Post 108; May 7, 2020

Very interesting call on AYX yesterday and very reassuring considering the environment.   The company is typically conservative and I heard plenty of caution around quantitative predictions going forward, but their qualitative outlook was very positive.  I heard quotes throughout like: “upscaling of workers; digital transformation is strong; exceeded $1B in cash equivalents; customers are pausing, but not punting; Business model is basically frictionless; analytics are important in good times and absolutely critical in bad times; we hit $400m in ARR milestone for the first time;” and on and on.   I felt they came across very optimistic, but appropriately cautious about the future in spite of the challenges of the Covid-19 crisis.   US growth was up 50%, but they saw some slowdown due to Europe where the virus hit earlier and faster and where growth was only up 28%…to be expected.  They made significant new sales in MANY of the hardest hit industries including cruise ships, oil and gas, and Healthcare.   I’m not really worried here long-term and will maintain my position, noting that the stock is trading this morning above where it was 3 short days ago!   The one other gem they threw out at the very end of the call was a hint that “in the next three weeks you will start hearing about a new type of software which sector we plan to own” (paraphrasing).   No other clues, but looking forward to what they have in the hopper and not going anywhere on AYX.   Cheers!

PS-  NET earnings out today and their stock is up 10% today in anticipation.   Hope to see some of you on the call…this is a company unlike AYX that may benefit tremendously from COVID-19.

User Comment: Thank you for this insight Victor!

Victor:
Wow!  4 days in a row the portfolio is up and it is very close to its 2/19 all time highs.  And NET had solid earnings announcements today with 49% revenue growth and maintained their 78% margins.  I would have liked to see some acceleration in revenue growth, but they are maintaining in the middle of COVID-19 , which is great and no small feat.  NET Is one of my smaller positions, making up only about 3% of the portfolio. I will not be adding anymore, but am certainly not selling it, either…and if you missed it today, it was up 18%…just today!   Wow!  😉

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