It's been another whirlwind of a quarter for us here at Spaceship. We've bought and sold some stocks, and changed our positions in others, so let's take a look at the latest changes to our Spaceship Voyager portfolios.
The Spaceship Universe Portfolio
Bought: Advanced Micro Devices
Founded in 1969 as a Silicon Valley startup, Advanced Micro Devices (AMD) began with around a dozen employees focused on producing semiconductor products. Fast forward to today and AMD is a global company developing high-performance computing and visualisation products for business and consumer markets.
AMD's chips can be found in Microsoft's Xbox and Sony PlayStation, among others.
We like AMD because we are seeing increased semiconductor usage in multiple industries. AMD helps give the Spaceship Universe Portfolio exposure to both CPUs and GPUs, which are used in data centres for cloud computing.
We also believe in Lisa Su, who has done a great job as CEO.
AMD is also winning market share against Intel, thanks in part to a key management decision to gain scale and capital benefits from Taiwan Semiconductor.
While there is some risk in investing in AMD due to competition from the likes of Nvidia, we still believe AMD's diverse product portfolio remains a competitive advantage.
Bought: Doximity
Doximity is a leading social network and service provider for medical professionals, reaching more than 80% of physicians in the USA. It is designed to allow doctors to connect with each other without breaking medical privacy laws, in turn making medical and healthcare professionals more productive.
We believe the service is a mix between a Linkedin and a Bloomberg for doctors, supporting workflows like esignature, research updates, scheduling, and telehealth tools, combined with referrals that can be accessed over their social network.
We like Doximity because we believe the digitisation of healthcare is a trend that will bring efficiencies to US healthcare, where spend as a percentage of GDP is 17%, much higher than other developed countries such as Japan at 11%.
The company has captured the top 20 pharmaceutical companies and the top 20 health systems in the US, suggesting network momentum from both the doctor side and suppliers side.
While there may be some risk to Doximity due to a slowdown in hybrid workflows and telehealth post-pandemic, product usage is still hitting new records and we believe this is still offset by the size of the addressable market in the US and the fact that this trend is only just getting started.
Sold: Docusign
Docusign is an electronic signature provider that was a major beneficiary of the recent work from home trend.
We believed that unlike other Covid-19 beneficiaries, the benefits of moving from paper to e-signature would be a sustaining benefit even when workers returned to the office. However, we were wrong with our analysis, in particular about Docusign's sales execution. Docusign's management has admitted they had so much demand they made sales without helping and following up on customers so they could fully utilise the benefits of e-signatures, so when contracts came up, customers didn’t renew at the same rates.
We feel there are fundamental issues in its go-to-market sales approach and the company will have to spend time correcting these issues with customers. We sold the majority of the position ahead of the recent downgrade, and since then, the Chief Revenue Officer and the CEO have stepped down because of these sales and contract issues.
Sold: Pinduoduo
Pinduoduo is a tech platform based in China that connects farmers and distributors with consumers in an innovative way, by enabling ‘group shopping’ at discounted prices.
While we only bought Pinduoduo last year, we have decided to sell it from the portfolio as a way to reduce the portfolio's exposure to China. Regulatory uncertainty and a weak economy are concerns, but the biggest issue for us is China's leadership style, which is increasingly autocratic and aligned to Russia (to which we have no exposure).
Interestingly, Chinese shares have staged a recovery as investors focus on the fact China has low inflation and is stimulating the economy. As such, we took advantage of the rally to sell Pinduoduo to reduce our Chinese exposure.
While noting we still have some Chinese exposure through owning Alibaba and Tencent, selling out of Pinduoduo has allowed us to reduce the weighting to China.
Sold: Ramsay Healthcare
Ramsay Healthcare recently received a conditional, non-binding, indicative proposal by a consortium of investors to buy the company at a $88 cash-per-share bid.
By selling Ramsay Healthcare we were able to redistribute the proceeds across the rest of the Australian portfolio.
Sold: Rakuten Group
Rakuten is a Japanese ecommerce company.
We have owned Rakuten since the inception of the Spaceship Universe Portfolio (four years ago), however we have been concerned with Rakuten's move into the mobile industry.
The company is building out infrastructure and using it as a customer acquisition tool for its other businesses, now they’re offering their mobile infrastructure network services overseas. We feel this is a major change to its business model, and therefore our investment thesis in Rakuten has fundamentally changed.
The Spaceship Earth Portfolio
This quarter, we only made two small changes to the Spaceship Earth Portfolio.
The first was to increase our position in Advanced Micro Devices, due mostly to our belief in the company's growth potential and its attractive valuation.
The second was to reduce our position in Nintendo, not because we have any fundamental concerns, but simply because there are other attractive opportunities that we wanted to take advantage of (including the position in AMD).
The Spaceship Origin Portfolio
For customers in the Spaceship Origin Portfolio, things are a little different.
The Spaceship Origin Portfolio is made up of around 100 of some of the largest ASX listed companies by market capitalisation, and around 100 of some of the largest global companies by market capitalisation.
If a company moves in or out of the Spaceship Origin Portfolio, it will be because its market capitalisation has changed, not because we have made the decision to buy or sell it.
One or more of the Spaceship Voyager portfolios invest in Advanced Micro Devices, Nvidia, Doximity, Ramsay Healthcare, and Nintendo at the time of writing. Please refer to the Spaceship app or our website for more information on what each portfolio invests in.
Important! We’re sharing with you our thoughts on the companies in which Spaceship Voyager invests for your informational purposes only. We think it’s important (and interesting!) to let you know what’s happening with Spaceship Voyager’s investments. However, we are not making recommendations to buy or sell holdings in a specific company. Past performance isn’t a reliable indicator or guarantee of future performance.
