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Building on strength – 35 QV portfolio stars to buy now

December 9, 2020


Above is a chart of the S&P 500. It is broader-based  and less technology-weighted than other indices I favour like the Nasdaq 100 and the Nasdaq Technology index but it has still been a fabulous long-term performer. The latest trend is strong and after the Covid-19 shock a great period could lie ahead for the US and the global economy. The message of this chart is that equities generally and US equities particularly are probably the world’s most exciting asset class as we head for the third decade of the new millennium. Quentinvest is not only all about equities, with a small side bet on cryptocurrencies but the focus is totally on growth or what I call 3G (great chart, great growth, great story). It’s not rocket science; it’s common sense. I look for shares in the world’s best, most exciting, fastest growing, highest quality, best led businesses and recommend/ buy them. This creates a great portfolio including 10, 20, 50, 100, 200 shares with every one a star performer. Then it is all about the passage of time. Keep buying, keep holding, keep the faith and the capital appreciation will follow.

I like to build on strength, which is why I keep recommending and re-recommending the strongest shares. What this does is concentrate your portfolio around the best performers, leaving the under-performers to shrink in importance even if you never sell anything. Below are 35 star performers to buy now. This can either be adding to existing holdings or opening new positions. Remember that these are strong recommendations. The QV table is already a list of the world’s most exciting equities. The shares below are part of a short list from that table of shares in companies which are classic 3G and look timely to buy now. If you like it is the pick of the pick of the crop at a moment in time. Not included are shares which look timely to buy but have been recommended recently at close to current prices. My ideal shares is recommended again and again on the way up so recommendations are typically made at significantly higher prices. It is an arbitrary list. There are many other shares from the table that could easily be included but I have chosen the ones below.

For speed I will list them with minimal details and a recent newsflash/ quote.

American Micro Devices AMD  Buy @ $94  MV: $113bn Next figures due: 2 February  Times recommended: 7  First recommended: $36.50  Last recommended: $84.50  Sector: semiconductors  Newsflash/ quote: “Before going into details on our strategic acquisition of Xilinx, I’d like to start with our very strong financial results. Our business accelerated in the third quarter resulting in record quarterly revenue with net income and EPS more than doubling year over year.” 27 October 2020

Applied Materials  AMAT  Buy @ $89  MV: $81.7bn Next figures due: 18 February 2021 Times recommended: 1  First recommended: $82  Sector: semiconductors  Newsflash/ quote: “Applied Materials delivered record revenue in our fourth fiscal quarter, and earnings hit an annualized run rate of $5 per share for the first time. For the fiscal year, we grew revenues 18%, and earnings 37% while making significant strategic investments in new technologies and products to address the industry’s highest value problems and position the company for sustained long-term success.” 12 November 2020

ASML  ASML  Buy @ $466  MV: $195bn Next figures due: 20 January 2021  Times recommended: 1  First recommended: $420  Sector: semiconductors  Newsflash/ quote: “The ongoing transformation of the digital infrastructure along with the secular end market drivers such as 5G, AI and high power compute, will continue to fuel demand for advanced process nodes, both in Logic and Memory, which drives the demand for our products. Therefore, although we are currently going through a period of near-term uncertainty, the long-term demand drivers only increase our confidence in our future growth outlook toward 2025.”

Bilibili  BILI  Buy @ $74  MV: $17.8bn  Next figures due: 3 March 2021  Times recommended: 1  First recommended: $62.50  Sector: social media in China  Newsflash/ quote: “We see a golden opportunity to expand our reach in today’s market. To seize this window, we stepped up our approach to user growth, with a focus on further growing our content, expanding our brand awareness and targeted channel acquisition. This was especially fruitful in our third quarter peak season. As a result, our user base hit a record high. In August, our MAUs [monthly active users] exceeded 200m milestone, marking a new monthly record. Total MAUs for the third quarter were up 54pc to 197m, and DAUs were up 42pc to 53m, both on a year-over-year basis. Mobile users also continued to grow at a faster pace. Mobile MAUs were up 61pc year-over-year to 184m in the third quarter. Our users are highly engaged, spending an average of 81 minutes per day on our platform, making Bilibili one of the stickiest video communities in China. The quality growth of our users is not only reflecting the high engagement levels, but also in the paying user conversions. MPUs were up 89pc year-over-year, reaching 15 million in the third quarter, and our paying ratio improved to 7.6pc from 6.2pc in the same period last year. These increases drove our top line expansion in the third quarter, revenues reached another record high of RMB3.2 billion, up 74pc year-over-year. While we grew our top line, we also improved our gross margin. Gross margin was 23.6pc in the third quarter, up from 18.9pc in Q3 last year, and we are gaining even more operating leverage.” 19 November 2020  BILL Buy @ $129  MV: $10.2bn  Next figures due: 4 February 2021  Times recommended: 7 First recommended: $37  Sector: enterprise software  Newsflash/ quote: “We are excited about the increasing adoption of our platform throughout our diversified go-to-market ecosystem. Core revenue, which we define as subscription plus transaction revenue, grew by 53pc year-over-year to $43.8m. We also delivered a strong non-GAAP gross margin of 77pc in the quarter.  At the end of the first quarter, we achieved a company milestone by surpassing the 100,000-customer mark, with overall customer growth of 27pc year-over-year. We believe there’s plenty of opportunity ahead.” 5 November 2020

Bitcoin  BTC Buy @ $18,367 Times recommended: 8 First recommended: $3,540  Last recommended: $12,350  Sector: cryptocurrencies  Newsflash/ quote: “Microstrategy has announced the sale of $400m in senior convertible notes to raise capital for purchasing even more Bitcoin. The firm has already bought $475m BTC this year. ” 8 December 2020

Cable One  CABO  Buy @ $2,080  MV: $12.5bn  Next figures: 3 March 2020  Times recommended: 1  First recommended: $1,747  Sector:  Broadband communications provider Newsflash/ quote: “All of these factors, combined with our strategic acquisitions, resulted in quarter-over-quarter growth in revenues of 18.9pc, adjusted EBITDA of 24.6pc and adjusted EBITDA margin growth of 230 basis points to 51.4pc. We continue to see robust need for reliable high-speed data service, reflected in both significantly elevated customer growth and data usage. In Q3, we added more than 26,000 residential HSD [high speed data] customers on a sequential basis, which included roughly 5,000 new Valu-Net customers, and our year-over-year growth increased to 26.7pc. We experienced this increase during the period while we were gradually returning to our normal collection policies for nonpaying customers. Year-to-date, through the end of the third quarter, we organically added a record 84,000 residential HSD customers. To give some perspective on that year-to-date growth number, if we exclude our various acquisitions since 2015, we have organically added over 50pc more customers in nine months of 2020 than we did over 4.5 years between our spin-off and the end of 2019.”

Cadence Design Systems  CDNS  Buy @ $118  MV: $33bn Next figures due: 28 January 2021  Times recommended: 8  First recommended: $71.55  Last recommended: $111.5  Sector: electronic design  Newsflash/ quote: “The data-centric revolution led by AI, data analytics, hyperscale computing continues to fuel strong semiconductor and system design activity and our Intelligent System Design strategy uniquely position us to enable our customers to accelerate their innovation. Design Excellence is the foundational layer of our strategy and includes our Core EDA chip design solutions and IP portfolio. Cadence delivered another quarter of strong revenue growth and expanding profitability. And naturally, I’m pleased by this quarter’s results. But we always recommend that you shouldn’t focus too much on the results of any single quarter. What I’m most pleased about is, the improvement in our three-year revenue growth CAGR [ compound annual growth rate], the fact that our team continues to operate very effectively during the pandemic and we are on track to achieve greater than 50pc non-GAAP incremental margin for the fourth year running.

Carvana  CVNA  Buy @ $257.50  MV: $18.3bn Next figures due: 3 March 2021 Times recommended: 10 First recommended: $28.85 Last recommended: $221  Sector: Online used car sales  Newsflash/ quote: “The third quarter was an exceptional quarter for us financially and operationally. Let’s start with the financial highlights. The biggest headline is that it was our first EBITDA positive quarter as a company. We also crossed $4,000 GPU for the first time. These are incredible milestones and both carry significant meaning and implications for our long-term financial performance and our strategic flexibility. The numbers themselves are exciting. We think they are even more remarkable when putting them in context. In the last four years, we’ve improved gross profit margin by almost 12%, SG&A as a percent of revenue by over 12%, and EBITDA margin by about 25%. We’ve made all of that progress while simultaneously making the investments necessary to grow the business more than 10 times. In addition, the third quarter also saw incredible operational achievements. The first and most notable of these was that we bought more cars from our customers than we sold them for the first time in our history. This is an amazing accomplishment that was only made possible at the quality of experiences we deliver to our customers, the quality brand we’ve created, the infrastructure we are building, and the herculean effort put forth by our team.” 29 October 2020

GoDaddy  GDDY  Buy @ $85.50  MV: $14.4bn  Next figures due: 17 February  Times recommended: 3  First recommended: $70.50  Lowest recommended: $67.39  Sector: web design/ creation  Newsflash/ quote: “Q3 was another record quarter of customer growth, and we are seeing sustained momentum into October. In Q3, we once again added over 400,000 net new customers while also seeing improved customer retention. We continue to see increased demand for online solutions due to the pandemic, and coupled with higher marketing spend, our website traffic has increased by an average of 20pc year-over-year since April. We have seen increased adoption of our website creation platform, Websites + Marketing and Managed WordPress, as well as our content and commerce tools, Over and SellBrite. As an additional insight into this part of the business, we are excited to share that together, these solutions reached an annualized recurring revenue of nearly $350m in Q3, growing at approximately 40pc year-over-year. This group of products now account for more than 2.2m subscriptions, growing over 20pc year-over-year. Additionally, this quarter, we saw an acceleration of SellBrite’s GMV growth. Between Websites + Marketing and SellBrite, GoDaddy now has more than $4.5bn annualized GMV [gross merchandise value] transacting through our platforms, growing at nearly 80pc year-over-year. These proof points reinforce our strategy of driving scale in the growth phase for customers by focusing on commerce.”

Intuit  INTU  Buy @ $378  MV: $99.5bn  Next figures: 25 February 2021 Times recommended: 6  First recommended: $210.50  Last recommended; $309  Sector: accounting software  Newsflash/ quote: “Our fifth big bet is to disrupt small business mid-market with QuickBooks Online Advanced and the features that we’re introducing to individually tailor the offering to the needs of small businesses with 10 to 100 employees at a disruptive price point. We doubled our QuickBooks Online Advanced customer to 75,000 in fiscal year 2020 and we’re continuing to build on this momentum. We continue to pursue our premium app strategy and introduced integrations with Salesforce and HubSpot. We now have two of the largest CRM [customer relationship management] solutions available for our customers. And finally, our first big bet, revolutionize speed to benefit enable us to put more money in our customers’ pocket to eliminate friction and deliver confidence at every touch point by using AI and customer insights. Last year, we increased use of AI and increased the number of models deployed across our platform by over 50pc, tripled the speed of delivery on our modern development platform and increased mobile application deployments by 60pc. We’re building on this momentum this year as we innovate rapidly to solve our customers’ biggest problems. Across all of our big bets, we’re building momentum and accelerating innovation which we believe positions us well for durable growth into the future. We also believe the current environment continues to act as an accelerant to these bets. Most everyone is looking for virtual solutions, small businesses are accelerating their shift to online and omnichannel commerce and both consumers and small businesses are looking for ways to put more money in their pockets. I’m excited about the opportunity we have ahead of us.”

Lam Research Corporation  LRCX  Buy @ $507  MV: $73bn  Next figures due: 23 January 2021  Times recommended: 1 First recommended: $445  Sector: semiconductors Newsflash/ quote: “Notably, the September quarter marked record revenue and diluted earnings per share for the company and was also the first quarter in which we have exceeded $1bn in revenue from our Customer Support Business Group. At the midpoint of our December quarter guidance, we will be growing EPS more than 35pc year-over-year in 2020. Investments we are making in manufacturing and supply chain resilience are enabling us to meet customers’ critical needs in a period of strong demand and are preparing us for the continued growth we see ahead. From a market perspective, we see positive momentum in the underlying drivers of semiconductor growth and believe this translates into a healthy outlook for Lam’s business. Work and learn from home trends continue to drive demand in key electronic categories, including PCs, storage and networking. Third-party data suggests that growth in PC, notebook and workstation shipments in the calendar third quarter surpassed a 10-year high to reach record levels. Moreover, some memory manufacturers have noted shipping record levels of consumer solid state drive bids in their most recent quarter.”

Learning Technologies Group  LTG  Buy @ 160.50p  MV: £1.2bn Next figures due: 12 April 2021  Times recommended: 8  First recommended: 80p  Last recommended: 143p  Sector: online learning  Newsflash/ quote: “At the time of the placing [to raise £81.8m] the board set out a new financial strategic target to achieve run-rate revenues of circa £230m and run-rate adjusted EBIT of circa £66m by the end of 2022 through a combination of organic growth and additional strategic bolt-on acquisitions financed through the placing proceeds, internally generated operating cash flows and prudent debt financing. These financial targets exclude any assumptions of acquisitions of a larger scale. The group is managing an active pipeline of acquisition opportunities and I look forward to updating shareholders on progress over the coming months….”Learning Technologies Group plc (LTG), a global leader in the high-growth workplace learning and talent industry, has acquired eThink Education, a leading provider of Moodle-based learning management systems (LMS), for an initial cash consideration of $20m. This addition further bolsters LTG’s credentials in the high-growth Moodle market following the acquisitions of Open LMS and eCreators earlier this year. eThink, a market leader in North America, will be integrated into LTG’s global Moodle business, Open LMS, in line with the group’s intention to consolidate the commercial Moodle market, creating a market leader and force for good in the sector. A growing company with strong potential for future organic growth, integrating eThink into Open LMS adds further customer experience excellence to the business. With a customer retention rate of 98pc over the past 13 years, the customer-centric company serves more than two million users in 22 countries. Building on the combined product offering of OLMS, eThink enhances our ability to innovate the Moodle platform. eThink has been a significant supporter of the open-source Moodle project, and plans to continue supporting and contributing to that global community. With more than 325 hosted Moodle clients, the Open LMS business now has more than 1,460 cloud-based Moodle clients, and 8,000,000 users. eThink founders, Brian Carlson and Cheryl Patsavos, will be joining the enhanced Open LMS leadership team as head of sales and head of customer success.” 7 December 2020 [Moodle is a user-friendly Learning Management System (LMS) that supports learning and training needs for a wide range of institutions and organizations across the globe.]

Lemonade  LMND  Buy @ $90.50  MV: $5.1bn  Next figures due: 25 February 2021  Times recommended: 1  First recommended: $80  Sector: online insurance  Newsflash/ quote: “Despite concerns that the pandemic might disrupt migratory patterns within our seasonally strongest quarter, we in fact saw robust growth and sustained improvements across our unit economics. Year-on-year our in-force premium, or IFP, doubled. Our adjusted gross profit jumped 138pc, while our losses per dollar of gross earned premium halved. Perhaps the most noteworthy thing that happened this quarter though is something that didn’t happen, the dog that didn’t bark to borrow a phrase from Sherlock Holmes. In Q3 we had a major nonevent, which is easily missed and which I’d like to highlight.Unprecedented disasters [forest fires and hurricanes] hit the most popular states in the union, which are also home to the majority of Lemonade’s customers. Against this devastating backdrop, we see the significance of the dog that didn’t bark. Our loss ratio for Q3 remained perfectly healthy. In fact, at 72pc, it was more than 7pc lower than the corresponding quarter last year…. The second thing of note this quarter was our launch of pet health insurance. It’s our first foray into an insurance sector beyond homeowners and it’s off to a roaring start. About 40pc of pet policies were sold to first-time Lemonade customers. These newcomers alone delivered about nine times more IFP than we generated from newcomers to Lemonade in the three months following our initial launch four years ago.”

Masimo Corporation MASI  Buy @ $270  MV: $14.9bn  Next figures due: 23 February Times recommended: 1 First recommended: $248.50 Sector: medical technology  Newsflash/ quote: “For the third quarter, our product revenues were $278 million, reflecting growth of 21.5% or 21.1% growth on a constant currency basis. Worldwide sales of technology boards and instruments were up 76pc due to increased demand from both our direct and OEM [original equipment manufacturer] customers. Also, our worldwide sales of single patient use adhesives since has rebounded and were up 6pc as elective procedures further recovered compared to the decline of 8pc in the second quarter. Our worldwide direct and distribution business revenues grew 11pc to reach $219mn for the quarter and our OEM business revenues grew 91pc to reach $59m, which represented 21pc of our total product revenues in the quarter compared to 13pc in the prior-year quarter. For the third quarter, we shipped 151,700 technology boards and instruments, which is roughly 2.5 times our normal run rate. As a result, we have now shipped over 2.1m technology boards and instruments over the last 10 years. At the end of the third-quarter 2020, we estimate that our installed base has grown approximately 17pc over our installed base at the end of the third-quarter 2019.” More on Masimo’s business: “Our core business is to measure through motion and low perfusion arterial blood oxygen saturation and pulse rate monitoring, known as Masimo SET® pulse oximetry, but our product offerings have expanded significantly over the years to also include noninvasive blood constituent, brain and breath monitoring, including rainbow® Pulse CO-Oximetry, brain function electroencephalogram (EEG) monitoring, respiration rate, capnography and anesthetic agent monitoring. In addition, we have developed the Root™ patient monitoring and connectivity platform and Patient SafetyNet™ remote patient surveillance monitoring system.”

Match Group MTCH  Buy @ $144  MV: $38.9bn   Next figures due: 21 January 2021   Times recommended: 3  First recommended: $99.5  Last recommended: $124  Sector: online dating  Newsflash/ quote: “We’re very happy to see the growth levels we saw across all our businesses, including the 23pc increase in non-Tinder revenue. Hopefully, it all reinforces what we’ve been saying for some time now: One, our products serve a fundamental need that isn’t going to go away. Two, we’ve been talking about our growth strategy that is based on a three-pronged approach of, one, growing Tinder; two, returning our legacy brands to growth; and three, making new bets that contribute to growth in a reasonably short time frame. And hopefully, Q3 results are a good illustration of the contributions of all of these three levers. We believe in our portfolio strategy because it’s designed to help members across geographies, demographics and intent because there is no one-size-fits-all dating product. And we understand this category and business well. Our financial performance was excellent in Q3, with year-over-year revenue growth of 18pc, operating income growth of 14pc and EBITDA growth of 21pc. Overall, we’ve had a lot to manage in 2020 but are thrilled with the resiliency of our business and our team. We have a spectacular portfolio of brands, which we are confident will enable us to continue to generate consistent strong revenue growth at high levels of profitability and cash flow for many years to come.” 5 November 2020

MercadoLibre  MELI  Buy @ $1603  MV: $80bn  Next figures due: 25 February 2021  Times recommended: 11 First recommended: $316.11  Last recommended: $1276  Sector: e-commerce Newsflash/ quote: “MercadoLibre recorded another strong quarter, driven by high demand for e-commerce and FinTech services. Brazil, Chile and Colombia delivered very strong results in both e-commerce and FinTech, while our Mexican operation is still experiencing robust growth despite slight deceleration. Increased demand continued during the third quarter despite the gradual reopening of physical retail throughout the region. During the quarter, we surpassed the 300-million milestone in live listings, reaching 304 million. Since the beginning of the pandemic, we’ve observed that buyers have diversified their purchases across a wider range of verticals on our platform. This, in turn, activates and engages them in a greater number of services and increases overall purchase frequency. The step up in online purchasing has been stable across all sites in the region. MercadoLibre’s consolidated gross merchandise volume growth accelerated to 117% year on year on an FX-neutral basis. At the regional level, Brazil and Argentina accelerated to 74% and 242% year on year on an FX-neutral basis, respectively. Mexico’s performance is notable given how COVID-19 impacted the region, delivering yet another quarter of GMV growth above 100% year on year, also on an FX-neutral basis. The growth of our Mexican business has been remarkable over the past few quarters. In fact, if we were to adjust our GMV growth for the blue-chip exchange rate in Argentina, rather than the official exchange rate, our Mexican business is already at a size comparable to that of Argentina. This is a clear indicator of not only the phenomenal execution we’ve delivered, but the large opportunity that still lies ahead for us in Mexico. Execution and logistics has been stellar across multiple geographies. Mercado Pago [the payments business] reached almost 60m unique payers during the quarter, adding 7.5mn payers, mainly attributable to Brazil. FX-neutral consolidated total TPV [total payment volume] grew by 161pc% year over year during the quarter. Our off-platform payments business accelerated sequentially to 197pc year on year on an FX-neutral basis, not only with a robust performance of online payments, but also an improvement in our in-store payment solution, particularly mobile point-of-sale devices. The opportunity ahead of us remains sizable, and we feel increasingly confident that we can capitalize on it.” 4 November 2020

MSCI  MSCI  Buy @ $428  MV: $35.4bn  Next figures: 4 February 2021  Times recommended: 4 First recommended: $150 Last recommended; $270  Sector: financial services  Newsflash/ quote: “During the third quarter, and despite the challenging environment for our clients, MSCI had strong financial performance, including total revenue growth of nearly 8pc, run rate growth of 11pc, adjusted EBITDA growth of 13pc and adjusted earnings-per-share growth of 31pc. MSCI continues to play a central role helping investors build better portfolios for a better world. We are executing our mission in two key interrelated ways. Creating indices that serve as underlying components for client portfolios and equipping our clients with the essential ingredients for them to build their own optimized portfolios. Indices as underlying components for client portfolios include benchmarks for active managers, replication tools for indexed managers and underlying indices for listed futures and options, structured products and OTC [over the counter] derivatives. These indices can cover a very wide spectrum of client portfolio construction needs from equities to fixed income, from market cap-weighted to ESG [environmental. social and corporate governance] and climate overlays, and from factor tilts to thematic megatrends. Consequently, indices as underlying components have a vast number of use cases and, therefore, our business opportunities in this area are enormous. The essential ingredients to equip our clients to construct their own optimized portfolios, include our factor, risk and performance models, our ESG ratings and screenings, our climate metrics and value-at-risk models, and tools for thematic and megatrend exposures. Across these two interrelated offerings, we see incredible opportunities that expand new product areas, new client segments and new capabilities.”  27 October 2020

Paypal  PYPL  Buy @ $217  MV: $255bn Next figures due: 3 February 2021  Times recommended: 18 First recommended: $70.97  Last recommended: $198 Sector: online financial services/ fintech  Newsflash/ Quote: “PayPal is at an exciting and meaningful inflection point in our history. Our mission has never been more important. Emerging technologies, combined with mobile phones and financial platforms like PayPal, can drive a future of inclusion and financial health. PayPal is in a strong position to help shape a future where everyone, not just the affluent, can participate in the new digital economy. As the use of cash continues to decline, new and innovative financial technologies are rising. For example, central banks around the world are seriously exploring or even trialing forms of retail digital currencies that they issue directly. And it’s also clear that digital wallets are a natural complement to all forms of digital currencies. These trends create an opportunity for us to work with central banks and regulators to shape a modern and inclusive financial system built on more efficient digital infrastructure designed for the future. The digitization of the global economy, combined with the rise of digital wallets, will drive our growth over the next decade. Our scale, two-sided network, trusted brand, our strong relationships with regulators around the world, and our AI and data modeling capabilities can all be leveraged to ensure our PayPal and Venmo apps are essential parts of our customers’ daily lives. We still have a lot to do to achieve that vision, but let me be clear. We are investing to create one of the most compelling and expansive digital wallets in the world and you can see this beginning to play out in our strong Q3 results. In Q3, our total payment volume grew by a record 36pc on an FX-neutral basis to $247bn, an annual run rate just shy of $1 trillion. Even more impressive is the growth of our volumes, excluding eBay, which grew 38pc, eclipsing any previous record. Our revenue and EPS forecast for the years ahead are substantially higher than those we had developed just a year ago. And I’ve never been more enthusiastic about PayPal’s role in shaping a new future.”

Pinduoduo  PDD  Buy @ $154.5  MV: $99.7bn Next figures due: 17 March 2021  Times recommended: 8 First recommended: $49.57  Last recommended: $134  Sector: e-commerce in China  Newsflash/ quote: “Pinduoduo turned five years last month, reaching another milestone on this incredible journey. This year, we continue to deliver strong user growth and build trust and engagement with consumers. We are facilitating more sales every day with the support of our users, merchants and business partners. For the 12 months ended September 30, 2020, Pinduoduo’s reached 731m active buyers and generated nearly RMB1.5 trillion/ US$199bn GMV. During our fifth anniversary campaign early October, the peak daily order volume surpassed 100m, driven by increased demand for agricultural products. Strong consumer activities continue into Q4. We expect this growth to continue thanks to our continued focus on user experience. We are seeing better engagement metrics as we offer more selection, more compelling value and more fun and interactive features. In Q3, we observed an increase in the frequency of visits, the number of categories visited and average daily time spent, which contributed to our average annual spending per user increasing from RMB1,857 in Q2 to RMB1,993 in Q3, despite a net add of another 48m active buyers. It still feels like we just started yesterday. Pinduoduo has also become China’s largest online platform for agricultural products by enabling direct selling from farms to the dining table.

RingCentral/ RNG  Buy @ $348  MV: $31bn Next figures due: 15 February 2021  Times recommended: 5 First recommended: $283.73  Last recommended: $287  Sector: cloud communications  Nesflash/ quote: “With a substantial part of the global workforce continuing to work from home, we see that cloud communication solutions are becoming a core tenet of business continuity. RingCentral’s importance to all customers for their communication and collaboration needs continues to increase. Leveraging these megatrends, we delivered a solid third quarter. We saw continued strong adoption of RingCentral as our customers are going through their digital transformation journeys, and the numbers are there to prove it. For Q3, total ARR grew 34pc year over year to $1.2bn. Customer mindshare grew at the level we have not seen before, with record new logo business up over 60pc year over year. Underpinning these trends is the customers’ clear need for a complete communication solution that combines all major means in which people communicate, message, video, and phone or what we refer to as MVP. Our business has never been stronger and we see tailwinds continuing. Our well-differentiated global, secure, reliable MVP platform, and the unique ecosystem of strategic relationships, give us preferential access to over 180 million users worldwide for nearly half of the on-premise PBX installed base. The cloud is winning and RingCentral is winning in the cloud, and we believe the best is yet to come. Stay tuned for additional exciting announcements on both the technology and go-to-market front.”  9 November 2020

S4 Capital SFOR Buy @ 520p  MV: £2.5bn  Next figures due: 23 March 2021  Times recommended: 3  First recommended: 300p  Last recommended: 383p  Sector: digital media  Newsflash/ quote:”The group continued to progress with a very strong thrisd quarter performance, despite the impact of Covid-19 and is now more in line with its target of doubling organically by 2021. Billings were £163.1m, up almost 13pc. Revenue was up almost 53pc to £86.4m and gross profit up almost 79pc to £75.3m. Gross profit improved sequentially each month in the third quarter, up 18pc in July, 24pc in August and 25pc in September. The number of people in the firm was 2,870 at the end of the third quarter, up almost 26pc compared to last year as we continue to hire aggressively around strong gross profit growth and significant new bysiness wins. The company recently developed a 20 client objective. That is to develop 20 clients with more than $20bn revenue per year, termed ‘whoppers’. The merger or combination platform also remains very strong. The group continues to trade extremely well in line with is post-Covid forecasts and objectives for 2020.” 9 November 2020

ServiceNow  Now  Buy @ $543  MV: $106bn  Next figures: 3 February 2021  Times recommended: 6  First recommended: $243 Last recommended: $499   Sector: IT services  Newsflow/ quote: “Getting teams to collaborate across the enterprise is now more important than ever. The workplace of the future will be distributed. Managing complex digital workflows will be critical. Enterprises need innovation without disruption. It’s clear that speed has become the differentiator. ServiceNow is leading this once-in-a-generation opportunity to make work, work better for people. And this is what we’re seeing. All value chains are being split apart. They are being reformed into modern digital workflows across the enterprise. More than $3 trillion have been invested in digital transformation initiatives. But as IDC research shows us, only 26% of the investments have delivered meaningful ROI. Massive investment is simply not creating massive change. This is fueling the workflow revolution. The missing link is integration. Systems, silos, departments and processes must come together into holistic, cross-enterprise workloads.The Now Platform unlocks this ROI by offering speed, agility and resilience. Companies need it now. It gives companies the ability to deliver at scale the experiences employees and customers demand. That’s the power of the Now Platform, a single architecture and data model that serves as the enterprise platform for all other platforms. In other words, it’s the platform for digital business. As one CIO said to me, my goal with the Now Platform is to enable my colleagues to perform their top 50 tasks in a single environment that provides a consumer-like experience. The momentum of the workflow revolution is unstoppable. Despite the COVID operating environment, our team delivered outstanding Q3 results. We beat expectations across the board. We surpassed 1,000 customers with ACV over $1m. We landed our largest deal ever with our largest customer who has now crossed over $40mn in ACV. And we’re raising full-year guidance today. We’re driving sustainable growth well on our way to $10bn and beyond. ServiceNow is accelerating. We are confident in our ability to succeed in this environment. We are bullish on our long-term outlook. In so many ways, we are just getting started. This year’s unprecedented headwinds have only strengthened our digital transformation tailwinds. ServiceNow is incredibly well positioned to become the defining enterprise software company in the 21st century.”

ShakeShack  SHAK  Buy @ $85  MV: $3.27bn  Next figures due: 1 March 2020  Times recommended: 3 First recommended: $66.50  Loestwest recommended: $55.70  Sector: Casual dining  Newsflow/ quote: “Quarter by quarter, Shake Shack continues to come back. Our business during this most recent quarter showed steady recovery, thanks to the hard work and dedication of our team, their agility in adapting new Shack protocols and models and an increasingly strong suite of digital capabilities. Since our last update at the end of July, forward momentum has continued, and we’re encouraged to see a strong recovery in both sales and profitability, with many Shacks returning to or even exceeding last year’s results, total year-over-year company-operated Shack sales declined 17pc in the third quarter compared to a decline of 39pc during the second quarter and further improved to a decline of just 5pc in fiscal October. Same-shack sales have also improved sequentially in every single 1 of the last 6 months. We are ramping up the opening of new locations through the remainder of the year and into 2021 and beyond. As of the end of fiscal October, we’ve opened 33 Shacks during this challenging year, including 15 domestic company operated, of which 4 were opened in the third quarter. In August, we are excited to report the opening of our first Shack in Beijing, which has outperformed all expectations, with sales in the opening month among the highest of any international Shack opening. Before and after COVID, our strategy is to win, market by market, with a focus on top-tier real estate across the United States. Our evolving multi-Shack format model positions us to take advantage of current real estate opportunities emerging across the country, particularly as we look at openings in the next year and beyond. We’re getting really excited to launch our first ever drive-through location late next year. The Shake Shack drop will be a modern version of the traditional driveline experience supported by technology-enabled hospitality and innovative design. We’re also investing in the future of the Shack digital experience. our progress in recent months is encouraging in nearly every corner of our business. We are certainly not out of the woods, when it comes to the impacts from the pandemic. But each day brings us new momentum and confidence we’re on the way.” 29 October 2020

Smartsheet  SMAR  Buy @ $69  MV: $8.35bn Next figures due: 17 March 2021  Times recommended: 7 First recommended: $38 Last recommended: $57.50  Sector: Online analytics  Newsflash/ quote: “We’re pleased with our Q3 results of $98.9m in revenue and $112.4m in billings. Highlights from the quarter include continued strength with large deals, a new high-water mark for our government business, the completion of our acquisition of Brandfolder, a successful Engage conference, and a total Smartsheet community that now exceeds 7.6m users. These Q3 results are a reflection of the resiliency and quality of the Smartsheet community and the increasing relevance of our core value proposition. As enterprises across the globe seek to digitally transform how work is delivered and innovation is achieved, the value of Smartsheet platform is becoming increasingly clear. In Q3, our domain average annualized contract value, or ACV, grew 42pc year over year to $4,665, an expansion within the base included 294 companies increasing their ARR by more than $25,000, up from 235 in Q2; 106 increasing their ARR by more than $50,000, up from 79 in Q2; and 36 increasing their ARR by more than $100,000, up from 19 in Q2. At a time when collaborative work management, or CWM, solutions are increasingly recognized as an effective means by which to rapidly deliver digital transformation and high-value workflows, we are investing to expand product development and innovation, deepen our selling capacity across the globe, and firmly position Smartsheet as the market leader. “Recent product enhancements drove some notable engagement metrics in the quarter. We saw roughly 40m form submissions, 128pc year-over-year increase. Almost 650,000 dashboards were created, and dashboard views were up 64pc year over year. A 48pc year-over-year increase in workflows built, and 4,600 customers utilized our digital proofing capabilities. At Engage, we also introduced our integration with Brandfolder, the leading digital asset management platform we acquired in mid-September. Past the pandemic, it is clear that the future of work is going to be a confluence of collaboration, workflow, and content. Smartsheet’s value proposition is the essence of doing that effectively and efficiently. The TAM [total addressable market] and sheer scale that this opportunity creates is incredible.”

Synopsys  SNPS  Buy @ $238  MV: $36.4bn Next figures due: 24 February 2021  Times recommended: 2  First recommended: $180.5  Last recommended: $195  Sector: semiconductors & software design Newsflash / quote: “Despite unprecedented macro challenges, we built considerable financial, technology and customer momentum. We substantially exceeded our original plan with business strengthening through the year. We grew revenue nearly 10pc to $3.685bn, led by EDA [electronic design automation] software and IP [intellectual property] , expanded non-GAAP operating margin by three percentage points, delivered more than 20pc non-GAAP earnings growth and record cash flow of $991m. Contributing to these very positive results were the new EDA and IP products we’ve introduced over the past few years. We expect to further build on this momentum with several groundbreaking technologies that we launched this year. In addition, our reenergized Software Integrity business is on its way to scaling to the next level and reaccelerating growth. About two years ago, we communicated a three-year financial plan to drive double-digit non-GAAP earnings growth through a combination of top-line growth and operating margin expansion to the high-20pcs by 2021. We achieved our initial ops margin target a year early and have consistently delivered high single-digit revenue growth. As we enter 2021, we expect to surpass $4bn in revenue with non-GAAP operating margins of 29pc to 30pc, low to mid-teens non-GAAP EPS growth and more than $1bn in operating cash flow. Beyond 2021, we will raise our ambition to a Rule of 45 as we drive revenue growth and further operating margin expansion.” The Rule of 45 states that growth plus profit margin should equal or exceed 45. As you can see from the above for 2021 SNPS is targeting margins of 29-30pc and eps growth in the low-to mid-teens. It cou do that and still miss the rule of 45 hence the plan to raise their ambitions beyond 2021. The group is operating with a strong tail wind. “Meanwhile, design activity remains strong across the board. Opportunities in key end markets such as AI and machine learning, high performance computing and cloud, 5G and automotive are massive as all drive increasing adoption of our advanced solutions at a time that Synopsys enjoys particularly strong differentiation. This includes ambitious companies such as AI start-ups and cloud hyperscalers as they position themselves to leverage big data generated by the billions of cloud connected IoT devices.

Taiwan Semiconductor Manufacturing  TSM  Buy @ $105.50 MV: $551bn  Next figures: 21 January 2021  Times recomended: 1 First recommended: $95.50 Sector: semiconductors Newsflash/ quote: “Third quarter revenue increased 14.7pc sequentially in NT dollars or 16.9pc in US dollars, as we saw strong demand for our advanced technologies and special technology solutions, driven by 5G smartphones, HPC and IoT-related applications. Based on the current business outlook, we expect our fourth quarter revenue to be between US$12.4bn and US$12.7bn, representing a 3.4pc sequential increase at the midpoint. Based on the exchange rate assumption of $1 to NT$28.75, gross margin is expected to be between 51.5pc and 53.5pc, operating margins between 40.5pc and 42.5pc.” Prospects for the rest of the year look good. “For the full year of 2020, although COVID-19 continue to bring some level of impact to the global economies, we also observed that COVID-19 is accelerating digital transformation, while 5G and HPC-related applications continue to drive semiconductor content enrichment. We now forecast the overall semiconductor market, excluding memory, to increase mid single-digit percentage, while foundry industry growth is expected to be close to 20pc year-over-year. For TSMC, our technology leadership position enable us to capture the industry mega trend of 5G and HPC, we expect to outperform the foundry revenue growth and grow by about 30pc in 2020 in US dollar terms.” TSM is the world’s dedicated semiconductor foundry so stands at the heart of the technology revolution. Log term prospects look excellent. “Our business outlook is supported by strong demand for our industry-leading advanced technologies and specialty technology solutions, driven by the industry megatrends of 5G and HPC related applications. In order to meet this demand and support our customers’ capacity needs, we now expect our full-year 2020 capex to be above US$17bn.”

Tesla  TSLA  Buy @ $648  MV: $616bn Next figures: 2 February 2021 Times recommended: 12  Times recommended: 12  First recommended: $75.96  Last recommended: $497 Sector: sustainable energy (transport and solar panels) Newsflash/ quotes: “We continue to see growing interest in our cars, storage and solar products and remain focused on cost-efficiency while growing capacity as quickly as possible. Fremont: We have recently increased capacity of Model 3 / Model Y to 500,000 units a year. In order to do this, we restarted our second paint shop, installed the largest die-casting machine in the world and upgraded our Model Y general assembly line. Production should reach full capacity toward the end of this year or beginning of next year. Shanghai: Model 3 production capacity has increased to 250,000 units a year. We reduced the price of Model 3 to 249,900 RMB [US$38,211] after incentives, making it the lowest-price premium mid-sized sedan in China. This was enabled both by lower-cost batteries and an increased level of local procurement. As a result of this shift in cost and starting price, we recently added a third production shift to our Model 3 factory. Berlin/ Brandenberg: Construction of the Gigafactoryin Berlin continues to progress rapidly. Buildings are under construction and equipment move-in will start over the coming weeks. At the same time, the Giga Berlin team continues to grow. Production is expected to start in 2021. Autpilot & full self-driving: Our Autopilot team has been focused on a fundamental architectural rewrite of our neural networks and control algorithms. This rewrite will allow the remaining driving features to be released. In October, we sent the first FSD software update enabled by the rewrite to a limited number of Early Access Program users City Streets. As we continue to collect data over time, the system will become more robust. Vehicle software: Our Autopilot team has been focused on a fundamental architectural rewrite of our neural networks and control algorithms. This rewrite will allow the remaining driving features to be released. In October, we sent the first FSD software update enabled by the rewrite to a limited number of Early Access Program users City Streets. As we continue to collect data over time, the system will become more robust. Battery & powertrain: On September 22, we hosted Tesla Battery Day where we described a path to reducing battery pack cost per kWh by 56pc, enabling production of a profitable $25,000 vehicle. This, in our view, is a critical component to exceed cost parity with internal combustion engine vehicles.Additionally, due to a simpler cell manufacturing process, we believe capex per GWh of battery capacity should decline by 69pc compared with today’s production process. Energy business: Our energy storage business reached record deployments of 759 MWh in Q3. Megapackproduction continued to ramp at GigafactoryNevada as production volumes more than doubled in Q3. Powerwalldemand remains strong and is growing, particularly as our solar business grows as many customers include a Powerwallwith their solar installation. Additionally, we are seeing accelerating interest in Powerwallas concerns with grid stability grow, particularly in California. We continue to believe that the energy business will ultimately be as large as our vehicle business. Our recently introduced strategy of low cost solar (at $1.49/watt in the US after tax credit) is starting to have an impact. Total solar deployments more than doubled in Q3 to 57 MW compared to the prior quarter, with Solar Roof deployments almost tripling sequentially. While not yet at scale, we recently demonstrated a ~1.5-day Solar Roof install, as shown below in the photos. For Solar Roof, installation time is a key area of focus to accelerate the growth of thisprogram. We continue to onboard hundreds of electricians and roofers to grow this business. We are currently building Model Y capacity at GigafactoryShanghai, GigafactoryBerlin and GigafactoryTexas, and remain on track to start deliveries from each location in 2021.Tesla Semi deliveries will also begin in 2021. We continue to significantly invest in our product roadmap.” 21 October 2020

The Trade Desk  TTD Buy @ $914  MV: $43bn Next figures: 25 February Times recommended: 15 First recommended: $127.98  Last recommended: $810  Sector: Enterprise software/ online media Newsflash/ quote: “Despite the headwinds of a global pandemic, we had healthy growth in the third quarter, up 32pc year over year, far surpassing our own expectations. In this environment, marketers have come to more fully appreciate the power of data-driven advertising. And as that happens, we are becoming indispensable. We developed closer relationships with the biggest brands and the agencies in the world, and we are winning more business with both new and existing customers. In addition, we continue to see rapid growth in key channels, such as Connected TV, which grew more than 100pc year over year. This was a very encouraging quarter, not only in terms of our revenue and market share growth, but also what it signals about our growth opportunity moving forward. While our growth is very encouraging, we are still operating at a time of great uncertainty for many industries. But even in the midst of that uncertainty, we are clear that our role is to help our customers drive economic recovery. Advertising is an engine of economic growth and our customers know that their campaigns can fuel growth and drive market share gains for their brands. And because of that, during times of uncertainty, they become much more deliberate. That’s not to say this is a straight-line recovery for our customers. It’s not. Often, our customers are still being hurt by the global pandemic and the economic consequences of most people staying home. But while we are a long way from being completely out of the woods, I do believe that in 2020, so far, we have gained more market share or said another way, grabbed more land than at any point in our company’s history. We’ve accomplished this because advertisers have become more deliberate, and we are a part of the solution that helps them manage uncertainty and chart a path to growth. Our rate of grabbing land in Q3 might be the biggest bullish indicator we produced as a publicly traded company. Market share gains in 2020 is a testament to the strength of our value proposition and our customer relationships. I want to give color about the third quarter because I think it will give insight as to why I’m so bullish on our future.” 5 November 2020

Tyler Technologies  TYL  Buy @ $447  MV: $18bn  Next figures due: 10 February 2021  Times recommended: 3 First recommended: $375 Last recommended: $399  Sector: software Newsflash/ quote: “After we experienced our first year-over-year decline in quarterly revenues in almost a decade, we returned to revenue growth this quarter, driven by strength in recurring revenues. Subscription revenues grew a robust 18.6pc. We continued to experience significant savings in operating expenses in the third quarter, in part driven by the successful deployment of more efficient service delivery and operating models. As a result, our operating margins expanded significantly with our non-GAAP operating margin up 300 basis points to 28.6pc. And our adjusted EBITDA was a new quarterly record at $89m. Cash flow has also been very robust throughout the year, and both cash from operations and free cash flow reached new quarterly highs in the third quarter. It was also a strong quarter for bookings, which rose almost 13pc. With the challenges our clients face as a result of the spread of COVID-19, our clients’ need for digital connectedness, both within their organizations and directly with the public is rapidly shifting from a vision to an urgent requirement. We’re gratified by the accolades Tyler is receiving for our innovations to help our clients address the challenges of the current environment. We are confident that new long-term opportunities will emerge from this crisis, as both Tyler and our clients reexamine historical business practices. And that Tyler is better positioned than our competitors to provide innovative solutions to help our clients meet new challenges. We look forward to executing our long-term strategies until conditions allow us to return to a higher growth market.”

UnitedHealth Group UNH  Buy @ $347.50  MV: $330bn  Next figures: 19 January 2021 Times recommended: 3 First recommended: $293  Last recommended; $327  Sector: healthcare  Newsflash/ quote: “I’m sure you can see how advancing modern telehealth fits into our overall strategy to build high-performing systems of care. Our growing therapeutics capacities are positively impacting the management of chronic diseases. With the introduction of Level2, a digital therapy developed to improve the lives of the 30m people with type 2 diabetes, we are helping patients move toward remission of the disease. Level2 uniquely measures signals and applies artificial intelligence, engaging people and producing better health outcomes. You can expect more digital therapeutics from us in the coming months and years. Our growing capacities are especially apparent within our OptumCare platform where 53,000 physicians across 1,500 local patient-centered facilities served nearly 20m patients, over 3.5m of these in some form of risk arrangements with 1.3m Medicare Advantage or duly eligible members under global capitation. OptumCare created substantial value by building a deeper clinician-patient relationship and by leveraging data and artificial intelligence to enable our clinical model to intercept and treat disease early and proactively, leading to better health outcomes, value and industry-leading patient experiences. Our patients experience safer, healthier, more fulfilling lifestyles, spending one-thirds fewer days per year on average in a hospital bed and 40pc fewer days in a skilled nursing facility than patients supported by traditional Medicare fee-for-service.Moreover, our most advanced care delivery practices deliver this high-quality care at upwards of 40% lower cost than the equivalent traditional Medicare benefit with the value fully reflected in improved benefits and lower costs for seniors, all at world-class NPS [net promotor scores] scores in the mid-70s. We continue to innovate our product offerings with all Medicare Advantage (MA) plans featuring zero copay primary care digital health visits and the expansion of our personal support services, such as an annual clinical health assessment delivered in a senior’s home and, for many, the assignment of a dedicated UnitedHealthcare navigator. We expect strong growth in individual MA. And when combined with our group Medicare gains, 2021 is shaping up to be another year of market-leading growth. We also expect continued growth in Medicaid due to transitions in coverage and net new market gains and are looking forward to a record RFP [request for proposals] season as we seek to serve more people in more geographies.” 14 October 2020

Visa V Buy @ $212  MV: $497bn  Next figures due: 4 February 2021  Times recommended: 5 First recommended: $139 Last recommended: $178  Sector: financial services  Newsflash/ quote: “Our fiscal 2020 started off very strong. And as COVID-19 spread across the globe, certainly, our business was impacted. As a result, we were quite thoughtful during the year, adjusting our expenses yet we continue to invest in key initiatives to support and fuel growth. Let me share a few highlights from fiscal 2020 that illustrate our continued momentum. Over 185bn payment transactions and almost $9 trillion of payment volume were made on Visa credentials. Acceptance points grew 16pc to nearly 70m merchant locations, and that only counts our partners like PayPal, Square and Stripe as one each. Contactless penetration grew to 43pc of all face-to-face transactions around the world, 65pc excluding the United States.U.S. tap-to-pay cards reached 255m. And globally, there were 23 countries that increased their penetration by 25 points or more over fiscal 2019. We expanded wallet partnerships, which now represent over $2bn in potential credentials and nearly 70m additional potential acceptance locations. Globally, the number of active credentials in e-commerce, excluding travel, rose 14pc since January, reinforcing the continued shift by consumers to online shopping. We renewed about 25pc of our payments volume in fiscal 2020 with key clients and secured several new wins. Over 50pc of Visa volume has now been renewed over the last two years. We expanded tokenization globally, crossing the 1.4bn tokens milestone and enabling over 8,300 issuers across 192 markets….Our strategic focus in 2021 remains the same: accelerating our growth through consumer payments, new flows and value-added services, all while fortifying the key foundations of our business model: our brand, security, technology and talent. In the last 90 days, we signed multiple deals with digital wallets including Yandex in Russia, Wing in Cambodia, PayCo in Korea, Naranja X in Argentina and Easypaisa in Pakistan. These wallets represent tens of millions of potential credentials. Our existing wallet relationships have continued to grow this year. Rappi, Latin America’s super app with over 30m users, is now expanding into financial services with its new division, RappiBank, and it has chosen Visa as their exclusive network and payments provider. Our long-term strategy, which we covered in depth just eight months ago at our investor day, remains more relevant than ever. And I believe Visa has a tremendous opportunity to continue transforming secure, reliable and efficient money movement for everyone everywhere.” 28 October 2020

Wisetech Global  WTC  Buy @ A$31.50  MV: A$10.1bn Next figures due: 18 February Times recommended: 3  First recommended: A$15.19 Last recommended: A$26.50  Sector: software  Newsflash/ quote: “Our FY20 financial performance reflects the momentum we are achieving in delivering on our strategy of global growth and market penetration. COVID-19 has accelerated the longer term trend away from legacy systems towards integrated global logistics technology, and as a result we are seeing increasing demand for our CargoWise offering. In the past nine months we have signed global contracts with six significant new customers. In addition, our existing large customers have increased usage of the CargoWise platform by adding transactions and seats, adopting additional modules and functions and increasing their demand for accelerated development and delivery of customer co-funded product enhancements. Our global operations are strong. We delivered solid growth in FY20, despite the impacts of COVID-19, with revenues up 23pc to $429.4m and EBITDA up 17pc to $126.7m. We are focused on our long-term vision of delivering the operating system that drives efficiency and digital transformation in global logistics. Throughout FY20, we continued investing in expanding our technology and operations globally. We extended the reach of the global CargoWise integrated platform, increasing penetration and growing our addressable markets through new modules and new geographies. We also invested in transforming our content architectures, channels and brand, and growing our R&D capacity. There has never been a greater need for the digitisation and globally integrated logistics technology that CargoWise provides.” Annual report, 2020

Zebra Technologies  Corporation ZBRA  Buy @ $375  MV: $20bn  Next figures due: 25 February 2021  Times recommended: 3 First recommended: $232  Last recommended; $289  Sector: enterprise software  Newsflash/ quote: “In Q3, our results continued to be pressured by the global macro environment. For the quarter, we realized net sales growth of 30 basis points. Adjusted EBITDA margin of 20.3pc which contracted by 240 basis points and non-GAAP diluted earnings per share of $3.27, a 5pc decrease from the prior year. As a result of excellent execution by our teams and the faster than expected recovery in demand, each of these measures exceeded our outlook. Demand from our large strategic customers has been at record levels driven by accelerated trends to digitize and automate workflows. Not surprisingly, the pandemic has disproportionately impacted our smaller customers and certain end markets, which has resulted in a significant shift in business mix. Together with premium shipping costs, this has weighed on gross margin. In light of this pressure we have continued to diligently manage discretionary costs, to preserve profitability and cash flow. Despite the challenging environment, our enterprise customers have been prioritizing spend with Zebra. We continue to view acquisitions as a vector of profitable growth for Zebra, and the way to elevate our role as a solutions provider. In early September, we closed on the Reflexis acquisition .We are encouraged by the faster than expected recovery with small and mid-sized businesses and are beginning to realize the benefit of pent-up demand from many customers who have paused their spending earlier in the year. Based on these trends, and our healthy channel inventory levels, we expect Q4 adjusted net sales to increase between 3pc and 7pc. This outlook assumes an approximately 150 basis point additive impact from the acquisition of Reflexis and a neutral impact from foreign currency changes.”

Zendesk  ZEN  Buy @ $135  MV: $15.8bn  Next figures due: 16 February 2021 Times recommended: 6  First recommended: $68.67 Last recommended: $110 Sector: enterprise software Newsflash/ quote: “Wwe entered our last quarter of the year with momentum on our side. In the third quarter, we turned the corner on the biggest impacts to our business in COVID-19. Our new business growth continued as churn returned to pre-pandemic levels. Our expansion business too returned to strong growth as our contraction trended closer to pre-pandemic levels too. All of these trends set us up well for the rest of the year. I’m particularly happy that we crossed the $1bn annual revenue run rate during this third quarter and also that we are guiding to exceed our $1bn revenue target for the full-year. Third quarter revenue increased 24pc year-over-year and exceeded our expectations. Revenue outperformance was driven by strong demand for our solutions and improved churn and contraction rate during the quarter. Our net expansion rate improved to 112pc in Q3, up from a 111pc in Q2 and continue to be in the healthy range of 110pc to 120pc. Total RPO [remaining performance obligations] increased 43pc% year-over-year. Short-term RPO increased 39pc and long-term RPO increased 56pc% year-over-year. The increase in RPO demonstrates our customers’ commitment to partner with us for the long-term. We saw an elevated number of multi-year contracts this quarter, compared to earlier this year. With a strong balance sheet and a competitive position, we are well-positioned to invest for the long-term growth of this company.” 29 October 2020

There is a lot to read if you read it all but I think it is worth it. You will learn a great deal about these stocks, what is happening in the stock market generally and how I approach stock selection with QV for Shares. These are all excellent examples of shares in businesses that I like and believe have huge potential. If you were in a position to buy them all right now I would see that as a great move. Because there is so much to read, time is passing and most of the material is quotes from company reports, I have not rigorously checked the copy so please forgive any typos. There should not be any substantive errors. I think another think you will learn from reading about these companies is why shares, especially in the USA, are moving so relentlessly higher. This is not a bubble. The share price performance is underpinned by brilliant corporate fundamentals. I have never seen so many companies doing so well and with such great opportunities. These are exciting times.




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