In our ‘Fundamentals’ service we have three areas of focus - cloud software and services at large, cybersecurity software, and space. We focus on these sectors in the service, and invest in the sectors in staff personal accounts, for one simple reason: growth. Each offers the potential for multiple names growing at way-faster-than-market rates of revenue growth, ramping profitability and cash generation, and a degree of investor excitement to propel the stocks upwards with lofty valuation multiples.
In amongst the rock-star ‘New Cloud Generation’ names we cover - - think ZScaler, CrowdStrike, Spire Global - we pepper in a few older names. Some properly Grandpa Tech - we wrote up Oracle recently
- and some just Papa Tech. Old enough to be making proper money (you know, a big ol’ gusher of barbarians’ favorite tipple, unlevered pre-tax free cashflow), but not so old that they would rather go sailing than dial for dollars.
One of our Papa Tech cybersecurity picks, ProofPoint, announced yesterday that it was being acquired. Longtime software buyout shop Thoma Bravo has agreed to buy PFPT for a 34% premium to last Friday’s closing price. This is a great outcome for PFPT shareholders in our view, and with that in mind, we happily sold our staff personal holdings into the 30-something percent pop that followed.
We flagged to our ‘Fundamentals’
subscribers back in February this year that PFPT could very well get picked up by a bigger friend. Here’s a snapshot of that note.