Alec Hogg: How we hit Cloudflare home run

In late March, I agonised over a decision to offload our BizNews Share portfolio's holding in Berkshire Hathaway, creation of the investing and business genius Warren Buffett. At the time, panic selling because of the projected impact of Covid-19 dropped many high quality stocks to bargain prices. Locally we were able to acquire, at unbelievable prices, holdings in Sasol (at R28) and Discovery (at R67)..Also read: Alec Hogg: All hail the Free State activist – this time with the interview link!.Mr Market's reaction to the pandemic also brought two stocks I'd been watching for some time onto the buying radar. Music and podcast streaming group Spotify had tanked, enabling purchases at $129 (now $253). Even more appealing, however, was Cloudflare, the global cloud security software leader, whose price had virtually halved, dropping this always highly rated stock to just about its lowest point since listing in September 2019..Cloudflare was added to the BizNews portfolio in late March at $22 a share. It closed on Friday at $64 – a near trebling in just eight months. The market cap has rocketed from around $7bn to almost $20bn. That's a rich valuation for a company whose annual revenue will break $400m for the first time this year. In other words, the stock now trades at an astonishing 47 times sales (it was 16 times when we bought)..___STEADY_PAYWALL___.Also read: Alec Hogg: Cloudflare's 23% surge proves the value of homework.What excites investors about this world-leading business, however, is its ability to keep innovating and thus even expand its advantage, fat profit margins (over 70%) and dominance of a mushrooming sector (Cloudflare's sales are growing at over 50% a year). Even so, buying the stock at today's rating requires a huge vote of faith. After it had virtually halved in March, not so much. The lesson: with investing, there is no substitute for patient preparation. One never knows when Mr Market will next lose his marbles. Homework gets you ready for the next fat pitch..For your attention today….WEBINAR ALERT….* We have a smorgasbord of topics for you in today's premium-only Rational Radio webinar: Anchor Capital founder Peter Armitage on his delisting decision, Forensics for Justice founder Paul O'Sullivan on Ace Magashule's arrest and PANDA's Nick Hudson giving us the latest on Covid-19 and the Great Barrington Declaration. Join me at noon – here's the link to register: https://attendee.gotowebinar.com/register/6730147365502274830.* And if you have school-going children (or grandchildren) please make a diary note to join me tomorrow at noon for answers to all those questions about high schooling in the digital age. In studio will be our partners from the disruptive Valenture Institute, founder Robert Paddock (whose previous company Getsmarter.com was sold to the world's online education leader, Nasdaq-listed TwoU, for R1.8bn) and Valenture faculty lead Sarah Elphick. Register here: https://attendee.gotowebinar.com/register/4850212282925182219.FOR DOWNLOADING….* Here's the link to watch the live coverage of the first private company to send astronauts into space (see story below): https://www.youtube.com/watch?v=bnChQbxLkkI&feature=emb_rel_pause.* The latest BizDigest PDF can be downloaded here: https://bit.ly/3kuz5to.* And here's episode nine of Inside Investing where we focused on Biden, Pfizer, Capitec, Valenture and more: https://www.biznews.com/business-unusual/2020/11/12/capitec-3.DOWNLOAD THE FREE BIZNEWS.COM APPClick on the links below to download your own Biznews.com App:.Apple: https://apps.apple.com/za/app/biznews-com/id1517392839.Android: https://play.google.com/store/apps/details?id=com.goodbarber.biznews&hl=en

Alec Hogg: How we hit Cloudflare home run

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