Bought Qualcomm

Hyper competitive rather than anti competitive was the unanimous decision regarding Qualcomm in a recent US Appeal Court. Although 5G rollout may take a while, I guess that pretty much everybody everywhere will have a 5G phone in a few years time, even before 5G services become available in some areas.

So the premier 5G chip business seems a reasonable purchase at this time despite the high historic P/E ratio. There is also a dividend – running at $2.60 per share giving a yield of 2.1% at circa $122.

A bit of profit taking

I mentioned the rationale for my very recent addition to Alibaba. This remains a core holding but I took some profit on the additional shares.

Also reduced AMD – still a significant holding but I prefer to keep to sensible percentages within my portfolios.

Wondering about BAT and it’s high yield. Last sold my holding at 3179p, now 2538p.

Bought Inphi

Added a holding of Inphi yesterday. The company is a global leader in high speed data movement interconnects. So the business is involved in solutions for AI, 5G, data centres, and edge computing.

They have some large accounts, notably Microsoft and Huawei, so need watching closely. But with AI and 5G the view that one needs “to be in it to win it” comes to mind.

A bit surprised that there were no other holders where I do business – and their depot value covering all clients must be about 70 billion dollars. So hope the stock will move into the mainstream sometime soon.

Noticed that Slack (around 29) seems to be out of favour at present. A bit strange as nobody much wants to go to their offices anytime now, working from home has accelerated, and the WHO are talking about two years before things start to return to normal.

A touch of reality

I mentioned that Gilead were sold recently – price has been weakening while people try and assess relative values of CV19 therapies, and theirs is somewhat expensive.

What caught my eye is that the EU has pre ordered a huge amount of vaccine. No company was mentioned but what is the betting that Glaxo/Sanofi are the front runner. The vaccine league table for 2020 has them first and third. Anyway I could not see much harm in buying a holding in Glaxo – I’ve owned it in the past – no longer a growth story, but a 5% dividend yield plus the prospect of huge vaccine demand – whether their own formulation or stuff made under licence – grabbed my interest.

My semiconductor stocks are doing well, especially AMD that were only bought recently. One reason is that Intel has run into a few problems – just at the wrong time – demand is strong. Intel has been trading on a low multiple. plus a 2.7% dividend yield, which made the stock look cheap bearing in mind that there is plenty of free cash flow available to correct manufacturing problems and move forward. So I bought a holding in Intel. Clearly their management see the stock as cheap too, because within a few hours of my purchase they announced an accelerated buy back of about 5% of their equity (part of a larger programme to buy back about 10% with 3.9% already done). The news of manufacturing delays is already out there, so I guess that the management are not expecting any further bad news !

An update

A few changes have been made just recently.

Teladoc initially did well, but fell back on news of its mostly share exchange offer for Livongo – another key player in the telehealth marketplace. So I added to my holding in Teladoc – on the basis that either a stand alone or merged business should work out well over the next few years.

Also took profits on MMM – as it is unclear where the share price is headed after quite a reasonable recovery for an industrial stock.

Just noticed that Ant Group – one of the largest Fintech businesses – has filed for listings in HongKong and Shanghai. Alibaba should benefit due to the size of its holding, so added to this position.

There was also an informative article about Bandwidth in Forbes dated 13th August 2020. The trend away from old fashioned business telecom providers seems well under way as companies like Bandwidth offer cheaper solutions based on Voice Over Internet Protocol. Seems a sensible investment to keep !

A few changes

I said that I was looking to buy Slack, and this is now done. When I held the stock last year there was no pandemic – now the long term implications of working from home or from bubbles are sinking in.

On the medical and pharmaceutical front I sold my holdings in Gilead. This was bought because they had a treatment that helped patients with coronavirus. Several new treatments have emerged from studies, and I have the feeling that there will be more to come before any mass vaccination programmes, and that at least one of these will be preferred to the Gilead product. Another area of interest is telemedicine – where the level of take up this year has been massive. I have a few companies on my watch list here, and so far have bought Veeva Systems and Teladoc

Magnite/F5 Networks

The Rubicon Project changed name to Magnite at the beginning of this quarter.
Also sold F5 Networks after holding for about two months, as possibly too early in this one.

Watching Slack for a purchase if there is some weakness.

Added to Advanced Micro Devices

There was a chance to buy just below 49 (which I missed) but nevertheless happy to have added at 49.45. AMD stock has not performed as well as a Nvidia recently : both companies stand to benefit from the US wanting to bring more production of chips onshore for security reasons.

Bought The Rubicon Project

Advertising has always been a bit of a mystery to me. But I noticed that The Trade Desk, a buyer’s platform, has been doing well. The Rubicon Project is I believe more of a seller’s platform, and was recently enhanced by merging with Telaria. I have also noticed that there are more investigations going on regarding online “walled garden” advertising platforms operated by Google, Facebook, et al – and we all know what happens to walled gardens on the internet once the walls are breached.

2020 is an election year in the United States, and there do not seem to be any limits on advertising spending there, either by the parties and candidates, or by various political groups – sometimes indirectly funded by the Chinese Communist Party or the Russian Secret Service. Perhaps the slack in ad spending could be taken up soon.

Markets still very uncertain in June

I continue to hold most of my portfolios in cash. However a few new holdings have been bought to add to the Alibaba and Bango which were retained.

In the technology sector, the new holdings are Advanced Micro Devices, Atomera, Bandwidth, F5 Networks, and Lam Research. A new position in my old favourite Roku has also been bought.

Among conventional stocks, I now have holdings in Gilead, William Morrison, and 3M. William Morrison are a UK supermarket company who have been hiring staff to deal with expansion in online orders and deliveries – these types of shopping are already well established in the U.K. so there should not be too many problems. I bought 3M after people who followed their financials year after year – concluding great business but too highly valued – decided that the shares were now good value and worth buying.

I also bought two holdings of U.K. investment trusts covering Far East markets – Baillie Gifford Shin Nippon and Schroder Oriental Income.

So my domestic U.K. exposure is limited to one supermarket business – everything else there has revenue coming from elsewhere.

Roku continues to attract bullish and bearish comments. The real deal here is the gradual movement in TV advertising revenues away from conventional TV to online TV. In the meantime there has been international expansion, and Roku smart TVs seem attractive to women in particular, as they remove a dust trap box with wires from the house and there is only one small remote

I was interested to see that Hertz has filed for bankruptcy in the the car rental business is dead in the water. In an interesting twist, the company is seeking permission to issue $1 billion in new equity – an IBO (Initial Bankruptcy Offering) !! Perhaps the Venture Capitalists who backed Uber and Lyft should take this on, as car hire seems a lot more straightforward than ride sharing.