We review the coverage universe in our Pro service. Subscribers can read the note here. Winning calls to date include AJRD, DT, MAXR, SAIC and SPCE. If you're interested in subscribing to a Cestrian Capital Research service, check our main site or email us at firstname.lastname@example.org.
Today we commence our Pro service coverage of the cybersecurity sector. Our first Pro note sets out the vendor landscape as we see it, and explains why our top picks include ZScaler (ZS) and Cloudflare (NET). The note is free to all Pro subscribers - if you're yet to subscribe, you can buy the note on a one-time basis - we'll deduct the cost of the note against your subscription fee should you choose to join us.
We've been busy here at Cestrian Capital Research, Inc - and we're getting busier. We share with you news about our new 'Cestrian Elements' service, highlight some recent work of ours, and take a brief look at the investment research we'll be publishing in the coming weeks.
In the coming weeks we will be adding a number of stocks to our 'Cestrian Pro' research service. They will include:
- Iridium Communications (IRDM), a pureplay space stock
- L3Harris (LHX), a defense contractor building share in the government space sector
- Salesforce (CRM), an enterprise cloud software consolidator
Now available for Cestrian Pro subscribers, our stock-by-stock review of the names we cover in the service. We review the progress of AJRD, DT, MANT, MAXR, NOC, SAIC and SPCE. Pro subscribers can access the review here.
Not yet a Cestrian Pro subscriber? Read on. We walk you through the service below.
In our recent blog post on the application performance monitoring sector we covered DataDog (DDOG) - the new new thing; NewRelic (NEWR) - the almost-eponymous vendor in the middle of transforming its model; and Dynatrace (DT), now emerged from both corporate and private equity ownership and making its own way as an independent public stock.Our detailed initiating coverage report on DT is now available.
Look underneath the simple browser- or mobile app-based user interface of most enterprise software applications today and you will find a veritable spaghetti bowl of code, pulled together and orchestrated from multiple different sources, locations, owners and indeed underlying languages. The construction and operation of application software today is far more complex than ever. At the same time, user expectations of uptime, latency and responsiveness are way higher than ever before. Taken together this means that the user acceptability level for application downtime is very low; but the potential likelihood of application downtime is very high. To resolve this big enterprise IT problem, you need cloud monitoring software. There are three vendors in the news right now; DataDog ($DDOG), Dynatrace ($DT), and NewRelic ($NEWR). Which of these stocks should you buy? Depends who you are. We explain below.
DataDog (DDOG) stock popped yesterday on the rumor that Salesforce (CRM) was considering acquiring the company in an all-stock deal. "But wait" said everyone. "This makes no sense". (Whilst at the same time bidding up DDOG). We don't know if the rumor is true. And certainly the numbers are hard to wrap your mind around. But we could see why CRM might want to acquire DDOG. We expand on this below.
Cloud software stocks have at most times in their relatively short history traded at valuation multiples beyond the ken of many mainstream investors. This causes such investors to stay away from these stocks. Hang around the bars, trading rooms and home offices occupied by said investors and you will hear mutterings of "valuation is crazy ... will all end in tears ... I'm not buying that". And upon any given market paroxysm du jour, or at least de l'annee, when cloud stocks tumble for a moment, those same investors can be heard to say "there - you see - told you so - it ended in tears". Whereupon they don't buy cloud stocks because, well, the vertiginous drop has proven that the valuations were lunacy in the first place. Only for cloud stocks to get back up, dust themselves off and resume their moon-shot trajectory. Still without those mainstream investors as shareholders.
Now, this doom loop happens because investors have been educated to believe that software stocks are different. Hard to understand. Risky. Could go bump in the night at any moment. In fact, the best cloud software companies are safe as houses, and any thoughtful investor can understand them. In this, Part 1 of our "Cloud 101" series, we begin our journey walking you through what good looks like in the cloud.