took the chance to do so.
Lets go over the numbers:
- Q1 revenue up 41% YOY, exceeding expectations; company raises 2021 revenue outlook to $1 billion
- Create Solutions, Operate Solutions, and Strategic Partnerships and Other revenue was $70.4 million, $146.6 million, and $17.8 million, respectively, an increase of 51%, 40%, and 12%, respectively, from the first quarter of 2020.
- Their loss was up, but this was mainly related to the recent IPO
One of the key points they noted was the move from 2D to 3D and Unity affirmed again they find it very important to keep spending a lot on R&D.
What I also like about Unity is how they provide tools to game developers to make it easier to provide money generating items in mobile games for example. This is a division that will have a lot of potential.
Because they were able to present such high growth rates and the share price had been hit so drastically the last months I decided to buy a few extra shares.
As I moved out of Bitcoin, I moved about 1.5k into $COIN making this now 5.5% of my portfolio. This was Coinbase first earnings and much of what was said as the earnings was already known publicly as they have only recently IPOd.
Here are the Key Metrix they published:
We can see that they have had an incredible growth in both users, revenue and especially income that has pretty much exploded.
Coinbase has a huge profit, but the stocks does remain expensive. So the big question is if it can keep up its growth. Now the stock did plummet a bit after earnings, but this is also caused by market conditions.
Coinbase is highly dependent of the Crypto prices, Coinbase warns if we would have another Crypto winter, as we had a few times already, that we could see even periods that the company is non-profitable, and this will make the stock price highly volatile.
Everyone is pretty much basing the Coinbase stock on earnings from Crypto, and fears of competition of other platforms in this area is not doing the stockprice much good. But I think Coinbase could expand to other areas that are less dependent of Crypto trading, although still related to the crypto world.
For example I am very curious about the Coinbase Cloud that was only just created in April:
For now I remain invested, waiting to see what other markets Coinbase can expand to, due to the high P/E ration I remain a holder and not a buyer for now.
When Lyft first IPOd one of their key points was that they wanted to invest heavily into autonomous vehicles. Lyft recently announced they sold their autonomous vehicles department, and this lead to the stock price tanking.
Key Metrix for this earnings report are:
- Lyft reported Q1 revenue of $609.0 million versus $955.7 million in the first quarter of 2020, a decrease of 36 percent year-over-year, but an increase of 7 percent from $569.9 million in the fourth quarter of 2020.
- Net loss for Q1 2021 was $427.3 million versus a net loss of $398.1 million in the same period of 2020. Net
They managed to limit their losses by selling their Autonomous driving division, and this should set them on the path to profitability by Q3 2021.
Right now I believe its very early to make big statements on where the company is going. I do believe they will hit profitability as the US market reopens, but it remains uncertain on how their partnership with Motional will perform to get access to the autonomous driving market.
While this remains to be my most uncertain investment for now I remain invested.
With Netflix and the Disney channel report slow growth there was plenty of panic going around that Roku would suffer the same fate and this caused the stock to tank pre-earnings. However as it turns out Roku was able to present extremely strong growth numbers.
- Total net revenue grew 79% year-over-year (YoY) to $574.2 million;
- Platform revenue increased 101% YoY to $466.5 million;
- Gross profit was up 132% YoY to $326.8 million;
- Roku added 2.4 million incremental Active Accounts in Q1 2021 to reach 53.6 million;
- Streaming Hours increased by 1.4 billion hours over last quarter to 18.3 billion;
- Average Revenue Per User (ARPU) grew to $32.14 (trailing 12-month basis), up 32% YoY;
These are perhaps the best numbers any of my stocks reported so far. Q1 does remain to be a quarter highly affected by Covid, so its very hard to tell in what way Covid is affecting Roku, but by now it does seem clear that the company’s users are growing faster then Netlfix that has over 200 million users. That also gives hope for Rokus total addressable market.
Roku also has a different earnings model, unlike Netflix that is just one Platform, Roku is a hub for multiple platforms and they actually live mainly from advertising.
I actually have a similar device as Roku at home that I purchased long ago. But if you purchase Roku instead it already comes with the Roku channel. So it has an advantage on both Netflix and other Mediahub vendors.
I added one $ROKU share after earnings and I continue to strongly believe in the company.
Snowflake currently has 3.9% of my growth portfolio. $SNOW has its earnings report on the 26th of May. I didn’t want to wait to publish this blog until then, but once this happens I will update this blog.
Beam Therapeutics ($BEAM) and Galapagos ($GLPG)
For Beam Therapeutics & Galapagos the most important is their pipeline as both companies are barely making any money. This is pretty much unchanged the last quarter. Galapagos might have some preliminary results coming up by next quarter with their Toledo program, but Beam Therapeutics will have to wait a bit longer probably.
I would like to buy more from each of these companies, but for now I am holding off the boat as in these times with 0 profit they are such an easy target for shorts.
I remain bullish on the future
Today for the very first time I saw a Belgian newspaper talking about inflation. Its disappointing to see how far behind they are. How could they only have noticed this after one crazy ride up the last year? While they have just noticed the start of it, I am seeing light at the tunnel as economies reopen and trading gets easier again.
I also have not seen any big rises on interest rates, so while the market is moving into value stocks growth stocks continue to loan cheap and grow with double digits.
The last month has been painful, but this pain will not last, and all the institutions that exited their positions will need to move back in at some point if they don’t want to miss the next ride up.
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