Study of SNOW
12/04/2020 – very interesting to study more about Snowflake when I have time
The Most Popular Guru Buys of the 3rd Quarter
These stocks had the most net buys from gurus during the 3rd quarter of 2020
Snowflake
Snowflake’s core product is a cloud-based data warehouse that seamlessly operates across the three major public clouds. Founded in 2012, it seems that the founders of the company anticipated the shift to the cloud, as they began to build a cloud computing data warehouse right near the beginning of the cloud’s rise in popularity.
During the quarter, 11 gurus bought shares of Snowflake, which had its initial public offering on Sept. 16. Thus, no gurus have yet reported selling shares of the stock. As of the quarter’s end, 11 gurus had a stake in Snowflake.
The largest guru shareholder of the company is Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) with 2.21% of shares outstanding, followed by Philippe Laffont (Trades, Portfolio) with 1.46% and Frank Sands (Trades, Portfolio) with 0.86%.
During the quarter, shares traded for an average price of $238.10. As of Dec. 4, the stock trades around $384.75, marking a 57% increase from its IPO price. The company has a cash-debt ratio of 23.07 due to ample fundraising, but is not yet profitable.
Despite being a tech IPO, Snowflake has two qualities that value investors have found attractive: a good management team and a moat. The company was founded by two former Oracle (ORCL) employees, Benoit Dageville and Thierry Cruanes, as well as Marcin Zukowski, one of the co-founders of Dutch data start-up Vectorwise. All three came from industry-leading data companies, which is an encouraging starting point in terms of the company’s future prospects. Snowflake’s current CEO, Frank Slootman, has extensive executive experience as the former CEO of ServiceNow (NYSE:NOW), an industry leader in cloud-based, back-end software vendors for large enterprise customers.
Additionally, taking advantage of the trends of big data processing and the public cloud, Snowflake can take all of the data from a company (regardless of the source) and make sense out of it, essentially providing unique value-added services that competitors have yet to replicate. This could become a potential source of moat for the company if it can become the undisputed leader in its niche before direct competitors can get a foothold.
