Investors are spoilt for choice today as the Sohn Hearts & Minds Investment Conference delivers plenty of portfolio ideas. While all of the stock picks are believed to be offering potentially market-beating returns, the most ambitious might be Yen Liow's selection — GitLab Inc (NASDAQ: GTLB) shares.
Today, the managing partner of Aravt Global informed attendees of his high conviction in GitLab. However, Liow's estimated upside to the DevOps platform company is the real elephant in the room. In sharing his top pick for 2022, the fund manager noted the opportunity for GitLab to 10x in value in the coming decade.
Interestingly, Liow stumbled upon the company while researching Atlassian Corporation (NASDAQ: TEAM) — a company that has generated a monstrously good return in its own right. While Atlassian hones in on one specific piece of the DevOp stack, GitLab offers an end-to-end solution.
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What is GitLab?
GitLab is for the software developers and coders out there. At its core, the company's product allows developers to store their code online. This allows developers to collaborate on projects together remotely.
However, this is only one piece of the puzzle. In addition, developers are able to plan, manage, create, verify, package, secure, monitor, and release their code (among other things) using the GitLab platform. For those that aren't privy to the world of code, this essentially means people who code have nearly all the tools needed in the one place.
In describing the potential of the GitLab share price and the company, Liow said:
We kept on hearing from our conversation with our developers in the community that this company has fantastic software which they believe will become one of the emergent standards for years to come.
Imagine getting onto Atlassian at the start of the ride. We believe that company is GitLab
At present, the DevOps industry operates in what Liow describes as a duopoly between GitLab and Microsoft's GitHub. At this stage, there is no DevOps offering that provides developers with a one-stop shop for their coding needs. However, Liow expects GitLab is the best-positioned company to solve this problem.
Investing in GitLab shares
Another attractive feature in the eyes of the fundie is GitLab's track record of growth. Over the last seven years, the company has been growing at almost 70%. As a result, GitLab now boasts a run rate of nearly $230 million a year. On top of that, it has maintained a high gross margin of 88% as it expands its customer base.
The proposition for investing in GitLab shares in Liow's words is "software developers are among the most valuable employees in the world and that they will be an extremely valuable place to sell software into".
Shares in the US-listed tech company are valued at US$91.23 a pop.
