Adding A Stock To My Tech Stock Dashboard ($BOX)

By: ispeculatornew
Date posted: 02.12.2015 (5:10 am) | Write a Comment  (0 Comments)

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$BOXToday, I’m adding the first of several stocks to the list of stocks that I follow; Box Inc. (BOX)

For those of you who are new to the blog, you might know that one of the main things I blog about are my long & short tech stocks. It’s not a big part of my investments but it’s a lot more active than the rest and has done extremely well in the past few years. Evey time that I look for a trade opportunity, I start by looking at the list of stocks that I follow. That list can be found here.

I also track news, earnings reports and more for all of these companies. I generally tend to stay away from trading recently turned public companies. It is partially because I want more historical data on those companies but also because they are so volatile in the first few months. Just look at the daily movements by BOX:

ycharts_chart

What is Box?

Box is an extremely interesting company to add. It is an online file sharing company that mainly focuses on a business offering. As companies quickly move their assets towards the “cloud”, Box is very well positioned as one of the leaders. Many companies have tried to do this themselves which often ends up with security issues as we saw with the now famous Sony hacking incident.

Growing Sector But…

Box’s main problem of course is that it competes with the likes of Microsoft, Google, Dropbox, Amazon and many others in a sector where margins are quickly decreasing. Many of these companies are looking at selling this service as a way to establish a relationship with these businesses rather than trying to make money off of it which makes it extremely difficult for BOX to extract good margins and for that reason, I’d be very hesitant to pay a high valuation for a stock like that.

Beware The Company’s Financials

Like other stocks such as ZenDesk (ZEN) and Salesforce (CRM), Box should be seen as a SAAS (software as a service) company and valued based off of that. Here is a great article that explains the differences involved:

Understanding SAAS: Why the pundits have it wrong

Do any of you have a position or opinion on BOX?

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