Mid Tier Priced Cloud and eCommerce

As the title suggests, these type of companies seem to be performing consistently well in recent months. Are there any more to add to my list?

So far I have held or am holding: Datadog, Fastly, Livongo, Crowdstrike, DocuSign, Etsy.

You put fastly twice. How about Shopify?

@student007 has a portfolio which seems to be the sort of things you are looking for, just make sure to do your own research before committing to anything.

Wow ETSY! I sell on there but didn’t think to invest too. That’s such a good call!

take a look at WCLD etf, it has all these in it and more. https://www.wisdomtree.com/etfs/thematic/wcld



I had a look at the portfolio and it looks good, although I’m not hugely convinced with Zoom. It’s way overvalued.

Roku as well I’m not convinced they can take on their competitors and win. They’re doing well in South America and had a massive run up in late 2019, but I don’t have the confidence in them.

Never heard of Coupa, I must look into them.

Etsy are killing it lately with the lockdown in place.

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Great, this is exactly what I was looking for.

there are 52 holdings, so you can research each one, keep you busy :slight_smile:

Another one not available that all the kids LOVE (I work with them and they tell me ALL the time) is Tik Tok (byte dance) that would be a good stock to hold for volume (or perhaps would have been?)

WCLD is a good etf especially if you are “lazy” - if you enjoy doing stock research, I believe one can do even better!

Livongo for e.g is one of my top picks which is up over 50% since I introduced it to the forum and is not a top holding in the etf, similarly for some other stocks I hold -

Roku also is widely misunderstood by the investment community and I believe has great upside potential - Zoom is also widely misunderstood as a “ v expensive “ not so expensive if you look 3-5yrs ahead - the same was said of Zoom it when it was below $100/share - the more people think of it as “ v expensive” the better the opportunity for the rest of us who believe they can continue to execute and beat estimates

ByteDance are not public at the moment but you’re right, Tik Tok has exploded in popularity. My issue here is that it is a Beijing based company and Chinese stocks and I have had issues in the past. I’m not a fan of their government regulations.

Livongo has been nothing but fantastic for me.

Zoom however doesn’t make sense at the current price. Do you really think a value of $73.84b is correct for a company like Zoom? Thats roughly the same evaluation as Morgan Stanley and more than companies like Goldman Sachs, AMD, Booking, Colgate-Palmolive, General Electric, Heinz etc. The list goes on. Even at $100 dollars a share, Zoom was over valued in my opinion.

WCLD looks good though, I’ll check that out, thanks!

I don’t understand what you mean by mid tier priced, you mean a normal PE ratio?

But my two cents are Microsoft (high PE I know but very justified imo). Their Azure cloud is amazing and it keeps growing like nobodies business.

I’m talking about literally price for retail purchase.

so whats mid tier then? 100-200$? higher? lower?

Everyone has their own way of thinking and there is nothing wrong in them - everyone can have a different investment style mine is growth oriented and let me just say there is more than 1 way of making money in the markets.
Having said that, don’t you think there is something fundamentally wrong about the way you are thinking which has kept you away from Zoom or other “new economy “ stocks when you make the comparison to “old economy “ stocks like Morgan Stanley.

My results speak for themselves as you can see below - infact the very fact people are still think my stocks are expensive and keeping away from them could very well be the reason they keep going up in addition to their immaculate execution and management teams and also add expanding total addressable markets for e.g Zoom just announced today Hardware as a service and continues to have a slick and successful business strategy.

Investing in a good ETF is also a good strategy but as you can see if you can go the extra mile you can even beat the very best of the etfs like WCLD👇

Now it’s inevitable that we will have a 30% drawdown but why keep wasting energy arguing if something is cheap or something is expensive or when the markets will drop 30% when I can concentrate my efforts and time on following the respective businesses I am invested in and if there are challengers or their financials start deteriorating I always have the option to press sell! At least that’s how I think and so far it has served me very well

Not again - don’t be so defensive when someone asks about one of your picks!

Even if you believe that Zoom is a good pick you can’t seriously believe the valuation! If you do then good luck to you as you will need it (and I suggest reading about previous tech over valuations). It is nothing to do with new vs old sectors but all about how does a company ever make the sorts of profit that would justify those sorts of valuation.

Even trying to price in massive potential future growth for Zoom how could the valuation be correct?

Does not looks overvalued to me? :point_down:

It’s not my numbers but based on analyst consensus revenue estimates - either you believe in the maths or you not - I look at tr numbers objectively - thank you - there is more than 1 way of making money - do your own research!

If you want to play with numbers then by all means.

For example current market cap of $73bn with revenue of $0.6bn and net income of $25 million (profit margin of 4%)!

Just work out what level of usage would be needed to generate enough profit to rack up annual figures that even got you anywhere close to a market cap of $73bn over say 10-25 years.

Current monthly active users is 13 million - even if you go on the discredited 300 million daily active participants (ie not users as 1 user could participate multiple times) then make some sort of assumption for % of paying customers at say $15/month. Let’s be charitable and say all 13 million pay - that gives us $2.3bn of revenue per year ie 4 times current revenue which suggests that the number of paying customers is not as high as 13 million users.

That is just revenue, if we charitably continue on an estimate of $2.3bn on current user figures and apply the same 4% profit margin then profit is $94 million per year…now tell me how many years of $94million profit you need to reach a valuation of $73bn?!?

Of course those are crude figures based on the little public information available, but it shows you the scale of difference between valuation and reality. How does Zoom increase its profitability to close that massive gap?

Amazing! Well done , except there is only one problem:
Markets are forward looking but all of your revenue and profit numbers are backward looking:
Zoom 2021 revs: 1.8bn
2022 revs: 2.3bn
2023 revs: 3.0bn!

Either one has to believe you are right or the consensus analysts who spend all their time doing research are right - I don’t know who will be proven right in 5 yrs but I continue to side with the analysts until Zoom’s financials start deteriorating and thesis is broken - why will I want to predict who wins - one step at a time - al US companies report quarterly and I analyse then.
And if I may add, in case it was not clear from Zooms revenue runway, Zoom is not a normal company: it’s gross margins are 68%+ , efficiency rate is incredible 211%, free cash flow positive LTM 42% and hence no surprise market values it so richly! Not a reason to sell without a change /deteriorating bottom line.