⁠Librarian Capital
"Spirax: Focus on Self-Help, Lower for Longer After Investor Day?"

The market has reacted badly to last week’s $SPX investor day, but we think the pessimism is overblown

https://t.co/pk4drk4hFr https://t.co/gAZQRC9Yz0
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⁠Investing visuals
Palantir $PLTR is on track to becoming a $100 billion company 🔥

But with sky-high expectations and a stretched valuation, the question is: can $PLTR live up to it? What do you think?👇 https://t.co/8uKuZU6D03
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⁠Stock Analysis Compilation
Diamond Hill on Starbucks $SBUX US

Thesis: Starbucks’ global scale, resilient earnings growth, and undervaluation in China make it an attractive investment opportunity.

(Extract from their Q2 letter) https://t.co/BvRMc1fVUN
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⁠Quiver Quantitative
RT @InsiderRadar: $STTK has risen another 10% this morning, now up 22% since their CEO's stock purchase on Monday

🚨Insider Trading Alert

Shattuck Labs Inc, $STTK, sees large insider buy:

🔹CEO: ~$44,220 purchase on Oct 7
🔹Largest insider purchase by the CEO in 3+ years

Shares are up 14.16% today since the purchase https://t.co/MNxQ02E2zA - Insider Radar
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⁠Dimitry Nakhla | Babylon Capital®
~6 months ago I suggested that $MSCI is a worthwhile consideration for investment at $446💵

Since then, $MSCI shares have rallied +35% ✅

As I stated in my analysis:

“Given its wide moat, exemplary capital allocation, & linearity in its EPS & FCF, I believe 29x is fair for $MSCI & leaves us with some margin of safety

Today at $446💵 my research leads me to believe that $MSCI is a worthwhile consideration for investment”

#stocks #investing

A sober valuation analysis on $MSCI 🧘🏽‍♂️

•NTM P/E Ratio: 29.33x
•10-Year Mean: 34.93x

•NTM FCF Yield: 3.64%
•10-Year Mean: 3.37%

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

Going forward, investors can receive ~19% MORE in earnings per share & ~9% MORE in FCF per share 🧠***

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

BALANCE SHEET🆗
•Cash & Short-Term Inv: $519.31M
•Long-Term Debt: $4.50B

$MSCI has an ok balance sheet, a BBB- S&P Credit Rating, & 6.80x FFO Interest Coverate

RETURN ON CAPITAL✅
•2019: 23.4%
•2020: 28.6%
•2021: 26.5%
•2022: 33.0%
•2023: 35.2%

RETURN ON EQUITY🆗
•2019: (463.5%)
•2020: (231.5%)
•2021: (239.3%)
•2022: (148.6%)
•2023: (131.4%)

*ROE negative due to heavy use of debt

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

REVENUES✅
•2013: $913.36M
•2023: $2,528.92M
•CAGR: 10.72%

FREE CASH FLOW✅
•2013: $280.93M
•2023: $1,213.27M
•CAGR: 15.75%

NORMALIZED EPS✅
•2013: $2.16
•2023: $13.52
•CAGR: 20.13%

SHARE BUYBACKS✅
•2013 Shares Outstanding: 121.07M
•LTM Shares Outstanding: 79.60M

By reducing its shares outstanding 34.2%, $MSCI increased its EPS by 51.9% (assuming 0 growth)

MARGINS✅
•LTM Gross Margins: 82.2%
•LTM Operating Margins: 53.9%
•LTM Net Income Margins: 44.6%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive ~19% MORE in EPS & ~9% MORE in FCF per share

Using Benjamin Graham’s 2G rule of thumb, $MSCI has to grow earnings at an 14.67% CAGR over the next several years to justify its valuation

Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be less than the (14.67%) required growth rate:

2024E: $14.84 (9.8% YoY) *FY Dec
2025E: $17.07 (15.0% YoY)
2026E: $19.39 (13.6% YoY)

$MSCI has a great track record of meeting analyst estimates ~2 years out, but let’s assume $MSCI ends 2026 with $19.39 in EPS & see its CAGR potential assuming different multiples

32x P/E: $620.48💵 … ~14.6% CAGR

31x P/E: $601.09💵 … ~13.2% CAGR

30x P/E: $581.70💵 … ~11.9% CAGR

29x P/E: $562.31💵 … ~10.5% CAGR

28x P/E: $542.92💵 … ~9.1% CAGR

As you can see, $MSCI appears to have double-digit return potential if we assume >29x earnings, a level of fundamental support (first green line in P/E chart) & a level below its 10-year average multiple of 34.93x

Given its wide moat, exemplary capital allocation, & linearity in its EPS & FCF, I believe 29x is fair for $MSCI & leaves us with some margin of safety

Today at $446💵 my research leads me to believe that $MSCI is a worthwhile consideration for investment

Knowing that $MSCI could trade down a bit more (closer to 25x as you’ll see in second green line in P/E chart) I would piece into the position

In other words, if I wanted to allocate 5% to $MSCI, I’d likely look to initiate a 3% - 3.5% allocation & leave room to add more & make it 5% if we see $MSCI trade between $380💵 - $400💵

#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. - Dimitry Nakhla | Babylon Capital®
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⁠Stock Analysis Compilation
Silver Ring Value Partners on International Game Technology $IGT US

Thesis: IGT's stable lottery business, significant cash reserves, and attractive dividend yield offer a compelling undervalued opportunity, with limited downside risk.

(Extract from their Q2 letter) https://t.co/LEGLW1C4Qi
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⁠Stock Analysis Compilation
Hedge funds' best ideas #13 is in your inbox 🔥
(link below)
Artemis Finds / Artisan Partners / Bonsai Partners / Broyhill AM / Clearbridge / Cooper Investors / Guinness GI / Harding Loevner / Hardman Johnston / Harris Associates / McElvaine Value Fund / Orbis / Pender / TCW / Third Point / YCG Investments
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⁠App Economy Insights
💣 US DOJ considers a Google break-up.

🚫 Limiting default search deals
🤖 Restrictions on AI-related products
🔓 Opening up APIs and ranking signals
🔎 Splitting Chrome and Android from Search

$GOOG We cover the possible impact here.👇
https://t.co/vcMGNBzlPM
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⁠Librarian Capital
Your periodic reminder that posting your stockpicks (and going on podcasts) can be harmful to returns

Nick Sleep: "Evangelism is not healthy"

An investor doing so may "subconsciously rob himself of his objectivity and the option to change his mind"

(Nomad letters, 2004)

PS. Why talking abut stock picks is bad. "Evangelism is not healthy". "In publicly disclosing his stock picking commitments, does the investemnt mgmr. subtly and no doubt subconsciously rob himself of objectivity and the option to change his mind?". Nick Sleep won't like FinTwit! https://t.co/HqEr5YBIt8 - Librarian Capital
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