FANG this and FAANG that. Maybe it's enough already. And, hey, we coined the phrase.
Maybe we should talk about the cloud kings and their heir apparents -- the cloud princes -- because they are royalty when it comes to performance.
Last night ServiceNow (NOW) reported a quarter with plus 30% growth across the board. ServiceNow, which automates pretty much everything that you need automated so you can spend more time with clients, is up $27 after that Everest-like quarter because that growth is almost unheard of for a $40 billion company -- except from the other cloud kings of course. It's up 52% since the fourth quarter low.
When you look at the performance of the companies we anointed last year as cloud kings since 2019 began you are talking some serious outperformance versus the 7% the S&P has given you.
You have ServiceNow's blowout numbers. Let's run down the rest for worst to second best given that NOW's got the 2019 crown so far.
The weakest? Adobe (ADBE) , which I bet can just deliver a "whamma jamma" quarter when it reports in March, perhaps taking it back from $248 to its all-time high of $277. I think of Adobe these days as the principal engine behind e-commerce. Everything seems to run through Adobe and last night Visa (V) told us that e-commerce is growing three times the rate of brick and mortar. So being up only 8% since the year began may be an opportunity. It's jumped 19% since the fourth quarter low, again, it seems like the stock should be higher.
Speaking of opportunities. VMware (VMW) , which reported the second best quarter after ServiceNow, so far is only up 9% this year even as it remains the best way to onboard to the web service companies. Think Amazon (AMZN) . The stock has rallied 35% since the low and has also given you a $26 dividend.
We own Salesforce (CRM) for the Action Alerts PLUS charitable trust and its 10.6% gain, ironically, seems low compared to its outsized 26% growth. This is a $116 billion company for heaven's sakes. That's amazing; digitizing selling is a must. Salesforce has jumped 33% since its fourth quarter nadir.
Workday (WDAY) has been winning contracts left and right, many of them from Oracle (ORCL) as it moves from digitizing human resources to the much bigger financial silo. It's up 15% and I don't know if that's enough although it is up 50% since its low. Then there's Splunk (SPLK) which had the misfortune to report smack in the middle of the big downturn. No matter, it is still up 20% for the year because there is incessant demand for data mining and no one mines data as they do. Should have bought this one at the fourth quarter low -- it's roared 50%.
Oh, how about the last king? It hasn't gone up much at all. That's because it's Red Hat (RHT) which got a gigantic bid from IBM (IBM) , a 63% premium to where it was trading. I think IBM will come out of this one fine if they can keep Jim Whitehurst, the Red Hat CEO, at the top of their gigantic food chain.
Not long after we anointed the kings we developed our prince list of cloud players and lo and behold, since the year began Coupa Software (COUP) is up 37%, Okta (OKTA) , recently featured on Mad Money has risen 28%, Hubspot (HUBS) and New Relic (NEWR) are tied with 25% gains and Atlassian (TEAM) has advanced 11.9%. Only Tableau Software (DATA) has failed to beat the market with a 5% advance.
Why are these doing do well in such a choppy environment. Simple: they weren't HBP, which doesn't stand for Hit by Pitch, it's Hit by (Jay) Powell. These are classic worldwide secular growers that do not need a strong economy because they perform functions that are vital for a company to cut the fat, increase the margins and beat the other guy. So when someone says the king is dead, you just come back and say long live the king. Unless, of course, the king is Elvis.
