Cash Inflow

Will be receiving about 2.2k dividend from CapitaRetail China Trust, Keppel DC Reit, Parkwaylife Reit, Raffles Medical and Venture. I have opted for script for Raffles Medical at $0.76 per share.

Wanting to inject a bit more cash in my SaaS mini-fund, I decided to trim my Intuitive Surgical holding at US$708 for a 31% gain. I also parted with my tiny position in Zuora, decided that its prospects are not as good as the other SaaS counters that I owned.

Cash Outflow

Last month, I mentioned that I was waiting for a correction in US market. That finally happened for the past week and I added a bit more of Adobe (US$484), Netflix (US$496) and Shopify  (US$925) on Monday. These purchases bring my average price to US$363 (Adobe), US$493 (Netflix) and US$664 (Shopify).

With more cash available for my SaaS mini-fund, I also took the opportunity to buy the following on Tuesday.

  • Alteryx US$111 (avg. US$126)
  • Atlassian US$171 (avg. US$173)
  • Crowdstrike US$125 (avg. US$112)
  • Veeva US$266 (avg. US$185)
  • Paycom US$277 (new)
  • Service Now US$449 (new)
  • Zoom US$360 (new)

Re-entered Zoom (previously sold at $272) for its amazing growth this year. Yes, yes, valuation is crazy but it’s hard to see how it is not going to carry on to make money in the near term. Similar thoughts for the other purchases as they continue to grow their top lines during this crisis and are free cash flow positives. I am left with about US$3.5k for this mini-fund and will deploy if the price continues to correct in the coming weeks/months.

I would like to reiterate that by any traditional valuation, the SaaS companies are very expensive and if they do not continue to grow as expected, their price will plummet. Yet, I think it is necessary to have some exposure to them as their business is sustainable and scalable with a huge potential market.

This mini-fund of mine currently only takes up 3.3% of the portfolio (by cost) , and 6.5% if my US micro-cap fund is included. I am unlikely to inject more cash to them in the next few years. So if I am wrong in my thinking, the portfolio will suffer a small loss but if I am right, then they will provide a good boost to its return.