TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

Equity Bottom-Up

<p>Snowflake had a good quarter…it was a bit above expectations that were well telegraphed from the IPO, and their guidance was only inline (though likely conservative)….so what does one do with a stock that is the single richest multiple in the stock market (100x+ sales)? Buy a lot more? We can’t pretend to understand why this stock was up 16% today. And we can’t pretend to understand why the market values its revenues at 3x!!! the rest of high valuation software. We don’t short on valuation alone. But we certainly couldn’t justify owning Snowflake.</p><p><strong> </strong></p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</p></div>

Snowflake had a good quarter…it was a bit above expectations that were well telegraphed from the IPO, and their guidance was only inline (though likely conservative)….so what does one do with a stock that is the single richest multiple in the stock market (100x+ sales)? Buy a lot more? We can’t pretend to understand why this stock was up 16% today. And we can’t pretend to understand why the market values its revenues at 3x!!! the rest of high valuation software. We don’t short on valuation alone. But we certainly couldn’t justify owning Snowflake. Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.

Snowflake 3Q21: Our Revenues Are Worth More Than Your Revenues

<p>When we first began writing about Slack last summer, an acquisition was always on the radar, even as we were initially positive....for the same reason we flipped negative. Slack is a product, not a company, and is best housed inside a larger enterprise IT company...Salesforce.com is certainly it. Price matters though...and Slack is now trading ~22x forward EV/Sales after the 20% rip....CRM 10x. Are we sure Marc Benioff is willing to dilute his stock THAT much? slack = 10% of CRM EV.</p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</p></div>

When we first began writing about Slack last summer, an acquisition was always on the radar, even as we were initially positive....for the same reason we flipped negative. Slack is a product, not a company, and is best housed inside a larger enterprise IT company...Salesforce.com is certainly it. Price matters though...and Slack is now trading ~22x forward EV/Sales after the 20% rip....CRM 10x. Are we sure Marc Benioff is willing to dilute his stock THAT much? slack = 10% of CRM EV.Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.

<p>Amazon turned in another sensational quarter, and gave an impressive guidance given the sheer amount of spending the company is engaged in as it builds its logistics capabilities at breakneck speed. The stock, like its mega cap brethren has been weak for a variety of reasons (Covid/Election-linked volatility = sell all beats)..and is at the same price as prior to 2Q20 earnings. For a long term investor, $3000 is a good entry point, as we think the stock is eventually worth $6000…and ongoing Covid lockdowns will only increase demand for all its services.</p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</p></div>

Amazon turned in another sensational quarter, and gave an impressive guidance given the sheer amount of spending the company is engaged in as it builds its logistics capabilities at breakneck speed. The stock, like its mega cap brethren has been weak for a variety of reasons (Covid/Election-linked volatility = sell all beats)..and is at the same price as prior to 2Q20 earnings. For a long term investor, $3000 is a good entry point, as we think the stock is eventually worth $6000…and ongoing Covid lockdowns will only increase demand for all its services.Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<p>mportant price support levels previously highlighted have held strong, including the 3200-3230 level on the S&amp;P 500, 10,855 on the Nasdaq 100, and $145/the 200-day MA on the Russell 2000 (IWM). Additionally, both the S&amp;P 500 and Nasdaq 100 are breaking out from their bullish falling wedge patterns that have been taking shape since the early-September highs. These bullish inflections are encouraging and, combined with market dynamics which remain mostly healthy, lead us to believe the lows of this recent correction are likely in.  In today’s report we highlight attractive Groups and stocks within Consumer Discretionary &amp; Technology: Casinos &amp; Gaming, Small-Cap, Solar Energy, Fuel Cells/Lithium Batteries, and Software, Customer Relationship Mgt.</p>

mportant price support levels previously highlighted have held strong, including the 3200-3230 level on the S&amp;P 500, 10,855 on the Nasdaq 100, and $145/the 200-day MA on the Russell 2000 (IWM). Additionally, both the S&amp;P 500 and Nasdaq 100 are breaking out from their bullish falling wedge patterns that have been taking shape since the early-September highs. These bullish inflections are encouraging and, combined with market dynamics which remain mostly healthy, lead us to believe the lows of this recent correction are likely in.  In today’s report we highlight attractive Groups and stocks within Consumer Discretionary &amp; Technology: Casinos &amp; Gaming, Small-Cap, Solar Energy, Fuel Cells/Lithium Batteries, and Software, Customer Relationship Mgt.

Equity Capital Markets

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<p>We've looked into many IPOs over the last 20 years, and think Snowflake is one of the better ones we've come across. Its architectural competitive advantages vs. legacy data warehouse providers are simply insurmountable, and while the cloud platforms loom as eventual rivals, we think this management team knows how to carve out a defensible place amongst the cloud titans.</p>
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<p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</p>
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We've looked into many IPOs over the last 20 years, and think Snowflake is one of the better ones we've come across. Its architectural competitive advantages vs. legacy data warehouse providers are simply insurmountable, and while the cloud platforms loom as eventual rivals, we think this management team knows how to carve out a defensible place amongst the cloud titans.




Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.




United States

salesforce.com, inc. provides software on demand. The Company supplies a customer relationship management service to businesses worldwide providing a technology platform for customers and developers to build and run business applications. Clients use salesforce.com to manage their customer, sales and operational data.

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Salesforce.Com Inc (CRM US)

Snowflake 3Q21: Our Revenues Are Worth More Than Your Revenues

Snowflake's first public quarter was a raging success according to the stock market, who boosted a 100x P/S company by 16% just for meeting...

Aaron Gabin

Slack + Salesforce.com: Initial Thoughts

We take a look at the potential pluses and minuses of Salesforce.com's proposed acquisition of Slack. The proposed deal is expensive and makes more...

Aaron Gabin

Amazon 3Q20: Amazon $6,000

Amazon's continued success is nothing new, but the pause in the stock grants longer term investors another bite at the apple at $3000...we think...

Aaron Gabin

U.S. Equity Strategy: Correction Over?

In today’s report we highlight attractive Groups and stocks within Consumer Discretionary & Technology: CD-24 Casinos & Gaming, Small-Cap,...

Vermilion Research

Snowflake: Making It Rain

We've looked into many IPOs over the last 20 years, and think Our investment philosophy attracts us to investing behind THE major secular trend in...

Aaron Gabin

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