Offshore
Photo
Finding Compounders
Nick Sleep on the Robustness Ratio.
This ratio is appropriate when analyzing low cost service providers such as GEICO, Costco and Amazon.
This is from my newsletter.
The link is in my bio https://t.co/JOxdiAI5SX
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Nick Sleep on the Robustness Ratio.
This ratio is appropriate when analyzing low cost service providers such as GEICO, Costco and Amazon.
This is from my newsletter.
The link is in my bio https://t.co/JOxdiAI5SX
tweet
Offshore
Photo
The Kobeissi Letter
US wage growth is set to cool this year:
The share of private workers voluntarily quitting their jobs fell to 2.1% in November, the lowest since the 2020 pandemic.
The quits rate has declined by 1.2 percentage points over the last 3 years, matching the decline seen during the 2008 Financial Crisis.
In the past, the quits rate has been a leading indicator for the Employment Cost Index measuring employee compensation changes.
This suggests wages and benefits growth in the US may decline from the current 3.8% YoY to as low as 3.0% YoY over the next 6-9 months.
This could also lower inflationary pressures in the second half of the year.
Wage growth seems to be normalizing.
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US wage growth is set to cool this year:
The share of private workers voluntarily quitting their jobs fell to 2.1% in November, the lowest since the 2020 pandemic.
The quits rate has declined by 1.2 percentage points over the last 3 years, matching the decline seen during the 2008 Financial Crisis.
In the past, the quits rate has been a leading indicator for the Employment Cost Index measuring employee compensation changes.
This suggests wages and benefits growth in the US may decline from the current 3.8% YoY to as low as 3.0% YoY over the next 6-9 months.
This could also lower inflationary pressures in the second half of the year.
Wage growth seems to be normalizing.
tweet
Offshore
Photo
Stock Analysis Compilation
Artisan US Mid Cap Growth Strategy on Pure Storage $PSTG US
Thesis: Pure Storage is redefining enterprise data storage by utilizing custom all-flash systems sourced from raw NAND flash memory, which positions the company for accelerated growth following its recent hyperscaler data center contract.
(Extract from their Q4 letter)
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Artisan US Mid Cap Growth Strategy on Pure Storage $PSTG US
Thesis: Pure Storage is redefining enterprise data storage by utilizing custom all-flash systems sourced from raw NAND flash memory, which positions the company for accelerated growth following its recent hyperscaler data center contract.
(Extract from their Q4 letter)
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Offshore
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Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: $BKNG stock finally reached my $4,300 price target & bounced +4% 💸
While this is nice in the short-term, I’d much prefer $BKNG to trade in my accumulation range a bit longer so I can continue adding to the position
As I stated a couple months ago:
“I’d consider $BKNG a great purchase closer to $4300 (~18.50x multiple) roughly 7% below today’s share price or closer to 21x NTM estimates
This is where I can reasonably expect ~10.50% CAGR assuming a more conservative 20x 2027 earnings estimates, ensuring a substantial margin of safety & leaving room for potential multiple expansion”
A quality valuation analysis on $BKNG 🧘🏽♂️
•NTM P/E Ratio: 22.76x
•3-Year Mean: 20.52x
•NTM FCF Yield: 5.35%
•3-Year Mean: 5.17%
As you can see, $BKNG appears to be trading near fair value
Going forward, investors can receive ~10% LESS in earnings per share & ~3% MORE in FCF per share 🧠***
Before we get into valuation, let’s take a look at why $BKNG is a great business
BALANCE SHEET✅
•Cash & Short-Term Inv: $15.78B
•Long-Term Debt: $13.79B
$BKNG has a great balance sheet, an A- S&P Credit Rating, & 9x FFO Interest Coverage Ratio
RETURN ON CAPITAL✅
•2019: 33.3%
•2020: 2.7%
•2021: 14.2%
•2022: 29.1%
•2023: 47.3%
•LTM: 48.8%
$BKNG has strong ROIC, highlighting the financial efficiency of the business
REVENUES✅
•2014: $8.44B
•2024E: $23.43B
•CAGR: 10.74%
FREE CASH FLOW✅
•2014: $2.78B
•2024: $7.52B
•CAGR: 10.46%
NORMALIZED EPS✅
•2014: $53.31
•2024E: $182.76
•CAGR: 13.11%
SHARE BUYBACKS✅
•2014 Shares Outstanding: 53.02M
•LTM Shares Outstanding: 34.51M
By reducing its shares outstanding 35%, $BKNG increased its EPS by 54% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 84.7%
•LTM Operating Margins: 28.7%
•LTM Net Income Margins: 21.8%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~10% LESS in EPS & ~3% MORE in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $BKNG has to grow earnings at an 11.38% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be more than (11.38%) required growth rate:
2024E: $182.76 (20.1% YoY) *FY Dec
2025E: $208.88 (14.3% YoY)
2026E: $241.36 (15.6% YoY)
2027E: $282.17 (16.9% YoY)
$BKNG has a decent track record of meeting analyst estimates ~2 years out, but let’s assume $BKNG ends 2027 with $238.17 in EPS & see its CAGR potential assuming different multiples
23x P/E: $6489💵 … ~13.0% CAGR
22x P/E: $6207💵 … ~11.3% CAGR
21x P/E: $5925💵 … ~9.6% CAGR
20x P/E: $5643💵 … ~7.8% CAGR
19x P/E: $5361💵 … ~6.0% CAGR
As you can see, $BKNG appears to have attractive return potential if we assume >22x earnings, a valuation above allowing for slight multiple compression, yet one that’s below its 3-year mean
Additionally, $BKNG EPS growth rate ( >12%) more than justifies a >22x multiple
Today at $4620💵 $BKNG appears to be a decent consideration for investment & fairly valued
I’d consider $BKNG a great purchase closer to $4300 (~18.50x multiple) roughly 7% below today’s share price or closer to 21x NTM estimates
This is where I can reasonably expect ~10.50% CAGR assuming a more conservative 20x 2027 earnings estimates, ensuring a substantial margin of safety & leaving room for potential multiple expansion
#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 𝐢�[...]
RT @DimitryNakhla: $BKNG stock finally reached my $4,300 price target & bounced +4% 💸
While this is nice in the short-term, I’d much prefer $BKNG to trade in my accumulation range a bit longer so I can continue adding to the position
As I stated a couple months ago:
“I’d consider $BKNG a great purchase closer to $4300 (~18.50x multiple) roughly 7% below today’s share price or closer to 21x NTM estimates
This is where I can reasonably expect ~10.50% CAGR assuming a more conservative 20x 2027 earnings estimates, ensuring a substantial margin of safety & leaving room for potential multiple expansion”
A quality valuation analysis on $BKNG 🧘🏽♂️
•NTM P/E Ratio: 22.76x
•3-Year Mean: 20.52x
•NTM FCF Yield: 5.35%
•3-Year Mean: 5.17%
As you can see, $BKNG appears to be trading near fair value
Going forward, investors can receive ~10% LESS in earnings per share & ~3% MORE in FCF per share 🧠***
Before we get into valuation, let’s take a look at why $BKNG is a great business
BALANCE SHEET✅
•Cash & Short-Term Inv: $15.78B
•Long-Term Debt: $13.79B
$BKNG has a great balance sheet, an A- S&P Credit Rating, & 9x FFO Interest Coverage Ratio
RETURN ON CAPITAL✅
•2019: 33.3%
•2020: 2.7%
•2021: 14.2%
•2022: 29.1%
•2023: 47.3%
•LTM: 48.8%
$BKNG has strong ROIC, highlighting the financial efficiency of the business
REVENUES✅
•2014: $8.44B
•2024E: $23.43B
•CAGR: 10.74%
FREE CASH FLOW✅
•2014: $2.78B
•2024: $7.52B
•CAGR: 10.46%
NORMALIZED EPS✅
•2014: $53.31
•2024E: $182.76
•CAGR: 13.11%
SHARE BUYBACKS✅
•2014 Shares Outstanding: 53.02M
•LTM Shares Outstanding: 34.51M
By reducing its shares outstanding 35%, $BKNG increased its EPS by 54% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 84.7%
•LTM Operating Margins: 28.7%
•LTM Net Income Margins: 21.8%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~10% LESS in EPS & ~3% MORE in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $BKNG has to grow earnings at an 11.38% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be more than (11.38%) required growth rate:
2024E: $182.76 (20.1% YoY) *FY Dec
2025E: $208.88 (14.3% YoY)
2026E: $241.36 (15.6% YoY)
2027E: $282.17 (16.9% YoY)
$BKNG has a decent track record of meeting analyst estimates ~2 years out, but let’s assume $BKNG ends 2027 with $238.17 in EPS & see its CAGR potential assuming different multiples
23x P/E: $6489💵 … ~13.0% CAGR
22x P/E: $6207💵 … ~11.3% CAGR
21x P/E: $5925💵 … ~9.6% CAGR
20x P/E: $5643💵 … ~7.8% CAGR
19x P/E: $5361💵 … ~6.0% CAGR
As you can see, $BKNG appears to have attractive return potential if we assume >22x earnings, a valuation above allowing for slight multiple compression, yet one that’s below its 3-year mean
Additionally, $BKNG EPS growth rate ( >12%) more than justifies a >22x multiple
Today at $4620💵 $BKNG appears to be a decent consideration for investment & fairly valued
I’d consider $BKNG a great purchase closer to $4300 (~18.50x multiple) roughly 7% below today’s share price or closer to 21x NTM estimates
This is where I can reasonably expect ~10.50% CAGR assuming a more conservative 20x 2027 earnings estimates, ensuring a substantial margin of safety & leaving room for potential multiple expansion
#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 𝐢�[...]
Offshore
Dimitry Nakhla | Babylon Capital® RT @DimitryNakhla: $BKNG stock finally reached my $4,300 price target & bounced +4% 💸 While this is nice in the short-term, I’d much prefer $BKNG to trade in my accumulation range a bit longer so I can continue adding to…
� 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® tweet
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® tweet
Offshore
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Finding Compounders
Great presentation by former Costco CFO Richard Galanti https://t.co/vW7U6iUkPb
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Great presentation by former Costco CFO Richard Galanti https://t.co/vW7U6iUkPb
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Offshore
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The Kobeissi Letter
The US housing market is weakening:
The 12-month average of US housing starts has dropped to 1.37 million in January, the lowest since 2020.
Since the 2022 peak, housing starts have declined by ~458,000, or 25%.
In the past, a prolonged decline in housing starts has been a reliable recession indicator.
During the 2006 housing bubble, it took 18 monthly declines in housing starts for the recession to begin.
Before the 2001 recession, housing starts had fallen for 24 months.
Is the housing market signaling a 2026 recession?
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The US housing market is weakening:
The 12-month average of US housing starts has dropped to 1.37 million in January, the lowest since 2020.
Since the 2022 peak, housing starts have declined by ~458,000, or 25%.
In the past, a prolonged decline in housing starts has been a reliable recession indicator.
During the 2006 housing bubble, it took 18 monthly declines in housing starts for the recession to begin.
Before the 2001 recession, housing starts had fallen for 24 months.
Is the housing market signaling a 2026 recession?
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Offshore
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The Kobeissi Letter
The Kobeissi Letter for the week of March 17th has been published and may be viewed through the link below:
https://t.co/6TDuawjZAN
The Chart of the Week for the week of March 17th has been published. View or sign up for FREE through the link below:
https://t.co/jCCx3iSLbJ
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The Kobeissi Letter for the week of March 17th has been published and may be viewed through the link below:
https://t.co/6TDuawjZAN
The Chart of the Week for the week of March 17th has been published. View or sign up for FREE through the link below:
https://t.co/jCCx3iSLbJ
tweet
Offshore
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Stock Analysis Compilation
Hardman Johnston Global Equity on Uber $UBER US
Thesis: Uber is a market-leading platform company benefiting from significant growth opportunities in ride-hailing, food delivery, and freight services across global markets.
(Extract from their Q4 letter) https://t.co/wCaBFuwTLG
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Hardman Johnston Global Equity on Uber $UBER US
Thesis: Uber is a market-leading platform company benefiting from significant growth opportunities in ride-hailing, food delivery, and freight services across global markets.
(Extract from their Q4 letter) https://t.co/wCaBFuwTLG
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