⁠Quiver Quantitative
Broadcom stock, $AVGO, is up 20% today after releasing earnings.

Pelosi bought up to $5M in Broadcom call options earlier this year: https://t.co/YxQY82bszc
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⁠Investing visuals
$AMZN, $GOOGL & $MSFT had a combined cloud revenue of 247 BILLION in 2024.

Every investor should at least own one of them. Do you? 👀
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⁠Stock Analysis Compilation
Silver Ring VP on Jazz Pharmaceuticals $JAZZ US

Thesis: Jazz Pharmaceuticals offers significant upside with strong management, a solid balance sheet, and a proven ability to navigate drug transitions

(Extract from their Q3 letter) https://t.co/B6PmfBgfic
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⁠Quiver Quantitative
Just released some big improvements to the Quiver mobile app on iOS.

It makes it super easy to track stock trading by politicians, insiders, and hedge funds.

Working on getting push notifications set up to send alerts on suspicious trades as they are disclosed.

Link below:
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⁠Startup Archive
WhatsApp founder Jan Koum on how to deal with competition

“We always had competition - like from day one. There was actually a point in time where there was a new messaging app popping up every month. And every month there was an article on TechCrunch about how this awesome new messaging app is going to take down all other messaging apps.”

But the early WhatsApp team basically just ignored it:

“We didn’t say anything because we didn’t want to draw attention to ourselves. We actually - on purpose - tried to stay under the radar. But it was just kind of funny to see this dog and pony show that happened with all these apps. There was PingMe. There was MessageMe. There was GroupMe. There was Kick… There were 10 different messaging apps at some point which kept getting all this publicity.”

Jan and team said:

“Good for you. Have all the publicity you want. We will just stay under the radar and not have any attention drawn to us.”

Jan continues:

“We always had competition - be it big guys like iMessage or Facebook Messenger or little guys like Kick… Even today we have apps like Telegram… But we always said that our destiny is really in our hands. We can’t worry too much about competition. We have to worry about our product and our users. And if we spend a lot of time thinking about competition or looking at competition, we’re going to fail.”

Video source: @StanfordOnline (2017)
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⁠Quiver Quantitative
RT @InsiderRadar: $UAMY is up 21% this morning, and is now up 39% in total since this insider purchase was reported. https://t.co/feRamez6sP

🚨BREAKING: New CEO Insider Purchase

The CEO of $UAMY has reported the purchase of ~$300K of the company's stock, increasing his ownership stake by 15%.

This is the first insider buy we have ever seen him report. A director at the company also reported a $100K purchase today. - Insider Radar
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⁠Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: A quality valuation analysis on $MELI 🧘🏽‍♂️

•NTM P/E Ratio: 49.60x
•1-Year Mean: 48.36x

As you can see, $MELI appears to be trading near fair value

Going forward, investors can receive roughly the same in earnings per share 🧠***

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

BALANCE SHEET✅
•Cash & Short-Term Inv: $6.67B
•Long-Term Debt: $3.04B

$MELI has a strong balance sheet, an ok BB+ S&P Credit Rating & 20x FFO Interest Coverage

RETURN ON CAPITAL🆗➡️✅
•2019: (4.8%)
•2020: 3.7%
•2021: 8.1%
•2022: 14.2%
•2023: 25.3%
•LTM: 20.1%

RETURN ON EQUITY🆗➡️✅
•2019: (14.2%)
•2020: (0.1%)
•2021: 5.2%
•2022: 28.7%
•2023: 40.3%
•LTM: 42.6%

$MELI has strong and improved return metrics, highlighting the financial efficiency of the business

REVENUES✅
•2018: $1.44B
•2023: $14.47B
•CAGR: 58.64%

FREE CASH FLOW✅
•2018: $133.35M
•2023: $4.63B
•CAGR: 203.29%

NORMALIZED EPS✅
•2018: ($0.82)
•2023: $22.84

SHARE BUYBACKS❌
•2013 Shares Outstanding: 44.53M
•LTM Shares Outstanding: 51.28M

MARGINS🆗➡️✅
•LTM Gross Margins: 52.5%
•LTM Operating Margins: 11.4%
•LTM Net Income Margins: 7.8%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive roughly the same in EPS

Using Benjamin Graham’s 2G rule of thumb, $MELI has to grow earnings at a 24.80% CAGR over the next several years to justify its valuation

Today, analysts anticipate 2025 - 2026 EPS growth over the next few years to be more than the (24.80%) required growth rate:

2024E: $33.59 (47.1% YoY) *FY Dec

2025E: $45.76 (36.2% YoY)
2026E: $62.50 (36.6% YoY)

$MELI has an ok track record of meeting analyst estimates ~2 years out, but let’s assume $MELI ends 2026 with $62.50 in EPS & see its CAGR potential assuming different multiples

40x P/E: $2500💵 … ~15.5% CAGR

38x P/E: $2375💵 … ~12.7% CAGR

36x P/E: $2250💵 … ~9.7% CAGR

34x P/E: $2125💵 … ~6.7% CAGR

As you can see, $MELI appears to have attractive return potential IF we assume >38x earnings (a multiple justified by its growth rate & moat)

$MELI boasts an expansive growth trajectory, fueled by powerful network effects that should drive sustained momentum

Key factors contributing to its promising outlook include 🔑

1. Margin expansion

2. Unparalleled access to Latin America's burgeoning economy

3. Network effects that produce self-reinforcing dynamics ensuring long-term competitiveness, among other things

Those buying $MELI today at $1856💵 are buying it for a fair price, with little margin of safety — however, these growth rates have to be revised down substantially for $MELI to miss the mark, even if the company grows earnings at 25% CAGR over the next 5 years, shareholders will likely end up with a decent return

I consider $MELI a strong buy closer to $1,700💵 (~9% below today’s price) where I can reasonably expect ~14% CAGR while assuming a 36x end multiple, ensuring some margin of safety

#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.
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⁠Investing visuals
NVIDIA $NVDA: I think the company selling picks and shovels in the AI era is actually reasonably priced right now👌 https://t.co/C4NylpiWFl
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⁠Stock Analysis Compilation
Macquarie on Lockheed Martin $LMT US

Thesis: Lockheed Martin’s strong defense demand, improving contract margins, and geopolitical tailwinds make it a robust long-term investment.

(Extract from their Q3 letter) https://t.co/PL1l4RtwIj
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⁠Quiver Quantitative
RT @InsiderRadar: Another strong week for insiders, with an average return to-date of +4.4% for trades we reported on this week:

- $60M purchase of $RVMD by director on 12/9. Since our report, the stock is down 4%.

- $9.7M purchase of $SCVL by Chairman on 12/9. Since our report, the stock is down 2%.

- $1.8M purchase of $MSCI by CEO on 12/9. Since our report, the stock is up 1%.

- $960K purchase of $PLAY by CEO on 12/12. Since our report, the stock is up 7%.

- $645K in purchases of $TREE by CEO and CTO on 12/9. Since our report, the stock is up 1%.

- $320K purchase of $PETS by director on 12/9. Since our report, the stock is down 5%.

- $300K purchase of $UAMY by CEO on 12/11. Since our report, the stock is up 33%.
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⁠Stock Analysis Compilation
Madison Funds on Charles Schwab $SCHW US

Thesis: Charles Schwab’s growth in customer assets and lower interest expenses post-rate hikes set the stage for strong earnings growth

(Extract from their Q3 letter) https://t.co/2ZsjbGobID
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