Thoughts On Salesforce (CRM), Our Second Largest Position
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Qualys (QLYS) remains below its indicated BuyAt of $107.76 (currently $102.83) but since Risk Research has a full position of 8.4% of portfolio, and taking into consideration the elevated market, I haven’t bought a fourth position.
Interesting interview of the CEO of Pro-Dex (PDEX) here. We’ve been accumulating PDEX on the recent stock price decline. Took a third position a week ago at $26.30. Now $26.31.
Chart of The Day, Salesforce (CRM)
The following buy and sell prices for CRM are based on the Risk Research Algo, updated earlier this week. This graph is published here to provide perspective on the current indicated CRM BuyAt and SellAt prices.
- BuyAt $218.70.
- SellAt $246.65.
- Current market $239.67.
CRM Algo results over the last 12 months:
- Fourteen purchases, fourteen sales.
- Average purchase at $169.61; average sale of $180.72.
- Average return per transaction of 6.6%.
- Average holding period 15 days.
- Annualized return 154%.
In reality, the Risk Research actually holds a position in CRM with an average cost of $222.22, 10.2% of portfolio. That’s after selling half our position February 2 at $234.54.
The discrepancy between the Algo and our actual portfolio has to do with two factors:
- In the last week we held an Algo-improvement competition between two mathematicians and a physicist. We modified the Algo based on the backtest with the highest return. We took the position based on the prior Algo, which generated slightly different results.
- A reluctance to sell high quality growth companies with our high cash position, currently 45% of portfolio. In general, we follow the Algo but don’t always sell when stocks reach the SellAt level in the case of particularly high-quality growth stocks. I’m not sure if I’ll sell CRM the next time it reaches its SellAt. I’m definitely thinking about it. This market scares me a little.
Risk Research Inc. provides research tools to professional investors based on proprietary AI software. Our software is also available, customized to client specifications, on a monthly rental basis.
Analyst's Disclosure: I am/we are long CRM, QLYS.
We offer this research as insight into what we do in our own portfolio rather than as a recommendation or offer to buy or sell securities. This research should not be your sole source of information. It is based on probabilities, not certainties.
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