Shopify Inc. (SHOP.TO)

Up almost 110% this year. This has been a rocket ship. A great story about what Canadian technology can do, when it really works well. In investing, you have to have a view as to what something is intrinsically worth. If you think you can sell something to someone else, at a higher price, then you are speculating. Investing requires a discipline. He wouldn’t chase it at its current price.

The concept is wonderful. The down side is that it is trading at a horrendous price to book and has no earnings. It is highly volatile. A great company and a great concept. When the market comes off, these companies will REALLY come off. There is tremendous investment risk.

Technically this is the best stock that is in the market right now. It is just skyrocketing. Has reached an all-time high today.

This is a very rich stock and they’ve obviously done quite well. But with any new offering that hits the market at very, very high multiples, you need to see some form of correction. In the context of where we are in the economic cycle, were starting to see some roll over in the tech sector, and tech tends to generally be indicative of what is happening in the tech cycle. You need to have a bit of a pause here. A good quality stock, but an expensive stock.

The trend on this is up. A great looking chart. Whenever a stock gets off the trend line, and this one is really parabolically off, you know that the momentum indicators will be overbought. Wait for them to round over, and you’ll probably see this one return back to its trend line, and that would be your opportunity to buy.

One of the most transformational themes is internet commerce, and this is right in the middle of it. They provide the plumbing to all kinds of small and medium-sized web-based retailers, and continue to grow. The pie is growing very rapidly and they have a very dominant space in it. People continue to underestimate the transition we are going through and the way people do business. Ideally you want to get a combination of 2 things in a growth stock. Growth in earnings and revenue, and expansion in the multiples investors are prepared to pay as they continue to execute. This company is doing that. (See Top Picks.)

Losing money, but expects them to turn that around in the 4^th quarter. A great platform for small and midsized businesses. It has a fair number of leverages it could introduce. Any kind of enhancements to the shopping platform that retailers could use, would be attractive. Working on their mobile applications and streamlining those and making them a little more effective. Overall, he likes the name.

A stellar Canadian tech name. They’ve essentially created a platform where if you have an item to sell, in a few clicks you can create a website with a checkout screen. They help you with shipping, logistics, etc. Thinks they are just getting started. Their big market right now is the US. They haven’t really tapped into international markets. There is a lot of growth. If a value investor, you are probably not going to like this. Longer-term, if they continue to double revenues over a number of years, it will do well.

The peak of $92.29 brought in a bunch of sellers. It has a new little base now. A really volatile stock. If it breaks around $90, it could jump down easily to $80.

One of Canada’s real true success stories. The company has executed. They’ve made large investments in their business, so as a result there have not been any earnings or cash flow to share with shareholders. Trading at an extreme valuation right now.

Top of the pack for price momentum. The valuation just isn’t there. They don’t have the cash flows or return on equity.

It is in a lucky position in that revenues are growing and they are promising some bottom line. They have a lot of running room and have been very successful. They have 3 to 6 years of running room according to analysts.

He has it in his growth portfolio. They are the backend for small business commerce. They have about 300,000 small business customers. There are 10 million small businesses in North America. He would not buy the stock today because it has gone parabolic. He would look for a pullback. You can’t really assign a value to them. They are first to market, however. He likes them, but would not run out to buy them right now.

Play this through options? The longest option he can see is October. Looking at the current Strike Price, it is around $90Cdn. He prefers Writing options as opposed to buying them. Looking at a $74 option, almost 20% below the market, you could Write a Put today and take in about $2 to $3, meaning you could make a couple percent, waiting to buy this cheaper. He loves these kinds of strategies.

This company makes a lot of sense in what they do, helping small companies go online for 1-stop shopping. It is clearly not making any money right now, and have just started turning cash positive. You have to look down the road and assume they will have continued growth. They are also getting into things like shipping and payments. Has been pondering this one, but hasn’t come to any conclusion.