6/7/24 - $dlo - bot size at $8. risk/reward finally aligns. lego
6/7/24 - vrockstar - 
DLO - time to update on this one. (fresh post b/c it's longer and felt like more of a change of size/ conviction vs. my smaller size on EPS - go read that for context if you'd want the thread).
I took it to a full position into the close w/ a combo of shares and 12/20 7C's (for ~$2.15). i've started buying ITM C's to supplement names that i already believe have gone beyond margin of safety levels which does 2 things - helps me keep the overall notional gross in my book lower (more ammo for shares/ or other oppties) and also offers firepower to the upside re my conviction on various names. Rn i have done this w
YOU (which is working nicely), 
NICE (i'm slightly down after this week on the c's but overall think i'm in a good spot) and now $dlo.
SO why "now" on $dlo. my variant perception on the tape is that the move remains one of degrossing/ risking and possible shorting (gl to those here, lol), but it's not fundamental any longer. the implied EV w/ the firm's adj. cash (need to subtract customer cash) is now squarely sub $2 bn. we're growing revenue 40% and ebitda mgn expectations are reset at 25%. if u r buying rule of 40 co's... and perhaps you need a margin of safety on that figure for more complicated and smaller caps... i think we've reached that point.
a. so the expectations are now reset and have had a chance to start getting priced in (perhaps this will continue - more on this below - but undeniably these expectations are starting to be priced in)
b. when considering fcf generation potential even on lower ebitda mgns extrapolating 40% growth (and their customers are A-tier and their geos have mega growth vs. DM) this rate is sustainable and the opex will flex by '25 which gets priced in sooner than later... you're at 5% fcf yield already on a PF basis today (again balance the growth but vs. "EM" and "whack chart" - and the middle ground is somwhere here).
c. importantly, even from a probability stand pt, this one will get dumped super hard in event nasdaq risk further throat kicks the smaller caps, but guys, this is why you need to stay nimble and know what you own, not just relying on the TA-bros. the fundamental downside here is obviously always to zero lol, but realistically it's to mid 6's. at that point, this thing gets taken out. point blank - and probably at the level we're at or more likley in the high SD's (or at least that's where the theoretical offer would come in).
d. so downside risk 20-30% (this is bottom), not the 20-30% i mention above which is merely an extrapolation of estimating where the buy level is (which i'm discussing at $8 here.. we're there fam). so downside to $6 and upside on execution is probably high SD's into YE and compounding w/ opex flex thereafter. we're back in the teens by '25. so the R/R is actually BALANCED here thru YE.
e. when you consider a highly rentable stock, go sell the 2M C's for income if you want exposure, the 8/16 8C will pay you almost 90c. that's a 10% yield and also lowers your theoretical breakeven to low 7's where you can decide to repeat that playbook or hold w/ no loss on a downside scenario.
f. flagging this one b/c while the macro tape is chewing up and spitting out anything that's sub-5 bn and with any sort of short-term issues (and this is understandable) we're actually starting to see DEEP VALUE within these names that's getting missed in the "index at all time highs" normie, buy ETF and chill setup. where do you think rotation moves? again i'm not suggesting i know if/when... but that we've reached the point where i feel comfortable using shares and options to express a full size POV
and for that i wanted to alert the fam to take a look and ask q's.
(PS- used to cover this one professionally. would debate with smart comments if anyone has comments/ risks that they need responded to.)
Gl and good weekend
V
DLO - time to update on this one. (fresh post b/c it's longer and felt like more of a change of size/ conviction vs. my smaller size on EPS - go read that for context if you'd want the thread).I took it to a full position into the close w/ a combo of shares and 12/20 7C's (for ~$2.15). i've started buying ITM C's to supplement names that i already believe have gone beyond margin of safety levels which does 2 things - helps me keep the overall notional gross in my book lower (more ammo for shares/ or other oppties) and also offers firepower to the upside re my conviction on various names. Rn i have done this w
YOU (which is working nicely), NICE (i'm slightly down after this week on the c's but overall think i'm in a good spot) and now $dlo.SO why "now" on $dlo. my variant perception on the tape is that the move remains one of degrossing/ risking and possible shorting (gl to those here, lol), but it's not fundamental any longer. the implied EV w/ the firm's adj. cash (need to subtract customer cash) is now squarely sub $2 bn. we're growing revenue 40% and ebitda mgn expectations are reset at 25%. if u r buying rule of 40 co's... and perhaps you need a margin of safety on that figure for more complicated and smaller caps... i think we've reached that point.
a. so the expectations are now reset and have had a chance to start getting priced in (perhaps this will continue - more on this below - but undeniably these expectations are starting to be priced in)
b. when considering fcf generation potential even on lower ebitda mgns extrapolating 40% growth (and their customers are A-tier and their geos have mega growth vs. DM) this rate is sustainable and the opex will flex by '25 which gets priced in sooner than later... you're at 5% fcf yield already on a PF basis today (again balance the growth but vs. "EM" and "whack chart" - and the middle ground is somwhere here).
c. importantly, even from a probability stand pt, this one will get dumped super hard in event nasdaq risk further throat kicks the smaller caps, but guys, this is why you need to stay nimble and know what you own, not just relying on the TA-bros. the fundamental downside here is obviously always to zero lol, but realistically it's to mid 6's. at that point, this thing gets taken out. point blank - and probably at the level we're at or more likley in the high SD's (or at least that's where the theoretical offer would come in).
d. so downside risk 20-30% (this is bottom), not the 20-30% i mention above which is merely an extrapolation of estimating where the buy level is (which i'm discussing at $8 here.. we're there fam). so downside to $6 and upside on execution is probably high SD's into YE and compounding w/ opex flex thereafter. we're back in the teens by '25. so the R/R is actually BALANCED here thru YE.
e. when you consider a highly rentable stock, go sell the 2M C's for income if you want exposure, the 8/16 8C will pay you almost 90c. that's a 10% yield and also lowers your theoretical breakeven to low 7's where you can decide to repeat that playbook or hold w/ no loss on a downside scenario.
f. flagging this one b/c while the macro tape is chewing up and spitting out anything that's sub-5 bn and with any sort of short-term issues (and this is understandable) we're actually starting to see DEEP VALUE within these names that's getting missed in the "index at all time highs" normie, buy ETF and chill setup. where do you think rotation moves? again i'm not suggesting i know if/when... but that we've reached the point where i feel comfortable using shares and options to express a full size POV
and for that i wanted to alert the fam to take a look and ask q's.
(PS- used to cover this one professionally. would debate with smart comments if anyone has comments/ risks that they need responded to.)
Gl and good weekend
V
Nota
15% position for me into the close.that's large. i've only done that a few times w a few positions.
OLPX sub $1.35, YOU near $16, the btc-related closed end funds (many times) 
BITW, 
GDLC, 
OBTC and $NASDAQ:BLDE when nobody believed in it (and it was lonely) in the low $2's before it went on a ripper. this one is probably the most opaque of all the investments i've done this with. but i'll add - it's also the one i understand the best. but these are just guesses at the end of the day, even if they're strong convictions. it can always go against you. this is a falling knife at this pt. you can only catch those if you have a solid basis of valuation and underlying value creation. the charts don't help as much when stock is pushing new ATL's (all time lows). that's where having done the work, having conviction, digging in and staring the abyss in the face gets you outsized returns. lego. V
Nota
time to take a little moolah off the table herethe result honestly wasn't as good as the stock reaction would make it appear
i'm still v v bullish in the terminal, but prefer to transfer some of these gains to my
NXT position (which is not kidding 25%! of my book). and figure out how to re-enter $dlo. NXT is my benchmark and in the ST w the massive beat, great cash gen, great growth and no real issues ("yeah muh rates" i get it... i have conviction). anyway-way go read that one and remember to recycle fortunate situations, don't get complacent.will comment on this one when i start to size up. otherwise i keep it at about 2.5-3% for now and don't need to worry about that chunk of the book for a while.
V
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.