Luke's Global Fund achieved a return of 12.8% (in constant currency)over the month of October, and a 27.7% gain to date for FY21 on a constant currency basis. International markets also ended November generally up over the month, with the S & P 500 returning 10.4% for the month, with vaccine hopes fuelling turnaround speculation.
Following feedback from readers, going forward, we will include our portfolio breakdown as at the end of the month. So here is our portfolio as at November 30, 2020:
As can be seen in the table above, the fund performance was driven by Crowdstrike and Stone Co. Stone Co. took the market by surprise, announcing an outstanding 3rd quarter, with TPV up 114% yoy, revenue growing 46% yoy, and Adjusted net margin increasing the 30.8%. Given the significant layoffs in Q1/Q2, lockdowns, and business disruption in Q1/Q2, this was a tremendous turnaround, and management are now focusing on building out their business offerings, with staff number planned to return to pre-COVID levels by years end, the development of micro business platform TON, and building out of the software platform with Linx and Questor acquisitions. We believe Stone Co. is now a stronger business than it was prior to COVID-19 and is set to flourish in 2021.
The primary changes to our portfolio was to add to our Teladoc Health position, making it our third largest position. We trimmed a little Alteryx to do so.
KEY LEARNINGS THIS MONTH:
We sold out of our Trade Desk Position in October, on the grounds of a stretched valuation. We thought Mr Market has gotten ahead of itself. However, we neglected to factor in the US election. In 2016, Trade Desk benefited tremendously from election advertising spend, and Mr Market was factoring this in. We should of slowed down in our actions, and considered the “upside risk”, given we intended to sell. We exited Trade Desk in October at an average share price of $605.48 per share. On November 30, they closed at $901 per share – OUCH! Going forward, upside risks will be one item added to the sell checklist.
If you have any opinions on the companies we hold, or would like to know more about our investments, we would love to hear your feedback.
Regards,
Sean