The Long Investor
$SPY this chart was uploaded on the 1st of April and the traction it got was minimum.

Simply put, people do not want to believe anything negative

Since then the very tight ascending wedge has broken down and the 50 Day MA has been lost so far.

Tunnel vision is an investors achilles heel, keep your bias out of your assessment.

$SPY is still hanging on in this very slim and tight ascending wedge. https://t.co/A9cTGkzlKK - The Long Investor
tweet

Antonio Linares
Just 6 hours left of the discount on my 2 Hour Deep Diver course (sells for $150 instead of $199).

If you want to improve your ability to analyze businesses, check out my 2 Hour Deep Diver course, designed to teach you how to analyze companies in depth on your own like I do.

The course is selling for $150 (instead of $199) for 24 hours only.

By completing the course, you will emerge as a self-sufficient analyst with a distinct ability to do more research in less time, know when to buy or sell a stock and more easily spot undervalued companies, among other valuable skills that will help you compound wealth over your life, slowly. - Antonio Linares
tweet

Hidden Value Gems
Excited to be joining MOI Global, a membership community to learn and share investment ideas with other like-minded value-oriented investors.

Thank you @JMihaljevic for the invitation. I look forward to start contributing to the community.

@manualofideas
tweet

The Long Investor
Powell is due to Speak at 1315 EST.

Not an insignificant moment for him. https://t.co/6MHebVrWsP
tweet

Daniel
8 Investing Lessons from Peter Lynch: https://t.co/RfZJaeSvaT
tweet

The Long Investor
$RIVN
Was once valued at $176 Billion (2021)
It is now valued at $8 Billion.

$LCID
Was once valued at $145Billion (2021)
It is now valued at $5.5 Billion.

$PSNY
Was once valued at $35 Billion (2021)
It is now valued at $2.8 Billion.

$NIO
Was once valued at $113 Billion (2021)
It is now valued at $6.6 Billion.

$XPEV
Was once valued at $74 Billion (2021)
It is now valued at $7 Billion.
tweet

The Long Investor
RT @stocktalkweekly: *CHINA Q1 AIRLINE PASSENGERS JUMP +37.7% YEAR-OVER-YEAR (180 MILLION FLIGHTS)
tweet

The Long Investor
PE average of the S&P 500 right now.

28.8 average.

Where were the signs?

$SPY

Hat tip to $BRK-B, Value Investors can ride any storm. https://t.co/bRm1kXQVqy
tweet

The Long Investor
Dan is not happy with $TSLA

Whereas I want the elevator down scenario.

Cheap is good

Still will probably not buy until this goes below $100

We need to hear the rationale for the cost cutting, the strategy going forward, product roadmap, and an overall vision from Musk next week on the call otherwise many investors might head for the elevators during this Category 5 perfect storm of weak demand TSLA is seeing globally - Dan Ives
tweet

Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: @BourbonFps Really like $UNH here 👌🏽

A sober valuation analysis on $UNH 🧘🏽‍♂️

•NTM P/E Ratio: 16.50x
•5-Year Mean: 19.67x

•NTM FCF Yield: 6.84%
•5-Year Mean: 5.86%

As you can see, $UNH appears to be trading below fair value

Going forward, investors can receive ~19% MORE in earnings per share & ~17% MORE in FCF per share 🧠***

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

BALANCE SHEET✅
•Cash & Total Inv: $75.34B
•Long-Term Debt: $58.26B

$UNH has a strong balance sheet, an A+ S&P Credit Rating & 8.96x FFO Interest Coverage

RETURN ON CAPITAL✅
•2019: 18.6%
•2020: 19.1%
•2021: 19.1%
•2022: 19.4%
•2023: 19.1%

RETURN ON EQUITY✅
•2019: 24.1%
•2020: 23.8%
•2021: 24.1%
•2022: 25.4%
•2023: 25.0%

$UNH has strong return metrics, highlighting the financial efficiency of the business

REVENUES✅
•2013: $122.49B
•2023: $371.62B
•CAGR: 11.73%

FREE CASH FLOW✅
•2013: $5.68B
•2023: $25.68B
•CAGR: 16.28%

NORMALIZED EPS✅
•2013: $5.50
•2023: $25.12
•CAGR: 16.40%

PAID DIVIDENDS✅
•2013: $1.05
•2023: $7.29
•CAGR: 21.38%

SHARE BUYBACKS✅
•2013 Shares Outstanding: 1.02B
•LTM Shares Outstanding: 0.94B

By reducing its shares outstanding ~7.8%, $UNH increased its EPS by ~8.4% (assuming 0 growth)

MARGINS✅
•LTM Gross Margins: 14.6%
•LTM Operating Margins: 8.7%
•LTM Net Income Margins: 6.0%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive ~19% MORE in EPS & ~17% more in FCF per share

Using Benjamin Graham’s 2G rule of thumb, $UNH has to grow earnings at a 8.25% CAGR over the next several years to justify its valuation

Today, analysts anticipate 2024 - 2025 EPS growth over the next few years to be more than the (8.25%) required growth rate

However, consider the recent Medicare Rate Decision, I’ve assumed only a 10% EPS growth rate for 2025 & 2026 💡 (well below the current expected rates of 12.8% for both years):

2024E: $27.77 (10.6% YoY) *FY Dec
2025E: $30.54 (10.0% YoY)
2026E: $33.59 (10.0% YoY)

$UNH has an excellent track record of meeting analyst estimates ~2 years out, so let’s assume $UNH ends 2026 with $33.59 in EPS & see its CAGR potential assuming different multiples

19x P/E: $638.21💵 … ~14.3% CAGR

18x P/E: $604.62💵 … ~12.1% CAGR

17x P/E: $571.03💵 … ~9.9% CAGR

As you can see, $UNH appears to have attractive return potential even if we assume 18x earnings (a multiple below both its 5-year & 10-year mean) & a reduced growth rate

That’s a great rate of return for an excellent capital allocator & wide-moat recession-proof business like $UNH

Today at $458💵 $UNH appears to be a strong consideration for investment

However, keep in mind how volatile $UNH (and all health insurers) can get amid regulatory & political risks

Those considering $UNH would be wise to piece into the position, leaving room for additional purchases if $UNH continues to trade down to an even more attractive valuation

E.g. 1/3 of the purchase at $458💵, another 1/3 at $410💵, & 1/3 at $380💵

#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. - Dimitry Nakhla | Babylon Capital®
tweet