THE TIME ADVANTAGED INVESTOR
DAY 14
Overall portfolio is down $36,315 after a rough two weeks. Not an auspicious start but not concerned. As discussed, this will be a three-year experiment and I’m not looking either to connect on every trade or for short-term gains.
Spotlight position:
$ZDGE buy-write
Zedge is a software company that sells apps, ringtones and wallpaper for mobile phones. The majority of its revenues come from ads and subscriptions to its customization app. While this may sound like a business in decline, revenues remain near peak:
More importantly, Zedge is quite cheap. With more than 1/3 of its market cap in cash, ZDGE has an enterprise value of only $24.2M.
Management expects business trends to remain favorable:
The early results of this quarter reinforce that our approach is sound and that our operating model is gaining strength. Of course, we will modify our course if things change materially. We delivered a solid start to fiscal 2026 with a return to mid-single-digit revenue growth and continued progress across our strategic priorities. What stands out to me this quarter is the quality of that growth for the Zedge marketplace.
Why the position is time advantaged:
Zedge has been repurchasing shares and has $600k left on its current authorization. ZDGE let its share count balloon going into 2022 but has been reducing ever since. Too early to call it a share cannibal, but moving in the right direction.
Zedge pays a $0.016 quarterly dividend. Pretty small at 1.95% annualized yield, but its a start.
the covered call, though far OTM, will provide substantial additional yield as it decays towards its July expiry. And if shares hit the $5 strike and are exercised, even better.
Disclaimer: This is not financial or trading advice. I don’t even know if it will work. I certainly don’t recommend you do anything and have no responsibility to you under any circumstances. Don’t expect advance warning of any change in position — you will not get it. I might close or flip positions or take other trades you do not expect without notice. Under no circumstances will I have any liability to you, so be an adult and take responsibility for your own actions. If you disagree, discard this email, unfollow and ignore.