Welcome once again to the monthly update for the CTHGPRO portfolio. Each month I wonder if it’s worth actually writing a monthly update, as by the time I complete the task the new month has taken on a completely new complexion, rendering my mumblings well out of date. The start of December has been no different with the portfolio swinging wildly up and down but sadly for my investor (me) mostly down.
World news
It’s no news to anyone that inflation and interest rates are all we hear about in financial circles. November saw the US fed move away from the term transitory for inflation but it’s important to keep in mind they are still talking about inflation lasting only for approximately 12 months. The Fed also penciled in 3 rate rises over the next 12 months but we wait to see if that actually eventuates.
The wildcard for the month was the emergence of Omicron. Despite many social media epidemiologists claiming Omicron is of no concern, real trained scientists in the field are still saying it’s too early to tell. What many pundits fail to grasp is that even a more mild virus which is many times more contagious can cause even greater problems for our hospital system.
Portfolio News
The big movers this month for the portfolio were CTT and CXL as the news of a significant increase in website traffic for Cettire leaked out to the market. As the price rose and the emergence of Omicron we began trimming our positions in CXL and Cettire more as a risk management play rather than any loss of faith in the companies. The portfolio also revisited its original holding in VALN and restarted a position on Omicron news. The move to reinstate Valneva was viewed again as more of a hedge on the rise of Omicron and future possible variants and how the market would react to a worse case scenario. If omicron is indeed milder and there is light at the end of the pandemic tunnel, we may well exit the portfolio’s holding. I continue to hold VALN in my personal portfolio outside of cthgpro as an all or nothing play. As I’ve stated many times biotechs are well outside my circle of competence so the final outcome is skewed towards the nothing end of the spectrum.
We also took the opportunity to reduce CHL which has been the best performer for the portfolio so far. Again it’s not a reflection on the business but more on the Omicron outlook. Once the real scientists understand Omicron better I will revisit my weighting. PPL was another holding which spiked in price during November and again we trimmed our position.
While we increased our cash holdings we used some proceeds to add to our highest conviction stock UWL which informed the market that the consolidation of their acquisitions were complete at their AGM. As threaten prior to the commencement of the new portfolio November saw the portfolio’s first venture into the crypto space by taking up positions in SOL and LUNA. Again these were viewed as a hedge to current uncertainty. I will write more on why we chose these 2 in upcoming monthly updates
Finally the portfolio also started a position in a very small ASX listed company but due to volume constraints I’m unable to mention it at this time.
Analyst Angle – Cettire
About Cettire:
Cettire is an online luxury goods retailer, using a dropshipping business model to deliver products directly from suppliers to consumers, without holding any inventory. After launching in 2017, the company operates globally and offers free express shipping across its wide catalogue of over 200,000 products. More recently, Cettire has expanded its product range into childrenswear, allowing them to access a much greater portion of the market.
Financials:
• Gross Revenue: $124.5m (+333% YoY, representing 40% prospectus forecast beat)
• Sales Revenue: $92.4m (+304% YoY, representing 32% prospectus forecast beat)
• Active Customers: 114,830 (+285% YoY, to 114,830)
• 40% of gross revenue from repeat customers (FY20: 26%)
• Cash: $47.1 million cash (and zero debt)
Since listing on the ASX in December 2020, Cettire has grown exponentially, highlighted by their financials which have significantly outperformed their prospectus forecasts. Cettire’s Founder & CEO, Dean Mintz, commented on these results:
“It has been an exceptional year for Cettire, with the Company rapidly growing. I am particularly proud of the substantial increase in active customers, very strong revenue growth, robust product margins and the increasing proportion of revenues from repeat customers. The achievements over the past 12 months, both operationally and financially, demonstrate the traction we have with consumers, the scalability of our business model and the benefits of our proprietary technology platform.
Rapid Growth:
Aside from financials, Cettire’s strong growth rates are supported by its rapidly rising levels of website traffic. SimilarWeb (see graph below) highlights how Cettire has been experiencing significant interest in their site over the past months.
Alonzo Angle
Cettire contains the things we love the most, high end fashion and penny pinching. That’s all you need to know!
CXL, UWL, CTT, CHL and AND
Cash Approximately 35%
Once again, I would like to remind all readers that nothing in this update is financial advice. Please do your own research and consult a financial advisor before investing or even when choosing which side to part your hair.
As always, the team at CTHGPRO would like to take this opportunity to thank me for trusting us with my money.
Regards
Alonzo and “The Analyst”
CTHGPRO Portfolio Connoisseurs
