Offshore
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iinvested
2Q'24 Vulcan Value Partners on $PLNT, $QRVO, $KMX,
https://t.co/x8sPnxBizA
More fund letters here:
https://t.co/WRGkdL2eBG https://t.co/lYYYmCf96c
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2Q'24 Vulcan Value Partners on $PLNT, $QRVO, $KMX,
https://t.co/x8sPnxBizA
More fund letters here:
https://t.co/WRGkdL2eBG https://t.co/lYYYmCf96c
tweet
Offshore
Photo
Brandon Beylo
RT @adayeoyh: whenever I meet anti-capitalists in sf who profess to be advocating for the poor, I wish I could show them this chart and say “capitalism and technological progress have brought billions of people out of extreme poverty and suffering over the last 200 years. ofc it’s not perfect, but it’s the best system we have for human flourishing. is this what you wish to stop?”
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RT @adayeoyh: whenever I meet anti-capitalists in sf who profess to be advocating for the poor, I wish I could show them this chart and say “capitalism and technological progress have brought billions of people out of extreme poverty and suffering over the last 200 years. ofc it’s not perfect, but it’s the best system we have for human flourishing. is this what you wish to stop?”
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Hidden Value Gems
An interesting take on the economics of Olympic games 🥇by @azimbalitw at @joincolossus.
Here are my takeaways 🧵👇
1️⃣The price: The Paris 2024 Olympics is expected to cost $9B, which is an “improvement” over previous games. The 2020 Tokyo Olympics cost $35B, and the 2014 Sochi Winter Games an astounding $60B.
1/10
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An interesting take on the economics of Olympic games 🥇by @azimbalitw at @joincolossus.
Here are my takeaways 🧵👇
1️⃣The price: The Paris 2024 Olympics is expected to cost $9B, which is an “improvement” over previous games. The 2020 Tokyo Olympics cost $35B, and the 2014 Sochi Winter Games an astounding $60B.
1/10
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Offshore
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Librarian Capital
Lindsell Train on Nike $NKE:
"Share price ... essentially doubled then halved over our 4-year holding. To be back where we started is a depressing investment result"
"Perhaps we should have sold at 2021’s peak, though without 20:20 hindsight we will always find this tough" https://t.co/nBkK3CdqV3
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Lindsell Train on Nike $NKE:
"Share price ... essentially doubled then halved over our 4-year holding. To be back where we started is a depressing investment result"
"Perhaps we should have sold at 2021’s peak, though without 20:20 hindsight we will always find this tough" https://t.co/nBkK3CdqV3
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Offshore
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Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: A sober valuation analysis on $META 🧘🏽♂️
•NTM P/E Ratio: 23.17x
•10-Year Mean: 26.61x
•NTM FCF Yield: 3.77%
•10-Year Mean: 3.30%
As you can see, $META appears to be slightly undervalued
Going forward, investors can expect to receive ~14% MORE in earnings per share & ~14% MORE in FCF per share🧠***
Before we get into valuation, let’s take a look at why $META is a quality business
BALANCE SHEET✅
•Cash & Equivalents: $58.12B
•Long-Term Debt: $18.39B
$META has an excellent balance sheet, an AA- S&P Credit Rating & 147x FFO Interest Coverage Ratio
RETURN ON CAPITAL✅
•2019: 26.0%
•2020: 23.5%
•2021: 33.7%
•2022: 22.0%
•2023: 26.3%
•LTM: 30.1%
RETURN ON EQUITY✅
•2019: 20.0%
•2020: 25.4%
•2021: 31.1%
•2022: 18.5%
•2023: 28.0%
•LTM: 33.4%
$META has great return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2018: $55.84B
•2023: $134.90B
•CAGR: 19.29%
FREE CASH FLOW✅
•2018: $15.36B
•2023: $43.85B
•CAGR: 23.34%
NORMALIZED EPS✅
•2018: $7.57
•2023: $14.87
•CAGR: 14.45%
SHARE BUYBACKS✅
•2018 Shares Outstanding: 2.92B
•LTM Shares Outstanding: 2.64B
By reducing its shares outstanding ~9.5%, $META increased its EPS by ~10.5% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 81.5%
•LTM Operating Margins: 39.5%
•LTM Net Income Margins: 32.1%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~14% MORE in EPS & ~14% MORE in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $META has to grow earnings at an 11.60% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be greater than the (11.60%) required growth rate:
2024E: $20.14 (35.4% YoY)
2025E: $23.05 (14.5% YoY)
2026E: $26.32 (14.2% YoY)
$META has a decent track record of meeting analyst estimates ~2 years out, so let’s assume $META ends 2026 with $26.32 in EPS & see its CAGR potential assuming different multiples
24x P/E: $631.68💵 … ~12.5% CAGR
23x P/E: $605.36💵 … ~10.5% CAGR
22x P/E: $579.04💵 … ~8.5% CAGR
As you can see, $META appears to have double-digit CAGR potential if we assume >23x earnings, a multiple slightly below what it’s trading for today and a multiple below what may be justified given its mid-teens earnings growth rate
I also believe that Mark Zuckerberg will continue to execute exceptionally well
Additionally, the increased investment in future growth and necessary AI development has the potential to drive better growth prospects, which could serve as a bullish catalyst for the next several years
Today at $476💵 $META appears to be a good consideration for investment
$META appears to be an excellent deal closer to $450💵 where it has ~11% CAGR potential assuming 2026E and a 22x multiple (an added layer of margin of safety)
#stocks #investing
___
𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️: 𝐓𝐡𝐢𝐬 𝐢𝐬 𝐍𝐎𝐓 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐀𝐝𝐯𝐢𝐜𝐞. 𝐁𝐚𝐛𝐲𝐥𝐨𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥® 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐫𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐚𝐭𝐢𝐯𝐞𝐬 𝐦𝐚𝐲 𝐡𝐚𝐯𝐞 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭.
𝐓𝐡𝐞 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐢𝐬 𝐢𝐧𝐭𝐞𝐧𝐝𝐞𝐝 𝐟𝐨𝐫 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐧𝐥𝐲 𝐚𝐧𝐝 𝐬𝐡𝐨𝐮𝐥𝐝 𝐧𝐨𝐭 𝐛𝐞 𝐜𝐨𝐧𝐬𝐭𝐫𝐮𝐞𝐝 𝐚𝐬 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐚𝐝𝐯𝐢𝐜𝐞 𝐭𝐨 𝐦𝐞𝐞𝐭 𝐭𝐡𝐞 𝐬𝐩𝐞𝐜𝐢𝐟𝐢𝐜 𝐧𝐞𝐞𝐝𝐬 𝐨𝐟 𝐚𝐧𝐲 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥 𝐨𝐫 𝐬𝐢𝐭𝐮𝐚𝐭𝐢𝐨𝐧. 𝐏𝐚𝐬𝐭 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 𝐢𝐬 𝐧𝐨 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞 𝐨𝐟 𝐟𝐮𝐭𝐮𝐫𝐞 𝐫𝐞𝐬𝐮𝐥𝐭𝐬.
𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐨𝐛𝐭𝐚𝐢𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞, 𝐛𝐮𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬 𝐨𝐫 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲.
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RT @DimitryNakhla: A sober valuation analysis on $META 🧘🏽♂️
•NTM P/E Ratio: 23.17x
•10-Year Mean: 26.61x
•NTM FCF Yield: 3.77%
•10-Year Mean: 3.30%
As you can see, $META appears to be slightly undervalued
Going forward, investors can expect to receive ~14% MORE in earnings per share & ~14% MORE in FCF per share🧠***
Before we get into valuation, let’s take a look at why $META is a quality business
BALANCE SHEET✅
•Cash & Equivalents: $58.12B
•Long-Term Debt: $18.39B
$META has an excellent balance sheet, an AA- S&P Credit Rating & 147x FFO Interest Coverage Ratio
RETURN ON CAPITAL✅
•2019: 26.0%
•2020: 23.5%
•2021: 33.7%
•2022: 22.0%
•2023: 26.3%
•LTM: 30.1%
RETURN ON EQUITY✅
•2019: 20.0%
•2020: 25.4%
•2021: 31.1%
•2022: 18.5%
•2023: 28.0%
•LTM: 33.4%
$META has great return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2018: $55.84B
•2023: $134.90B
•CAGR: 19.29%
FREE CASH FLOW✅
•2018: $15.36B
•2023: $43.85B
•CAGR: 23.34%
NORMALIZED EPS✅
•2018: $7.57
•2023: $14.87
•CAGR: 14.45%
SHARE BUYBACKS✅
•2018 Shares Outstanding: 2.92B
•LTM Shares Outstanding: 2.64B
By reducing its shares outstanding ~9.5%, $META increased its EPS by ~10.5% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 81.5%
•LTM Operating Margins: 39.5%
•LTM Net Income Margins: 32.1%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~14% MORE in EPS & ~14% MORE in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $META has to grow earnings at an 11.60% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be greater than the (11.60%) required growth rate:
2024E: $20.14 (35.4% YoY)
2025E: $23.05 (14.5% YoY)
2026E: $26.32 (14.2% YoY)
$META has a decent track record of meeting analyst estimates ~2 years out, so let’s assume $META ends 2026 with $26.32 in EPS & see its CAGR potential assuming different multiples
24x P/E: $631.68💵 … ~12.5% CAGR
23x P/E: $605.36💵 … ~10.5% CAGR
22x P/E: $579.04💵 … ~8.5% CAGR
As you can see, $META appears to have double-digit CAGR potential if we assume >23x earnings, a multiple slightly below what it’s trading for today and a multiple below what may be justified given its mid-teens earnings growth rate
I also believe that Mark Zuckerberg will continue to execute exceptionally well
Additionally, the increased investment in future growth and necessary AI development has the potential to drive better growth prospects, which could serve as a bullish catalyst for the next several years
Today at $476💵 $META appears to be a good consideration for investment
$META appears to be an excellent deal closer to $450💵 where it has ~11% CAGR potential assuming 2026E and a 22x multiple (an added layer of margin of safety)
#stocks #investing
___
𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️: 𝐓𝐡𝐢𝐬 𝐢𝐬 𝐍𝐎𝐓 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐀𝐝𝐯𝐢𝐜𝐞. 𝐁𝐚𝐛𝐲𝐥𝐨𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥® 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐫𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐚𝐭𝐢𝐯𝐞𝐬 𝐦𝐚𝐲 𝐡𝐚𝐯𝐞 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭.
𝐓𝐡𝐞 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐢𝐬 𝐢𝐧𝐭𝐞𝐧𝐝𝐞𝐝 𝐟𝐨𝐫 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐧𝐥𝐲 𝐚𝐧𝐝 𝐬𝐡𝐨𝐮𝐥𝐝 𝐧𝐨𝐭 𝐛𝐞 𝐜𝐨𝐧𝐬𝐭𝐫𝐮𝐞𝐝 𝐚𝐬 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐚𝐝𝐯𝐢𝐜𝐞 𝐭𝐨 𝐦𝐞𝐞𝐭 𝐭𝐡𝐞 𝐬𝐩𝐞𝐜𝐢𝐟𝐢𝐜 𝐧𝐞𝐞𝐝𝐬 𝐨𝐟 𝐚𝐧𝐲 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥 𝐨𝐫 𝐬𝐢𝐭𝐮𝐚𝐭𝐢𝐨𝐧. 𝐏𝐚𝐬𝐭 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 𝐢𝐬 𝐧𝐨 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞 𝐨𝐟 𝐟𝐮𝐭𝐮𝐫𝐞 𝐫𝐞𝐬𝐮𝐥𝐭𝐬.
𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐨𝐛𝐭𝐚𝐢𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞, 𝐛𝐮𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬 𝐨𝐫 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲.
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Offshore
Photo
Librarian Capital
Altria $MO: US Vapor category still growing fast
"Through the first half of 2024, we estimate the category grew by approx. 40%, driven by illicit flavored disposable products ... now more than 60% of the category"
"Pod-based volumes declined by approx. 15%"
cc: $BATS $PM $IMB https://t.co/DdLKef93IH
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Altria $MO: US Vapor category still growing fast
"Through the first half of 2024, we estimate the category grew by approx. 40%, driven by illicit flavored disposable products ... now more than 60% of the category"
"Pod-based volumes declined by approx. 15%"
cc: $BATS $PM $IMB https://t.co/DdLKef93IH
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Brandon Beylo
I’m not going to lie.
I didn’t think I’d need to remind @AlderLaneEggs about our $CVNA deal.
But it might freaking happen.
Mark promised he’d cook me and @CliffordSosin a full-course dinner while wearing a dress.
AND
He said he’d buy me a Ford Shelby Mustang.
👀👀👀
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I’m not going to lie.
I didn’t think I’d need to remind @AlderLaneEggs about our $CVNA deal.
But it might freaking happen.
Mark promised he’d cook me and @CliffordSosin a full-course dinner while wearing a dress.
AND
He said he’d buy me a Ford Shelby Mustang.
👀👀👀
tweet