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No. of Recommendations: 7
This Hedge Fund Blend Screen had a good day today. That's because one of the holdings, Slack (NYSE:WORK) was up almost 40% today on the news that Salesforce will likely buy it out.

https://www.cnbc.com/2020/11/25/slack-shares-jump-following-...

At Slack's current market cap of $23 billion, Salesforce would be buying it for 30x trailing revenues. If Slack continues to grow sales at about 50% YoY, it would realize $1B of revenues next year, so Salesforce would be paying 23x forward 12-month sales. This would be one of the largest software acquisitions in history. Next time you think that a SaaS company growing subscription revenues at 50% annually is "overvalued" at 20x sales, just keep in mind that there are companies like Salesforce and Microsoft out there willing to pay that kind of multiple to buy them out.

The market is pricing Slack as if it's already been acquired, so if you followed this screen and bought a piece of WORK, your best bet would probably be to sell it tomorrow and pocket the quick 50% profit (the shares were trading at only $26 when I listed the screen picks here less than 2 weeks ago).

So what do you replace Slack with? The answer is Twilio (TWLO). That's the 5th largest holding in the Brandywine fund.

Cheers, and Happy Thanksgiving,

-Ron
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