Shopify Inc. (SHOP.TO)

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.

This is not in his wheelhouse, because normally he is looking at companies that are in a cash flow, and where you can calculate the ROC to see what is going from that perspective. However, he is recommending this because he thinks it is going to grow into that. This is a little bit out of his normal space, but seeing what he sees and the excitement around the company, he thinks it can grow into its valuation.

Deemed to be the Amazon (AMZ-Q) North, whereby they get really sticky and tight with their members, small businesses that are start-ups. They provide financing to them which is going to be very helpful moving forward. Because of the data they are culling from sales, they know exactly what is going on with each business, so they can create a platform that the online retailer is looking for.

An explosive growth type of name. It has clearly done very, very well. From a technical level, it is really overbought at this point. It’s a name to keep an eye on, because he thinks it will be one of those great growth companies. Estimates it will grow at least 25%, but we’ll have to see when they actually make money and start to earn proper profits year-over-year.

An excellent company. He would recommend you Hold or perhaps even buy more on a pullback. There is some risk with a border adjusted tax, but that is probably not going to happen, or at least not the way people are looking at it right now. A great company with a good service offering.

This is the kind of “knowledge” business that isn’t going to be bothered by 20% cross-border taxes. It could grow in the US. It provides a service for small businesses, so that they can have the same fire power as some of the big guys. Thinks it has great, long term growth prospects. This is one you can buy and put away, and 5-10 years from now you will have made a lot of money.

In recent results, sales grew like crazy, but unfortunately expenses also grew. Analysts have shaved estimates for earnings. Expected to lose $.28 in 2017, and to improve to positive $.19 in 2018. Against an $80 stock price, the 13X Price to sales multiple is somewhat breathtaking. It is a bit of a challenge figuring out what a reasonable price is.

This will soon be a great company, but he finds the valuation they receive interesting. Unfortunately, they don’t make money yet. They’ve been losing money every day so far. Have a lot of cash on the balance sheet and are rapidly increasing sales, and a year from now they should be profitable. Feels the valuation is out of control. If we get any kind of pullback, look for a sharp correction because there is no earnings support. Even looking out over 5 years, he can’t justify the valuation.

Has been hitting record highs recently. We have a nice trend, but that last leg is something you don’t want to pay up to. They are open to a pretty decent haircut. He has a target of $100. It is framed by the market. It is a higher beta. Try to get it in the $60s or low $70s.