12 Stocks to Launch the BLI Premium Portfolio

This week we officially launched the BLI Premium Portfolio for members of our Bottom Line Investing Premium service. This is a long-term oriented model portfolio aimed at finding the stock market’s best buying opportunities early in their respective growth stories — before the vast majority of investors catch on.

BLI Premium Members can track the portfolio at any time here. I’ve decided to start with as close to $100,000 in initial capital as possible to make it easy to gauge the portfolio’s performance from a nice round baseline. And I intend to trim existing positions along the way should I choose to add additional stocks to the portfolio (rather than simply adding cash positions to do so).

In case you missed it, here are the 12 initial stocks I added to the portfolio on Friday to get the ball rolling — in order from the largest to smallest allocations:

• SoFi Technologies (SOFI): I believe recent analyst concerns over the mark-to-market valuation of SoFi’s held-for-sale loan portfolio have created a buying opportunity for patient, long-term investors. With SoFi guiding for its first-ever quarterly GAAP profit when it releases earnings later this month, it should be an interesting start as the portfolio’s single-largest allocation.

• Gitlab (GTLB): Gitlab just achieved its first-ever quarter with positive adjusted operating profits. The sticky DevSecOps platform should benefit greatly from enterprises’ shift toward unified solutions rather than piecemeal options over the next several years.

• UiPath (PATH): UiPath is a leader in the budding robotic process automation (RPA) industry that’s proven its platform is incredibly sticky. As it continues to automate mundaNe tasks in order to help people focus on more “human” problems, the business should enjoy a long runway for growth.

• Lemonade (LMND): Lemonade management has predicted the insurtech company will be able to achieve sustained profitability without raising additional capital. Though it won’t be a straight line upward, I look forward to seeing Lemonade leverage its AI roots to disrupt incumbent insurers.

• StoneCo (STNE): StoneCo is poised to benefit from the Brazilian Central Bank’s lower interest rate policies for at least the next year, as well as the rise of micromerchants and e-commerce demand in the country. The Buffett-backed fintech also just received its banking license in Brazil, giving it access to customer funds for lending.

• Palantir (PLTR): Coming off its fourth straight quarter of GAAP profitability, this mysterious AI platform is not only winning massive contracts in the defense & security industry, but also enjoying significant momentum in the commercial space. It should be a primary beneficiary of the rise of truly useful AI solutions.

• Boston Omaha (BOC): As I’ve argued before here at BLI, Boston Omaha is an incredibly difficult business to value. But I believe its intrinsic value stands far above its current market cap implies. Eventually I think the market will catch on, and Boston Omaha’s share price will rally accordingly.

• Rocket Lab (RKLB): Rocket Lab is an underappreciated value in the space economy — second only in my mind to the currently private SpaceX. As it extends it reach (and payload capacity) with larger rockets like Neutron, the former SPAC merger target should be able to reclaim its post-IPO highs.

• Tilray (TLRY): I think Tilray’s recent post-earnings drop was overblown. The cannabis and alcohol beverage company is targeting solid adjusted EBITDA growth and positive free cash flow this year, implying it should be gearing up for a much more impressive second half.

• Redfin (RDFN): With U.S. home sales coming off their worst year in a quarter century, Redfin is already starting to benefit from lower mortgage rates and early signs of a rebound in the housing market. The Fed’s policy of reducing interest rates going forward should serve as a catalyst.

• Virgin Galactic (SPCE): This is a very high-risk, but also potentially high-reward stock in the space economy. Virgin Galactic recently shifted its business to focus on scaling out its next-gen Delta-class spaceships and motherships, and should have just enough cash to see it through that development process over the next couple years. If all goes well, it could be a multi-bagger in the making. If not, this small allocation won’t hurt the overall portfolio’s performance too badly.

• iRobot (IRBT): Finally, I’ve added a small allocation of iRobot shares to the BLI Premium portfolio on the heels of this week’s news that the European Commission intends to block its acquisition by Amazon on antitrust concerns. Perhaps Amazon is perfectly content allowing the deal to fall through, or perhaps its decision to call regulators’ bluff backfired by not offering concessions to appease those concerns in Europe. But noting iRobot will receive a $94 million breakup fee in the event regulators shut the acquisition down, it should go a long way toward helping the company re-ramp R&D and sales & marketing spend as it resumes life as a standalone business. I like the risk-reward proposition at these levels.