Last week we saw a divergence between two positions. DELL was the top performer in the portfolio, while this other company was the worst performer.
On Sunday, I published my view on DELL, lowered the target price from $639 to $601, read as to why here.
Today I trimmed DELL from 11% to 8.5% and put the proceeds into the other position, taking it from 4% to 6%.
Since adding this position and before the rebalancing, it was up 127%. Three weeks ago it was up 276%.
Revenue more than doubled y/y, above the top of its own guidance range, a 48% operating margin, full-year growth guide raised. The stock fell the next day and dropped further the day after. From its peak to the bottom, there was a significant drawdown, on a quarter with nothing that would justify it in my opinion.
Behind the paywall: the Q1 FY2027 review and the two numbers that actually moved the stock, the guidance delta against June, the thesis scorecard pillar by pillar, the rebuilt DCF with every assumption on the table, 10,000 Monte Carlo runs across the model, a bear case that gets to 1 to 1.5, and the risk register.