⁠Librarian Capital
One way to check quality of a research source is to see what they said on things you know about

How did I know some "analysts" were wrong on a few REITs? From their "work" on Tobacco stocks

Their conclusion wasn't wrong (everyone was bullish), but their "analysis" was laughable
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⁠Librarian Capital
Lucky timing on L'Oréal $OR: shares up ~11% since our research on 17-Sep highlighting its attractiveness

"Fears on China likely misplaced" https://t.co/iFjzPKloX0

"L’Oréal: New 52-Week Low, but Fears on China Likely Misplaced"

Shares are a good defensive asset, with a reasonable valuation, solid long-term EPS growth and minimal capital risk $OR $EL $ELF

https://t.co/zDuAFSdyf4 https://t.co/kD10ZjG1mb - Librarian Capital
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⁠Stock Analysis Compilation
Southernsun on Darling Ingredients $DAR US

Thesis: Darling Ingredients is set to benefit from growth in renewable energy and sustainable aviation fuel, with strong international market positions and a compelling valuation

(Extract from their Q2 letter) https://t.co/E7zio0XVT4
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⁠App Economy Insights
$COST Costco Q4 FY24.

• Revenue +1% Y/Y to $79.7B ($0.3B miss).
• EPS $5.29 ($0.23 beat).
• 891 warehouses (+30 Y/Y).

Comparable sales Y/Y:
• US +6.3%.
• Company +6.9%.
• E-commerce +19.5%. https://t.co/hPJHc2PNvG
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⁠Quiver Quantitative
BREAKING: Donald Trump has called for Nancy Pelosi to be prosecuted for insider trading.

Couple of notes:

1. Nancy Pelosi did recently sell up to $1M of Visa stock

2. The sale was made two months before the lawsuit was announced, not a day before like Trump says.

It was still a very notable sale to us, as Pelosi had not traded Visa stock for over a year before her sale in July.
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⁠Dimitry Nakhla | Babylon Capital®
Thank you all for helping me reach 10K followers! Beyond grateful for each of you - early & new followers alike.

I do this because of you all.

Your engagement, appreciation, & trust fuel my passion to continue creating quality content.

Thank you for being part of this journey. https://t.co/eiazYhyFTD
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⁠Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: A sober valuation analysis on $PYPL 🧘🏽‍♂️

•NTM P/E Ratio: 17.24x
•All-Time Mean: 29.77x

•NTM FCF Yield: 7.79%
•All-Time Mean: 5.02%

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

Going forward, investors can receive ~72% MORE in earnings per share & ~55% MORE in FCF per share 🧠***

Before we get into valuation, let’s take a look at why $PYPL is a good business

BALANCE SHEET✅
•Cash & Short-Term Inv: $13.62B
•Long-Term Debt: $9.73B

$PYPL has an excellent balance sheet, an A- S&P Credit Rating, & 20.78x FFO Interest Coverage

RETURN ON CAPITAL✅
•2019: 12.4%
•2020: 11.5%
•2021: 13.6%
•2022: 12.7%
•2023: 14.8%
•LTM: 15.8%

RETURN ON EQUITY✅
•2019: 15.2%
•2020: 22.7%
•2021: 20.0%
•2022: 11.5%
•2023: 20.5%
•LTM: 22.0%

$PYPL has strong return metrics, highlighting the financial efficiency of the business

REVENUES✅
•2018: $15.45B
•2023: $29.77B
•CAGR: 14.01%

FREE CASH FLOW❌*
•2018: $4.66B
•2023: $4.22B
•Decrease: (9.44%)

*LTM FCF is $6.70B 📈

*Also, FCF in 2017 was $1.86B, so FCF rose ~150% in 2018 start date (“normalizing” the decline above)

NORMALIZED EPS✅
•2018: $2.42
•2023: $5.10
•CAGR: 16.07%

SHARE BUYBACKS✅
•2015 Shares Outstanding: 1.20B
•LTM Shares Outstanding: 1.08B

By reducing its shares outstanding by 10.0%, $PYPL increased its EPS by 11.1% (assuming 0 growth)

MARGINS✅
•LTM Gross Margins: 39.6%
•LTM Operating Margins: 17.1%
•LTM Net Income Margins: 14.3%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive ~72% MORE in EPS & ~55% MORE in FCF per share

Using Benjamin Graham’s 2G rule of thumb, $PYPL has to grow earnings at an 8.62% 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 (8.62%) required growth rate:

2024E: $4.41 (-13.5% YoY) *FY Dec
2025E: $4.83 (9.5% YoY)
2026E: $5.40 (11.7% YoY)

$PYPL has an ok track record of meeting analyst estimates ~2 years out, but let’s assume $PYPL ends 2026 with $5.40 in EPS & see its CAGR potential assuming different multiples

20x P/E: $108.00💵 … ~15.6% CAGR

19x P/E: $102.60💵 … ~13.0% CAGR

18x P/E: $97.20💵 … ~10.4% CAGR

As you can see, $PYPL appears to have attractive return potential if we assume >18x earnings & aggressive return potential if we assume >20x earnings

The 🔑 isn't a mean reversion in $PYPL's multiple, but a modest increase (still below its historical average) - a reasonable and safe assumption

Everyone wanted $PYPL when it traded 50x earnings, not many wanted it when it traded for 12x earnings ☯️

There’s STILL negative sentiment around $PYPL and this sentiment is already being changed as management continues to make progress towards its goals as we’ve seen in the most recent quarters

Today at $77.67💵 $PYPL still appears to be a strong consideration for investment (albeit, with some turnaround & competitive risks)

#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.
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⁠Capital Employed
Nice overview of the 'out of favour' coal industry by @Delta9Echo 👇

https://t.co/uu82JiQyCc?
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⁠Capital Employed
RT @capitalemployed: FRESH OFF THE PRESS 🔥

Interview #100 with @lukewinchester9 from @MerewetherCap

Luke discusses...

2 Aussie microcaps he's bullish on
+ much more https://t.co/oautwWvR5B
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