by Travis Johnson, Stock Gumshoe | October 15, 2021 12:39 pm
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I hold Mitek. It has done fine so far for me. It is a stock that George Gilder is keen on.
Yep, I’ve written about Gilder pitching MITK once or twice — most recently in 2020, if I remember correctly, so his subs probably got in at a better price.
I got in at the time of the MF pitch back in March:
https://www.stockgumshoe.com/2021/03/microblog-150x-fintech-small-cap-from-mf-march-13-2021/#comment-5032221
People forget that Amazon was on a route to failure with growth decelerating to sub-10% when they did an innovative thing and launched Prime. That turned it around, and later did AWS. It was truly impossible to know whether Amazon would be a huge winner because the key components had not been invented yet.
It’s true, greatness is always more apparent in retrospect. I certainly didn’t buy Amazon back then, and wasn’t convinced by Bezos’ vision until much later … but reading his annual letters and believing that strategy certainly paid off.
hmmmm looking at the chart it sure looks pretty bubbly. God knows I’ve been wrong more than I’ve been right but still gonna wait on this one. Thanks for your insights, Travis. You have saved me a lot of money that took a lot of effort to make. Just to be clear for your sub’s, I use your service to save me money more than I use it to make me money. Either way, your services is the best money I ever spent!
Will you consider to put SOFI into Lock Box? Thanks!
What do you like about them? I have a hard time seeing the path for them to scale to profitability in a competitive space, but I’ve never really dug into SOFI in detail.
On the topic of SOFI, noticed them on reddit and for some reason bought some…… It went up 30% and as I thought about it more wasn’t sure why I bought it in the first place…… Sold it and took the profit.
Thanks Travis for highlighting MITK. To complement your coverage, there are increasing interests and investments in the Identity Access Management sector. The current specialized leaders are OKTA and PING, while others are MSFT and IBM. One specialized company that I am watching is FORG. It just IPOed and grew its revenue by about 51% at a GM of 81% last quarter and very likely to continue at an accelerated pace due to funds from coming public. The Q3 result will be a big factor to ascertain its potential to challenge the current leaders.
Thanks, I’ve owned Okta for a few years now and their growth has certainly been impressive. Haven’t looked at FORG yet.
$ALPP
@alpine4holdings
NASDAQ bound this Wednesday, October 20th, 2021.
Wow! What a conglomerate!
Thank you Kent B. Wilson, #Alpine4 Team &
https://alpine4.com/investors/market-activity/
@FinFreeFlex!
Get on #SIDE of Synergy, Innovation, Drive & Excellence
#Best2ALL!
https://twitter.com/H0U3/status/1449706455851061248?s=20
$ALPP 8-K Nasdaq announcement and CEO letter to shareholders exhibit:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1606698/000109690621002526/alpp-20211014.htm
The One to look at for lock-box portfolio.
#Best2ALL!
Have heard Mitek touted by a different financial “guru”.
Cant remember his name,
But did make it sound bite
worthy.
$UMGNF Forbes article: US Vivendi Investors Were Shortchanged, But ABBA Mania & George Lucas Are The Key To Great Growth For UMG by Jim Osman, Contributor, Hedge Funds & Private Equity
https://www.forbes.com/sites/jimosman/2021/10/12/us-vivendi-investors-were-shortchanged-but-abba-mania–george-lucas-are-the-key-to-great-growth-for-umg/
Best to ALL!
Is the page where you put your notes and analysis of every holding and last ‘buy below price’ still around somewhere? I had it saved as a favourite on my phone… Until it was run over by several cars at the weekend. Thanks!
That Annual Review summary is still up, and I still update it occasionally when my thinking changes. It’s on the bottom of the Daily Update emails and here: https://www.stockgumshoe.com/2021/03/annual-review-the-whole-magilla/
Travis. I bought Goosehead Insurance (GSHD) on you recommendation and it has done very well. Thank you. Trying to decide whether to take some profits or let it ride. Any insights on where you think this stock is going?
GSHD will probably report next week sometime (it was Oct. 29 last year), so the story could change pretty quickly. For me it’s a hold here, we’ve soared 40% above what I pegged as the last reasonable buy price, but I will review their next update and see if there’s a reason to change my mind and buy more. I have no idea where the stock is going in the next quarter, or even really in the next year or two, it’s been a rollercoaster, but the company itself has been growing their revenue-generating base of agents relentlessly, which is what makes me like their long-term prospects.
Their new website/app provides some reason for near-term optimism if that is appealing to customers, but it’s only been out for a couple months now so we don’t have any updates from the company on how that might impact business.
The major reason to own the shares is the power of their recruiting and the franchise model for agents, and the pretty clear line you can draw from recruiting increasingly huge waves of new agents last year and this year toward those agents generating meaningful revenue for Goosehead in 2023 or 2024, which could very well cause GSHD’s revenue growth to accelerate, which often really gets investors excited… this is a company where the recurring revenue flywheel is built to accelerate (mostly because agents get 80% of first-year commissions, but only 50% of renewals), but that doesn’t necessarily mean it makes sense for the stock to have surged 50% in a quarter. Maybe some of their new agents will have a really hard time building their customer base, or it will take longer than expected for them to generate revenue.
I am currently resisting the urge to take some profit, mostly because selling shares of a small company with a huge addressable market, strong and fairly predictable growth, a strong possibility for accelerating revenue growth, and margins that will improve almost mechanically, is usually a mistake in the long run. This is one of the names that bring up a mantra I sometimes have to repeat to myself, “in order to own extraordinary growth companies, you have to hold stocks at prices where you would not buy.” I think Goosehead has a solid chance to be extraordinary, and it has had a great start and remains a tiny company at this point, but the next few years should be interesting.
And the stock could ABSOLUTELY fall 50-70% on just a tiny bit of bad news (it fell 50% from Feb-June this year, without any genuinely bad news), we’re talking about a company valued at about 100X 2023 earnings forecasts and 25X sales, and with a tiny market cap of only about $3 billion… so, as with all things, it’s mostly about managing your emotions — if you can’t stand that kind of drop with your current position, you might want to sell a little bit. If you want some more pessimism, Bank of America just downgraded them to “underperform” because the stock shot so high so fast… though they did also raise their price target from $123 to $154 at the same time.
Will update when they report their next quarter, but I’m likely to give GSHD a lot of room.
Thank you Travis for your insight. This has definitely been a ride.
Travis, please take a look at GSHD’s Insider Trading, the member of 10% owner group, CFO, and CEO sold all of their holdings. They have ZERO shares.
#GSHD
That’s untrue. The GSHD cofounders and CEO are consistent sellers, that’s true and I consider it a minor caution flag, as I’ve noted in the past, but they have not sold anywhere near all their shares — they are still very large holders. If memory serves, they still own ~1.5 million shares or so among them.
Wow! I have been offline all day and just noticed that PUBM is down a lot. Did I miss a big reveal of some kind?
Not that I’m aware of, I assume it’s just general pain in the ad sector — a few disappointments in advertising-driven stocks, and nerves about the adtech companies who have yet to report.
Got it — thanks Travis. I sold my position in ATY last week — will re-purchase if things look up–noticed that you continue to watch it, but no nibbling! I still like PUBM and others in the space and look forward to seeing what happens as the economy starts to re-open
Travis, the short interest as % of float for PUBM = 11.35% . Is that considered high for its niche or for the market in general? Is there a benchmark % to go by to determine if a stock favors the short-sellers over longer -term investors?
I don’t know that any of the old “rules” for short interest
apply these days, most people seem a little scared of shorting now… that’s fairly high, it would take ~3-4 days of normal trading to cover that short, but I haven’t watched the level over time with this one.
I don’t know of any reason to suspect fraud or malfeasance, so shorts are probably looking just for a bad quarter or a downturn in ad volume to disappoint investors — adtech in general is having a bad couple of weeks, but that’s still a risky bet. Still might work, I guess we’ll find out soon — and I don’t remember offhand whether PUBM has any convertible
Debt, but if so you’ll often also find a structural short in the shares as lenders hedge their convertibles.
Yesterday there was an altimetry event where Joel Litman revealed all 23 tickers from microchip confidential, and yes MITK was one of the, bought in December 2020 and up 19% until now #MITK #MICROCAP #ALTIMETRY