My Portfolio for 2021

Introduction

A lot of my followers are asking, what are you betting on in 2021 and why? Maybe that is in an alternate universe where I have more than a handful of followers. That’s okay, I am an influencer in my own mind.

After a 60% return in 2019 and a 114% return in 2020 I am feeling like I am getting better at picking the winners and cutting the losers. A big return in 2020 isn’t that big of an achievement however. There are certainly plenty of people who won huge on TSLA going up 700%+ and biotechs that rallied on covid treatments. The Nasdaq was up 40%+!

Revealing the Portfolio

Drumroll please…! Here is the starting lineup for 2021 in all its glory. I will share a few words on why I like my top five.

ADCORE Inc

This is a SAAS advertising automation company. Market cap is ($0.76 * 56M shares) = $42.56M USD. If we subtract about $7M of liquid assets, we get $35.56M. Divide it by an expected revenue of $12.8M for 2020, we get an EV / revenue ratio of 2.77X. Compare that to the EV / revenue ratio of 59.08X of advertising technology leader TTD (Trade Desk), and you can see why this is my #1 position. I expect ADCORE to grow revenue 50%+ in 2021. Q4 results being released will be an inflection point. I expect Q4 revenue to be up over 90% YoY.

If the EV / revenue ratio stays stable, and ADCORE revenue grows 50%, we can expect the stock price to go up 50%. That is a good base expectation. Now if ADCORE gets noticed, and the EV / revenue jumps to 6X for instance, you could easily be looking at 200% gains. For big winners, valuation expansion is historically a bigger factor than earnings and revenue growth.

Urbanimmersive

Looking at their monthly graphs of platform usage, we can see they are growing fast and accelerating. November growth YoY was 65% and December over 80%. With their newly launched 3D tour product I believe they can grow 50% in 2021 and turn an EBITDA of $1.5M CAD. Slap on a 15X multiple on that and the share price CAD would be up 50% at $0.225 compared to recent highs around $0.15. So it should go up 50% on revenue growth. However the market could easily reward it with a growth valuation of 30X EBITDA and then you are looking at another potential 200% gainer.

Clearpoint Neuro

This company has a platform for administering deep-brain stimulation (“DBS”), laser ablation, biopsy, neuro-aspiration, and delivery of drugs, biologics and gene therapy to the brain. It dominates its niche market. I see it growing nicely at 20% to 30% a year organically. However if some of the 25+ treatments they are partnering on delivering are approved, that growth could vastly accelerate. There is no way this company and its proprietary platform is not worth $1B+ compared to today’s market cap of $160M. I believe 2–3 years and they will hit the $1B for a 500% return from today.

DGTL Holdings

This a new holding. However they look on track from recent press releases to be able to grow at least 50% to 150% a year organically. Once again in the advertising technology arena their EV / revenue ratio of around 4X is vastly smaller than market leader Trade Desk’s 59X. There is a lot of room for valuation to move up while revenue grows organically or they find strategic acquisitions.

Advanced Nanotek

This producer of zinc oxide for chemical free sunscreen and beauty products was poised to easily surpass 100% revenue growth in 2020 before the pandemic hit. With the vaccine being administered I expect travel and sunscreen use to go back to normal and Advanced Nanotek to continue their hyper-growth. This company is valued by the market like a value company instead of the growth company it is. Not only is revenue exploding, but there is a lot of room for the valuation metrics to go way up.

Summary

I believe that these five companies may be something I hold onto for years, which is pretty unusual for me. I am usually looking to buy something right before an inflection point where it makes a big move, then I consider taking profits and repeat with a new holding. Several of the companies above are at inflection points, and others will take more time to blossom. However I expect great things from them. I’m hoping they can be a platform for a 100%+ year in 2021.

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Lindsay Leeds

Lindsay Leeds

I am an IT guy by trade, with interests in investing and personal finance.