Offshore
Photo
โ App Economy Insights
๐ This Week in Visuals:
๐ฆ JPMorgan $JPM
๐ Blackrock $BLK
๐ฉ๏ธ Delta Airlines $DAL
๐บ Constellation $STZ
๐ฟ Tilray $TLRY
https://t.co/ihoYX8urWL
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๐ This Week in Visuals:
๐ฆ JPMorgan $JPM
๐ Blackrock $BLK
๐ฉ๏ธ Delta Airlines $DAL
๐บ Constellation $STZ
๐ฟ Tilray $TLRY
https://t.co/ihoYX8urWL
tweet
โ The Kobeissi Letter
Today's tariff exemptions on smartphones, computers, and chip-makers make it clear:
Large cap technology companies will ultimately come out ahead when this is all said and done.
Small caps and small businesses will come out behind.
Large caps will get larger at small caps' expense.
tweet
Today's tariff exemptions on smartphones, computers, and chip-makers make it clear:
Large cap technology companies will ultimately come out ahead when this is all said and done.
Small caps and small businesses will come out behind.
Large caps will get larger at small caps' expense.
tweet
Offshore
Photo
โ Dimitry Nakhla | Babylon Capitalยฎ
A quality valuation analysis on $ASML ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 24.88x
โข10-Year Mean: 31.10x
โขNTM FCF Yield: 2.77%
โข10-Year Mean: 3.09%
As you can see, $ASML appears to be trading below fair value
Going forward, investors can receive ~25% MORE in earnings per share & ~10% LESS in FCF per share๐ง ***
Before we get into valuation, letโs take a look at why $ASML is an excellent business (*Financials in USD*)
BALANCE SHEETโ
โขCash & Short Term Inv: $13.21B
โขLong-Term Debt: $3.84B
$ASML has a strong balance sheet & 68x FFO Interest Coverage
RETURN ON CAPITALโ
โข2020: 21.6%
โข2021: 43.8%
โข2022: 48.0%
โข2023: 48.7%
โข2024: 38.3%
RETURN ON EQUITYโ
โข2020: 26.9%
โข2021: 49.0%
โข2022: 59.4%
โข2023: 70.4%
โข2024: 47.4%
$ASML has excellent return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2014: $7.09B
โข2024: $29.28B
โขCAGR: 15.23%
FREE CASH FLOW*
โข $ASML FCF is very sporadic due to heavy capital expenditures & isnโt necessarily the most reliable way to analyze the companyโs value
NORMALIZED EPSโ
โข2014: $3.15
โข2024: $20.03
โขCAGR: 20.31%
SHARE BUYBACKSโ
โข2018 Shares Outstanding: 426.40M
โขLTM Shares Outstanding: 393.60M
By reducing its shares outstanding ~7.7%, $ASML increased its EPS by ~8.3% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 51.3%
โขLTM Operating Margins: 31.9%
โขLTM Net Income Margins: 26.8%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~28% MORE in EPS & 10% LESS in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $ASML has to grow earnings at a 12.44% 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 (12.44%) required growth rate:
2025E: $27.20 (24.7% YoY) *FY Dec
2026E: $32.30 (18.7% YoY)
2027E: $38.63 (19.6% YoY)
$ASML has a decent track record of meeting analyst estimates ~2 years out. HOWEVER, letโs be conservative & assume $ASML ends 2027 with $35.00*** in EPS (~9% below current estimates) & see its CAGR potential assuming different multiples:
29x P/E: $1,015๐ต โฆ ~17.6% CAGR
28x P/E: $980๐ต โฆ ~16.1% CAGR
27x P/E: $945๐ต โฆ ~14.6% CAGR
26x P/E: $910๐ต โฆ ~13.1% CAGR
25x P/E: $910๐ต โฆ ~11.6% CAGR
As you can see, $ASML appears to have attractive return potential EVEN if we assume greater or equal to 25x EPS (below its 10-year mean, current multiple, & justified given its quality, moat & growth rate)
Also, given todayโs 24.88x multiple, we wouldnโt be relying on multiple expansion at 25x
Today at $668๐ต $ASML appears to be a strong consideration for investment, albeit with extreme volatility
Additionally, we have some margin of safety by relying on a lower multiple & lower growth rate
As Iโve stated before, given its volatility, however, itโs wise to piece into $ASML โ this way, you enhance your margin of safety while also positioning yourself to โwin-winโ if the stock moves up or down in the short-term ๐ต
#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.
๐๐ง๐๐จ๐ซ๐ฆ๐[...]
A quality valuation analysis on $ASML ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 24.88x
โข10-Year Mean: 31.10x
โขNTM FCF Yield: 2.77%
โข10-Year Mean: 3.09%
As you can see, $ASML appears to be trading below fair value
Going forward, investors can receive ~25% MORE in earnings per share & ~10% LESS in FCF per share๐ง ***
Before we get into valuation, letโs take a look at why $ASML is an excellent business (*Financials in USD*)
BALANCE SHEETโ
โขCash & Short Term Inv: $13.21B
โขLong-Term Debt: $3.84B
$ASML has a strong balance sheet & 68x FFO Interest Coverage
RETURN ON CAPITALโ
โข2020: 21.6%
โข2021: 43.8%
โข2022: 48.0%
โข2023: 48.7%
โข2024: 38.3%
RETURN ON EQUITYโ
โข2020: 26.9%
โข2021: 49.0%
โข2022: 59.4%
โข2023: 70.4%
โข2024: 47.4%
$ASML has excellent return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2014: $7.09B
โข2024: $29.28B
โขCAGR: 15.23%
FREE CASH FLOW*
โข $ASML FCF is very sporadic due to heavy capital expenditures & isnโt necessarily the most reliable way to analyze the companyโs value
NORMALIZED EPSโ
โข2014: $3.15
โข2024: $20.03
โขCAGR: 20.31%
SHARE BUYBACKSโ
โข2018 Shares Outstanding: 426.40M
โขLTM Shares Outstanding: 393.60M
By reducing its shares outstanding ~7.7%, $ASML increased its EPS by ~8.3% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 51.3%
โขLTM Operating Margins: 31.9%
โขLTM Net Income Margins: 26.8%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~28% MORE in EPS & 10% LESS in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $ASML has to grow earnings at a 12.44% 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 (12.44%) required growth rate:
2025E: $27.20 (24.7% YoY) *FY Dec
2026E: $32.30 (18.7% YoY)
2027E: $38.63 (19.6% YoY)
$ASML has a decent track record of meeting analyst estimates ~2 years out. HOWEVER, letโs be conservative & assume $ASML ends 2027 with $35.00*** in EPS (~9% below current estimates) & see its CAGR potential assuming different multiples:
29x P/E: $1,015๐ต โฆ ~17.6% CAGR
28x P/E: $980๐ต โฆ ~16.1% CAGR
27x P/E: $945๐ต โฆ ~14.6% CAGR
26x P/E: $910๐ต โฆ ~13.1% CAGR
25x P/E: $910๐ต โฆ ~11.6% CAGR
As you can see, $ASML appears to have attractive return potential EVEN if we assume greater or equal to 25x EPS (below its 10-year mean, current multiple, & justified given its quality, moat & growth rate)
Also, given todayโs 24.88x multiple, we wouldnโt be relying on multiple expansion at 25x
Today at $668๐ต $ASML appears to be a strong consideration for investment, albeit with extreme volatility
Additionally, we have some margin of safety by relying on a lower multiple & lower growth rate
As Iโve stated before, given its volatility, however, itโs wise to piece into $ASML โ this way, you enhance your margin of safety while also positioning yourself to โwin-winโ if the stock moves up or down in the short-term ๐ต
#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.
๐๐ง๐๐จ๐ซ๐ฆ๐[...]
Offshore
โ Dimitry Nakhla | Babylon Capitalยฎ A quality valuation analysis on $ASML ๐ง๐ฝโโ๏ธ โขNTM P/E Ratio: 24.88x โข10-Year Mean: 31.10x โขNTM FCF Yield: 2.77% โข10-Year Mean: 3.09% As you can see, $ASML appears to be trading below fair value Going forward, investorsโฆ
๐ญ๐ข๐จ๐ง 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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Offshore
Photo
โ The Kobeissi Letter
RT @KobeissiLetter: We now know Trump's TOP economic priority:
For weeks, President Trump said there would be NO tariff delay, even as stocks erased $12+ TRILLION.
Then, the bond market BROKE and a 90-day tariff pause was implemented 12 hours later.
Keep watching bonds.
(a thread) https://t.co/M3AltQqjee
tweet
RT @KobeissiLetter: We now know Trump's TOP economic priority:
For weeks, President Trump said there would be NO tariff delay, even as stocks erased $12+ TRILLION.
Then, the bond market BROKE and a 90-day tariff pause was implemented 12 hours later.
Keep watching bonds.
(a thread) https://t.co/M3AltQqjee
tweet
Offshore
Video
โ The All-In Podcast
Chamath explains four key industries that the US needs to onshore:
1) The AI Supply Chain ๐ง
2) Energy โก๏ธ
3) Critical Minerals and Rare Earths โ๏ธ
4) Pharma APIs ๐
On E223, @ezraklein asked @chamath what success would look like for Trump's tariff / onshoring agenda:
Chamath:
"There is a major issue that the United States has that's much bigger than China."
"We are not in a position to take care of what we need."
"We depend on folks whose view of the United States can change in real time."
Ezra:
"Give me what indices you are going to look for."
Chamath:
"We need to measure and protect four critical areas."
1) The Entire AI Supply Chain ๐ง
"Number one is all of the technology, both the chips, as well as the enabling technology around artificial intelligence."
"It must be a robust, largely American supply chain."
2) Energy โก๏ธ
"Number two is energy."
"We do not have the capability we need to make the energy we need quickly."
"In many ways, we have critical supply chains that can be shut off by China around photovoltaics."
3) Critical Minerals and Rare Earths โ๏ธ
"Number three... there are critical material inputs that drive the material science of the future."
"So we have a critical minerals and rare earths and material science input problem."
4) Pharma APIs ๐
"And then the fourth, Ezra, are pharma APIs."
"So that when American citizens get sick, we have the ability to not just make it, but also design it and manufacture it."
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Chamath explains four key industries that the US needs to onshore:
1) The AI Supply Chain ๐ง
2) Energy โก๏ธ
3) Critical Minerals and Rare Earths โ๏ธ
4) Pharma APIs ๐
On E223, @ezraklein asked @chamath what success would look like for Trump's tariff / onshoring agenda:
Chamath:
"There is a major issue that the United States has that's much bigger than China."
"We are not in a position to take care of what we need."
"We depend on folks whose view of the United States can change in real time."
Ezra:
"Give me what indices you are going to look for."
Chamath:
"We need to measure and protect four critical areas."
1) The Entire AI Supply Chain ๐ง
"Number one is all of the technology, both the chips, as well as the enabling technology around artificial intelligence."
"It must be a robust, largely American supply chain."
2) Energy โก๏ธ
"Number two is energy."
"We do not have the capability we need to make the energy we need quickly."
"In many ways, we have critical supply chains that can be shut off by China around photovoltaics."
3) Critical Minerals and Rare Earths โ๏ธ
"Number three... there are critical material inputs that drive the material science of the future."
"So we have a critical minerals and rare earths and material science input problem."
4) Pharma APIs ๐
"And then the fourth, Ezra, are pharma APIs."
"So that when American citizens get sick, we have the ability to not just make it, but also design it and manufacture it."
tweet