⁠Capital Employed
A great write-up on an Italian small cap by @mavix_leon

$PWS – Powersoft SpA 🇮🇹

Provides a range of products, such as power amplifiers, speaker's electronics and audio software. 🔻

https://t.co/ppHRYvK2De
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⁠Hidden Value Gems
RT @HiddenValueGems: What is your take on China's market?
- A short-term rally
- 1+ year long recovery
- Don't know,still learning
- China is 'uninvestable'
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⁠Alex Bilzerian
How else would science work?

@datarade Physical theories always being provisional and subject to revision based on new empirical data is a good thing! - Alex Bilzerian
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⁠Alex Bilzerian
RT @markham: When you send the text to the person the text is about (cc @phlaimeaux)

A VC firm I had a Zoom meeting with used Otter AI to record the call, and after the meeting, it automatically emailed me the transcript, including hours of their private conversations afterward, where they discussed intimate, confidential details about their business. - Alex Bilzerian
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⁠Alex Bilzerian
RT @nntaleb: @alexbilz @EGHaug @alexbilz https://t.co/F7hvCThXOp
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⁠Dimitry Nakhla | Babylon Capital®
In last month’s post I stated: “Today at $149.50💵 $GOOG appears to be a strong consideration for investment”

Since then, $GOOG is up +13% ✅ … is $GOOG STILL A BUY? 👇🏽
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Today, analysts anticipate 2024 - 2026 EPS to be:

2024E: $7.64 (31.7% YoY) *FY Dec
2025E: $8.69 (13.8% YoY)
2026E: $10.03 (15.4% YoY)

$GOOG has an excellent track record of meeting analyst estimates ~2 years out, so let’s assume $GOOG ends 2026 with $10.03 in EPS & see its CAGR potential assuming different multiples

23x P/E: $229.31💵 … ~15.3% CAGR

22x P/E: $219.34💵 … ~13.0% CAGR

21x P/E: $209.37💵 … ~10.7% CAGR

20x P/E: $199.40💵 … ~8.4% CAGR

As you can see, $GOOG appears to have attractive return potential even if we assume >21 earnings (a multiple well below its 5-year & 10-year mean, albeit with a bit less margin of safety compared to last month)

A 21x multiple for $GOOG is not unreasonable, let alone 22x - 23x (given its growth rate, moat, balance sheet, & exemplary capital allocation)

Today at $169💵 $GOOG still appears to be a good consideration for investment

#stocks #investing $GOOGL"

A sober valuation analysis on $GOOG 🧘🏽‍♂️

•NTM P/E Ratio: 18.63x
•10-Year Mean: 24.56x

•NTM FCF Yield: 4.59%
•10-Year Mean: 4.34%

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

Going forward, investors can receive ~31% MORE in earnings per share & ~6% MORE in FCF per share 🧠***

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

BALANCE SHEET✅
•Cash & Short-Term Inv: $100.73B
•Long-Term Debt: $11.88B

$GOOG has a strong balance sheet, an AA+ S&P Credit Rating & 303x FFO Interest Coverage

RETURN ON CAPITAL✅
•2019: 16.4%
•2020: 16.2%
•2021: 27.6%
•2022: 26.1%
•2023: 28.1%
•LTM: 30.9%

RETURN ON EQUITY✅
•2019: 18.1%
•2020: 19.0%
•2021: 32.1%
•2022: 23.6%
•2023: 27.4%
•LTM: 30.9%

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

REVENUES✅
•2013: $55.52B
•2023: $307.39
•CAGR: 18.66%

FREE CASH FLOW✅
•2013: $11.30B
•2023: $69.50B
•CAGR: 19.91%

NORMALIZED EPS✅
•2013: $2.19
•2023: $5.80
•CAGR: 10.22%

SHARE BUYBACKS✅
•2018 Shares Outstanding: 14.07B
•LTM Shares Outstanding: 12.58B

By reducing its shares outstanding ~10.5%, $GOOG increased its EPS by ~11.7% (assuming 0 growth)

MARGINS✅
•LTM Gross Margins: 57.6%
•LTM Operating Margins: 31.0%
•LTM Net Income Margins: 26.7%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive ~31% MORE in EPS & ~16% MORE in FCF per share

Using Benjamin Graham’s 2G rule of thumb, $GOOG has to grow earnings at a 9.32% CAGR over the next several years to justify its valuation

Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be more than the (9.32%) required growth rate:

2024E: $7.63 (31.5% YoY) *FY Dec
2025E: $8.69 (14.0% YoY)
2026E: $9.97 (14.8% YoY)

$GOOG has an excellent track record of meeting analyst estimates ~2 years out, so let’s assume $GOOG ends 2026 with $9.97 in EPS & see its CAGR potential assuming different multiples

23x P/E: $229.31💵 … ~20.5% CAGR

22x P/E: $219.34💵 … ~18.3% CAGR

21x P/E: $209.37💵 … ~16.0% CAGR

20x P/E: $199.40💵 … ~13.6% CAGR

19x P/E: $189.43💵 … ~11.2% CAGR

As you can see, $GOOG appears to have attractive return potential EVEN if we assume >19x earnings (a multiple well below its 5-year & 10-year mean)

At >20x earnings, $GOOG CAGR potential is excellent & it’s not unreasonable for the business to even trade for ~23x (given its growth rate, moat, balance sheet, & exemplary capital allocation)

Today at $149.50💵 $GOOG appears to be a strong consideration for investment

#stocks #investing $GOOGL
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𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️: 𝐓𝐡𝐢𝐬 �[...]

�𝐬 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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⁠Alex Bilzerian
Nicolas Bourbaki: https://t.co/nMV6ma693R

"He" is still at it to this day with Spectral Theory being the most recent book topic.

Mathematicians dedicate enormous amounts of time to the field over 90 years, doing without individual credit - Alex Bilzerian
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⁠Alex Bilzerian
The Platonic view of mathematics:

@alexbilz Where you are wrong is here:

Once proven, a mathematical theorem is eternally true.

It should be:

A mathematical theorem is eternally true regardless of someone knowing a proof. - Jero
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⁠Stock Analysis Compilation
The London Company on Gates Industrial $GTES US

Thesis: Gates Industrial, with strong free cash flow and a leading market position, offers a solid investment opportunity with limited downside at an attractive valuation

(Extract from their Q2 letter) https://t.co/gW9A0gmxEl
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⁠Alex Bilzerian
I think it was @DulwichQuantum that started this joke a couple years ago.
I use it far too much.

The same physicists that brought you this are now nitpicking over the mere mention of "negative probability". https://t.co/MiSFDoPPXQ - Alex Bilzerian
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⁠App Economy Insights
🏈 Sports betting is booming!

Who's winning the big bucks?

Let's visualize:

🛡️ Fan Duel $FLUT
👑 DraftKings $DKNG
🦁 BetMGM $ENT.L
📺 ESPN BET $PENN

Learn who's poised to dominate the category. 👇
https://t.co/ddYjq6iaWu
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