⁠Hidden Value Gems
German DAX is at ATH 😳

Would have never guessed if I only followed the media articles about troubles at car makers, strikes, higher energy prices etc... https://t.co/1m6zctaKKz
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⁠Hidden Value Gems
$OTB.L launched up to £25m buyback until 31 March ‘25. Its mkt cap is just £287m, no debt, £96m cash.

Looks interesting although I admit that package holidays is not the sector I want to invest in the long term. https://t.co/JSqKYTp35G
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⁠Stock Analysis Compilation
Artisan on Galderma $GALD SW

Thesis: Galderma leverages its leadership in dermatology and aesthetics, poised for growth with innovative treatments and high-margin opportunities.

(Extract from their Q3 letter) https://t.co/LOrKGdylwo
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⁠Stock Analysis Compilation
Hardman Johnson on Nexans $NEX FP

Thesis: Nexans capitalizes on electrification and grid modernization trends, leveraging its high-voltage cable expertise for multi-year growth

(Extract from their Q3 letter) https://t.co/ML6hmdPPRb
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⁠Startup Archive
Mark Zuckerberg on Elon Musk’s acquisition of Twitter

Elon Musk famously reduced head count by 80% after acquiring Twitter. It was controversial at the time, but Mark is asked what he thinks Elon did well during it.

Mark responds:

“You can agree or disagree with the exact tactics and how he did that. Every leader has their own style… But a lot of the specific principles that he pushed on: making the organization more technical, decreasing distance between engineers at the company and him, fewer layers of management. I think that those were generally good changes.”

Mark also believes this was good for the technology industry as a whole:

“My sense is that there were a lot of other people who thought that those were good changes, but who may have been a little shy about doing them. Just in my conversations with other founders and how people have reacted to the things we’ve done… When people see what Elon is doing, I think that gives people the ability to think through how to shape their organizations in a way that can be good for the industry and make all these companies more productive over time.”

He continues:

“So I think that was one thing where he was quite ahead of a bunch of the other companies on… And from the outside, it’s very hard to know. Did he cut too much? Did he not cut enough? I don’t think it’s my place to opine on that… But certainly his actions led me and, I think, a lot of other folks in the industry to think about, ‘Hey, are we doing this as much as we should? Could we make our companies better by pushing on some of these same principles?’”

Video source: @lexfridman (2023)
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⁠Dimitry Nakhla | Babylon Capital®
A quality valuation analysis on $GOOG 🧘🏽‍♂️

•NTM P/E Ratio: 20.07x
•10-Year Mean: 23.62x

•NTM FCF Yield: 4.36%
•10-Year Mean: 4.18%

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

Going forward, investors can receive ~18% MORE in earnings per share & ~4% 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: $93.23B
•Long-Term Debt: $10.88B

$GOOG has a strong balance sheet, an AA+ S&P Credit Rating & 370x FFO Interest Coverage

RETURN ON CAPITAL✅
•2019: 16.4%
•2020: 16.2%
•2021: 27.6%
•2022: 26.1%
•2023: 28.1%
•LTM: 31.7%

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

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

REVENUES✅
•2018: $136.82B
•2023: $307.39
•CAGR: 17.57%

FREE CASH FLOW✅
•2018: $22.83B
•2023: $69.50B
•CAGR: 24.93%

NORMALIZED EPS✅
•2018: $2.19
•2023: $5.80
•CAGR: 21.50%

SHARE BUYBACKS✅
•2018 Shares Outstanding: 14.07B
•LTM Shares Outstanding: 12.51B

By reducing its shares outstanding ~11%, $GOOG increased its EPS by ~12.3% (assuming 0 growth)

MARGINS✅
•LTM Gross Margins: 58.1%
•LTM Operating Margins: 32.1%
•LTM Net Income Margins: 27.7%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive ~18% MORE in EPS & ~4% MORE in FCF per share

Using Benjamin Graham’s 2G rule of thumb, $GOOG has to grow earnings at a 10.04% CAGR over the next several years to justify its valuation

Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be more than the (10.04%) required growth rate:

2024E: $7.98 (37.5% YoY) *FY Dec

2025E: $8.95 (12.2% YoY)
2026E: $10.16 (13.5% YoY)
2027E: $11.78 (15.9% YoY)

$GOOG has an excellent track record of meeting analyst estimates ~2 years out, but let’s assume $GOOG ends 2027 with $11.78 in EPS & see its CAGR potential assuming different multiples

23x P/E: $270.94💵 … ~16.7% CAGR

22x P/E: $259.16💵 … ~15.0% CAGR

21x P/E: $247.38💵 … ~13.3% CAGR

20x P/E: $235.60💵 … ~11.5% CAGR

19x P/E: $223.82💵 … ~9.7% CAGR

As you can see, $GOOG appears to have attractive return potential IF we assume >20 earnings (a multiple below its 5-year & 10-year mean)

At >22x earnings, $GOOG has aggressive CAGR potential & it’s not unreasonable for the business to even trade for ~22x (given its growth rate, moat, balance sheet, & exemplary capital allocation)

Those buying today have a decent margin of safety given

In $GOOG latest report we saw a strong re-acceleration in cloud growth ☁️ & margins continue to expand

Today at $173💵 $GOOG appears to be a strong consideration for investment

#stocks #investing $GOOGL
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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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⁠App Economy Insights
Cyber week smashed records.

📦 Online sales soar double-digit.
📱 Mobile tops 53% of transactions.
💳 Gen Z & Millennials embrace BNPL.
📆 Holiday sales span all of November.

Let’s visualize the trends. 👇
https://t.co/tfEYyS0uCE
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AkhenOsiris
The old "triple the price target trick" thanks to being brutally offsides.

BofA Double Upgrades $CRDO to Buy from Underperform, Raises PT to $80 from $27

Analyst comments: "Following a solid beat and material raise earnings call, we double upgrade Credo, and raise FY26/27E EPS est. by 65%/88% to $1.01/$1.51, and take our price objective to $80 from $27.

Our new price objective is based on 60x CY26E PE (from 10x CY25E EV/S previously as Credo shifts to translating sales growth to better earnings growth), inline with the higher end of comps, as CRDO’s outlook suggests the start of a multi-year adoption cycle for its Active Electrical Cable (AEC) product that enables power-efficient AI clusters.

Near term, we see the company driving a strong 2HFY25E (Jan25Q plus Apr25Q), driven by strong AI growth at Amazon Web Services, a key customer (and investor) in CRDO. Our prior cautious view was based on limited TAM assumptions for AEC, but CRDO’s earnings call addressed those concerns nicely, with three 10% customers (Microsoft, Amazon, Tesla) and growing momentum in other adjacent areas (optical DSP, line card PHY, retimer).

Risks to our call are CRDO’s premium valuation, high sensitivity to any sentiment shift around AI deployments, and growing competition in the AEC market (from $MRVL, $AVGO)."

Analyst: Vivek Arya - Wall St Engine
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AkhenOsiris
$AMZN

Black Friday through Cyber Monday sales press release usually drops at 9am ET with the usual "record breaking performance". Primarily a fluff piece lacking hard #s but on occasion a nugget or two.
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