I sold my poor Stitch Fix to raise some cash last week. I recently nibbled on $NET after hours because of FSLY downside guidance (personally never liked FSLY for numerous reasons, hindsight is 2020, but I am glad I don’t own them). Not saying they wont do great in the future, I just don’t prefer usage based model and fluctuation of revenue. I also have friends who swear by CloudFlare without bias.
Anyway, its that time of year where we have earnings, these high flyers are going to take a break (as we are currently seeing) and need to deliver. And i mean DELIVER. Fastly obviously did not impress, one question I have is what about other users? Does that mean usage stayed stagnant? Is the work from home bull thesis not intact? I have a lot of questions, I will just have to wait for the report! For such a high growth name, that information was very disappointing, this is where you cant just say "long-term" it will be fine, that is an underlying business shift that needs to be addressed in the next call.
In uncertain times, I believe it is fair to have cash on the sidelines. I am usually 99% invested in my stocks, but this massive run up in CloudFlare gave my portfolio a giant boost so I ended up closing out of Stitch Fix to raise some cash, and waiting until mid-earnings season to deploy some, maybe I will even find a new attractive name! I have a few on my list I would like to add… Zebra Technologies is on the top of the list. I nibbled on a starter position today, and will add more if they dip after earnings, or at all. I have followed this name for 2 years, I like the name, management, and industry, it is not a "high flyer", but it is steady and in a very in-demand industry.. Warehouse automation is increasingly important, and I will throw up a report on them soon as well.
I think a fair assessment of the current high growth area is stagnant/pullback until we can breakdown earnings calls, numbers, and what they have to say and are seeing in their relative markets. I expect strength, but lets see what the market says…. Could be some very good buying opportunities in the next 2 months into year end.
This is a short and sweet post. I am sitting tight, and monitoring. BlackLine showed very good strength today, while everything else was down. So did Zebra Technologies. Remember: STAY DYNAMIC