Next 10x Stock Winner

[manch]

MOAR SHOES!!!

[Elt1]

I invest in what I know and use. Apple, HD. Costco, Wallmart, Microsoft, Amazon, Ruger, Facebook, Vail.

[hanera]

@Jil wasn’t bad too but he traded instead of owning them. Now he should be looking for another SHOP instead of TSLA. His pick was SHOP TDOC VEEV

[manch]

This thread is too long and outdated. Why don’t you start a new one with everyone’s new picks for 2021?

[marcus335]

@marcus335

Here’s what passes the first few criteria:

• $2-10B market cap
• 40%+ gross margin
• 30%+ yr/yr revenue growth for most recent qtr
• Still run by founder

BAND - It seems to be a TWLO competitor
BILL - automates financial stuff for small-medium businesses
ESTC - search structured and unstructured data
FSLY - edge cloud platform
NCNO - cloud-based software for financial institutions
SAIL - identity governance solutions and enterprise app access rights (OKTA competitor?)

I found it interesting only 14 met the non-founder criteria. Last time, there were a LOT, and it was pretty time consuming to look up each one. It just goes to show that by the time companies go public their market cap is already BIG.

I don’t like the BAND and SAIL, since they seem to be far behind the leaders of their category. I think NCNO is a relatively small niche, since there’s fewer and fewer financial institutions as potential customers. That leaves BILL, ESTC, and FSLY.

It’s interesting that people always talk about engineers making all the money. I suspect sales pays as much more even more. It seems every enterprise software company spends more money on sales than engineering. I wonder how the average comp per employee compares.

@Zeapelido

Here’s the more recent list. There’s a lot fewer stocks under $10B, since the market has run a lot and companies wait longer before IPO. Then here’s the ones if it’s expanded more to $20B then $50B market cap:

If I bump to $20B, then that adds:

AVLR
DT
NET
ZEN
MDB
TER
WORK
ZS
COUP

I didn’t check those for founder led. The next group under $50B:

RNG
OKTA
DDOG
CRWD
DOCU

I didn’t check those for founder led either.

[hanera]

@manch

This thread is too long and outdated. Why don’t you start a new one with everyone’s new picks for 2021?

This thread is started by @marcus335

[druid]

@marcus335 Your comment about spending more on sales vs engineering is true. I was shocked to recently learn that my employer’s sales organization has as many employees as we do engineers.

Why does your criteria not use Rule of 40 or do you think that’s not relevant in the current market?

[marcus335]

I’m less concerned about profits in a highly growing company. I care more about a high gross margins, since that is the key to big profits later. If gross margin is low, then it’s impossible to end up highly profitable. I do think it’s worth looking at cash flow, since that’ll determine if a company can fund itself or will need to keep raising money. I don’t like a high cash burn rate.

I also look for founder led, since it’s hard to get top talent to run a small company unless it’s the founder.

[wuqijun]

Quantity is important. A 100% return on $1 million is better than a 1000% return on $50k. So be happy with your aapl due to the quantity of it.

[hanera]

@wuqijun

Quantity is important.

@wuqijun

So be happy with your aapl due to the quantity of it.

You sense I am not envy of your TSLA gain ?

[marcus335]

Our CFO showed us some of the board deck today. It’s interesting how he thinks about software company valuation. He did a cut of >30% revenue growth and operating loss of $10M or better. He had different views ranking by revenue growth rate, price/revenue ratio, then 1-yr and 2-yr stock performance. The cohort absolutely killed the market average return.

[hanera]

@marcus335

The cohort absolutely killed the market average return.

Release the list of cohort! We’re hooked.

[mcp]

More Alarm Bells Are Being Raised About Sky-High Tech Valuations

[marcus335]

I can’t remember the full list. It had a bunch of names we discuss here. I’ll see if I can re-create it.

[Jil]

@hanera,

I see the possibility of NTAP May drop sometime soon ( wave 3?).

Do you see similarities? What level it can drop?

[hanera]

NTAP. Didn’t do a count. TA is bearish. Bearish gravestone and decreasing volume. Should close two gap ups till $60, depending on market conditions might attempt to close $55 gap.

[Jil]

@hanera

NTAP. Didn’t do a count. TA is bearish… Bearish gravestone and decreasing volume. Should close two gap ups till $60, depending on market conditions might attempt to close $55 gap.

The EWT gives wave 3, but my algo says it is very high peak and about to turn down (may be wave 4).

[hanera]

@Jil

The EWT gives wave 3,

Looking at the your graph, it seems to indicate current picture. It didn’t indicate whether it is going to complete or not.

Refer to my graph. Length of wave iii is 2.88 of length of wave i. Wave iii could have been completed. If not completed yet, should complete not higher than $69.

[Jil]

@hanera

It didn’t indicate whether it is going to complete or not.

Right, but my algorithm indicated peak is now and possible down period ( like TSLA ) in 2-8 days range.

BTW: not a stock advice, viewers be careful it can go wrong

[hanera]

Didn’t realize I own a 10x over 9 months (from low in Apr). Ofc, quantity is too low, so didn’t hit $10M like @wuqijun Also didn’t add more at the low, best is 4-5x