Offshore
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The Kobeissi Letter
BREAKING: Bitcoin falls back below $90,000 as markets "sell the news" following US Crypto Reserve announcement. https://t.co/4c4skiEWcp
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BREAKING: Bitcoin falls back below $90,000 as markets "sell the news" following US Crypto Reserve announcement. https://t.co/4c4skiEWcp
It's official:
President Trump has officially announced the US Strategic Crypto Reserve and Bitcoin is back above $94,000.
In just 3 hours, crypto markets have now added over +$300 BILLION of market cap on the news.
What's coming next? Let us explain.
(a thread) https://t.co/8jcIZjTSlT tweet
The Kobeissi Letter
BREAKING: President Trump and chip-maker Taiwan Semiconductor, $TSM, are expected to announce a $100B investment in the US, per WSJ.
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BREAKING: President Trump and chip-maker Taiwan Semiconductor, $TSM, are expected to announce a $100B investment in the US, per WSJ.
BREAKING: President Trump is going to make "an investment announcement" today at 1:30 PM ET - per the White House. tweet
twitter.com
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Offshore
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Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: A quality valuation analysis on $SNPS 🧘🏽♂️
•NTM P/E Ratio: 30.75x
•10-Year Mean: 37.51x
•NTM FCF Yield: 2.41%
•10-Year Mean: 2.67%
As you can see, $SNPS appears to be trading somewhere below fair value & near fair value
Going forward, investors can receive ~22% MORE in earnings per share & ~10% LESS in FCF per share 🧠***
Before we get into valuation, let’s take a look at why $SNPS is a good business
BALANCE SHEET✅
•Cash & Short-Term Inv: $4.05B
•Long-Term Debt: $15.60M
$SNPS has a strong balance sheet & 40x FFO Interest Coverage
RETURN ON CAPITAL✅
•2020: 11.8%
•2021: 12.9%
•2022: 18.7%
•2023: 19.3%
•2024: 14.0%
RETURN ON EQUITY✅
•2020: 14.7%
•2021: 14.8%
•2022: 17.8%
•2023: 20.7%
•2024: 18.6%
$SNPS has great return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2014: $2.06B
•2024: $6.13B
•CAGR: 11.52%
FREE CASH FLOW✅
•2014: $1.34B
•2024: $4.69B
•CAGR: 11.11%
NORMALIZED EPS✅
•2014: $2.53
•2024: $13.20
•CAGR: 17.96%
SHARE BUYBACKS🆗
•2014 Shares Outstanding: 157.71M
•LTM Shares Outstanding: 155.94M
MARGINS✅
•LTM Gross Margins: 81.4%
•LTM Operating Margins: 22.1%
•LTM Net Income Margins: 23.5%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~22% MORE in EPS & ~10% LESS in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $SNPS has to grow earnings at a 15.38% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be slightly less than the (15.38%) required growth rate:
2025E: $14.89 (12.8% YoY) *FY Oct
2026E: $17.15 (15.2% YoY)
2027E: $19.86 (15.8% YoY)
$SNPS has a great track record of meeting analyst estimates ~2 years out, but let’s assume $SNPS ends 2027 with $19.86 in EPS & see its CAGR potential assuming different multiples:
32x P/E: $635.52💵 … ~13.0% CAGR
31x P/E: $615.66💵 … ~11.7% CAGR
30x P/E: $595.80💵 … ~10.3% CAGR
29x P/E: $575.94💵 … ~8.9% CAGR
28x P/E: $566.08💵 … ~7.5% CAGR
Given its quality, moat, predictability, & growth rate, I am comfortable relying on a ~30x multiple, making $SNPS a good purchase today at $457💵
$SNPS will thrive as AI and tech advancements drive chip demand, boosting the need for its cutting-edge semiconductor design software that helps create faster, smarter chips, among other things
$SNPS offers a stellar way to tap into the semiconductor boom, delivering steady, predictable growth and reliable recurring revenue for investors seeking stability in the space
I consider $SNPS a strong purchase with a substantial margin of safety closer to $400💵, or ~27x NTM earnings (~12.5% below todays price)
Given today’s estimates, at $400💵 I can reasonably expect ~11.5% CAGR while assuming an attractive & conservative 27x multiple
___
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 �[...]
RT @DimitryNakhla: A quality valuation analysis on $SNPS 🧘🏽♂️
•NTM P/E Ratio: 30.75x
•10-Year Mean: 37.51x
•NTM FCF Yield: 2.41%
•10-Year Mean: 2.67%
As you can see, $SNPS appears to be trading somewhere below fair value & near fair value
Going forward, investors can receive ~22% MORE in earnings per share & ~10% LESS in FCF per share 🧠***
Before we get into valuation, let’s take a look at why $SNPS is a good business
BALANCE SHEET✅
•Cash & Short-Term Inv: $4.05B
•Long-Term Debt: $15.60M
$SNPS has a strong balance sheet & 40x FFO Interest Coverage
RETURN ON CAPITAL✅
•2020: 11.8%
•2021: 12.9%
•2022: 18.7%
•2023: 19.3%
•2024: 14.0%
RETURN ON EQUITY✅
•2020: 14.7%
•2021: 14.8%
•2022: 17.8%
•2023: 20.7%
•2024: 18.6%
$SNPS has great return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2014: $2.06B
•2024: $6.13B
•CAGR: 11.52%
FREE CASH FLOW✅
•2014: $1.34B
•2024: $4.69B
•CAGR: 11.11%
NORMALIZED EPS✅
•2014: $2.53
•2024: $13.20
•CAGR: 17.96%
SHARE BUYBACKS🆗
•2014 Shares Outstanding: 157.71M
•LTM Shares Outstanding: 155.94M
MARGINS✅
•LTM Gross Margins: 81.4%
•LTM Operating Margins: 22.1%
•LTM Net Income Margins: 23.5%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~22% MORE in EPS & ~10% LESS in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $SNPS has to grow earnings at a 15.38% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be slightly less than the (15.38%) required growth rate:
2025E: $14.89 (12.8% YoY) *FY Oct
2026E: $17.15 (15.2% YoY)
2027E: $19.86 (15.8% YoY)
$SNPS has a great track record of meeting analyst estimates ~2 years out, but let’s assume $SNPS ends 2027 with $19.86 in EPS & see its CAGR potential assuming different multiples:
32x P/E: $635.52💵 … ~13.0% CAGR
31x P/E: $615.66💵 … ~11.7% CAGR
30x P/E: $595.80💵 … ~10.3% CAGR
29x P/E: $575.94💵 … ~8.9% CAGR
28x P/E: $566.08💵 … ~7.5% CAGR
Given its quality, moat, predictability, & growth rate, I am comfortable relying on a ~30x multiple, making $SNPS a good purchase today at $457💵
$SNPS will thrive as AI and tech advancements drive chip demand, boosting the need for its cutting-edge semiconductor design software that helps create faster, smarter chips, among other things
$SNPS offers a stellar way to tap into the semiconductor boom, delivering steady, predictable growth and reliable recurring revenue for investors seeking stability in the space
I consider $SNPS a strong purchase with a substantial margin of safety closer to $400💵, or ~27x NTM earnings (~12.5% below todays price)
Given today’s estimates, at $400💵 I can reasonably expect ~11.5% CAGR while assuming an attractive & conservative 27x multiple
___
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 �[...]
Offshore
Dimitry Nakhla | Babylon Capital® RT @DimitryNakhla: A quality valuation analysis on $SNPS 🧘🏽♂️ •NTM P/E Ratio: 30.75x •10-Year Mean: 37.51x •NTM FCF Yield: 2.41% •10-Year Mean: 2.67% As you can see, $SNPS appears to be trading somewhere below fair value…
�𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬 𝐨𝐫 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲.
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Offshore
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The Kobeissi Letter
RT @KobeissiLetter: This is unusual:
24 hours ago, someone took $200,000,000 worth of Ethereum and Bitcoin longs on 50x leverage.
This meant even a 2% drop in Bitcoin would liquidate $200M.
Today, President Trump announced the US Crypto Reserve including BTC and ETH.
Did someone know? https://t.co/nktfVJWw5v
tweet
RT @KobeissiLetter: This is unusual:
24 hours ago, someone took $200,000,000 worth of Ethereum and Bitcoin longs on 50x leverage.
This meant even a 2% drop in Bitcoin would liquidate $200M.
Today, President Trump announced the US Crypto Reserve including BTC and ETH.
Did someone know? https://t.co/nktfVJWw5v
It's official:
President Trump has officially announced the US Strategic Crypto Reserve and Bitcoin is back above $94,000.
In just 3 hours, crypto markets have now added over +$300 BILLION of market cap on the news.
What's coming next? Let us explain.
(a thread) https://t.co/8jcIZjTSlT tweet
Offshore
Photo
Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: Worried about tariffs & economic news impacting your stocks?
Don’t sweat the headlines 📰
Your focus should be on the long-term quality & performance of the businesses you own
THAT’S what matters
As Pulak Prasad writes in “What I Learned About Investing from Darwin” 📖 https://t.co/S1ioWTHRY1
tweet
RT @DimitryNakhla: Worried about tariffs & economic news impacting your stocks?
Don’t sweat the headlines 📰
Your focus should be on the long-term quality & performance of the businesses you own
THAT’S what matters
As Pulak Prasad writes in “What I Learned About Investing from Darwin” 📖 https://t.co/S1ioWTHRY1
tweet
Offshore
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The Kobeissi Letter
Something is happening:
The Volatility Index, $VIX, just surged above 20 for its 6th STRAIGHT day.
Since February 14th, the Volatility Index is now up +45% and the S&P 500 has seen near-daily swings of $500B+.
Are you ready for the era of volatility?
(a thread) https://t.co/kh3yp4JjVF
tweet
Something is happening:
The Volatility Index, $VIX, just surged above 20 for its 6th STRAIGHT day.
Since February 14th, the Volatility Index is now up +45% and the S&P 500 has seen near-daily swings of $500B+.
Are you ready for the era of volatility?
(a thread) https://t.co/kh3yp4JjVF
tweet
Offshore
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Stock Analysis Compilation
Diamons Hill Small Mid Cap Fund on Informatica $INFA US
Thesis: Informatica is a promising data management software company with a solid long-term outlook, currently transitioning to cloud-native solutions, which presents an attractive investment opportunity.
(Extract from their Q4 letter)
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Diamons Hill Small Mid Cap Fund on Informatica $INFA US
Thesis: Informatica is a promising data management software company with a solid long-term outlook, currently transitioning to cloud-native solutions, which presents an attractive investment opportunity.
(Extract from their Q4 letter)
tweet