by Travis Johnson, Stock Gumshoe | January 7, 2022 5:17 pm
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Source URL: https://www.stockgumshoe.com/2022/01/friday-file-fintech-for-the-lock-box/
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Hi Travis
Happy new year to you and everyone here
Glad to see you add to upst, how about afrm and pypl which have significantly come down
I also like your charts, what app do you use
As usual loved reading your first Friday file of 2022, thanks
I haven’t really convinced myself about the “moat” of any of the buy now/pay later names, but PayPal is certainly impressive — I’d gravitate to SQ before PYPL, but haven’t looked that closely at either recently.
And thanks! I use Ycharts.
I have AFRM and am a bit worried that I can’t really find a differentiator between them and the multitude of new BNPL offerings and competing offerings from incumbent financial services.
I have both SQ and PYPL. Not very happy with PYPL but willing to cut them some slack.
a) I remember seeing a google sheet of all the companies in Lockbox with their cost basis. If you don’t mind can you link that pls?
b) Have you thought about slowly building a position in the lockbox instead of putting straight 5k?
The Lock Box portfolio page is here: https://www.stockgumshoe.com/100k-lock-box-portfolio/
I tend to build positions slowly in my regular portfolio, but not in this one.
I seem to recall when you came out of LMND you did so on the basis that you expected to have an opportunity go back in at $50. Now it’s below $40 … are you interested?
Not currently, they have really failed to execute on the kind of customer growth they need… which makes me think the marketing spend and/or competition is going to be tougher than I hoped.
As someone born and raised in the U.S. but having lived in Brazil for two years consecutively (and having travelled to both Uruguay and Argentina for shorter stints), I will say that if you have not done something like that it is hard to comprehend the cultural differences present across the world. As humans we’re very biologically dispositioned to only find importance in specific experiences we’re raised with (watch the Netflix docu on babies and their development — very interesting).
As such, if I were betting on the retail LatAm market, there is no way I would put my dollars with SE over MELI. That’s not to say SE won’t/can’t be a highly successful company in their own right, but I’m just saying I will not be surprised in the least if they fail to make a meaningful extension into the LatAm market when a homegrown company has been doing it very successfully for many years and has not taken their foot off the gas pedal in the least. Just my two anecdotal cents.
Thanks for the post. Very timely as I am looking to start a small position in MELI.
True, established leadership and a built network and brand in a market are powerful things. Shopee quickly moved to #2 in Brazil,
From what I can tell, but isn’t very likely to be #1. Similar to
The challenge the multinationals have in trying to take share from Shopee in Indonesia and the other smaller Southeast Asian markets. It’s going to be a slog — I like MELI too, though have never owned it. Has certainly been a good buy at times, particularly when people freak out about currency failures and fluctuation in LatAm countries, and You can certainly argue that the valuation has come back down to “fairly reasonable” again.
When you calculate in SE’s losses (MELI is technically profitable), they both earn close to the same amount of money (i know that sounds finagled, and it is, but still…), but all of MELI’s is in this hemisphere. I’m really curious to know how much revenue SE is getting in LatAm — can’t seem to find that. I know downloads have been extremely impressive for Shopee, as has been time on the app; they’ve got this gaming mechanic built into it that seems to drum up downloads.
To be clear, I think SE’s growth is extremely impressive but will say their entrance timing into LatAm was fortuitous with pandemic tailwinds for ecom. I think one of the big things for them to figure out is logistics. Making a fun app feels like a short term victory for an ecom business (though, technically, SE is MORE than just an ecom business). Delivering every type of product to everyone everywhere in an accurate and timely fashion and while still turning a profit is the long game.
Natorious,
This is off subject, but i like that you said “…if you have not done something like that(extensive travel) it is hard to comprehend the cultural differences present across the world.”
Mark Twain said something very similar. I have an old photo of him sitting on the deck of a steamship, with that quote below.
Another awesome read, Travis! Thank you!
Good writeup. Have both ROKU and SEA. Been a wild ride. Holding on for the foreseeable future.
Thanks Travis. Happy New Year
I’ve sold 60% of my SE shares to recoup my initial investment but planning to get back in, the question is when and at what price…$130 – $140 may provide some support, if that gap in Aug ’20 had any meaning
Last year, The Motley Fool recommended UPST twice in Stock Advisor and once in Rule Breakers – the latter at $336
$RPRX is too cheap
I agree, if you look at RPRX compared to a lot of other royalty companies it’s awfully inexpensive. It will be interesting to see how investors value the company as it gets a few years under its belt. A drug royalty doesn’t have the perpetual value of a mining royalty, given the short life of RX patents, but they also probably have a much better “hit” rate on investments than the royalty financiers in mining, and RPRX has been doing this long enough to have a good track record in assessing the value of the royalties they buy.
Dramatic price control legislation will hurt, as would the failure of a couple big drugs in their portfolio, but at this price I think that risk is overstated.
Yes…there is a lot of skepticism around the model… patent cliff, & pricing which is why it hasn’t seen the valuation it deserves. I don’t think it should trade at nearly half the P/E of the S&P….I personally believe in the model bc they have proven growth successfully +20 years from nothing to +$20B MC & +$2B sales annually with +20% ROE. That is enough proof of concept for me and the founder is still running the business. On the patent issues, I believe they eventually diversify into perpetual royalties like medical devices or medical software and even licensing of their valuable/unique data. It appears that given their extremely low cost of capital, reinvestment of reliable +85% cash flow margins, and high “hit” rate, they have proven they can grow at a much faster clip than legacy royalties can deteriorate. The pipeline looks incredible so far and the overall portfolio is more diverse than just about any biopharma company I have seen. I would almost compare these guys to a Berkshire, Constellation Software, Blackstone in terms of being capital allocators… The technicals are finally started to look positive w/ 50d ma crossing 200d. I hope we finally see +$50 this year. I am long around $38/share
You and I are thinking along the same lines. Hopefully we’ll be right, but only after I’ve finished building out a position.
Hi Tiger5, may I know which website you got this data
IBD…prices were pulled in November but generally still in-line
Hey Travis
Thanks for the update on Bam. I bought some close to 54 few months ago and after reading your article I bought some more. Looking for the rest of your thoughts about Bam Friday if you get to finish the update.