SE - Sea Limited ADR

[Xerxes]

I was a dork with a calculator on Amazon till early 2017.
Been happy since. Pay up ! And average up.

[Simba]

I was a dork with a calculator on Amazon till early 2017.
Been happy since. Pay up ! And average up.

But what are you paying up for? Paying up because price is up? Multiple expansion has obviously trounced fundamentals.

Also I'm not sure if you know but here is how Amazon traded in 2017. It looks cheap with just running a Bloomberg Screen

Jan-1-2017
Amazon:
Price / Sales Ratio 2.2x
EV / EBITDA 19x (NTM)
Revenue grew 27% and 30% in 2016 and 2017 respectively

[valueinvestor]

Gregmal
How about light speed LSPD at $5 billion market cap than Sea at $83 billion.

If I am going to go with a high market cap on an absolute basis it would be Mercaodolibre, given its entrenchment.

I still don’t understand LightSpeed - granted I didn’t do a deep dive. Funny enough I think I have the CEO phone number in my contacts. Any chance Xerxes you can pm or post your thesis here? I can take a look and get back to you, if you find that valuable.

As for Meli - it’s definitely more entrenched but I like Sea is in more “stable” low corruption economies with high GDP growth that’s sustainable imho.

Also Sea for me is almost like a mini-tencent with tencent backing. Hence they can leverage tencent’s operational expertise to NOT make the same mistakes as tencent to grow, as opposed to Meli who are doesn’t really have strategic shareholders.

What kind of nailed it for me this year is that they are cash flow positive. All they need to do is dial down the growth and take out the cash. Although if that’s the case, then stock is wildly expensive but it’s a huge plus as opposed to building infrastructure from outside capital or dilution. When my napkin math said that I had a more than fair value at 50-60, I went “all-in” as they say.

I just hope they can keep on getting capital at reasonable rates and try to dominate South East Asia.

[valueinvestor]

Also Lightspeed seems to be a beneficiary of Canadian Tech ETF/mutual fund flows, just like Shopify - where there are very little tech companies in Canada and yet tonnes of etf money.

Here's ishares holdings:

CSU   CONSTELLATION SOFTWARE INC   Information Technology   CAD 109,512,360.32   25.19   
SHOP   SHOPIFY SUBORDINATE VOTING INC CLA   Information Technology   CAD 104,453,176.86   24.03   
GIB.A   CGI INC   Information Technology   CAD 78,773,391.00   18.12   
OTEX   OPEN TEXT CORP   Information Technology   CAD 55,296,757.08   12.72   
DSG   DESCARTES SYSTEMS GROUP INC   Information Technology   CAD 22,256,587.74   5.12
KXS   KINAXIS INC   Information Technology   CAD 17,406,300.00   4.00   
BB   BLACKBERRY LTD   Information Technology   CAD 12,791,003.75   2.94   
LSPD   LIGHTSPEED POS SUBORDINATE VOTING   Information Technology   CAD 12,356,506.80   2.84   
ENGH   ENGHOUSE SYSTEMS LTD   Information Technology   CAD 9,916,306.56   2.28   9
CLS   CELESTICA INC   Information Technology   CAD 3,712,560.43   0.85   

Imagine having 10 tech etf with the same allocation. They are desperate for more tech companies if they included Celestica.

[Xerxes]

Valueinvestor,

Within my TFSA, i am holding half a dozen names. I call it the portfolio of long shots. Within that I hold Spotify, Uber, IAC, Mercado-Liber and Lightspeed.
I also have BB there but will remove it as soon it gets close to $10 CAD.

That basket of names all have nose-bleed valuation (with the exception of perhaps IAC) and make up less than ~30% of the entire financial assets and is meant to hedge against 'my other side' which is more about looking in depth in some of the names. So, what I have in there is not based on deep conviction (they are not Berkshire size bet for me on absolute and relative terms), but rather bets on general themes. I am not even looking at earnings. Only market opportunity and the fact that all of them with the exception of Uber are ran by founder-owners. Specifically on LSPD, it is a home city name, Canadian and the market cap is low enough to have enough runway. That is good enough for the intent of that portfolio to cover a fintech type names, without dishing out top dollar for Square.

On the other hand, I hold Amazon, Tencent, Alibaba and Alphabet, each with much larger position size in my retirement account along with the old economy stalwart names that I have (Walt Disney, Berkshire, BAM, Couche Tard, RTX, FFH, General Motors etc). I spent my time mostly on these names, rather the portfolio of long shots. It works for me.

[Xerxes]

I was a dork with a calculator on Amazon till early 2017.
Been happy since. Pay up ! And average up.

But what are you paying up for? Paying up because price is up? Multiple expansion has obviously trounced fundamentals.

Also I'm not sure if you know but here is how Amazon traded in 2017. It looks cheap with just running a Bloomberg Screen

Jan-1-2017
Amazon:
Price / Sales Ratio 2.2x
EV / EBITDA 19x (NTM)
Revenue grew 27% and 30% in 2016 and 2017 respectively

Actually i didn't. But good to know it has a very low p/s ratio.
Back in the day i was looking only multiple on earnings and not on sales.
Very high multiples on earnings on Amazon for me was a company that chose to have depressed earnings (indication that it was re-investing).
of course, the re-investment thesis above is not mine, everyone was saying that about Amazon at the time.

My value add was simply to take action and lock-in some shares instead of looking at it. Bought in between $800-$1100. My mistake since 2017 was not adding to it. The highest I bought was at $1100 USD.

[valueinvestor]

Valueinvestor,

Within my TFSA, i am holding half a dozen names. I call it the portfolio of long shots. Within that I hold Spotify, Uber, IAC, Mercado-Liber and Lightspeed.
I also have BB there but will remove it as soon it gets close to $10 CAD.

That basket of names all have nose-bleed valuation (with the exception of perhaps IAC) and make up less than ~30% of the entire financial assets and is meant to hedge against 'my other side' which is more about looking in depth in some of the names. So, what I have in there is not based on deep conviction (they are not Berkshire size bet for me on absolute and relative terms), but rather bets on general themes. I am not even looking at earnings. Only market opportunity and the fact that all of them with the exception of Uber are ran by founder-owners. Specifically on LSPD, it is a home city name, Canadian and the market cap is low enough to have enough runway. That is good enough for the intent of that portfolio to cover a fintech type names, without dishing out top dollar for Square.

On the other hand, I hold Amazon, Tencent, Alibaba and Alphabet, each with much larger position size in my retirement account along with the old economy stalwart names that I have (Walt Disney, Berkshire, BAM, Couche Tard, RTX, FFH, General Motors etc). I spent my time mostly on these names, rather the portfolio of long shots. It works for me.

Awesome! I think that's a good balance. I feel that there will be a time where Sea will be unpopular but the business is firing on all cylinders. Microsoft, Apple went through the same thing.

I'll wait for the pendulum swing towards value - which I see cracks off now but still not enough to think we're at a tipping point.

[arcube]

+1.

Yea, agree on the above. Grossly expensive but in the sweet spot in an area I love the outlook of and rather than be another dork with a calculator griping about the euphoria, I'll take a small flyer here, ~$170, and if were get a 50% drawdown I'll play ball. Wouldn't be the first time. If it keeps ripping, I like that too. These are the types of companies you either have to buy at horrible valuations or come to terms with never owning.

[valueinvestor]

Group
o Total GAAP revenue was US$1.2 billion, up 98.7% year-on-year.
o Total gross profit was US$407.6 million, up 100.6% year-on-year.
o Total adjusted EBITDA1 was US$120.4 million compared to US$-30.8 million for
the third quarter of 2019.

Raised guidance by 59%.

[Gregmal]

Approved for digital banking license in Singapore. Stock back to tiger by the tail mode.