I Just Sold Out of a Stock Completely. Here's What I Bought Instead

Hey everyone and welcome back to another portfolio update for today. So over the past week, the Kochi investing portfolio was up by 5.24% whereas the S&P was up by just over 2% which means year to date we're up now 32.7%. The S&P is up 13 let's call it 4% since the start. Still up 234% whereas the S&P is up 55.66%. yours truly won his first mini golf tournament this morning. So, you can officially call me the champ. But in today's video, we don't really have that much to talk other than the upcoming earnings week and some portfolio moves. And so, what we have over the next couple of days is actually quite interesting. On Monday, we do have after hours for us or for me personally, Rocket Lab. For many people, it's Rocket Lab and maybe AS Space Mobile. We also have here hims and hers. I'll talk a little bit about my expectations for Rocket Lab. On Tuesday before they open C Limited on holdings after the close super micro core will probably stream core. On Wednesday we do have an abuse before the market open. We are going to stream that one as well. Wednesday after the close we have Cisco Coherent Cerebras. I guess coherent and cerebras are the most interesting ones. on Thursday. Honestly, not not that much. JD in the morning, applied materials and figure after the close and that's about it. I do also think that Dlo actually reports Thursday after uh the close. And so yeah, for me personally, it's going to be Rocket Lab, Corewave, and the Local. And of course, before the open it is Nebus, the big one on Wednesday. Now, I'll share my thoughts in a bit. Portfolio moves the outside position where the options play here. PayPal bull spreads and actually quite in the green right now which is quite quite a nice surprise because stock is trading at around close to $60 per share. Didn't really go that much lower after the rejection of the bit. So we'll see. We'll see if somebody comes in maybe with a $70 bit could happen. And if not then if they continue to improve the company I guess this will be worth more and more. As for core of course right now it's in the green. A lot of things can change over the next couple of days. And so looking at the portfolio itself, Nebus is still number one, which means whatever happens on Wednesday is of course going to impact the portfolio. We'll talk about that in a bit. We have SoFi here at number two, above $18. Was this the last time you could buy SoFi at below $18? Who knows? Hopefully, yes. AMD at number three. We then have Google, Rocket Lab, Meta, Oscar. We'll talk about Oscar because they're reported their quarterly figures. Rubric. Rubric is already at $90 which and they didn't report earnings yet. I think we still have time for that. But this is this is like a very very sneaky move right back to 90 bucks. We have the local still around 14 $15. Micron $877. There has been a lot of talk about memory names over the last let's say 48 hours. Have they peaked? Have they not peaked? People moving to optics. To me, look, to me these names are very cheap. A Micron, a Sandis, SK Hindings, those names are cheap. Those are also companies that are still growing top and bottom lines significantly for the next couple of quarters. Now, yes, I I've been saying that companies are going to try and optimize for the memory use. Okay, we know this. The question, the bigger question is, are margins speaking? And if they are, can they stay as high as they are right now for a long period of time? Right, gross margins for Micron is around 85% or so, close to it. Can it stay around 85% or 80% for the foreseeable future? Because I do think that the revenue-wise that will continue to go up. The question is how much of that revenue will flow to the bottom line. And so the the sentiment around this, I wouldn't be surprised if Micron and all of these names go back to their all-time highs because as of right now, they are still growing like crazy and there are no real cracks in the business as of right now. But we'll see right now whatever I have left here is anyways house money. I've taken enough profit. So whatever happens happens. Palanteer is now here 3.64% 64% of the portfolio already up 55% on my position on my second position. We have Uber, Robin Hood, New Cash, Reddit, Axon, Netflix, couple of shares of Nvidia. So, there's one position missing. There's one position that's gone here and that's shift 4. By the way, I did buy more Palenteer at 125 before the earnings report. I said this, I know earnings are later today and this is a gamble on the earnings reaction. and Palanteer will crush it, but the stock might not react the way you think like 3 months ago. And that's fine. I just want to own a bit more shares in case the market does reward accelerated growth, which uh well, which is exactly what has happened. And so, yeah, we're at $172 per share. I will not be chasing it right now. For me personally, I'm now happy with what I have. It's already up 55%. If we do have a breeder and we do go back down, then yes, I'll probably add more shares. Uber we already covered. Axon we covered. Reddit is almost back to pre-earnings prices. Uber is already higher than pre-earnings prices because I mean we covered the quarter in I think two videos or so ago. It was a good quarter. Market's reaction didn't make much sense and so yes the stock went back up. Oscar did drop and so did shift 4 but for different reasons. Now, the reason why I wrote or why I sold shift 4, I did lose here 35.6%. So, it's not like, oh, I'm jumping ship when I'm breaking even. I sold with a loss. And yes, on the one hand, I'm okay with it. Of course, I would have loved it to to be break even, take the the whole position in cash and and be done with it. But that didn't happen. Of course, before the earnings, the stock was at $55. So, I would have lost less if I sold before the earnings. But the reason why I held it is because I thought again they would report a good quarter. Guidance wouldn't be very very bad. And so initially in my thoughts were okay the stock would stay at 55 might maybe even challenge 60 if they're surprising to the upside. Guess what? It didn't happen which is exactly why I'm cutting this so-called loser in the portfolio. Disappointment with the guidance and comments. There were lots of potentials here but unfortunately the execution wasn't there. also a couple of things out of their control which fine. Q2 was good. We'll talk about that. I'll take my cash and put it somewhere else. I take the loss and move on. This is something that's important to learn along your investing journey. Sometimes, yes, sometimes you just have to take your loss and move elsewhere. It sucks to take a loss. But then again, if you keep holding something that will not go up or where the business is not going the right direction just because you are afraid of taking the loss, then that's a much bigger mistake because I cannot take that money and put it into companies that are accelerating their business, right? That there aren't many question marks. I am now waiting. Yes, of course, Nebus is reporting. So, we'll see what happens with that. But otherwise, yes, I I still want to increase the Reddit position, might still increase new, I might still increase many, many positions here. And so I will take that cash and put it in a company where I don't have to fear, oh, is this going to be a good quarter? Is this going to be a good guidance, etc. There was a lot of potential with Chief, which is why I bought it, which is why I covered it many times. Market cap very small, profitable, yes. Growing, yes. M&As are always tricky, but their track record was quite okay, so it made sense. But unfortunately, over the last couple of quarters, things didn't work out for them. Maybe it might work out and then I might come back in and I'm okay at buying at higher prices if, of course, the business is doing much, much better. And so, as you can see, Q2 was not the problem because we see here beats across the board for Q2. Gross revenue up 34%. Gross revenue less network fees up 51%. Gross profit is up also 53%. Adjusted Eida is up. Adjusted free cash flow is down 82% but still beat their own guide of $10 million. But the problem was mostly guidance right you can see this. It has been revised down a little bit across the board which you don't want to see. Now of course the Middle East conflict is affecting this business. It's depressing, lucrative, high margin, tax-free shopping corridors into Europe. Again, something that they cannot control. And then you have, of course, the debt and interest burden. So, they added a billion dollars term loan B to refinance 2027 converts, raising quarterly interest expense to $65 million and net leverage to 3.7 times. I still think that over the next couple of years they can they it's not really going to be such a big risk for them if they do stay of course free cash or positive and all that and they continue to grow which I assume they will but yeah when you have a stock that's already under pressure and outlook gets reduced and you have these types of things free cash flow compression here as well from 42% to uh 40% of adjusted Ebida it's not great and in a time like this I again I rather take my money out, take the loss for me personally and park that money somewhere else where I don't have these issues. Now, if we look at Oscar held here as well, Q2 a good quarter growth across the board, beats across the board as well. So, no problems there. Actually, no problems at all other than the stock went down. Now switching to Oscar Health, it's important to note also that Oscar Health has had a very good yeartoate performance. The stock-wise business-wise has also been doing quite well. As you can see, Q2 beats across the board. Growth, medical loss ratio is improving. SGNA expense ratio is improving as well. Earnings per operation is positive. So again, nothing bad to say here at all actually. So what was the problem? Why did the stock drop? Well, the stock definitely didn't drop because of the fiscal year 2026 financial guidance. Total revenue was reaffirmed. Earnings per operation here. We're now expecting 71% year-over-year growth. Medical loss ratio a reduction here of 90 basis points in their favor. SGN expense ratio also 20 basis points in their favor. Adjusted Ebida a $250 million improvement. Again, we are not seeing here anything wrong with the business and so what could have gone wrong is maybe what was mentioned during the earnings call. So management warned during the call that second half monthly churn will double from 1 to 2% to 2 to 4% per month due to aggressive CMS eligibility verification and data sweeps. And here as well it was the same as with Zeta Global right a beat for a quarter but guidance for the full year was not really raised by that much. So in this case we have a beat for a quarter but they reaffirmed revenue growth for the year which means there is going to be a deceleration in revenue growth but then again for the full year revenue has increased quite significantly. And here might be another reason why the stock dropped $164 million of Q2's operating earnings came from backward-looking prior period reserve developments, including $160 million from the final 2025 CMS Gris adjustment report, excluding this normalized medical loss ratio was 82 to 83%. And so it's more about the market looking forward and saying okay if churn is going to be higher than expected it might not impact the business that much this year but what about the upcoming years that might be the fear right now. Now there's no reason to start making assumptions here because a month and a half or so less than a month and a half from now we do have an investor day where management will outline long-term growth targets technology monetization and IRA expansion roadmap. So whatever gets mentioned there probably maybe a new midterm or maybe mid to long-term guidance. This is what's going to be moving the stock. Remember this is still a very small company in an huge huge market and right now in my opinion they're doing exactly what they should be doing. The road here is still very very long for Oscar. Moving on to Rocket Lab. Rocket Lab reports Monday after hours. Now, as you can see, we're back above $80 per share. We're really experiencing here a draw down of 44.7%, but we were actually down $61% from the highs. Now, we were going as low as $60, just under $60. So, the stock is up close to 30% over a matter of a week or two. And so, we are expensive again. We were super expensive and overvalued at $150. We are expensive right now, right? It's a 4748 billion company. Revenue right now over the last 12 months still under a billion. Of course, that revenue is expected to grow right quite rapidly. If we look at the expected growth rates for this company, we are looking at revenue for fiscal 26 of around $923 million, $1.2 billion in fiscal 27 and $1.7 billion in fiscal 28. Of course, there is also the acquisition going on that should close mid 2027 of Iridium that gives them I think around $500 million of free cash flow if I remember correctly. So the growth the expectations here are definitely not going to reflect reality in my honest opinion. As for the quarter itself, the market is looking for $230 million in revenue EPS. There's no point in looking at that because there's no no earnings as of right now. We are expected to see negative $22 million in Ebida and of course the rest here doesn't really matter. What does matter quite a lot for a rocket lab for the company for the stock of course for investors as well is updates on Neutron. Are we still scheduled to see a Neutron launch later this year? Because remember the the further out they push this Neutron lounge, the further out the revenue recognition will start, right? Neutron is a complete gamecher for uh this company. Neutron needs to work in order for everything to work for Rocket Lab, right? If you want to be that one-stop shop, then Neutron needs to work, plain and simple. If it doesn't work, then the thesis for me, the thesis is is going to be broken. Now, I've said this before and I'll say it again. If they think that they should push it by another month or two or a quarter or so purely because they want to make sure that when they test it, they get all the necessary data that they need, then okay, then do it. But of course, they have been delaying this time and time again. Hopefully hopefully we do see one in 2026 because well it's going to be quite an exciting time and well it's about time. Moving on to corore reef and then of course Nebus. Corre is still up 14.8% year to date experiencing a draw down of 34%. Corore is also worth around one rocket lab but it is generating or has generated $6.2 2 billion in revenue over the last 12 months. And that revenue of course is expected to grow significantly over the next couple of years. Right? If you look at this fiscal year, 12.6 billion, $25.1 billion in fiscal 27, and then close to $40 billion in fiscal 28. Now, this is not the problem. The revenue growth is definitely not the issue here. The problem is can we finally see margin stabilize and maybe improve. 3 months ago they told us that we should be expecting this to happen. So let's see if that's true. Let's hope there aren't many more delays because again the more delays that happen the less revenue that they can recognize. And guess what does doesn't get delayed? Well interest payments. Now with a company like this it's all about making sure that the GPUs come online as fast as possible. everything super efficient. They have an extra layer of software, added services, you name it. And they start monetizing more and more in order to reach these expected targets as soon as possible. And so you have less debt risk or default risk for a company like Kore. Of course, we still have that back stop from Nvidia, but to me, what I want to see this quarter is yes, is margins stabilize. And well, the best case scenario is margins actually improve. Wall Street is looking at $2.55 billion in revenue. EPS for the quarter to be a loss of $122. If we look at Ebida, the market is looking at around $1.4 billion in Ebida. If we look at capex for the quarter, it sits at 8.3 billion, but the range here is quite big with the max point here at around 14.1 billion. And as you can see, last quarter capex number came in at $7.6 billion. Estimated number was actually closer to 5.9 billion. Moving on to Nebus. Nebus has crushed it this year. It's up more than double at 108% year to date. It is experiencing a draw down of around 34.5% was experiencing a draw down closer to 50% not that long ago. This is a company worth around also one rocket lab $47.7 billion has generated over the last 12 months $877.9 million but that's irrelevant because here as well it's all about what comes next and of course these numbers right here are a different uh business. We only focus on what has happened more recently and what will happen going forward. So we're expecting $3.3 billion of revenue this fiscal year 11.4 4 billion in fiscal 27. I actually think they could beat this. $21.4 billion in fiscal 28. Of course, going into this quarter, again, it's all about how fast can you make sure that all of these clusters come online. Then there were definitely going to be questions about well the potential delays in data centers, especially in vinand. Now, there's still a whole legal thing happening there that will take hours and hours, maybe even days. I don't know the whole the whole details there but that's definitely something that will get asked during the earnings call and maybe they even address it before the question gets asked but with the Nebulus they have a very good and diversified portfolio of data center locations in the United States in Europe and elsewhere so it's not like oh if there is going to be an issue in one location it's going to affect the whole company no they're very well diversified in my opinion the fact that they're also based in Europe is going to be a big advantage for them as Europe wants to invest more and more in local data centers. I think a player like Nebus could be a very big winner there. So what are we looking at? Well, we're looking at them meeting their own targets and hopefully maybe maybe guidance gets increased, right? AR guidance maybe that gets increased. We are of course going to have to see what they tell us about 2027. I'm expecting again growth to be quite aggressive in 2027 and onwards. Now the market is looking at $574 million in revenue for the quarter. There's not really going to be an EPS here. EIDA for a quarter of around $173 million. And then the capex number according to analyst expected to come at around $5.4 billion. Last quarter was expected 2.6. They came in at 2.4. four two quarters ago expected number was three billion came in at just over $2 billion but it's quite clear that capex is expected to increase over the coming quarters now this one is of course a name that's been flying quite high yes it had a draw down of 34.5% but if if we hear whether it's a Nebus or anybody else if we do hear maybe a message that there might be an issue with one specific data center it could send the stock back down. But then again, if they reaffirm guidance despite that, that could also be quite good. Now, me personally going into this earnings report, of course, this is a big position for me. So, I'm not going to play the earnings because why should I, right? Now, the thing here, they report right after Corore Wave. So, whatever Corore will say, it will definitely affect a stock like Nebus. Then, we'll have to wait until Wednesday morning. So 12 to 15 hours later, we'll get way more information. But all in all, my cash pile, well, my cash pile, my cash position, not a pile, my cash position did increase by a little bit because I sold shift 4. And now I wait, now I wait for, of course, this week, Rocket Lab, Nebus, DLO to report, Rubric, and Micron. We still have time for that. And we'll see what the market does. The market, I think, will still give us plenty of opportunities. uh rate hikes, rate cuts, no rate, whatever. This is macro stuff. Yes, of course, that impacts the market, but these are all short-term things. If you want to invest for the long term in great companies that continue to execute, it doesn't really matter. Oh, expectations of a rate cut went up by 5%, I don't care. It's cool. It's nice. It's good content. We talk about this, but it's not part of the thesis. And so, all in all, ladies and gents, that's about it for me in today's video. The golf champ is signing out. See you all in the next one. Bye-bye.