3 Recent Buys – AYX, ICE, TWLO

BuySell

A quick update on recent buys in my portfolio. As mentioned in the Outlook post, after a lot of sales in March, I have decided to start deploying more capital into the markets as I don’t like to sit on a lot of cash on the sidelines. In this iteration, all two of the three companies are new to my portfolio and one is a re-initiation.

  • First purchase: I re-initiated my position in Twilio Inc (TWLO) @ $115.43. TWLO is a fast growing SaaS company that I had a position in the past. I am still bullish on the long term for this company even though we may see some bumps along the road as we go through this recession. The revenue growth is slowing for this wide moat company & current expectations are approx 25% going forward.
  • Second purchase: I initiated a position in another SaaS company: Alteryx Inc (AYX) @ $112.49. Alteryx makes business critical end-to-end data analytics software. Another wide moat company that has been growing well and is expected to grow revenue by approx 30% going forward.
  • Third purchase: I initiated a position in Intercontinental Exchange (ICE) @ $91.93. ICE owns 12 regulated exchanges (including NYSE) and 6 clearing houses. Market operators like ICE have a very wide moat and the future continues to be brighter than ever.

What are your thoughts on these purchases. Share a comment below.

Full Disclosure: Long AYX, ICE, and TWLO. Our full list of holdings is available here.

Where Will Qualcomm’s Growth Come From?

Qualcomm (QCOM) designs, develops, manufacturers and markets digital communication products. Qualcomm’s business segments include mobile device chipset manufacturing, mobile device royalties and strategic investments. Qualcomm is the leader in ARM-based chipset processors which can be found in the bulk of Android (GOOG), BlackBerry (BBRY) and Windows (MSFT) mobile devices. The licensing segment is used by almost all mobile device manufacturers including Apple (AAPL). Considering that 1 billion smartphones were shipped last year, the real winner from the smartphone wars really is Qualcomm. Qualcomm charges royalties on each handset sold based on its technology and one time licensing fees from handset vendors to use its proprietary technology.

Competition And Risks

  • On the technology front, Qualcomm competes with GSM mobile phone technology, which is wildly prevalent outside North America and is an open source technology.
  • As the world moves from 3G to 4G (LTE/WiMax), Qualcomm has lost some of the hefty royalty pricing power on OFDMA-based LTE technology as it commanded on CDMA technology.
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