Skip to main content
No. of Recommendations: 30
Hi all,

I posted this to another premium board today but thought it might be of interest here as well given Magnite has been discussed some here in recent weeks and also because many of us are in TTD. Hope you find this interesting.

Please also reference a MGNI article today from the Fool as well. https://www.fool.com/investing/2020/11/19/heres-whats-behind...
-------------

Well it certainly appears that investors are accumulating Magnite this month. The stock has risen more than 40% from $9/sh as investors now appear to realize how well positioned Magnite is as the leading sell-side programmatic advertiser. MGNI is incredibly well positioned in CTV, and with big content provider ad customers like Disney and many many others. And you can bet, as CEO Michael Barrett intimated during the earnings call, that major announcements are coming soon relating to their expansion and growth with such major customers everywhere.

This folks is a massive market opportunity as the world shifts its ad dollars to CTV and other electronic means. And if the walled gardens of Google and Facebook ever get compromised from an anti-trust perspective, companies like TTD and MGNI will have another enormous tailwind to ride IN ADDITION TO their current significant market opportunities.

So the net of it is that I believe the money going into TTD and MGNI this month (and past year) is 'smart money' that realizes these trends and wants to invest with the two leading companies driving such tech-enabled and strategic advertising change.

Fool on!
-Rockleppard
VERY long TTD and MGNI
Print the post Back To Top
No. of Recommendations: 7
It’s also a very recent pick by a much respected premium service that got a lot of us into the stock at under 10 bucks a share.

FYI, MGNI and TTD business models are different. MGNIs gains might very well be TTDs losses. At least that’s the way it was explained to me. TTD big into mobile and apps, MGNI is a CTV model.

I didn’t realize that MF had written about it as well, but shows how tied together many of these services are now. I think we are all using the same favorite sources for information and investment ideas, which includes this board.
The only one you don’t have to pay for and why Saul makes a point to ask people to subscribe to one or more of these services.


TMB
Print the post Back To Top
No. of Recommendations: 37
FYI, MGNI and TTD business models are different. MGNIs gains might very well be TTDs losses. At least that’s the way it was explained to me. TTD big into mobile and apps, MGNI is a CTV model.

TMB, respectfully, you couldn't be more wrong. TTD is the largest demand-side platform (DSP), and MGNI is the largest sell-side platform (SSP). TTD works on behalf of companies looking to advertise, while MGNI works on behalf of publishers seeking to fill ad space. TTD and MGNI WORK TOGETHER within the advertising marketplace/ecosystem to fulfill buy-sell orders. In fact TTD has stated recently in articles and releases that MGNI is an important partner with whom they are expanding.

Both TTD and MGNI have well-developed CTV capabilities, and they are growing 100%+.

Please consider reviewing some of the content on this Board and the premium sites for more details as they detail all of this more fully.

-Rockleppard
Print the post Back To Top
No. of Recommendations: 4
Some numbers a friend posted on StockTwits today comparing TTD and MGNI (these are taken from Koyfin Website)



.............................. TTD...............MGNI
Rev CAGR (1Y)..... 21.41% - 16.49%

Gross Profit......... 19.69% - 25.86%
CAGR (1Y)

Gross Margin..........75.07% - 61.92%

EV / Sales (LTM)..... 51.7x - 7.7x

EV / Sales (NTM).... 37.8x - 5.8x

Market Cap................$38B - $1.5B

Cash + Inv................ $255M - $89M

Revenues.....................$680M - $164M



I have a 5% position now (after the recent surge.

NOTE - I'm not predicting this, but I would not be shocked if the do a capital raise. Every time a stock pops now I get suspicious that a raise is coming. Has happened to several of my companies this year.
Print the post Back To Top
No. of Recommendations: 3
When I read TMB's comment "MGNIs gains might very well be TTDs losses", I interpreted in terms of TTD losing investors to MGNI.

One reason is that MGNI may have a higher potential growth rate. You can read more in Tom G's post in the premium board.

Another reason is the potential headwind facing TTD with regards to Apple's changes to IDFA (and possibly Google). You can read more here and/or subscribe to Beth Technology for more details: https://seekingalpha.com/article/4389685-q3-2020-earnings-da...
Print the post Back To Top
No. of Recommendations: 9
“Both TTD and MGNI have well-developed CTV capabilities, and they are growing 100%+.“

Beth Kindig did an amazing report on ROKU, MGNI and TTD. It’s unfortunate that I cannot share the details of the report, and my comments above admittedly were way to general and therefore misleading.

I will say that the advantages that ROKU and MGNI has going forward is that they aren’t a third party provider like TTD is so they can sell their services cheaper then TTD.

There is a lot more in the report, maybe she will release it on a public platform at some point, but it’s very detailed and very much worth a read.


TMB
Long ROKU and MGNI
Print the post Back To Top
No. of Recommendations: 6
I read the report from Beth K, and IMO you don't need to choose between TTD, and MGNI. There might be some headwinds coming against TTD due to cookie restrictions from Apple and later chrome, but the negative material impact if significant will not be noticed for a long time. I am building MGNI and already have substantial position with TTD and ROKU - all of these will be riding the secular trend in a market which has 5 years CAGR much higher than markets of other high growers (APM/log processing, endpoint/cloud security or video conferencing).
Print the post Back To Top
No. of Recommendations: 32
It really shows the strength of this board that we were able to look and earnings, collaborate, discuss, and come to the right conclusions seemingly faster than the rest of the market, which is especially true for a company like Magnite that has probably been underfollowed historically tho I don’t think that will be the case for much longer.

The past five days have been fun if you are an MGNI owner with pretty nice upward moves all but one day:

+9.3%
+6.1%
-2.4%
+10.2%
+17.5%

And it was initially up another +5% this morning, tho it has pulled back a little in the past hour

It may just be a coincidence but that string of increases started with the day Disney announced earnings on Nov 12. They had already announced earlier that they were expediting the move to streaming (Magnite runs the ad platform for Disney+ and Hulu) which was one big part of the reasoning why I was buying MGNI two weeks ago.

Disney more recently announced that three feature films, Cruella, Pinocchio, and Peter Pan and Wendy will all launch on streaming rather than debuting them in theaters, which will only be good news for Magnite.

Thanks again to everyone that chimed in on the discussions, especially rockleppard and analogkid for mentioning this company initially on the TTD earnings thread, without which, MGNI probably never would have been on my radar to look into. I mostly bought regular shares but I picked up a few June calls (the furthest that were available) that are now up +140% already in a little over a week! And even after the recent run, I still think today’s price for Magnite is going to look really cheap a year or two from now.

-mekong
Print the post Back To Top
No. of Recommendations: 39
I sincerely hope some folks jumped aboard (or are still considering jumping aboard) this stock as heavy volume buying has been consistent most of November. As I stated a week ago when the stock was at $13 and just starting to move, this company has significant potential moving forward and I believe 2021 is going to be a blockbuster year for Magnite. Nobody is better positioned as a SSP (sell-side), and they are operate quite cohesively with TTD in their DSP (buy-side) focused business. The stock has ripped past $15 and is now nearly $20 (up another 10% today) as more firms and folks become aware. I also understand Beth Kindig has been raving about Magnite though I am not a subscriber to her services as yet.

This market cap has quickly doubled in a short period of time but at $2B (vs. TTD's $40B) and a lower sales multiple, I believe MGNI remains an extremely good story stock value and has a very long runway of business expansion and share price growth to pursue from here.

FWIW, I put all of my Fastly shares into this name given my analysis, and MGNI has not disappointed now already growing to 15% of my portfolio since Q3. Another example of pursuing higher confidence stories rather than waiting out those with more complicated stories to unsort. Thank you Saul for beating that concept into so many on this board.

Fool on!
-Rockleppard
Print the post Back To Top
No. of Recommendations: 3
Rockleppard, thanks for bringing this company to my attention. I did decide to open a small position last week and so far am pretty pleased with the performance of the stock. As I usually do with trial-sized positions, before deciding to make them a "real" position in my port, I'm attempting to learn more about Magnite specifically and the programmatic ad business generally. TTD has gradually moved up to the #2 spot in my port over the last 2 years, so I already know a little bit about how programmatic ads work. Mostly I know that whatever TTD is providing is in demand!

A question for you, since you seem to be the main Magnite prophet on this board: I have read Tom Gardner's opinion that growth potentially for a company focusing on the sell-side is substantially smaller (he suggested about one-tenth the size) than the potential size of a company on the buy-side, which is of course the sandbox Trade Desk plays in and seems to be taking over. Their respective market caps right now are approximately $2B for Magnite vs. $40B for Trade Desk.

Is this simply because the number of publishers and the space for the advertising they could potentially host is smaller than all of the businesses and brands who could potentially want to advertise? (That is, that long-term there will be more demand for ads than there is space to host them? That sort of makes intuitive sense to me. Or do you have a different opinion about the TAM in this space?

Again, thanks.

BC
Print the post Back To Top
No. of Recommendations: 0
Rockleppard, thanks for bringing Magnite. Main question from me is organic growth was only 12% last quarter. I guess the main number here is CTV growth which was 51%. Based on this article https://www.fool.com/investing/2020/11/25/why-magnite-stock-... the management expects to return to 20% annual growth.

I'm not sure if 20% top-line grower is something which meaningfully will contribute to our portfolio returns? I think Magnite should be growing at least in 30s or 40s in order to provide real alpha to the board's portfolios. Yes, the multiple was and still is relatively low and looks like the market is starting to price the company higher based on CTV expansion trends.
Print the post Back To Top
No. of Recommendations: 7
I'm not sure if 20% top-line grower is something which meaningfully will contribute to our portfolio returns? I think Magnite should be growing at least in 30s or 40s in order to provide real alpha to the board's portfolios. Yes, the multiple was and still is relatively low and looks like the market is starting to price the company higher based on CTV expansion trends.

LearningInvest0r -

The share price accumulation you see is in anticipation of significant growth acceleration for Q4 20 and forward. It is clear that CTV advertising is increasingly necessary to reach today's audience (vs. traditional TV and other means), and we are in the midst of that transformation as we speak. This is not about the past, it is about expectations for the future of programmatic advertising being centralized amongst the key players as: (a)walled garden of GOOG, FB, and (b)non-walled garden of TTD, MGNI as DSP/SSP leaders.

Hope this helps.

Fool on!
-Rockleppard
Print the post Back To Top
No. of Recommendations: 6
Exactly! Investors in Magnite aren't buying because they think it will only grow in the 20% range going forward. I wouldn't have bought any MGNI if I thought it would only grow in the 20%'s next year.

That 6.1% new position I opened in MGNI two weeks ago (blend of shares and calls) is up more than 90% already! It's grown to more than an 11% position in just 9 trading days! This was, and still is, a great opportunity hiding in plain sight, especially considering the opportunity to add for a couple days even after earnings were announced, before the stock started this great run.

If Magnite is as successful as I think they can be, I expect we'll see much higher growth rates for the next several years.

and I agree with rockleppard that they are just getting started, and this business, and stock, has a long way to go!

-mekong
Print the post Back To Top
No. of Recommendations: 0
May I know the premium service you are referring to in this post.

Thanks,
Ajay
Print the post Back To Top
No. of Recommendations: 3
Hi all, thanks for the great thread on MGNI.


One thing that seems to be clouding the water (at least for me) is the impending "death of cookies" and Apples end of IDFA.

I watched this video (https://youtube.com/watch?v=_noDLVK_j_k) which I think someone posted? Thanks if they did. In it, Jeff and Dave of TTD and Tom of MGNI talk about the future of programmatic advertising, and they're all behind the UID2 proposal, and seemingly a) pretty enthusiastic about UID2, b) pretty concerned about the timings of the changes, and c) repeatedly stating how this changes the whole of internet advertising.

As far as I can tell, theres a long way to go before UID2 gets any real traction. The removal of 3rd-party cookies seems to be a monumental shift in how advertising is done on the internet, and as such has the potential to have a significant detrimental impact on ad businesses like MGNI and TTD.

Perhaps TTD is more impacted because of the demand-side nature of their business. Maybe MGNI is less impacted? But even still, it seems a significant risk to MGNI.

However... the market doesn't seem to care much, which means I'm missing something. Can anyone clarify why they're not concerned about the death of cookies, IDFA etc re: MGNI?


Thanks!
Greg
Print the post Back To Top
No. of Recommendations: 0
May I know the premium service you are referring to in this post.

Here you go :

https://boards.fool.com/4056/magnite-earnings-34662992.aspx
Print the post Back To Top
No. of Recommendations: 1
Can someone please delete this and the previous messages that I posted in this thread. I selected "Email this reply to the author" but did not unselect "Post this reply to the Boards".

Sorry for the trouble.
Print the post Back To Top
No. of Recommendations: 0
One can report their own posts.
Print the post Back To Top
No. of Recommendations: 17
Hi Greg,

The thesis on Magnite, is that they have already started to position themselves away from third party cookie data, and will instead be able to provide customer segment data eg football fans, fitness fans, and the catalyst of this is their industry shaking tie up with Disney. The theory is that they will be able to use their customer data, and become the honey pot for other publishers to consolidate with Magnite, rather than currently where there are literally hundreds of SSP'S, and this then starts to become very powerful for advertisers.

Beth Kindig has produced a quite wonderful report and analysis all about this, building out why she is going big on Roku & Magnite, and not The Trade Desk, as she foresees trouble ahead for them. She was early on The Trade Desk and made some coin on them, so its not out of spite.

I know there have been discussions about Beth Technology and the value of it, I am increasingly finding it invaluable and would highly recommend others to sign up as their analysis is pretty incredible.
Print the post Back To Top
No. of Recommendations: 1
Thanks all for the great discussion.
I just want to follow up on BC's question. I also read Tom G's post, regarding MGNI is more likely to be a 5 baggers in 10 years. He thinks that since MGNI is only advocating for publishers, it will likely not be a fast grower like TTD, because the sell side market is smaller than the buy side market that TTD is serving.

I was wondering if anyone has different opinions on Tom G's analysis? In my view, the sell side market size should match with the buy side market size, otherwise there won't be a market.
Print the post Back To Top
No. of Recommendations: 2
The reason that demand side is bigger than sell side is apparently that the big sell side accounts don't need an SSP. They are able to just go direct to the DSP. The SSP functions as an aggregator for advertisers who trade in smaller volumes. At least that's what I'v surmised.
Print the post Back To Top