Growth Stock Thoughts

An Investment in Knowledge Pays the Best Interest

Benjamin Franklin

 

Building Benjamins

Coupang is the Amazon of Korea

• Coupang (NYSE: CPNG) grew third-quarter revenues to $4.6 billion, up 48% year over year (YoY).
• Coupang grew more than twice as fast as the 20% growth rate of the Korean e-commerce industry.
• Expected to grow revenues 25% for 10 years. Will be 10X bigger.
• Not profitable currently, but margins are improving, and expect profitability in 2024.
• Its own network of warehouses, trucks, bikes, and drivers provides a great customer experience and will be difficult to replicate.
• This network is a big moat and provides a sustained competitive advantage.
• Services include food delivery, grocery delivery, and streaming.
• Highest customer satisfaction of competitors in several sectors.
• This is a high-risk, hypergrowth stock.

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Building Benjamins

Coupang’s rapid growth makes it the Amazon of Korea. CPNG $29. Attractive at only two times revenue.

• Grew third quarter revenues to $4.6 billion, up 48% year over year (YoY).
• Coupang grew more than twice as fast as the 20% growth rate of the Korean ecommerce industry.
• Expected to grow revenues 25% for 10 years. Will be 10X bigger.
• Not profitable currently, but margins are improving and expect profitability in 2024.
• Its own network of warehouses, trucks, bikes and drivers provides a great customer experience and will be difficult to replicate.
• This network is a big moat and provides sustained competitive advantage. This is a high risk, hypergrowth stock.

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Building Benjamins

Cameco Radiates Carbon Free Electricity

• Uranium demand poised to surge as the world builds out electrical nuclear energy which is greenhouse emission free.
• Uranium prices on the rise, leading to increased profitability and cash flow.
• World’s largest uranium refinery, producing most of the United States and Canada’s capacity for reactor fuel.
• Vertically integrated, from mining, to enrichment, to reactor components.
• Significant marketing effort for CANDU reactors in China and South America, providing opportunity.

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Building Benjamins

Charlotte’s Web Big Potential as Congressional Legislative Web Untangled

• Big stock price recovery potential as stock traded at $7 in early 2021.
• In an excellent position to capitalize on further CBD/Cannabis legalization.
• Bipartisan support and new legislation regarding CBD/Cannabis could get passed in the first half of 2022.
• Tax-loss selling has exacerbated price decline significantly; we expect a strong recovery into 2022 and believe the company is trading at a discount to intrinsic value
• Access to massive online sales channels, 22,000 retail locations, and direct sales to healthcare providers.

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Building Benjamins

Charlotte’s Web CWBHF – Stock has dropped from $7.00 to $1.03 as congress delays passing 2 bills.

• Charlotte’s Web produces CBD hemp extract wellness products for pain, sleep, stress, immunity, and exercise recovery.
• CBD is legal but CWBHF often trades in sympathy with the legal Cannabis Industry.
• Stock sold off as congress could not agree on what to include in the federal marijuana legalization bill and did not get it passed. In addition, a separate bill providing FDA authority to regulate CBD also failed to get through congress. Both bills have bipartisan support and should get passed in the first half of 2022.
• Tax loss selling has exacerbated the decline. We expect a strong recovery into January and believe the company is worth significantly more than the current price.

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Coinbase Faces Margin Erosion and Strong Competition

Coinbase as the early leader in cryptocurrency trading and custody enjoyed very strong margins. Unfortunately with widespread acceptance of cryptocurrencies, intense competition is driving down fees as innumerable competitors enter the field. We believe profitability will be hard to come by and that we may have already seen peak earnings in 2021. We sold the stock because of this intense competition and margin erosion.

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Building Benjamins

Perion Networks PERI had a great quarter. Revenues up 45%. EPS up 90%.

• Perion Networks (PERI) had a great quarter.
• Revenues up 45%. EPS up 90%. Current price 22 vs high of 30. Stock surged after quarter but has pulled back.
• A good entry point for a secular 30% grower.
• Over 500 advertising partners, 200 publishers, and 8 billion page views in 2020.
• Massive 45% increase in total revenue in third quarter driven by 30% increase in average spend and 12% increase in new clients.
• AI-powered solutions to a traditionally “analog” industry. The total addressable market (TAM) is expected to climb to $524 billion by 2024, from $340 billion in 2020.

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Building Benjamins

Growth Stock poised for recovery into 2022. StoneCo (STNE) price 18. Traded as high as 92.

• StoneCo is a leading Brazilian provider of financial technology solutions that empower merchants and integrated partners to conduct electronic commerce seamlessly across in-store, online, and mobile channels.
• The move into credit has been mismanaged creating unfavorable bad debt expense.
• The stock’s pull back is over done with tax loss selling pushing it lower than fundamentals would indicate.
• Expecting strong partial recovery in January.

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Building Benjamins

Solar Electricity Generation is the best Green Solution, Canadian Solar (CSIQ) price 34 – Solar Grower

• Solar Electricity Generation is poised to grow over the next few decades because it is the best green energy solution.
• Cost competitive and getting cheaper. Easily distributed to users whether at home, office, factory, warehouse or store.
• Readily available and efficient where most of the world’s population lives.
• CSIQ is a Solar Grower. Solar and the related batteries are a multidecade growth opportunity.

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Building Benjamins

StoneCo’s Fintech Platform Poised for Growth

• Latin American Fintech with Massive Market Opportunity.
• Explosive growth over the course of the pandemic.
• A dominant force in Brazil.
• Revenues made up of fees from customers.
• Vertically integrated, from banking to sales to logistics.

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Building Benjamins

Ovintiv OVV $33.73 – Incredibly inexpensive 4 PE, 17% Free Cashflow Yield, Growing Shareholder Value.

• Ovintiv Enhanced by Drilling Efficiency Improvements Growing Free Cash Flow and Compelling Valuation.
• Free cash reducing debt and raising dividends.
• Aggressive efficiency campaign, which is improving profitability and cash flow.
• 540 MBOe/d portfolio of hydrocarbon wells across the US and Canada.
• Diversified product mix of crude oil, NGLs, natural gas. PE of 4 and 17% Free Cashflow Yield.

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