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Offshore
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โ 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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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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โ Startup Archive
WhatsApp founder Jan Koum on how to deal with competition
โWe 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.โ
But the early WhatsApp team basically just ignored it:
โWe didnโt say anything because we didnโt 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 Kickโฆ There were 10 different messaging apps at some point which kept getting all this publicity.โ
Jan and team said:
โGood for you. Have all the publicity you want. We will just stay under the radar and not have any attention drawn to us.โ
Jan continues:
โWe always had competition - be it big guys like iMessage or Facebook Messenger or little guys like Kickโฆ Even today we have apps like Telegramโฆ But we always said that our destiny is really in our hands. We canโt 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, weโre going to fail.โ
Video source: @StanfordOnline (2017)
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WhatsApp founder Jan Koum on how to deal with competition
โWe 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.โ
But the early WhatsApp team basically just ignored it:
โWe didnโt say anything because we didnโt 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 Kickโฆ There were 10 different messaging apps at some point which kept getting all this publicity.โ
Jan and team said:
โGood for you. Have all the publicity you want. We will just stay under the radar and not have any attention drawn to us.โ
Jan continues:
โWe always had competition - be it big guys like iMessage or Facebook Messenger or little guys like Kickโฆ Even today we have apps like Telegramโฆ But we always said that our destiny is really in our hands. We canโt 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, weโre going to fail.โ
Video source: @StanfordOnline (2017)
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โ 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
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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
๐จBREAKING: 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. tweet
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โ Dimitry Nakhla | Babylon Capitalยฎ
RT @DimitryNakhla: A quality valuation analysis on $MELI ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 49.60x
โข1-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 ๐ง ***
Before we get into valuation, letโs take a look at why $MELI is a great business
BALANCE SHEETโ
โขCash & Short-Term Inv: $6.67B
โขLong-Term Debt: $3.04B
$MELI has a strong balance sheet, an ok BB+ S&P Credit Rating & 20x FFO Interest Coverage
RETURN ON CAPITAL๐โก๏ธโ
โข2019: (4.8%)
โข2020: 3.7%
โข2021: 8.1%
โข2022: 14.2%
โข2023: 25.3%
โขLTM: 20.1%
RETURN ON EQUITY๐โก๏ธโ
โข2019: (14.2%)
โข2020: (0.1%)
โข2021: 5.2%
โข2022: 28.7%
โข2023: 40.3%
โขLTM: 42.6%
$MELI has strong and improved return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2018: $1.44B
โข2023: $14.47B
โขCAGR: 58.64%
FREE CASH FLOWโ
โข2018: $133.35M
โข2023: $4.63B
โขCAGR: 203.29%
NORMALIZED EPSโ
โข2018: ($0.82)
โข2023: $22.84
SHARE BUYBACKSโ
โข2013 Shares Outstanding: 44.53M
โขLTM Shares Outstanding: 51.28M
MARGINS๐โก๏ธโ
โขLTM Gross Margins: 52.5%
โขLTM Operating Margins: 11.4%
โขLTM Net Income Margins: 7.8%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive roughly the same in EPS
Using Benjamin Grahamโs 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 letโs assume $MELI ends 2026 with $62.50 in EPS & see its CAGR potential assuming different multiples
40x P/E: $2500๐ต โฆ ~15.5% CAGR
38x P/E: $2375๐ต โฆ ~12.7% CAGR
36x P/E: $2250๐ต โฆ ~9.7% CAGR
34x P/E: $2125๐ต โฆ ~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 ๐
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 $1856๐ต are buying it for a fair price, with little margin of safety โ 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 $1,700๐ต (~9% below todayโs price) where I can reasonably expect ~14% CAGR while assuming a 36x end multiple, ensuring some margin of safety
#stocks #investing
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๐๐๐๐๐๐๐๐๐๐โผ๏ธ: ๐๐ก๐ข๐ฌ ๐ข๐ฌ ๐๐๐ ๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐. ๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐๐ฏ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ.
๐๐ก๐ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ข๐ฌ ๐ข๐ง๐ญ๐๐ง๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ง๐จ๐ญ ๐๐ ๐๐จ๐ง๐ฌ๐ญ๐ซ๐ฎ๐๐ ๐๐ฌ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐ ๐ญ๐จ ๐ฆ๐๐๐ญ ๐ญ๐ก๐ ๐ฌ๐ฉ๐๐๐ข๐๐ข๐ ๐ง๐๐๐๐ฌ ๐จ๐ ๐๐ง๐ฒ ๐ข๐ง๐๐ข๐ฏ๐ข๐๐ฎ๐๐ฅ ๐จ๐ซ ๐ฌ๐ข๐ญ๐ฎ๐๐ญ๐ข๐จ๐ง. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐ข๐ฌ ๐ง๐จ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐จ๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐, ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ ๐จ๐ซ ๐๐๐๐ฎ๐ซ๐๐๐ฒ.
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RT @DimitryNakhla: A quality valuation analysis on $MELI ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 49.60x
โข1-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 ๐ง ***
Before we get into valuation, letโs take a look at why $MELI is a great business
BALANCE SHEETโ
โขCash & Short-Term Inv: $6.67B
โขLong-Term Debt: $3.04B
$MELI has a strong balance sheet, an ok BB+ S&P Credit Rating & 20x FFO Interest Coverage
RETURN ON CAPITAL๐โก๏ธโ
โข2019: (4.8%)
โข2020: 3.7%
โข2021: 8.1%
โข2022: 14.2%
โข2023: 25.3%
โขLTM: 20.1%
RETURN ON EQUITY๐โก๏ธโ
โข2019: (14.2%)
โข2020: (0.1%)
โข2021: 5.2%
โข2022: 28.7%
โข2023: 40.3%
โขLTM: 42.6%
$MELI has strong and improved return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2018: $1.44B
โข2023: $14.47B
โขCAGR: 58.64%
FREE CASH FLOWโ
โข2018: $133.35M
โข2023: $4.63B
โขCAGR: 203.29%
NORMALIZED EPSโ
โข2018: ($0.82)
โข2023: $22.84
SHARE BUYBACKSโ
โข2013 Shares Outstanding: 44.53M
โขLTM Shares Outstanding: 51.28M
MARGINS๐โก๏ธโ
โขLTM Gross Margins: 52.5%
โขLTM Operating Margins: 11.4%
โขLTM Net Income Margins: 7.8%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive roughly the same in EPS
Using Benjamin Grahamโs 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 letโs assume $MELI ends 2026 with $62.50 in EPS & see its CAGR potential assuming different multiples
40x P/E: $2500๐ต โฆ ~15.5% CAGR
38x P/E: $2375๐ต โฆ ~12.7% CAGR
36x P/E: $2250๐ต โฆ ~9.7% CAGR
34x P/E: $2125๐ต โฆ ~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 ๐
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 $1856๐ต are buying it for a fair price, with little margin of safety โ 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 $1,700๐ต (~9% below todayโs price) where I can reasonably expect ~14% CAGR while assuming a 36x end multiple, ensuring some margin of safety
#stocks #investing
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ: ๐๐ก๐ข๐ฌ ๐ข๐ฌ ๐๐๐ ๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐. ๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐๐ฏ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ.
๐๐ก๐ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ข๐ฌ ๐ข๐ง๐ญ๐๐ง๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ง๐จ๐ญ ๐๐ ๐๐จ๐ง๐ฌ๐ญ๐ซ๐ฎ๐๐ ๐๐ฌ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐ ๐ญ๐จ ๐ฆ๐๐๐ญ ๐ญ๐ก๐ ๐ฌ๐ฉ๐๐๐ข๐๐ข๐ ๐ง๐๐๐๐ฌ ๐จ๐ ๐๐ง๐ฒ ๐ข๐ง๐๐ข๐ฏ๐ข๐๐ฎ๐๐ฅ ๐จ๐ซ ๐ฌ๐ข๐ญ๐ฎ๐๐ญ๐ข๐จ๐ง. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐ข๐ฌ ๐ง๐จ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐จ๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐, ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ ๐จ๐ซ ๐๐๐๐ฎ๐ซ๐๐๐ฒ.
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โ Investing visuals
NVIDIA $NVDA: I think the company selling picks and shovels in the AI era is actually reasonably priced right now๐ https://t.co/C4NylpiWFl
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NVIDIA $NVDA: I think the company selling picks and shovels in the AI era is actually reasonably priced right now๐ https://t.co/C4NylpiWFl
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Offshore
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โ Stock Analysis Compilation
Macquarie on Lockheed Martin $LMT US
Thesis: Lockheed Martinโs 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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Macquarie on Lockheed Martin $LMT US
Thesis: Lockheed Martinโs 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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โ 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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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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โ Stock Analysis Compilation
Madison Funds on Charles Schwab $SCHW US
Thesis: Charles Schwabโs 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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Madison Funds on Charles Schwab $SCHW US
Thesis: Charles Schwabโs 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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AkhenOsiris
RT @lokoyacap: Hock told you this 90 days ago. You just chose not to listen and couldn't wait for the second marshmallow:
"Yes, no, we continue to see orders. We continue to see upsides, and you're right in the pattern of that behavior that's going, because it's as our customers, these are hyperscalers trying to deploy more and more capacity of AI data centers, in AI data centers, and you start to hear them talk in terms of power. They don't even talk in terms of how many XPU or GPU cloud they found in there or 500 megawatt, 1 gigawatt, was not yet, but people are dreaming that. So, we are, as they get this enabled, we're getting pull-ins, we're getting upsides, and I expect that to happen a lot more in 2025. We're not putting that in any guidance or indication we're giving you, but probably what you say is exactly right on. We do expect to see upsides, as we've been seeing recently. We continue to see that probably going forward over the next 12 months, especially related to XPUs getting deployed and getting infrastructure available and rushing to deploy them. We see quite a bit of that." $avgo
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RT @lokoyacap: Hock told you this 90 days ago. You just chose not to listen and couldn't wait for the second marshmallow:
"Yes, no, we continue to see orders. We continue to see upsides, and you're right in the pattern of that behavior that's going, because it's as our customers, these are hyperscalers trying to deploy more and more capacity of AI data centers, in AI data centers, and you start to hear them talk in terms of power. They don't even talk in terms of how many XPU or GPU cloud they found in there or 500 megawatt, 1 gigawatt, was not yet, but people are dreaming that. So, we are, as they get this enabled, we're getting pull-ins, we're getting upsides, and I expect that to happen a lot more in 2025. We're not putting that in any guidance or indication we're giving you, but probably what you say is exactly right on. We do expect to see upsides, as we've been seeing recently. We continue to see that probably going forward over the next 12 months, especially related to XPUs getting deployed and getting infrastructure available and rushing to deploy them. We see quite a bit of that." $avgo
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