⁠Hidden Value Gems
Someone also noticed the value in $RKT.L

Activist investor Eminence Capital has built over 0.5% stake, expected to push for the sale of the Baby formula division.

Eminence also believed Reckitt’s management could do more to improve operating margins, which have shrunk in recent years.

“Other activist investors were also circling Reckitt, according to people familiar with the matter, with investors believing that the fallout from the Illinois jury’s verdict had disproportionately weighed down its stock price.”

My latest Monthly Stock Idea Lab focuses on 4 best ideas I researched last month.

The first one is Reckitt Benckiser $RKT.L $RBGLY

✅It is a 200-year global FMCG player focused on Health, Hygiene and Nutrition. The company has recently encountered a series of issues, which should be temporary.

✅This has created an interesting opportunity as the stock is down 42% from 2020 peak (down 17% YTD) and is trading at just 14.7x fwd PE.

✅The company has outperformed peers like $PG $UL $NSRGY delivering better growth and higher margins, but is trading at a 35% discount.

✅If the company can put its recent problems behind and the market regains confidence in the business, there is no reason why Reckitt should not re-rate to a peer average level of 20x P/E (similar to its historical avg). Combined with 400p dividends over two years, there could be over 60% upside (assuming 5% EPS growth). - Hidden Value Gems
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⁠Hidden Value Gems
“The MSCI China ETF $MCHI is now outperforming the S&P 500 ETF $SPY on the year after rallying over 30% from its low in January.”

h/t @charliebilello https://t.co/q66xm0Do1v
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⁠Antonio Linares
Just 2 left.

I’m selling 10 units of my 2 Hour Deep Diver course for $150 (instead of $199).

In this course, I teach folks to analyze companies like I do, breaking down the mental models behind my very successful $AMD, $TSLA, $PLTR and $SPOT investments. https://t.co/go88vfynrI - Antonio Linares
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⁠Antonio Linares
RT @alc2022: Here's what everyone missed in the $PLTR Q1 earnings:

The contribution margin has accelerated meaningfully QoQ, implying exponential financial growth over the coming year. An explanation 👇

The metric has risen from 55% in Q1 2023 to 60% in Q1 2024. This is an EXTRAORDINARY jump.

This signals lower cost of deployment and therefore improved unit economics.

As a leading indicator of profitability, all margins follow suit.

Contribution margin is therefore the $PLTR thesis’s most signal-rich metric: if it rises quickly, so too will cash flow production.

Additionally, as the bootcamps themselves are productized–thus enabling $PLTR to conduct more bootcamps per unit of time–I believe contribution margin will accelerate further.

I also believe we can already see this dynamic in this quarter’s acceleration.

If this trend continues, the long term implications are also VAST.

At the current rate of acceleration, the contribution margin will rise above 90% in the coming years and this will fundamentally change $PLTR moving forward.

At 90%, seamless deployment will allow $PLTR to drastically increase the number of customers per vertical, enabling a blueprint for scaling infrastructure that becomes accessible to companies N+1 and beyond.

This approach frees each subsequent company from purchasing raw compute and allows them to acquire computation tailored precisely to their operational objectives.

Drawing a parallel to gasoline, this shift is akin to providing wildcatters with industrial drilling equipment.

This changes how computation is sold in the market and places $PLTR at the top of the cloud compute funnel–in the fortunate position of being able to redirect prospective customers to the cloud hyperscalers.

In time, this should proliferate Palantir’s operating capability and, thus, free cash flow levels per share.
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