DDOG

Two of our portfolio names reported unusually strong earnings this week. In one case, Datadog, the upside was well rewarded with the shares reaching a new all-time high, up 19% for the week, and up about 32% since the start of the year. Tellingly, despite the strong appreciation last week, valuations have pretty much been…

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As the first sentence of The Tale of Two Cities puts it: “It was the best of and the worst of times.” I am sure that many subscribers are unhappy-or more than that with the performance of Alteryx and Fastly. Presumably, some subscribers are pleased with the performance of Shift4 and Datadog. I try to…

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High Growth tech names have depreciated sharply since the start of the sector rotation in mid-February. Most names have lost more than 20% as investors have fled the space-supposedly fearful of rising interest rates brought on by expectations of higher inflation. The flip side of this, is that companies in the space have seen a…

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Summary Several months ago, New Relic introduced its second iteration of New Relic 1. The offering is designed to compete more effectively with Datadog. In some ways, it is a case of imitation being the sincerest form of flattery. The quarterly results reported by NR in the first quarter of general availability of the new…

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Summary Enterprise software turned in a spectacular performance in 2020. My tea leaves suggest that the space will continue to outperform broad indices in 2021. I think a reasonable portfolio should focus on those companies who experienced demand headwinds in all or part of last year. I have taken a portfolio approach to making recommendations.…

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DDOG-How to value growth

Well, first you have to get growth right. As most readers will know, DDOG shares are down around 12% this morning in the wake of the company’s quarterly earnings release.  The shares are actually down about 20% in the last week and 27% in the last month. That is not pretty performance, although to be…

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Buying the dip

The last few trading sessions have seen a rather significant reversal of investor preferences. Risk-off is ruling investment sentiment and has pulled down many high-growth IT names by as much as 20% in a few days. Losses, as is typical in a panic, have been fairly indiscriminate although the names with the highest EV/S valuation…

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Trying to make sense of Datadog’s valuation Making sense of hyper-growth valuations is a fraught undertaking. The problems are manifold in that no one has any real idea as to when the hyper growth phase of a story ends. That would be true even if there were no pandemic, and work-from-home orders. But in this…

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April showers bring May flowers. Of course in NYC, there are also April flowers, and this year, there were even flowers in March. It is a dark, windy, rainy day here, but life goes on. Livongo Health is a name I reviewed back in January before the virus was a prominent factor in stock selection.…

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As I write this post this morning, much news again is centered on the Covid-19 impact. Apple has announced that it will not meet its sales and earnings forecasts for this current quarter due to the impact of the virus. There will, no doubt, be other vendors similarly situated. The reports I get are from…

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