HorsePlayAndrew Update July 2022

Summary

A quick update from me as I only just posted my June one.

Some earnings are starting to arrive and we’ve had a slightly more positive last few weeks.

My background

Entrepreneur, ex-founder of SaaS & marketplace business, exited, now founder of horseplay.ventures, sendtrumpet.com, angel investing & building other startups. Tweeting here:
https://twitter.com/andrewwebster11

Performance

2022 > -59%
2021 >21%
2020 > 209%
2019 > 41%

July 2022 -59%

July 2022 Portfolio

NET - 19%
SNOW - 17%
MDB - 15%
DDOG - 13%
CRWD - 11%
S - 10%
Crypto - 10%
GTLB - 5%

SOLD

I trimmed DDOG and CRWD.

BUYS

Gitlab A new try out position for me. Gitlab is in the DevOps space, basically offering a software platform for the millions of developers out there to store and manage their code. They have competition from the Microsoft owned GitHub but this is a new and fast growing space. Their last earnings they served up accelerating revenue growth of 75% up from 69% previously, one of very few SaaS co’s out there going in the other direction, most are slowing down. Management on their last earnings call were very bullish about the opportunity and how early it is, so there could be space for the revenue growth to continue for a fair bit longer. DBNR has knocked back from 150% to 130% so that’s one to watch. The share price action over the past few months is also very encouraging so I’m going to start small and see how we go.

And I topped up Cloudflare & SentinelOne, more below.

My companies

Cloudflare

I wrote in my last month’s report “if anyone is likely to withstand recessionary growth pressures, it’s them. If you look at the Covid period, and compare Datadog vs Cloudflare, there is at least historical evidence Cloudflare is more likely to keep delivering their revenue rates. Their price is now at sensible levels so I think now is the time to build out a sizeable position in Cloudflare.”

So I followed my own advice and topped up in the past few weeks. Earnings just came out last night and I’m really happy to see they have served up another remarkably consistent report. There was confidence from management regarding their guidance and they seem well placed to continue the hyper growth in this tricky macro environment so I now believe they are worthy of my highest conviction position.

Snowflake

We await earnings. There is some understandable nervousness considering the consumption model ala Datadog. Reflecting on their past earnings call, management explained that May 2022 actually saw a return to usual activity, after a slow April, which goes against what DDOG just saw. So there are reasons to be optimistic that SNOW can deliver 70%+ revenue growth for 2022. It is tempting to de risk here with earnings around the corner but this company is so stellar that my long term conviction is very high so I am willing to ride it out.

MongoDB

They have laid their cards on the table back in the Q1 earnings, and the market still liked what they saw, so pending any major surprises, MDB should deliver another strong showing.

Datadog

I have decreased my position size because of fears of a fairly rapid deceleration. There is no doubt this is a stellar company with great prospects ahead, but I am not confident enough that the share price will outperform whilst the growth tails off. Earnings yesterday clearly demonstrated that they are heading for the 50-60% growth space for the foreseeable, so until they stabilise and withstand the macro pressures, I’m not willing to hold them as a large position.

CRWD

If they deliver a strong earnings, along the lines of Cloudflare, ie business as usual, then I will be looking to increase my position again.

SentinelOne

Looking forward to earnings. They need to deliver big league revenue and customer growth numbers in order to justify the price tag.

Watch List

Monday.com, bill.com, NVDA

Appreciation to those on the board who keep sharing their insight and wisdom despite these very tough times.

Andrew

Previous updates

June 2022 - https://discussion.fool.com/horseplayandrew-update-june-2022-351…
April 2022 - https://discussion.fool.com/horseplayandrew-update-april-2022-35…
March 2022 - https://discussion.fool.com/horseplayandrew-update-march-2022-35…
Feb 2022 - https://discussion.fool.com/horseplayandrew-update-feb-2022-3506…
January 2022 - https://discussion.fool.com/horseplayandrew-update-jan-2022-3504…
December 2021
https://discussion.fool.com/horseplayandrew-update-dec-2021-3501…
November 2021 https://discussion.fool.com/horseplayandrew-update-november-2021…
October 2021 https://discussion.fool.com/horseplayandrew-update-oct-2021-3496…
September 2021 https://discussion.fool.com/horseplayandrew-update-sep-2021-3494…
August 2021 https://discussion.fool.com/horseplayandrew-update-august-2021-3…
July 2021 https://discussion.fool.com/horseplayandrew-update-july-2021-348…
June 2021 https://discussion.fool.com/horseplayandrew-update-june-2021-348…
May 2021 - https://discussion.fool.com/horseplayandrew-update-may-2021-3484…
April 2021 - https://discussion.fool.com/horseplayandrew-update-april-2021-34…
March 2021 - https://discussion.fool.com/horseplayandrew-update-mar-2021-3479…
February 2021 - https://discussion.fool.com/horseplayandrew-update-feb-2021-3476…
January 2021 - https://discussion.fool.com/horseplayandrew-update-jan-2021-3473…
December 2020 - https://discussion.fool.com/horseplayandrew-update-dec-2020-from…
November 2020 - https://discussion.fool.com/horseplayandrew-update-nov-2020-from…
October 2020 - https://discussion.fool.com/horseplayandrew-update-oct-2020-from…
September 2020 - https://discussion.fool.com/portfolio-update-from-london-uk-sep-…

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