March 2024 Portfolio Review
Total Return: +12.9% YTD (+2.7% vs S&P)
2024 Results:
2024 Monthly Allocations:
Key:
darker green: started during month
lighter green: added during month
yellow: trimmed during month
blue: bought and sold during month
red: position exits
positions >10% in bold
*Please note: I rolled an old 401K worth ~2.5% into the cash balance of this portfolio to start 2024. I’ve shaded the January cash cell to make sure the new cash is represented accurately (and honestly to remind myself as well).
Past recaps:
December 2018 (the one that got things started)
December 2019 (contains links to all 2019 monthly reports)
December 2020 (contains links to all 2020 monthly reports)
December 2021 (contains links to all 2021 monthly reports)
December 2022 (contains links to all 2022 monthly reports)
December 2023 (contains links to all 2023 monthly reports)
Stock Comments:
Another earnings season come and gone. In the end, I’m happy with how our holdings held up (pun intended).
AXON – Axon’s major news this month was the announcement of a new deal with the Puerto Rico Police Bureau. Under this contract, the bureau will be upgrading its officers to Axon Body 4 cameras in addition to using Axon’s digital evidence solution. This deal expands a successful 2023 deployment of Body 3 cameras for officers and Fleet 3 cameras in cars.
CELH – March saw Celsius announce plans to enter Australia and New Zealand. Said CEO John Fieldly:
We’re pleased to introduce our refreshing, great tasting and functional Celsius energy drinks to consumers in Australia and New Zealand. We expect to continue our international growth at a measured pace, targeting strategically important energy drink markets and employing our proven playbook to build a strong and passionate consumer base.
Build away, John.
CRWD – CrowdStrike continues its recent cadence of rapid-fire news. It began March by expanding its partnership with Dell. Under this arrangement, CRWD’s Falcon platform is now a featured tool in Dell’s own Managed Detection and Response services.
The company followed with what I thought was an excellent March 8 earnings report. I didn’t see a single area in which the company’s performance didn’t meet or beat my personal expectations for the quarter. Even better, the record net new ARR and RPO allowed management to issue a strong FY25 outlook.
In conjunction with earnings, CRWD announced the acquisition of Flow Security to add “the industry’s first and only cloud data runtime security solution.” Management expects Flow to strengthen its real-time endpoint and cloud protection. Even better, the deal will be paid “predominantly in cash” meaning shareholders won’t see significant dilution. The transaction is expected to close during Q1.
Next, CRWD conducted the CrowdStrike Gov Threat Summit event in Washington, DC on March 19. The event featured speakers from across the public sector discussing the future of cybersecurity and its impact on national security including upcoming elections This seems like a natural extension of CrowdStrike’s role as a member of the US’s Joint Cyber Defense Collaborative and is quite timely given where we are in the US’s election calendar.
Then CRWD unveiled a new SEC Readiness Service. This offering is specifically designed to help public companies navigate the new SEC requirement “to disclose the processes for assessing, identifying and managing material risks from cybersecurity threats in their annual 10-K filing, and to report on material cyber incidents within four days of determining an incident is material.” While more of a niche product, this seems like a no-brainer value add for current and potential publicly traded customers.
CrowdStrike then joined with one of the coolest kids around (OMG!!! NVIDIA!) on one of hottest products around (OMG!!! Generative AI!). Unveiled at an NVIDIA customer event, the firms announced a strategic collaboration embedding NVIDIA’s AI computing services into CRWD’s Falcon XDR platform. This partnership “puts custom and secure generative AI model creation in the hands of CrowdStrike and NVIDIA customers.” The quotes in the release came directly from CEO’s George Kurtz and Jensen Huang rather than a couple of VP’s of Whatever, so this seems like a pretty significant deal. Either way, it continues a nice run of best-in-class innovation efforts by CrowdStrike.
Lastly, it announced a global strategic partnership with global technology company HCLTech. Under the terms of this deal, HCLTech’s managed detection and response solutions will be powered by CRWD’s Falcon platform.
CrowdStrike has certainly been on a roll the last few quarters. Its excellent business performance has in turn pushed the stock to our top spot since November. Though I did trim slightly exiting this report, I see no reason not to let it keep fighting for that distinction.
DDOG – Datadog’s only March activity was presenting at a Morgan Stanley investor conference March 5. I didn’t see anything that looked like new news compared to what we heard coming out of DDOG’s mid-February earnings report.
ELF – The first piece of e.l.f. Beauty news I found this month was the late-February opening of its first European office in London According to the release, the 10,000-square-foot office will house roughly 40 employees and serve as a gateway to ELF’s European expansion efforts. Given the potential of its international runway, this seems like a smart move.
The second piece of news was a partnership with Liquid Death — a canned water company of all things — on a limited-edition “Corpse Paint” makeup kit for heavy and black metal music fans. For those that click the article, you have to watch the embedded video. It’s both clever and on point. While black metal music is far from my jam, I’m also the kid who absolutely, positively needed to have the latest Michael Jordan or Bo Jackson sneaker back in the day. ELF apparently hit the right notes since the offering was already sold out when I checked just three days later. Luckily, it still has a smartly placed link to the individual items so you can build your own kit.
Hmmm…clever, amusing, and sold out. Sounds like good marketing to me.
IOT – Samsara earned some third-party accolades in March. The first came when it was named a “Great Place to Work” in Poland. Workplace culture is a consistent focus for Samsara, and this award follows similar recognition in the UK along with an overall ranking award from noted job-search site Glassdoor.
The second and more relevant accolade came from the market after an outstanding earnings report. Samsara set several new performance records while showing excellent trends for the future. Most notably, it appears to have permanently flipped to positive cash flows and profits. CEO Sanjit Biswas feels very comfortable Samsara is addressing “a large market in the early innings of digitization.” So do I. Therefore, IOT will continue to hold a healthy allocation in our portfolio.
TMDX – TransMedics’ followed its excellent end-of-February report with appearances at two March investor conferences. It also purchased its 14th aircraft on March 8. Management continues to sound very confident about its business heading into the new fiscal year. Given the increased number of targeted planes and pace of purchases, I’m feeling similarly.
TTD – Always our quietest company, The Trade Desk stayed true to form in March. Since it is also one of our most reliable companies as far as consistent results, that’s fine by me.
ZS – Zscaler’s first March news was the acquisition of Avalor to expand its Zero Trust capabilities. Avalor’s tech includes “over 150 pre-built integrations enabling customers to proactively identify and predict critical vulnerabilities as well as improve operational efficiencies.” From acquisitions to recent staff additions, Zscaler is clearly increasing its AI capabilities as it looks to leverage the more than 400 billion daily transactions it currently processes.
Next Zscaler was named a Leader for Q1 2024 in the first-ever Forrester Wave Security Service Edge Solutions report. ZS received the highest possible score in 11 criteria including user experience, vision, innovation, and partner ecosystem.
Lastly, Zscaler announced an expanded partnership with BT Group in the UK. BT Group provides telecommunication, security, network, and IT infrastructure services to customers across 180 countries. Under the new arrangement, BT’s full suite of managed security solutions will feature ZS’s Zero Trust Exchange platform.
Despite some increased market attention on cybersecurity in recent months, Zscaler has admittedly taken on more of slow, boring vibe. While that’s better than competitor Palo Alto Networks (which was forced to restate its guides down), ZS has unfortunately given back much if not all the 2024 business momentum it was sharing with CrowdStrike. I’m OK with our current allocation at the current price, but mostly because I’m not interested in carrying any more cash. That being said, ZS and DDOG are the names I continue to grind away at in seeing if I can find alternatives. Stay tuned.
My current watch list…
…is basically monday.com (MNDY) and Super Micro Computer (SMCI). I have some interest in MercadoLibre (MELI) and NVIDIA (NVDA), but both are complicated businesses a little outside my circle of competence. MongoDB (MDB) and Snowflake (SNOW) both took a step back as I found neither earnings report very inspiring, especially the customer growth for each.
And there you have it.
March’s decent portfolio start unfortunately faded by the end of the month. However, I have no real complaints about the business updates we received this earnings season. I’d lump everyone’s results as expected or better and am comfortable with our current allocation. Looks like it’s time to settle in and wait for our next round of news…
As usual, thanks for reading, and I hope everyone has a great April.