It’s been almost three weeks since I last dug into the Real Money Portfolio and shared my updated thoughts… and a lot has been happening, with earnings reports and other big news from a lot of Real Money Portfolio stocks, so buckle in and I’ll try to at least hit the high and low points today.
So many big tech earnings came out… and to my eyes they were all “fine,” though Alphabet (GOOG) posted its first ever year-over-year revenue decline thanks to the collapse in advertising spending (Facebook, which has had revenue growing a bit faster than Alphabet over the past few years, did not decline, but did see growth slow down dramatically). That did not put any real dent in the shares of other ad-focused names like the Trade Desk, which stayed at elevated levels going into earnings and reported another beat and raise (more on that in a minute).
And when it comes to valuations of current market growth darlings, I again just have to shrug my shoulders… I have no idea how we can rationalize paying 60X revenues for Shopify. Or 40X sales for Fastly or DocuSign. None of which are profitable, or terribly likely to be very profitable anytime soon. But it’s also true that I was similarly concerned about 20X revenues for SHOP a couple years ago, and 30X last year when I took some profits. Crazy doesn’t mean it can’t get crazier.
Let’s start with the stocks where I made portfolio moves this week, most of them today, and then I’ll share a few other thoughts… I’m sure I won’t get to everything, but we’ll get as far as we can.
Roku (ROKU) posted a strong quarter following concerns about whether they’d be able to resolve their impasse with Peacock and HBO over revenue and ad sharing, but it wasn’t as strong as last quarter — the revenue growth fell back to something more normal (42%) instead of accelerating like it did last time out. Platform revenue, mostly that ad revenue, is really the key for Roku, and that grew by 46% year over year and more than 4% sequentially from the first quarter — with usage continuing to tie customers to Roku more each day (streaming hours on Roku devices grew by 65%, which is what creates that ad inventory — the average Roku user watched almost ...