Portfolio Update Q3 2024
Since my last update, my portfolio has maintained momentum, gaining ~16.7% since Q2. This was primarily due to my former largest holding underperforming, offset by other core positions outperforming coupled with some timely trades. My portfolio remains concentrated, with 5 stocks comprising >75% of my portfolio.
$BRFH: BarFresh was the main detractor behind Q3’s performance. While the story derisked significantly with the supply chain disaster resolving, the stock had rerated accordingly following a few PRs and a PT raise by Maxim to $6. Additionally, I was disappointed to see a slowdown in account wins following the Q1 update, and ended up selling in the mid to high 3’s around the time of a weak Q2 where sales were flat, and cash burn higher than expected. Even though cash is running low, management shifted towards SBC and landed a credit revolver. Since Q3/Q4 should be relatively strong, if the growth story continues, management can probably scrape by without a raise. That being said, I would prefer to buy back in following/during some healthy dilution. The company is reporting earnings after close today which should be relatively strong.
$SBBC: Simply Better Brands continues to grow sales through account wins and strong online sales. The CEO also recently bought 500k in shares and has been more active in investor conferences to share the story. Despite this, the stock has had a rough few months due to several in the money warrants being exercised by legacy shareholders and sold on the open market. In hindsight, this was relatively predictable since many of the warrants expired in early august (which coincided with the 40% correction), so it would have been prudent to sell some shares. Unfortunately, I didn’t, but luckily, I did add to my position following the correction and the stock is starting to tick upwards. I’m hoping they can continue landing new stores, launch new flavors, and meet their guide so the market can see that management isn’t all talk.
$LSF: Laird had a similar overhang due a secondary offering. Following a weak reaction to another record quarter where management raised guidance, I aggressively bought more shares, making Laird my largest position. The market seems to have warmed up to the turnaround, with shares hitting multi-year highs of over $7 today, and making the stock nearly a 3 bagger since my initial pitch. Laird seems to have found a winning formula and I’m excited to see where management can take the business over the next 12 months.
$SOWG: My skepticism with Sow Good’s management was rewarded following mis execution in the second quarter. Management was not prepared for the summer heats which melted the candy and forced a product recall. Furthermore, Mars announced their entrance into the category with their own freeze-dried skittles expected to hit the market in 6 months. With the amount of uncertainty surrounding the sustainability of $SOWG’s earnings, I doubt the stock will have a huge rerating anytime soon, but I’m keeping my eyes on it.
I’ve also been trading a few other positions, some of which I hope to post about in the coming weeks/months, but it was a quiet period due to college starting and work. Overall, it was another very strong quarter excluding a slight correction on $BRFH. On a side note, I like posting my position/trading updates on a quarterly basis, so unless I feel the urgent need to make an update post, lookout for these quarterly updates/tweets to see my current thoughts/positions.
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Disclaimer:
I and/or others I work with hold a position in the securities mentioned in this article. These are my personal thoughts alone and should not be used as a basis for an investment decision. Not financial advice.