Offshore
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Librarian Capital
FeverTree $FEVR 24H1
Revenue flat % ex-FX, -2% in £ (UK -6%, US +10%, Europe -12%; ROW +57% w/ own distribut.)
GP +15% (GM 35.9%; PY 30.7%)
Adj. EBITDA +79% (margin 10.5%; PY 5.8%)
EPS 6.49p (PY 0.94p)
FY outlook cut
Revenue +4-5% (was ~10%)
But "on track" for ~600bps better GM https://t.co/fSdiG63hO2
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FeverTree $FEVR 24H1
Revenue flat % ex-FX, -2% in £ (UK -6%, US +10%, Europe -12%; ROW +57% w/ own distribut.)
GP +15% (GM 35.9%; PY 30.7%)
Adj. EBITDA +79% (margin 10.5%; PY 5.8%)
EPS 6.49p (PY 0.94p)
FY outlook cut
Revenue +4-5% (was ~10%)
But "on track" for ~600bps better GM https://t.co/fSdiG63hO2
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Offshore
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Librarian Capital
Ruffer Total Return Fund "broadly flat in August"
Now +1.6% YTD and +3.7% p.a. last 5 years (£)
Flat despite taking profits on "some" protection
"We have been looking in the right direction"
"This was proof of concept"
A broken clock is right 2x a day
But expensive for clients https://t.co/Bt8ksnJVWW
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Ruffer Total Return Fund "broadly flat in August"
Now +1.6% YTD and +3.7% p.a. last 5 years (£)
Flat despite taking profits on "some" protection
"We have been looking in the right direction"
"This was proof of concept"
A broken clock is right 2x a day
But expensive for clients https://t.co/Bt8ksnJVWW
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Librarian Capital
"Gary Stevenson claims to have been the best trader in the world. His old colleagues disagree"
"FTAV spoken to 8 former employees ... All of them disputed his claim ... More than 1 ... alleged (he) had “delusions of grandeur”"
1 "described Gary’s central claim as “horse shit”"
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"Gary Stevenson claims to have been the best trader in the world. His old colleagues disagree"
"FTAV spoken to 8 former employees ... All of them disputed his claim ... More than 1 ... alleged (he) had “delusions of grandeur”"
1 "described Gary’s central claim as “horse shit”"
Gary Stevenson claims to have been the best trader in the world. His old colleagues disagree https://t.co/GGMoDiLKHM tweet
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Librarian Capital
Ruffer CIO Henry Maxey bought £5.3m of Ruffer Investment Co. $RICA 6 months ago (12-Mar)
RICA disclosed this voluntarily, no doubt hoping to boost confidence, and it received positive press
RICA share price is up just 4.6% since
(Y-axis obviously doesn't start at zero) https://t.co/MSwWh2jjCP
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Ruffer CIO Henry Maxey bought £5.3m of Ruffer Investment Co. $RICA 6 months ago (12-Mar)
RICA disclosed this voluntarily, no doubt hoping to boost confidence, and it received positive press
RICA share price is up just 4.6% since
(Y-axis obviously doesn't start at zero) https://t.co/MSwWh2jjCP
Ruffer CIO Henry Maxey bought £5.0m of Ruffer Investment Co. $RICA shares on 1-Aug
He previously made a £5.3m purchase on 12-Mar
No press coverage this time, despite more eye-catching RNS title ("CIO share purchase" vs. "senior mgmt. purchase"); RICA rose just ~2% since 12-Mar https://t.co/LaGrDGX9NS tweet
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Offshore
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Librarian Capital
VC with Chinese characteristics
A leading state-owned VC "filed 41 lawsuits since 2023 ... 35 against companies that had largely failed to go public" despite redemption clauses
"New start-ups face even more onerous terms ... founders must take personal liability for the debt" https://t.co/7pDFD6saSK
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VC with Chinese characteristics
A leading state-owned VC "filed 41 lawsuits since 2023 ... 35 against companies that had largely failed to go public" despite redemption clauses
"New start-ups face even more onerous terms ... founders must take personal liability for the debt" https://t.co/7pDFD6saSK
How China has ‘throttled’ its private sector - The Big Read https://t.co/yb57da3xR5 tweet
Offshore
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Librarian Capital
Revolut: CEO "Nik Storonsky ... sold between 40% and 60% of the stock that was offloaded by employees ... worth between $200m and $300m"
"Coatue and D1 Capital Partners become investors"
"Revolut is chaired by Martin Gilbert"
"Directors include Michael Sherwood"
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Revolut: CEO "Nik Storonsky ... sold between 40% and 60% of the stock that was offloaded by employees ... worth between $200m and $300m"
"Coatue and D1 Capital Partners become investors"
"Revolut is chaired by Martin Gilbert"
"Directors include Michael Sherwood"
Exclusive: Nik Storonsky, founder and CEO of British-based banking app Revolut, last month sold a stake in the company worth between $200m and $300m in a secondary share deal which propelled him up the ranks of the world's richest tech entrepreneurs. https://t.co/Ofbi8cEBeI tweet
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Hidden Value Gems
Quote of the day #85
From one of the recent articles by @vitaliyk https://t.co/TppkFxUHRG
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Quote of the day #85
From one of the recent articles by @vitaliyk https://t.co/TppkFxUHRG
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Offshore
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Dimitry Nakhla | Babylon Capital®
A sober valuation analysis on $META 🧘🏽♂️
•NTM P/E Ratio: 22.65x
•10-Year Mean: 26.32x
•NTM FCF Yield: 3.60%
•10-Year Mean: 3.33%
As you can see, $META appears to be slightly undervalued
Going forward, investors can expect to receive ~16% MORE in earnings per share & ~8% MORE in FCF per share🧠***
Before we get into valuation, let’s take a look at why $META is a quality business
BALANCE SHEET✅
•Cash & Equivalents: $58.08B
•Long-Term Debt: $18.39B
$META has an excellent balance sheet, an AA- S&P Credit Rating & 148x FFO Interest Coverage Ratio
RETURN ON CAPITAL✅
•2019: 26.0%
•2020: 23.5%
•2021: 33.7%
•2022: 22.0%
•2023: 26.3%
•LTM: 31.7%
RETURN ON EQUITY✅
•2019: 20.0%
•2020: 25.4%
•2021: 31.1%
•2022: 18.5%
•2023: 28.0%
•LTM: 35.4%
$META has great return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2018: $55.84B
•2023: $134.90B
•CAGR: 19.29%
FREE CASH FLOW✅
•2018: $15.36B
•2023: $43.85B
•CAGR: 23.34%
NORMALIZED EPS✅
•2018: $7.57
•2023: $14.87
•CAGR: 14.45%
SHARE BUYBACKS✅
•2018 Shares Outstanding: 2.92B
•LTM Shares Outstanding: 2.64B
By reducing its shares outstanding ~9.5%, $META increased its EPS by ~10.5% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 81.5%
•LTM Operating Margins: 41.2%
•LTM Net Income Margins: 34.3%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~16% MORE in EPS & ~8% MORE in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $META has to grow earnings at an 11.33% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be greater than the (11.33%) required growth rate:
2024E: $21.26 (43.0% YoY) *FY Dec
2025E: $24.41 (14.8% YoY)
2026E: $27.97 (14.6% YoY)
$META has a decent track record of meeting analyst estimates ~2 years out, so let’s assume $META ends 2026 with $27.97 in EPS & see its CAGR potential assuming different multiples
24x P/E: $671.28💵 … ~12.7% CAGR
23x P/E: $643.31💵 … ~10.7% CAGR
22x P/E: $615.34💵 … ~8.6% CAGR
21x P/E: $587.37💵 … ~6.5% CAGR
As you can see, $META appears to have double-digit CAGR potential if we assume >23x earnings, a multiple slightly below what it’s trading for today and a multiple below what may be justified given its mid-teens earnings growth rate
And as we’ve already seen, the increased investment in future growth and necessary AI development has the potential to drive better growth prospects could be a bullish catalyst for the next several years
Today at $511💵 $META appears to be a decent consideration for investment
$META appears to be an excellent deal closer to $465💵 where it has ~11% CAGR potential assuming 2026E and a 21x multiple (an added layer of margin of safety)
#stocks #investing
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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.
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A sober valuation analysis on $META 🧘🏽♂️
•NTM P/E Ratio: 22.65x
•10-Year Mean: 26.32x
•NTM FCF Yield: 3.60%
•10-Year Mean: 3.33%
As you can see, $META appears to be slightly undervalued
Going forward, investors can expect to receive ~16% MORE in earnings per share & ~8% MORE in FCF per share🧠***
Before we get into valuation, let’s take a look at why $META is a quality business
BALANCE SHEET✅
•Cash & Equivalents: $58.08B
•Long-Term Debt: $18.39B
$META has an excellent balance sheet, an AA- S&P Credit Rating & 148x FFO Interest Coverage Ratio
RETURN ON CAPITAL✅
•2019: 26.0%
•2020: 23.5%
•2021: 33.7%
•2022: 22.0%
•2023: 26.3%
•LTM: 31.7%
RETURN ON EQUITY✅
•2019: 20.0%
•2020: 25.4%
•2021: 31.1%
•2022: 18.5%
•2023: 28.0%
•LTM: 35.4%
$META has great return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2018: $55.84B
•2023: $134.90B
•CAGR: 19.29%
FREE CASH FLOW✅
•2018: $15.36B
•2023: $43.85B
•CAGR: 23.34%
NORMALIZED EPS✅
•2018: $7.57
•2023: $14.87
•CAGR: 14.45%
SHARE BUYBACKS✅
•2018 Shares Outstanding: 2.92B
•LTM Shares Outstanding: 2.64B
By reducing its shares outstanding ~9.5%, $META increased its EPS by ~10.5% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 81.5%
•LTM Operating Margins: 41.2%
•LTM Net Income Margins: 34.3%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~16% MORE in EPS & ~8% MORE in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $META has to grow earnings at an 11.33% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be greater than the (11.33%) required growth rate:
2024E: $21.26 (43.0% YoY) *FY Dec
2025E: $24.41 (14.8% YoY)
2026E: $27.97 (14.6% YoY)
$META has a decent track record of meeting analyst estimates ~2 years out, so let’s assume $META ends 2026 with $27.97 in EPS & see its CAGR potential assuming different multiples
24x P/E: $671.28💵 … ~12.7% CAGR
23x P/E: $643.31💵 … ~10.7% CAGR
22x P/E: $615.34💵 … ~8.6% CAGR
21x P/E: $587.37💵 … ~6.5% CAGR
As you can see, $META appears to have double-digit CAGR potential if we assume >23x earnings, a multiple slightly below what it’s trading for today and a multiple below what may be justified given its mid-teens earnings growth rate
And as we’ve already seen, the increased investment in future growth and necessary AI development has the potential to drive better growth prospects could be a bullish catalyst for the next several years
Today at $511💵 $META appears to be a decent consideration for investment
$META appears to be an excellent deal closer to $465💵 where it has ~11% CAGR potential assuming 2026E and a 21x multiple (an added layer of margin of safety)
#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.
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Stock Analysis Compilation
Davis fund on Humana $HUM US
Thesis: Humana offers a compelling long-term growth opportunity in Medicare Advantage, poised to rebound strongly as industry-wide cost pressures stabilize
(Extract from their Q2 letter) https://t.co/MybOMntbur
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Davis fund on Humana $HUM US
Thesis: Humana offers a compelling long-term growth opportunity in Medicare Advantage, poised to rebound strongly as industry-wide cost pressures stabilize
(Extract from their Q2 letter) https://t.co/MybOMntbur
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