Key insights
- The author is considering reallocating their portfolio to increase exposure to established SaaS companies like SAP and INTU, funded by selling positions in UNH, LULU, NVO, and MELI. They express bearish sentiment towards chip and memory stocks, viewing SaaS as relatively undervalued. This reflects a potential shift in investor preference towards established software names, which could provide a slight tailwind for these stocks.
I already own some MSFT (bought 100 shares just under $400), have ADBE at an avg cost of $272. But I'm looking to add more software specifically sticky legacy companies that are hard to replace overnight like everyone seems to think is going to happen.
SAP, INTU, and CRM have my attention, more so the first two though as I don't really see why enterprises would want to replace them or if they even can efficiently.
I would have to sell a few holdings to make room but I'm thinking it could be worth it. I can sell my UNH shares that are up 50% and my LULU shares that are down 32% and effectively break even there between the two. I just am hesitant as I actually do think LULU can come back, it's starting to get priced as if it's going out of business, but it doesn't seem to stop going lower. UNH I really think has almost topped out, even bullish projections don't have it going much higher and I feel I should take my easy win and run. And then roll it all over into the names I mentioned and/or probably more MSFT.
I have some NVO I'm looking to possibly dump, MELI as well. I would be taking a slight loss on those as well but the opportunity cost of not going all in on good tech based names that aren't overinflated chip and memory manufacturers is getting to me, the headaches are starting to make these seem not worth my time and energy, especially when so much of SaaS seems to be on sale.
Anyone else looking to do a similar move? I'm pretty bearish on the chip and memory stocks as they seem overvalued now.