End of Month Portfolio Update: July
Buys, sells and reevaluating some positions
Disclaimer: the opinions expressed are my own and should not be mistaken for financial advice. Do your own due diligence before purchasing any equities mentioned in this article.
July turned out to be a fantastic month for the QQQ 0.00%↑, and many stocks in my portfolio came out positive as well. Similar to June, ad-tech performed fairly well until receiving some collateral damage thanks to the likes of ROKU 0.00%↑ and SNAP 0.00%↑ dragging TTD 0.00%↑ and PUBM 0.00%↑ down with them.
Software stocks like VEEV 0.00%↑ and PAYC 0.00%↑, as well as vacation booking giant ABNB 0.00%↑ all rebounded significantly from previous lows. Here is my growth portfolio as of August 1st:
Activity - Buys/Sells
Note on Strategy Going Forward:
Now that my standing cash reserve is starting to dwindle a bit, I am taking a slightly new approach to dollar-cost averaging. Previously, I would purchase a bit of everything on a weekly basis as my cash horde from the end of 2021 was quite large relative to my other positions. As economic conditions falter, there will be companies in my portfolio that start to struggle and show deceleration in revenue growth. As a result, I will only be adding after analyzing the earnings report.
Alright, time for the update. No new sells or purchases this month. The Unity news was disappointing and forced me to completely reevaluate my position. Ultimately, I did not sell my shares, but more on this in a bit. Per the note on my strategy going forward, I added to Tesla, ServiceNow and Google. The only other company in my portfolio that has reported so far is Shopify, which I chose not to act on. Let’s take a look at how I view my current positions:
Top Tier
Middle Tier
Nothing has really changed from my June review. This is more of a speculative position that I don’t intend to add to yet. Confluent is in “prove itself” mode at the moment and I would like to continue to get know this company a bit better. I did a high-level writeup on Confluent, (found here), which covers the basics and demonstrates the extent of my knowledge on this company. My opinion has not changed, but I would like to see more before committing any more capital.
I have stopped adding to this position mainly because I just want to step back and reevaluate my thesis on this company. Monday.com has a ton of competition, and sits at a financial disadvantage. I have no plans to sell, but I will let the market decide how weighted this position becomes.
Shopify has been all over the news with the recent announcement that they are laying off 10% of their workforce, followed by a lackluster earnings report. They recently reiterated that they will be reinvesting all gross profit into the company’s growth. And they have a lot of ambitions, such as building out a fulfillment network, which require a massive capital investment.
Lower Tier
As long as there remains uncertainty with large chains accepting GoodRx discounts, this will stay in the lower tier. I have not purchased a single share in months and I don’t plan to before earnings. I still think GoodRx has a lot going for it, but I fail to see how they are going to combat chains not accepting their discounts. I’ll hold on to my current shares as I feel there really isn’t much of a point in selling, but GoodRx has a lot to prove before I even consider adding.
Nothing has really changed with Sea. I love the foundation they have established in a very lucrative market, but they are so exposed to geopolitical issues in southeast Asia (China mainly). I don’t think there is anything wrong with the business, but I don’t really feel comfortable holding too much of this company, which is usually an instinct I tend to trust.
Welcome Unity to the bottom tier. As if the AI issue wasn’t enough, they go and make a massive acquisition, albeit a decent one if I am being honest. My view on this is that acquiring ironSource was simultaneously a) smart and b) a clear sign that management has been unable to internally correct a major issue - helping their users monetize their apps. They have obviously addressed a problem the best way they could, but I am not happy about the fact that this was an issue in the first place. This could turn out to be an absolute home run of an acquisition, but I remain cautious for now.
Watchlist and Plans for August
For the most part I am happy with the weight of each position, but there is one company I will be adding a bit more heavily. That company is Datadog.
Observability and security are becoming more and more vital to organizations becoming increasingly digital. In an economic slowdown, this is the absolute last expense to be cut, making it nearly recession-proof. The partnership with Microsoft making Datadog easily available in the Azure portal speaks volumes about the quality of the company’s platform. I will be increasing this position as the market allows.
Additionally, I want to share a few other companies I am watching / researching. Intuitive Surgical ISRG 0.00%↑ is at the top of that list. I’ll be releasing my most extensive writeup yet on Intuitive in the coming weeks. For now, all I’ll say is that I love this company’s business model. They have an outstanding recurring revenue model for a hardware company and they’ve consistently led the robotic-assisted surgery market for decades.
A few others I am watching:
That’s it for July. Earnings season will no doubt be eventful. I’ll be providing my thoughts and buy/sell decisions on Twitter as each company reports, so follow along if you’re interested.