Sea Limited Is Investable Again

Summary

  • Last Tuesday, Sea Limited reported its Q3 2022 results and they were better than expected.
  • The market reaction was enthusiastic, with the stock up 36%, although it has already come down again.
  • The improvements quarter-over-quarter were impressive, even though the company still loses money.
  • Forrest Li committed to paying off the notes and still have cash in the bank. Management has always delivered what it promised.
  • This was not a quarter to be excited about, but the quarter that Sea needed. It is investable again.
  • Looking for more investing ideas like this one? Get them exclusively at Potential Multibaggers. Learn More »

Shopee headquarters in Singapore

kokkai

Introduction

Last Tuesday, Sea Limited (NYSE:SE) reported its Q3 2022 earnings. From the market reaction, I think it's clear how these were perceived. The stock shot up 36% following the announcement.

Chart
Data by YCharts

This is of course

Chart
Data by YCharts

Sea Ltd Group results Q3 2022

Sea's Q3 earnings call slides deck

Sea Limited revenue surprises

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Sea Limited EPS misses

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Sea issues notes

YCharts, adapted by the author

Amazon issues notes 1999 2000

YCharts, adapted by the author

Amazon profitability 2002

YCharts, adapted by the author

Sea Limited Q3 2022 results

From the Q3 earnings call slides, adapted by the author

Sea limited revenue growth

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Shopee and Garena percentage of revenue

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Sea Ltd. EBIT losses

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This article was written by

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Potential Multibagger helps you find multibaggers early on.

I am a 46-year old investor with a long-term perspective and that means I mainly think about the future when I invest. I try to uncover multibaggers early on. Picks include Shopify ($7.78), Crowdstrike ($98), The Trade Desk ($19.5), Cloudflare ($39) etc.

The strategy is simple but not easy: find disruptors that have a very high quality and hold them for a very long period. I try to identify stocks that have the potential to go up 1,000% and more over the next 10 years. I do deep research for the stocks that I pick to know if the quality is high indeed. 

I do not care about what my selection of stocks will do next year, but what the result will be over the long term. To paraphrase Warren Buffett: "You should only have stocks that you would feel comfortable having if the stock market closed up for 10 years."

I appreciate your comments because I believe I can learn a lot from your feedback and I believe in the wisdom of crowds.

Disclosure: I/we have a beneficial long position in the shares of SE, AMZN, MELI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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