Thanks for the review stock novice. I came across an interesting article that was on seeking alpha regarding BILL. The author states that Quickbooks which was once a partner with BILL is now turning competitor. It turns out Quickbooks will offer there own bill pay function and no longer offer Bills network to there customers. I’m curious to know how much Quickbooks was driving the growth for Bill. The article can explain it better.
StockNovice, another great monthly report write up. Congrats on the YTD returns.
I might disagree with you (and quite a few others I am sure) that now is the time to lighten up on SaaS. In fact I think now is the time to buy in to the stronger SaaS names because they will lead the vertical out of these macro pressures. The stronger names are those with expanding margins, healthy balance sheets and positive cash flows because they can get aggressive with taking market share when the competition is weaker.
Looking forward to your future post in GARP. It is something on my radar screen as well. Cheers!
Many thanks for this analysis of various holdings. I find it interesting that there is a tiny bit of overlap with what I have been doing.
I finally noticed the SaaS weakness and business spend drama relative to consumer spending in early January and started revamping my small indefinite port completely.
I immediately sold NET for TTD and S for FOUR. Then, I listened to many Q3 and Q4 reports in various sectors and B2B software dropped from 100% of my small, experimental indefinite port to 25% today as I sold ZS on the open. In the meantime I sold TTD as well but it remains my go-to when in doubt.
Last night, I ran a comparison of ZS to SWAV and ENPH and ZS came out last, **particularly in respect to my assessment of the potential company out-performance relative to expectations**.
I entered the year with DDOG, ZS, AYX, NET, and S, in % order.
I now have AYX, INSP, KNSL, FOUR as my highest conviction followed by a soon-to-be-determined mix of SWAV, CELH, ENPH, TWLO and starters in AEHR and TMDX.
This does not mean I have left SaaS. My 401k is tied to ETFs only and I remain 50% SaaS there including meaningful to me SNOW, ZS, S, CRWD, DDOG exposure.
But I was not happy to see SaaS taking a massive performance hit due to significant B2B belt tightening all the while consumers keep spending at a mildly abating rate. In addition, I am not convinced that SaaS headwinds will dissipate by June as everyone seems to hope, but I am ready to jump back in on ZS, DDOG, and S if that happens.
Thanks for the detailed writeup. I recognize the TMF username and look forward to reading your posts. Like this one, it usually has some detailed thought behind it. I agree with you the SaaS model has been stressed. I also believe we are being forced to adjust in valuing these companies as they drop out of hypergrowth and begin to mature. It's almost forcing us to take a GARP (growth at a reasonable price) approach to working through them. It's something I've started poking at with a draft post but haven't quite put everything together yet. Unless I'm mistaken, you seem to be thinking through something similar. I appreciate the share.
Thanks, I just responded to FInally Foolin's thread where I laid out some of my thoughts and all the holdings [I cannot post port updates there. My indefinite port is only 8% of net worth so it is a very different situation. Besides, I am trying to do all this without the expertise that some of you enjoy in SaaS]
I appreciate your in-depth analysis of individual companies as I don't get that far. My "specialty" I have decided to capitalize on is listening to calls as that allows me to assess the tone of the entire call far better than the dry transcript. The difference in tone between Q3 2022 calls for SaaS vs others as well as for old-friend AYX vs others was eye-opening to me. This continued in Q4 with BILL, which I have never owned but might in the future, the spookiest of all.
Thanks for the review stock novice. I came across an interesting article that was on seeking alpha regarding BILL. The author states that Quickbooks which was once a partner with BILL is now turning competitor. It turns out Quickbooks will offer there own bill pay function and no longer offer Bills network to there customers. I’m curious to know how much Quickbooks was driving the growth for Bill. The article can explain it better.
https://seekingalpha.com/article/4585422-billcom-holdings-quickbooks-flips-from-asset-to-serious-threat?source=feed_f&utm_campaign=twitter_automated&utm_content=article&utm_medium=social&utm_source=twitter_automated
Good question, and I hadn't seen that. Thanks for sending.
StockNovice, another great monthly report write up. Congrats on the YTD returns.
I might disagree with you (and quite a few others I am sure) that now is the time to lighten up on SaaS. In fact I think now is the time to buy in to the stronger SaaS names because they will lead the vertical out of these macro pressures. The stronger names are those with expanding margins, healthy balance sheets and positive cash flows because they can get aggressive with taking market share when the competition is weaker.
Looking forward to your future post in GARP. It is something on my radar screen as well. Cheers!
Many thanks for this analysis of various holdings. I find it interesting that there is a tiny bit of overlap with what I have been doing.
I finally noticed the SaaS weakness and business spend drama relative to consumer spending in early January and started revamping my small indefinite port completely.
I immediately sold NET for TTD and S for FOUR. Then, I listened to many Q3 and Q4 reports in various sectors and B2B software dropped from 100% of my small, experimental indefinite port to 25% today as I sold ZS on the open. In the meantime I sold TTD as well but it remains my go-to when in doubt.
Last night, I ran a comparison of ZS to SWAV and ENPH and ZS came out last, **particularly in respect to my assessment of the potential company out-performance relative to expectations**.
I entered the year with DDOG, ZS, AYX, NET, and S, in % order.
I now have AYX, INSP, KNSL, FOUR as my highest conviction followed by a soon-to-be-determined mix of SWAV, CELH, ENPH, TWLO and starters in AEHR and TMDX.
This does not mean I have left SaaS. My 401k is tied to ETFs only and I remain 50% SaaS there including meaningful to me SNOW, ZS, S, CRWD, DDOG exposure.
But I was not happy to see SaaS taking a massive performance hit due to significant B2B belt tightening all the while consumers keep spending at a mildly abating rate. In addition, I am not convinced that SaaS headwinds will dissipate by June as everyone seems to hope, but I am ready to jump back in on ZS, DDOG, and S if that happens.
Cheers
MAS4R on TMF
Hi, Steve.
Thanks for the detailed writeup. I recognize the TMF username and look forward to reading your posts. Like this one, it usually has some detailed thought behind it. I agree with you the SaaS model has been stressed. I also believe we are being forced to adjust in valuing these companies as they drop out of hypergrowth and begin to mature. It's almost forcing us to take a GARP (growth at a reasonable price) approach to working through them. It's something I've started poking at with a draft post but haven't quite put everything together yet. Unless I'm mistaken, you seem to be thinking through something similar. I appreciate the share.
Joe
Thanks, I just responded to FInally Foolin's thread where I laid out some of my thoughts and all the holdings [I cannot post port updates there. My indefinite port is only 8% of net worth so it is a very different situation. Besides, I am trying to do all this without the expertise that some of you enjoy in SaaS]
I appreciate your in-depth analysis of individual companies as I don't get that far. My "specialty" I have decided to capitalize on is listening to calls as that allows me to assess the tone of the entire call far better than the dry transcript. The difference in tone between Q3 2022 calls for SaaS vs others as well as for old-friend AYX vs others was eye-opening to me. This continued in Q4 with BILL, which I have never owned but might in the future, the spookiest of all.
Cheers and best of luck.