⁠Stock Analysis Compilation
Ensemble Capital on Illumina $ILMN US

Thesis: Illumina, poised for recovery with a divested GRAIL and new leadership, offers a compelling investment with its leading position in genomic sequencing and improving financial outlook

(Extract from their Q2 letter) https://t.co/a6VeqnApev
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⁠Invest In Assets 📈
RT @InvestInAssets: Top European Quality Stocks 💎

Sweden 🇸🇪
- Evolution Gaming
- Atlas Copco
- Lifco

Italy 🇮🇹
- Luxottica
- Moncler
- Ferrari

Spain 🇪🇸
- Clinica Baviera
- Amadeus
- Inditex

Netherlands 🇳🇱
- Topicus
- Adyen
- ASML

Denmark 🇩🇰
- Novo Nordisk
- Coloplast
- DSV

What else?
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⁠Capital Employed
Essential reading for the weekend...

https://t.co/oNu6kKryJS https://t.co/F4QgQpy0Li
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⁠Dimitry Nakhla | Babylon Capital®
Roughly 1 month ago, I suggested that investors would be wise to be patient & consider $LVMH for investment at €640💵

Since then, $LVMH fell -12%, reaching my price target

Don’t miss out on today’s analysis ‼️👇🏽

#stocks #investing https://t.co/rexmkGmauX

A sober valuation analysis on $LVMH 🧘🏽‍♂️

•NTM P/E Ratio: 19.97x
•10-Year Mean: 23.92x

•NTM FCF Yield: 4.87%
•10-Year Mean: 4.13%

As you can see, $LVMH appears to be trading below fair value

Going forward, investors can receive ~19% MORE in earnings per share & ~13% MORE in FCF per share 🧠***

Before we get into valuation, let’s take a look at why $LVMH is a high-quality business

*Financials In Euros €*

BALANCE SHEET✅
•Cash & Short-Term Inv: €11.09B
•Long-Term Debt: €11.64B

$LVMH has a strong balance sheet, reflected by its AA- S&P Credit Rating & 16x FFO Interest Coverage

RETURN ON CAPITAL✅
•2019: 16.6%
•2020: 10.2%
•2021: 18.9%
•2022: 21.2%
•2023: 21.0%
•LTM: 19.1%

RETURN ON EQUITY✅
•2019: 21.5%
•2020: 12.8%
•2021: 28.9%
•2022: 28.0%
•2023: 26.7%
•LTM: 22.8%

$LVMH has excellent return metrics, highlighting the company’s financial efficiency

REVENUES✅
•2013: €29.02B
•2023: €86.15B
•CAGR: 11.49%

FREE CASH FLOW✅
•2013: €2.99B
•2023: €11.59B
•CAGR: 14.52%

NORMALIZED EPS✅
•2013: €6.83
•2023: €30.33
•CAGR: 16.07%

SHARE BUYBACKS❌
•2013 Shares Outstanding: 503.22M
•LTM Shares Outstanding: 499.83M

MARGINS✅
•LTM Gross Margins: 68.5%
•LTM Operating Margins: 25.6%
•LTM Net Income Margins: 16.3%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive ~19% MORE in EPS & ~13% MORE in FCF per share

Using Benjamin Graham’s 2G rule of thumb, $LVMH has to grow earnings at a 9.99% CAGR over the next several years to justify its valuation

Today, analysts anticipate 2025 - 2026 EPS growth over the next few years to be less than (10.95%) the required growth rate:

2024E: €30.12 (-0.7% YoY)* Dec

2025E: €33.57 (11.4% YoY)
2026E: €36.73 (9.4% YoY)

So, let’s assume $LVMH ends 2026 with €36.73 in EPS & see its CAGR potential (dividends included) assuming different multiples:

23x P/E: €844.79💵 … ~14.1% CAGR

22x P/E: €808.06💵 … ~12.1% CAGR

21x P/E: €771.33💵 … ~10.0% CAGR

20x P/E: €734.60💵 … ~8.0% CAGR

As you can see, we’d have to assume 22x for $LVMH to have attractive return potential & while 22x is certainly reasonable given its quality, we should be aware that $LVMH 10-Year average multiple (24.92x) is elevated a bit due to the valuation spike in 2020-2021

If we “normalize” the multiple & use the 5-year average period from 2014-2019 we have a mean of 20.83x 🔎

While $LVMH deserves to trade at a premium multiple due to its quality, I’m hesitant to rely on 23x because I want to ensure some margin of safety

It’s safer to rely on ~21x earnings & be pleasantly surprised with some multiple expansion (rather than have the risk of multiple compression)

At 21x, we can still reasonably expect double-digit returns with some multiple expansion if growth estimates rise

Today at €636💵 $LVMH appears to be a decent consideration for investment (perhaps with a second tranche of accumulation if it gets to €585💵)

$MC $LVMHF $LVMUY

#stocks #investing
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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. - Dimitry Nakhla | Babylon Capital®
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⁠App Economy Insights
📊 This Week in Visuals: $LLY $NVO $CVX $AMGN $UBER $SONY $MDLZ $SHOP $GSK $ABNB $PLTR $OXY $FTNT $HLT $TTD $CPNG $YUM $GPN $TTWO $HUBS $QSR $EXPE $HOOD $DT $TOST $CYBR $TWLO $RDDT $CART $DUOL $LYFT $TRIP $DCBO

Get up to speed with the latest earnings 👇
https://t.co/vCAGinWlhX https://t.co/jxbhKau5bE
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⁠App Economy Insights
What are you watching this week?

• Monday: $MNDY.
• Tuesday: $HD, $NU, $SE.
• Wednesday: $CSCO, $DLO, $GLBE.
• Thursday: $AMAT, $BABA, $JD, $WMT.

All visualized in our PRO coverage next Saturday. https://t.co/ELMDNZbGlB
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⁠Dimitry Nakhla | Babylon Capital®
"Once you do have a great business selling at a good price with a satisfactory margin of safety, don't panic if the stock price drops after you buy. Changes in stock price have nothing to do with risk."

— Tweedy Browne 🗣️

#stocks #investing
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This quote highlights a crucial investing principle: separating market volatility from business fundamentals. Tweedy Browne, reminds us that:

• A great business is one with strong financials, competitive advantages, and a proven track record.

• A good price is one that offers a discount to the business's intrinsic value.

• A satisfactory margin of safety is a buffer against unforeseen events or errors in judgment.

Even if you've made a well-reasoned investment decision, the stock price may still fluctuate. However, these short-term changes don't necessarily reflect the business's underlying risk or value. Panic selling or buying based on market noise can lead to poor investment decisions.
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⁠Stock Analysis Compilation
Rogue Funds on Global Atomics (Uranium) $GLO CN

Thesis: Global Atomics, despite recent volatility and geopolitical risks, holds significant upside potential with strong fundamentals and a supportive regulatory environment in Niger

(Extract from their Q2 letter) https://t.co/Y9BIKW7ctH
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⁠Hidden Value Gems
RT @HiddenValueGems: ✅ “Firms have to live through ups and downs. They're organic entities, and they have life cycles of their own.”

“The biggest mistakes I have witnessed in my investing career came when people ignored the limitations imposed by the corporate life cycle. In short, investors did assume trees could grow to the sky. In 1999, just as in 1969, investors accepted that ultra-high profit growth could go on forever. They also concluded that for the stocks of companies capable of such growth, no p/e ratio was too high. People extrapolated earnings growth of 20%-plus and paid p/e ratios of 50-plus.”

9/13
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⁠Invest In Assets 📈
Tenets of the Warren Buffet Way

From The Warren Buffett Portfolio https://t.co/U2HMZ9PHSg
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