Weekly Roundup 2022-09-02

Weekly Roundup 2022-09-02

Lunar Capital Weekly Roundup


Index / Fund / Rate Start of Year Last week This Week % change YTD
JSE ALSI 73 723 70 173 67 378 -8.61%
NASDAQ Composite 15 833 12 142 11 631 -26.54%
S&P 500 4 797 4 058 3 924 -18.19%
Prime Lending Rate 7.25% 9.00% 9.00% 24.14%
Lunar BCI WW Flexible Fund 165.68 149.91 144.43 -12.83%
USD/ZAR 15.96 16.88 17.32 8.52%
EUR/ZAR 17.95 16.82 17.23 -4.01%
Brent Crude 77.86 100.70 93.26 19.78%

Source: iress

Company and Market News

In 2016: the Democratic National Committee (DNC) thought that they were hacked during the 2016 US-election between Hilary Clinton and Donald Trump. They brought in Crowdstrike to assess their assumptions. Crowdstrike put their product on all the DNC members’ laptops and phones, and noticed that a number of apps were sending information to a specific Russian Hacker group known as Cozy Bear, without the DNC-members knowing. Crowdstrike were able to provide evidence to the FBI, to indicate that Cozy Bear had tried to influence the election.

Crowdstrike, founded in 2011, is a cybersecurity company that focuses on endpoint security through the cloud. Crowdstrike, essentially collects data on what applications are interacting between a person’s devices and other devices; and sends that information to Crowdstrike where their AI system continuously assesses the data to see if there are risks. If they pick up any anomalies, Crowdstrike would have the ability to contain the threat by shutting off certain applications or devices to prevent further contamination. Crowdstrike are also able to look at where the threats are coming from and compare it to all the other threats they’ve seen on the other devices of other companies in their network.

Last week Crowdstrike released their Q2 2022 results. Annual Recurring Revenue (ARR) was $2.14 billion and it grew 59% year on year. Net loss for the company was $78.7 million for six months ended July 31, 2022. This is compared to the net loss for the same period a year ago of $140.2 million. Despite the net loss, net cash from operating activities for six months ended July 31, was $424.9 million compared to $256 million a year ago. The share price decreased by 11.1% during the week.

Businesses will always require protection against cybercrimes, which is currently on the rise. This plays in Crowdstrike’s favour. Crowdstrike offers a more thorough security compared to traditional firewall security as it continuously looks for threats in the devices, whereas other firewalls generally only search for threats at the entry point. On the other hand, cyber-criminals are also continuously developing newer and more difficult-to-spot threats. Crowdstrike is operating in an ever-changing environment which makes it tougher to cement their moat compared to other business types.

Disclosure: Crowdstrike is held in the Lunar BCI Worldwide Flexible Fund.

Read our full Disclosure statement: https://lunarcapital.co.za/disclosures/

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The Lunar BCI Worldwide Flexible Fund Fact Sheet together with our Disclaimers can be read here.


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