Why Agora (API) Stock is a Compelling Investment Case

Tao Value recently released its Q3 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 7.08% for the quarter, underperforming its benchmark, the MSCI All Country World Index (ACWI) which returned 8.41% in the same quarter. You should check out Tao Value’s top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.

In the said letter, Tao Value highlighted a few stocks and Agora Inc. (NASDAQ:API) is one of them. Agora Inc. (NASDAQ:API) is a software company. Agora Inc. (NASDAQ:API) stock lost 1.8% in the last three months and on October 28th it had a closing price of $40.91. Here is what Tao Value said:

“We initiated a small new position in Agora, an RTE-PaaS (real time engagement platform as a service) business. Although with a tongue-twisting name, the product can be easily understood as below: If you, as an individual developer, have a good software idea which requires real-time video & audio interaction (e.g. streaming class), you can simply use Agora’s tool (and pay them by your users’ volume) to code up your product, making it to work in short time (1 week). You are guaranteed by Agora to have your realtime interaction function working satisfactorily. There is an alternative way if you are a company with more resources – to build this real time interaction function by yourself. You might be able to build limited features with 10+ developers working on it for 3 months and you will need to maintain your own servers/network. To maintain and improve this tool, you will also need to dedicate developers & resources going forward. I believe RTE-PaaS has a potentially huge market, as our society is moving towards a virtualized future for which COVID19 gave us a preview. We are probably a few years away from the full fruition of real time interactive virtualization when the value of RTE-PaaS will become more obviously.

I’m also attracted by Agora’s founder/CEO Tony Zhao. Zhao grew up as a software engineer, working with Zoom’s Eric Yuan in early Webex days, later moved back to China and became CTO of YY (another fellow holding of ours) before he quited and founded Agora in 2014. Zhao is known in the industry for his strong technical aptitude & ability to gather a group of similarly high caliber technical talents. He also seems mindful, in designing Agora’s culture. For example, when Zhao founded Agora with some old friends, the first thing they decided is that no matter what exact product they are going to build, they will grand free 10,000 mins for the “developer first” belief. Additionally, Zhao made an unconventional decision on measuring the quality of its product for commercial purpose. While others typically use quantitative measures like latency & downtime SLAs, Zhao decided to use “experience” (i.e. refund if not satisfied) – which appears imprecise and even subjective. But thinking further, I would agree from user’s perspective this is the ultimate best, and right measure, which also shows Zhao’s confidence in their technology.”


Our calculations showed that Agora Inc. (NASDAQ:API) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

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Disclosure: None. This article is originally published at Insider Monkey.