My Current Portfolio - 9 May 2024

*This is not investment advice. Position sizes are not included for privacy. 

My investment theses are short and concise, prioritising clarity and brevity; avoiding superfluous jargon or length explanations. This approach allows me more time to focus on efficiency and optimise investment strategies instead.

I am not contrarian for its own sake. I form opinions based on available information and use Bayesian inference to update my variables, leading to sometimes contrarian views. I do not have a long target time-horizon, instead focusing on thematic catalyst-driven plays.

Uranium Energy (NYSE:UEC) | -2.6%

Global uranium demand is projected to double over the next decade, with significant production challenges facing major producers in Kazakhstan due to sulfuric acid issues and the U.S. banning Russian uranium exports. I anticipate the U.S. will seek to internalise its uranium supply to support the energy transition. Despite historical incidents like Fukushima in 2011, which have negatively impacted uranium sentiment, I believe current technologies have significantly improved safety, making uranium mining comparatively low-risk and highly efficient for energy utilisation. I am bullish on the increasing global energy demand driven by data centres, EVs, and other emerging technologies.

Incitec Pivot (ASX:IPL) | +2.1%

IPL’s fertiliser business has been beaten down by the market, with minimal catalysts remaining that could further depress the segment. Potential setbacks such as divestment failures, fertiliser demand challenges, and short-term productivity issues are priced in. Consequently, I view Dyno Nobel as the key growth driver for the stock. I am optimistic about the industrial explosives segment, given the growth in commodities like metallurgical coal and base metals this year. The trend towards increased underground mining, as opposed to open-pit mining, necessitates greater use of explosives, thereby enhancing profit prospects for IPL.

Woodside Energy (ASX:WDS) | -6.8%

Depressed natural gas prices have impacted Woodside stock; however, I anticipate a favourable outlook for the LNG supply-demand dynamic in the short term. Gas demand in non-OECD Asia is projected to quadruple by 2040, driven by strong economic growth and industrialization. Concurrently, supply is decreasing as major producers like EQT and Chesapeake Energy have reduced drilling activities in response to lower prices. Additionally, the recent approval of Santos’ Barossa project, a company I previously invested in, enhances the likelihood of success for Woodside’s Scarborough project.

Monash IVF (ASX:MVF) | +13.3%

MVF is a thematic play on fertility treatments and the decline in successful marriages and natural child-births in Australia. Further, rising obesity rates for male and females lead to hormonal imbalances and reduced fertility rates, resulting in a need for surgical procedures such as IVF to have babies. Moreover, government funding in the form of Medicare offers a 60% reimbursement for eligible patients. A risk factor that is creeping up is the introduction of GLP-1 drugs that improve insulin sensitivity, menstrual cyclicity and thereby improving natural pregnancy rates. 

Lynas Rare Earths (ASX:LYC) | +15.9%

Lynas stands out as one of the largest rare earth producers outside of China, particularly significant following China's announcement of a ban on rare earth extraction and separation technologies in December 2023. China largely controls global rare earth supply and pricing through export controls. As Western countries seek to regain control over their supply chains, Lynas represents a strategic investment, given the critical role of rare earths in the green energy transition. Lynas is making substantial investments and has strong cash reserves, enhancing its capabilities as a processor of third-party feedstock. Additionally, there is a strong likelihood that Lynas could benefit from potential government funding. With Chinese producers decelerating NdPr growth and a projected 25% increase in demand for 2024, Western producers like Lynas and MP Materials are expected to fill the gap. The recent increase in stake by Gina Rinehart further reinforces my confidence in Lynas.

Philip Morris (NYSE:PM) | +4.5%

Philip Morris’ traditional tobacco products may be controversial, but my investment thesis is driven by the impressive growth of Zyns. Philip Morris, known for its high margins, robust cash flows, and substantial dividends, has seen its primary tobacco products stabilise, with the market already pricing in traditional tobacco’s performance. However, the market appears to have undervalued the growth potential of Zyns (by price action/flow analysis), which saw an 80% increase in sales last year alone. This marks the beginning of a significant trend for Zyns. Currently, Philip Morris derives approximately 40% of its revenues and profits from non-cigarette products, and I anticipate the market will respond positively to the increasing share of non-smoke-based products like Zyns in the company's portfolio. Zyn nicotine patches, a healthier alternative to cigarettes, have gained significant popularity in the U.S. Despite being a smaller part of Philip Morris’ portfolio, I believe Zyns' growth is accelerating, driven by the rise of “Zynfluencers,” and will become a major component of Philip Morris’ portfolio in the future. 

Build Your Dream (HKG:1211) | +12.0%

In March, I adopted a bullish stance on Hong Kong, seeing the significant market turnaround and the impact of China's stimulus measures. I favoured BYD over other HSI equities due to its strong government support and lack of restrictive measures compared to other companies. BYD demonstrated exceptional sales growth, surpassing Tesla in 4Q24 to become the largest EV manufacturer globally by volume. During my visit to Shanghai, I was impressed by the high number of BYD vehicles on the road, indicating strong market presence. While HSI equities were generally undervalued, I remained cautious of potential value traps, a common issue for investors in Hong Kong. The observed shift in market momentum earlier in the year further reinforced my confidence in this investment.

Match Group (NYSE:MTCH) | -5.36%

Recent Earnings Commentary

MTCH has dropped around 6% following the recent earnings report, which showed a decline in Monthly Active Users (MAU) and slightly lower-than-expected guidance for the next quarter. However, the Daily Active Users to Monthly Active Users (DAU/MAU) ratio is at an all-time high, a more meaningful metric in my view, given that MTCH has removed numerous bot users. Despite a decrease in the number of payers, revenue per payer has increased by 20% for Tinder, resulting in a 12% net revenue gain (FX neutral). Management chose not to lower premium costs for short-term payer growth, demonstrating bold confidence in their strategy against market expectations. Additionally, Hinge continues to show exceptional growth, with $124 million in revenue and a 50% year-over-year increase.

NVIDIA (NYSE:NVDA) | +786.2%

More of a story as it's my only investment I’ve held for multiple years.

The Wall Street darling. I first invested in NVDA back in 2020 during lockdown while I was building my own PC when I couldn't find any GPUs that matched NVIDIA's quality and specs. After some basic research, I found out NVDA was dominating the GPU market. Plus, I had a few friends mining cryptocurrencies, and we talked a lot about how many GPUs we could cram into one setup. I realised that anything graphics-processing or computer powered pretty much had to go through NVDA. It was also my 18th birthday, and I’d been interested in stocks for a while but never had the chance to invest, so I jumped in with a company I liked. I’m not gonna lie and say I knew what I was doing at 18; I’m still figuring it out now. But sometimes variance ticks our way, sometimes it doesn’t.

I held onto NVDA through the ups and downs because the more I learned, the more I saw that big tech companies like Microsoft and Apple relied heavily on NVIDIA's GPUs. I sold half my shares around the ~$425 mark and plan to research more into the upcoming earnings on the 22nd to make a play with options, perhaps to neutralise deltas or make a bet on vol.

Microsoft (NYSE:MSFT) | 90.7%

I invested in MSFT primarily due to Azure’s profitability and office suite’s strong moat. The valuation dip at the time presented an opportunity, especially with cloud computing revenues rising from $32 billion to $75 billion in 2022, boasting a 45% operating income margin. With the surge in remote work, the cloud PaaS and IaaS market was projected to grow at around 22% IRR. Cloud computing was becoming a significant contributor to MSFT’s total profits. I also appreciated MSFT’s track record of successful acquisitions, like LinkedIn, smaller cloud/AI companies, and their investment in OpenAI, showcasing excellent capital allocation.

Tesla (NYSE:TSLA) | -28.7%

I invested in TSLA following a dip in lithium prices, expecting improved margins and attracted by the long-term potential of self-driving technology. Consumer enthusiasm, with many stating they would "never buy another car," reinforced my optimism about the EV industry’s growth. However, I underestimated the increasing competition from Chinese manufacturers and the ensuing price war, which eroded margins and profits. TSLA's stock declined after several earnings misses and failure to meet high expectations. In the future, I should better assess catalyst dynamics for optimal execution rather than relying solely on long-term potential that was most likely priced in the stock already.