The Razor's Edge

We visit the software as a service sector for the third time in a row, as the earnings week we were waiting for came to pass. Zoom reported the so-called 'greatest quarter ever in software', and skewed expectations for peers like PagerDuty and Slack. So, does the market have the reaction right, and where do we go from here? Akram's Razor and Daniel Shvartsman break it down.

Topics Covered

2:00 minute mark – Digging into Zoom's guidance

6:00 – The timing of PagerDuty and Slack's earnings (two days after Zoom's).

8:00 – What about the expansion in large clients for Zoom and potential new verticals

13:30 – How did Zoom's report affect PagerDuty/Slack's reports

18:00 – Why isn’t guidance going higher for some of these SaaS names?

28:00 – The longer onboarding cycle for Slack/PagerDuty

33:00 – The convergence of the attention economy

36:00 – The Dropbox angle

42:00 – Ramping up of adoption curves

48:00 – Macro and sector context to keep in mind

We continue to follow the software as a service sector and the impact of the work from home world, but this time with an outside perspective. Justen Stepka, the founder of Authentisoft and then a longtime product management executive at Atlassian and Docker, joined us to talk about his positions in Slack and Atlassian and what makes the companies stand out. Currently the co-CEO/co-founder of Enterprise Fund, a private equity firm, he also shares his views on the work from home environment we're in and its potential knock-on effects, as well as what he's seeing in private markets.

Topics Covered

2:30 minute mark - The importance of R&D in retention

6:00 - Product stickiness vs. ease of use

11:30 - Evaluating R&D as a competitive edge

15:00 - The importance of dogfooding

18:00 - Okta's position

23:30 - How can a software company really be on sale in this market?

28:45 - ServiceNow's position

30:00 - What's next in the industry, where is Justen watching, and what does the private market look like?

36:30 - The change in perspective from being an insider to an outside investor

41:00 - Work from Home and its broader effects

52:00 - Commercial real estate

With attention still focused on the tanker segment, J Mintzmyer speaks to underfollowed Torm PLC about what they're seeing in the wake of a solid Q1 earnings report and Q2 outlook.

Topics Covered

1:15 minute mark - Overview of current product tanker markets:

3:15 - Differences between LR & MR markets?

7:00 - How many of your LR2s are trading dirty vs. clean?

9:15 - How long is the destocking period likely to last, impact to rates?

14:00 - Capital allocation priorities at this time?

17:00 - Nearly 25 ships aged 15+, how are these performing? Plans to sell?

21:15 - Any levers available to close NAV discount?

24:00 - Free float is very thin, is there an ability to boost this without dilution?

30:15 - Crew replacements ongoing or still stuck on water?

35:00 - Current newbuild environment: Shipyards aggressively discounting yet?

37:45 - What differentiates Torm from peers and competitors?

The software as a service sector has passed its first recession test in flying colors, as the nature of the coronavirus market has led to a increased business for these companies. With two of the most popular names - Slack and Zoom - due to report in a couple weeks, Akram's Razor and Daniel Shvartsman check in on the state of the sector and whether work from home is a benefit or a liability.

Topics Covered:

3:00 minute mark – What explains a big move like Twilio's

7:00 - The broader valuation context

15:00 - The prevailing dynamic of competition

21:00 - Valuation pair mismatches – DDOG/NEWR, PD/EVBG, WORK/ZM

36:30 – Leaving the 10x EV/sales barrier in the past

46:00 – Where does Slack go when the light bulb turns on?

55:30 – the NFLX parallel for Zoom and the search for a pivot

1:03:00 – Slack earnings preview

J Mintzmyer speaks with Ardmore Shipping management about Q1 and the fast-moving product tanker section.

Topics Covered

1:00 minute mark - What’s the underlying trade in the product tanker markets?

2:30 - Thoughts on broker rates versus actual ‘market levels?’

5:30 - Difference in voyages in progress versus completed QTD?

6:30 - Thoughts on chemical side of the business, rates coming in lower?

8:45 - Shift in dividend policy, shift to deleveraging?

12:00 - Is Ardmore aligned? Can we trust you not to blow money on ships?

16:00 - At what point do you have to repurchase shares?

18:30 - Repurchases versus secondhand vessel acquisitions.

22:00 - Review of normalized ROA and ROE?

23:15 - Review of normal average MR product market?

27:00 - How do you communicate a ‘normalized value’?

30:15 - Visibility and thoughts on product floating storage volumes?

32:00 - Indications from customers/markets regarding terminal capacity?

34:30 - Parting thoughts for investors in Ardmore or product tankers?

In the most ambitious crossover event in Seeking Alpha podcast history, we turn the tables around. J Mintzmyer joins Akram's Razor and Daniel Shvartsman to talk the tanker trade, which is a hotly discussed topic in the markets these days. While the tanker rates and industry set up would seem to align with a generational shift, share prices have yet to pick up. Recorded at the beginning of a busy week for shipping sector earnings, it should provide some interesting background for people looking at this trade and the sector more generally.

Topics Covered

2:00 minute mark - The endurance of the shipping cycle

12:00 - Mean reversion for Value?

18:00 - The oil crash and commodity ETFs

22:00 - The abnormalities in this cycle

27:00 - How supply and demand have lined up

31:00 - Investor reactions

35:30 - The Macro context

46:00 - Dry bulk woes

49:30 - Talking the downside in the tanker trade

54:00 - The management and capital allocation question

58:00 - Getting down to some picks

J Mintzmyer spoke with Frontline's CEO, Robert Hvide Macleod, last week about how the tanker market is shaping up amidst a lot of commodity price moves and investor interest.

Topics Covered

1:00 minute mark - What has changed in the market YTD compared to initial setups?

3:00 - Have we seen something like this in the market before?

4:30 - Preferable data source or metric for global storage balance?

6:30 - Discussion of ‘oil on water’ metric

10:30 - What is LR2 clean/dirty split? What is driving LR2 spike?

11:45 - What time charter offers are available in the markets?

15:00 - Fixtures available anywhere for FRO? Indexes accurate?

18:45 - Comments on Saudi flotilla? What happens if destinations change?

21:00 - How does cash payment flow work for spot vs. TC?

23:30 - Any concerns with CP risk? Precedent for this?

25:15 - Chance of shifting terms of spot market payment?

26:45 - Risk factor of ‘famine’ on the other side of the curve?

31:00 - IMO 2020: Spreads are down, will they come back?

36:30 - Capital allocation priorities now? Any newbuildings? Consolidation?

41:15 - Formally swearing off newbuilds? Yes!

42:30 - What is holding back the tanker stocks in these markets?

We break down Snap's upside earnings report and what it means for the internet advertising space, coronavirus plays, the effects of stimulus, and a lot more.

Topics Covered

2:30 minute mark: Setting the scene

7:30: Attention Costs

10:00: The Hollywood effect

14:00: Snap's international growth

18:00: The filter issue

23:00: Relative valuation

27:00: Amazon's perfect storm

30:00: Other advertisers' prospects

33:00: The demographic questions

37:00: Stimulus effects

53:00: Shifting spending

59:00: Differing audiences

1:01:00: Twitter digression

1:07:00: How to interpret this earnings season

1:12:00: The Tiktok threat

1:17:00: Recovery risks

1:24:00: Second level effects

Zoom (ZM) was a go-go momentum stock in its first year of trading, with revenue multiples and performance outpacing most of its SAAS (software as a service peers). That was to a degree deserved due to the company's profitable business model and competitive advantages as a smooth, easy-to use video communications platform.

With the advent of lockdowns, quarantines, and social distancing to combat the spread of COVID-19, Zoom has transcended from growth stock favorite to widely known consumer brand and almost an inverse ETF of the bear market. While value investors like to grumble about the market getting irrational about growth stocks, there are some reasons to be optimistic about Zoom's prospects at least as compared to where they stood on January 1st. The increased usage of the product - while costing Zoom more to support - should both accelerate adoption for the long-term and potentially open up new avenues and use cases. On the other hand, the increased focus on Zoom has also highlighted issues the company has, most primarily with security, something hardwired into the company's fantastic success to date.

We discussed the cross-currents at play here and where Zoom might be headed next.

Topics Covered

2:30 minute mark - The Zoom setup

6:00 - Zoom's origin story and its advantage

14:15 - Zoom's killer app

16:30 - Questions that are beginning to arise

21:15 - The security issues

26:30 - Enterprise vs. consumer business model, and being thesocial distancing play

33:00 - Overall market description and Zoom's rise

38:15 - The competition

47:00 - Justifying the valuation?

55:00 - What sort of revenue upside is there

1:04:00 - Sorting out temporary from permanent

1:14:30 - The Zoom production studio angle

1:19:00 - China backlash

1:23:00 - Regulation

1:28:00 - A final macro note

J Mintzmyer speaks with Euronav Hugo de Stoop as part of Value Investor's Edge's COVID 19 / Oil Price War Forum. While shipping is in turmoil, oil tankers like Euronav are very nicely positioned. The two discuss the outlook for the months ahead.

Topics Covered

2:15 minute mark - How is COVID-19 impacting the crude tanker markets and EURN?

4:45 -How has the oil price war shifted the market- How is EURN positioned?

8:00 - Is this market surge different than last fall with COSCO?

13:00 - Only a few fixtures so far this week, more expected soon?

14:00 - IMO 2020 update, any shift in strategy?

19:45 - Any plans to load up more VLSFO to hedge lower fuel costs?

23:00 -The other ULCC on a new storage contract? Other storage requests?

27:30 - How do the recent resales fit into your fleet and IMO strategy?

31:00 - Any near-term supply risks or overhang on orders?

36:00 - Has your capital allocation strategy shifted at all this year?

40:30 - How to differentiate between vessel acquisitions and repurchases?

43:30 - Clarification on lock-out timing- delay to 1 Apr? Annual meeting vote?

50:30 - Any shift to your views on leverage? Still ample capacity?