Ubiquiti ($UBNT) Investment Thesis

January 23, 2015 5 Comments

Ubiquiti ($UBNT) is a fast growing network hardware producer. Normally when it comes to hardware and technology, margins and returns on investment are low, but Ubiquiti has managed to dominate its market with a unique approach to the business, one that is not easily replicated. It earns margins over 25% by having no marketing and advertising costs, relying entirely on its products to distinguish themselves from competitors.

The company is growing revenues at 40% per annum, is highly cash generative, yet is selling at a P/E of just 13, excluding cash (yes it has net cash, not debt!). Here is my investment thesis.

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What does Short Interest tell you?

January 8, 2015 7 Comments

As “investors”, we like to think we have some inherent advantage over most people in the market, which is made up of traders and short term thinkers. We think of ourselves as the rational ones who keep a level head and objective approach even in the midst of fear and crisis. Books like the Intelligent Investor by Ben Graham, and gurus such as Warren Buffett make out like the market as a whole is irrational, disregards company fundamentals and can be taken advantage of. But there is an important point which is easy to miss among this self congratulatory rhetoric, and that is that Mr Market, far from being incompetent, is usually right. It is only on occasion that he is irrational and will offer you the proverbial $1 for 50 cents. In this article I’m going to explore what the ‘short interest’ in a stock tells you from the perspective of going long (i.e. it’s not about shorting stocks).

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2014 review and portfolio update

January 2, 2015 5 Comments

It’s that time of year again, and hard to believe it’s been 2 years since I started this blog. Time sure does fly. The second half of 2014 in the markets has been very interesting, unfortunately for my portfolio that wasn’t a good thing. Overall my portfolio was down 10% in H2 2014 compared to -0.7%% for the FTSE All share tracker and +5% for the S&P 500 tracker. My portfolio is 75% in the UK so the FTSE is the closest benchmark, but given how easy it is to invest in the S&P and hedge currency I aim to beat both benchmarks.

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