Investors,

Volatility is back in the markets with the new rise of the Omicron virus along with a potential rate increase. Investors are beginning to adjust their discount rates upwards as valuations start to fall.

This past month was tough in terms of performance for my portfolio. Overall my portfolio was up around 3-4% by Thanksgiving day. After Thanksgiving my portfolio fell. I ended the month down around 4%.

I have never really thought of volatility as risk. The movement in stock prices means nothing in the short-term. If your thesis hasn’t changed as a stock gets cheaper you should buy more. Load up when the market pukes and sell when a stock hits your target price.

The added volatility in the market has given me the opportunity to add a new position in my portfolio. I started buying this stock last week and have made it a major position.

The company reported earnings last week and blew it out of the park. Investors used the opportunity to bid the stock up. At the high the stock was up 30%. The stock ended up closing up around 10% the day of earnings. The next day the stock plunged over 15% on zero news.

I have purchased over 17,000 shares and will likely continue to accumulate more shares as I think the valuation is extremely cheap at this price. This stock was trading at $14 per share back in February and was over $7.00 per share just in August. Today the price is a low $3.43 and fundamentals have only improved. Based on valuations of competitors and the potential free cash flow this company should generate, I think a valuation closer to $6-8 per share makes more sense over the next 6-12 months. In the long-term if management executes on their strategy, a share price closer to $15/share is not out of the realm of possibility.

Here’s the rundown of my investment thesis