🍨 Daily Scoop: An unlikely camera company
By Mon, Sep 9, 2019
What you need to know?
Hey Scoopers,
It’s the last day of our 3-part market-crusher series. We talked about a company that reaps the power of the Sun and has grown more than 500% in 2019. We introduced you to a company that gives TVs a brain, and grew more than 400% in 2019 alone. And, today, we are talking about a social media company that surprisingly wants to be a camera company. Nevertheless, this third market-crusher grew almost 200% in the first nine months of 2019, despite being a bit delusional about its identity.
On the topic of crushing it, the overall market didn’t have a bad day either. Scroll to the “Overall Market” and “What’s Up” sections to learn more.
MARKETS
- U.S. markets:The stock market continued its upward movement, and all three indices grew at least 1%. Scroll to the Overall Market section to learn more.
- Cryptocurrency: Contrary to the overall stock market, the cryptocurrency market wasn’t as excited. Bitcoin’s price continued to hover around $10,000 per coin.
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OVERALL MARKET
It’s the Fed again!
What happened on Thursday?
All three indices had a great Thursday. The Nasdaq almost reached the 2% growth mark. And, we have no one else but the Fed to thank for such an upbeat vibe. The news in the market is that the Fed’s officials are getting ready for a quarter-percentage-point interest rate cut. As we have seen in the last few months, the interest rate cut is all that investors are looking for.
What does this mean?
An interest-rate cut is good and all, but the Fed is getting very close to stripping itself out of any ammunition in the case we enter a recession. While we are celebrating the upward movement, we are also worried about what if a recession comes regardless of the cut, and the interest rate is so low that there is nothing left to cut. Something to ponder on and monitor in the coming months and quarters.
WHAT’S UP
This company had a great 2019, so far.
So, what happened?
In the third part of our marker-crusher series, we have the story of a company that we have never considered as a market-crusher. To be honest, for several quarters, this company was a laughing stock among our editorial team. For us, the comedy started from its S1 Document when they introduced themselves as a camera company.
Meet Snap, a camera company!
When Snap (Ticker: SNAP) went public, several uncertainties about the company’s operations and performance lead us to delay making any definitive decision. Just the fact that the company shied away from its social media nature and had to justify its valuation by calling itself a camera company was a signal of unclear vision and direction. Fast forward eight months, Snap was struggling with its process to increase and retain the number of active users. In its first year or so as a public company, no one believed Snap will be a stand-alone company in a few years.
The glimpses of hope
In Feb 2019, Snap Inc released its annual report. Full-year revenues reached $1.2 billion, an increase of 43% year-over-year. The management of Snap has taken efforts to stabilize the company’s profitability and user engagement by driving sustainable product innovation, scaling its advertising platform, and hiring a new leadership team. There were glimpses of hope. However, one of the concerns that still remained was the static number of Daily Active Users (DAUs).
The celebrations have started
By Q2 2019, investors can’t stop celebrating Snap’s success in its latest quarterly earnings. And, the stock price has been going up for a few months in a row. The company’s revenue grew by 48% y-o-y, and the average revenue per user grew to almost $2. While the company continued to be unprofitable, it was able to increase the number of daily active users by 13 Million, and reduce losses.
Maybe, Snap is a camera company!
The company’s investment in augmented reality is resulting in higher engagement. An example of such higher engagement is the widespread appeal of the “face swap” feature/filter on the app. We now can see how Snap can use its augmented reality capabilities to introduce a new generation of AR-enabled cameras. It’s still a far fetched goal, but a lot more realistic.
Final word
This edition of The Daily Scoop concludes our 3-part market-crusher series. Enphase Energy (Ticker: ENPH), Roku (Ticker: ROKU), and Snap (Ticker: SNAP) are three companies that have crushed the market performance, despite the doom and gloom. Well-managed companies in the growing markets have always astonished us, and that’s why we love investing in individual companies. It doesn’t matter what the average of the market does, someone will always crush the market.
About the Author
The authors of this Scoop are the editorial team at Stock Card, led by Hoda Mehr. Hoda Mehr is CEO and Co-founder of Stock Card and the host of Renegade Investors podcast. She runs a community of 40,000 stock market investors and manages Stock Card's successful flagship portfolio, Roll with Our CEO, on Stock Card Portfolio Store. Hoda is an Economist with an MBA from Concordia, John Molson School of Business. She applies behavioral economics, data journalism, and storytelling to all aspects of her work. Before starting Stock Card, Hoda worked as a strategy and insights lead at technology companies including Symantec, Aimia and Sony. Create a free account to do your stock market research easily and mistake-free: Stock Card Stock Card
