Dating deal breakers article
It is unfortunate that so many people join dating sites but so few put a fair effort into writing a really good profile that makes them stand out from thousands of other users.
It’s very much a “story” stock, there is huge revenue growth and there is potential to turn that revenue growth into substantial earnings at some point if they stop investing in the growth…and that, like other growth stock services, they emphasize those few huge winners that any such service always has.Most growth stocks that they tease get the “next Netflix” or “like buying Priceline at $50” or the “looks a lot like Amazon in the early days” treatment as they try to remind you of Gardner’s past successes and, perhaps, gloss over the fact that it is typically a few blowout performers that bring up the average returns for the sometimes 100 or more stocks recommended by the newsletter…like most smaller tech companies, SHOP never has any insider buying but gives lots of stock options and stock grants to employees and the board.Those same Motley Fool ads used to say that “This 36-Year-Old CEO Is Betting $560,100,000 on 1 Stock” — he hasn’t increased his bet by $230 million, it’s just that his holdings have increased in value (actually, it’s probably over $790 million now — and he is over much entrenched as the leader of the company, with 60% ownership of the super-voting Class B shares that are owned by company insiders).And it does seem to have a great market position and brand power among small entrepreneurs — much like Square (SQ) does, where we see the power of branding as those little Square terminals might take over most of the cash registers in a small town (like mine) even though there are dozens of companies that provide a similar product service.
Shopify is doing well so far, as you may have noticed — the shares are up 150% or so over the last year, and it’s not profitable but it is growing revenue very quickly and maintaining a strong relationship with its customers.
so you better buy all the stocks, or somehow pick the ones that will be huge winners instead of the ones that never take off.
One of David Gardner’s more recent heavily promoted “secret” ideas was Match Group (MTCH) last Spring, and that also got the “like buying Amazon in the 1990s” comparison (the stock is doing well since that recommendation, incidentally, up about 50%). This is, sez the Thinkolator without even having to shift out of first gear, the little Canadian company Shopify (SHOP).
I also like the relatively long history and established customer and developer base using Shop’s foundation (Shopify has been around for more than a decade), and I like the scalability of some of Shopify’s services (like the payments processing, which gives them more exposure to the growth of their best customers), but I wouldn’t personally make bets on the stock at this valuation…
odds seem pretty good, given the small size and the varying analyst expectations and high level of attention SHOP has received recently (particularly after announcing their better integration with Amazon earlier this year), that there will probably be large stumbling points when harder to buy the stock, and that’s probably the smartest time to get on board if you otherwise love the story. Have you ever subscribed to Motley Fool Rule Breakers?
This article was originally published on January 12, 2017.