RDDT

All right, number four on our list, Reddit. What do you like about Reddit today? Reddit stock down 45% from its all-time high. What is so interesting here is the growth narrative.

I mean, we're at two years of 60% or greater quarterly revenue growth. And as I continue to look at the trends from the business perspective, you know, this is a company that is increasing in its user base still at a very healthy rate.

So, daily users up 18% in the most recent quarter. What's so interesting here is that you know a billion new posts were in the most recent quarter. That is 4% of all the material that you can find on Reddit was created in the last 3 months.

So the engagement is still very strong and management pointing out that it recently made some changes. It is now it now had a 50% improvement in new user retention. A 50% improvement in retention.

I think that really bodess well bearing out in the numbers here. So advertisers increasingly comfortable with the Reddit platform. It the management team is kind of talking about it like Pinterest.

Like there's high intent for making a purchase on Reddit. So that makes it a little bit more favorable to advertisers, but the ad revenue in the most recent quarter up 64% year-over-year as you push that out over the the whole year.

Still expecting really good growth. And you know, the profits are growing faster than revenue. Pick your metric. free cash flow, operating cash flow, net income, all of these more than doubled year-over-year in the most recent quarter.

The next stock I want to talk about is Reddit. Now, Reddit, not quite as much volume, right? about one fifth or so of the average volume compared to the last 30 days, but is a stock that's coming down.

And the reason why I really wanted to highlight this is because similar to some of these other stocks, we're potentially coming down and breaking some up sloping trend lines or attempting to, right?

Reddit had a good sell, right? It it fell over here at the end of July. um about 24% off of poor earnings had a nice recovery and just like I said on Tesla right looked to retrace and actually went green and what did I say after filling a massive gap like that expect a multi-day sell 1 2 3 4 day sell down 19%

Now, Reddit, why is it undervalued to me? Reddit right now is a company worth around $29 billion, has a trailing PE of 35.6 times, but a forward one of 21.3 times.

Year-to-date, the stock is down 36.7%, and over the past 12 months, the stock is down 30.4%. Now, Reddit, while you might only look at the stock and say, "Oh, the company is definitely not doing well."

Well, actually, the it's the contrary. The company has grown revenue by over 60% for the last X quarters, so the growth is definitely there. The market is still expecting this company to grow quite rapidly over the foreseeable future.

and I believe you're pretty heavily invested in Mata Libre, Amazon, but but also Reddit and some other names, too.

we record this when basically Amazon and also Reddit just reported earnings

Yeah, I think there might be a couple more percentages after today's earnings, but still. And you know, another company that just reported earnings and it's quite volatile is Reddit.

It's one of the few companies where we actually took some profits when we felt like the stock had risen too much. And I got to say, our timing there has been quite good. You initially pitched the stock at about $85 per share.

And if it wasn't for me, I got to take that one. You probably would have made it a larger position than just 2% of the portfolio at the time. Nowadays, it is a much larger position.

Unfortunately, I was never a user, so I just needed a bit more time to be convinced by the investment case. Long story short, 4 months after we bought the stock, it was up already 140% and we decided to take some profits off the table at that price.