• GRIT
  • Posts
  • The BIG Investing Week Ahead: 10/11/21

The BIG Investing Week Ahead: 10/11/21

Join me as I highlight the most important topics to attack the investing week ahead.

11 Oct

One whole week!

It’s been an entire week that we’ve been rocking and rolling full-time over here on Substack, and to the over 3,000 of you who have decided to join me - thank you!

To say thank you (but with more oomph) I want to send 30 of you a copy of the book The World’s Simplest Stock Picking Strategy. The author reached out to me in efforts to bring some awareness around it and sent me a free copy.

I quickly realized this book / stock picking strategy follows our strategy of investing into companies we know and love (and are consumers of).

Instead of taking this guy’s money in exchange for promotion of this awesome book online, I suggested we use that money to instead just send my Substack community 30 copies for free.

He agreed.

Reply to this email with your name and address (US only) and we’ll send the first 30 people a copy.

In this post, I’m going to cover:

  • Hot IPOs taking place this week

  • Quarterly financial reports worth reading

  • Investor events to keep an eye on

  • Major economic releases

If you want to learn more about the companies mentioned in this post, consider using Unhedged to conduct your research.

IPOs to Watch this Week:

A very exciting week regarding market debuts - including a company whom I’m very excited about. 

  • GitLab (GTLB):

This well-known and massive SaaS-based DevOps software platform for enterprises worldwide plans to make their market debut this week. If you’re not familiar with the company, they’re the all-in-one solution to build digitally.

This means a single application that brings together managing, planning, creating, verifying, packaging, securing, releasing, configuring, monitoring and protecting a digital product.

Their customers include Goldman Sachs, Nvidia, Siemens, Ticketmaster, and countless others. Their $100K or more in annual revenue customers increased some +75% year over year (YoY), with their YTD revenue as reported in their S-1 coming in at $433 million (+70%).

Do they have competition? Absolutely. GitHub is massive and is also an authority in this space - but, in my humble opinion there will be more than one winner in this category. I believe GitLab could absolutely be one of them.

Going to keep a close eye on this one as well as do more research. If I really like the stock, I’ll release a deep dive IPO analysis.

  • AvidXchange Holdings (AVDX):

This North Carolina-based company was founded to develop cloud-based accounts payable account and payment systems aimed at middle-market companies and their suppliers.

They offer an AP automation software solution, a payment network, and a cash flow managing tool. They’re backed by some of the best from a VP perspective - including Bain Capital Ventures and Mastercard.

Revenue is growing around +30% annually, which is nothing to scoff at, but nothing I’m jumping out of bed for. I’d also argue a major competitor in their space is Coupa Software (COUP), and we all know the hurdles they’re overcoming right now.

Cool company, but I’ll be on the sidelines.

Key Earnings Announcements:

The ‘theme’ this week are bank stocks - as we begin to kick off Q3 earnings season.

October 13: JP Morgan (JMP), BlackRock (BLK), Delta Air Lines (DAL)

October 14: UnitedHealth (UNH), Bank of America (BAC), Wells Fargo (WFC), Morgan Stanley (MS), Domino’s Pizza (DPZ), Taiwan Semiconductor (TSM)

October 15: Goldman Sachs (GS), PNC Financial (PNC)

Personally, I’m underexposed to bank stocks. A big winner for the model portfolio earlier in the year was Capital One (COF), but we’ve since exited that position.

Also - don’t sleep on UnitedHealth. Their stock is hovering around $400 / share right now, or about ~13X forward EBITDA with some Wall Street analysts looking for ~15X forward EBITDA as a more ‘fair price’.

This assumes a $470 / share price target representing about +15% upside from current levels.

Investor Events:

We’re looking at a few big ones! Which just means I have a lot of work ahead of me this week regarding a summary of their highlights.. 

October 12: Hubspot (HUBS) Analyst Day

October 14: UiPath (PATH) and GoodRx (GDRX) both present at Morgan Stanley’s Spark Conference

UiPath has been taking an absolute beating since their IPO - despite being an interesting company in my humble opinion. This is the company I’ll be interested to learn more about as these investor events transpire over the coming days.

Major Economic Updates:

Inflation has been and will continue to be a hot topic of discussion and will absolutely be a catalyst for market movement this week. 

October 12: US Job Openings (JOLTs) Report for August

October 13: US Inflation Rate (annualized) for September

October 15: US Retail Sales for September

Below shows our annual inflation rate on a trailing 5-year basis. We’ve been told the recent inflation spike will be transitory - and I still believe a lot of inflation we’re experiencing right now will normalize to historical levels in the coming quarters.

With that being said, it’s painfully obvious how inflation is negatively impacting so many companies (as explained here with Conagra Brands) across the US. Things will likely get worse before they get better here.

Thanks for reading!

If you’d like to be one of the 30 to receive a free copy of the book mentioned above, just reply to this via email with your name and an address to send the book - thanks!

Disclaimer: This is not financial advice or recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.

Reply

or to participate.