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Quiver Quantitative
BREAKING: Senator Tommy Tuberville just disclosed 12 new stock trades.
They were all sales.
Up to $530K of stock sold.
Full trade list up on Quiver: https://t.co/XiURUgFzLF
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BREAKING: Senator Tommy Tuberville just disclosed 12 new stock trades.
They were all sales.
Up to $530K of stock sold.
Full trade list up on Quiver: https://t.co/XiURUgFzLF
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Offshore
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Stock Analysis Compilation
Gator Capital on Chain Bridge Bancorp $CBNA US
Thesis: CBNA's unique political clientele, high returns, and zero credit risk make it a compelling play in the regional banking sector, with acquisition potential.
(Extract from their Q3 letter, link to the analysis in SAC#64) https://t.co/kj1waXWZKJ
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Gator Capital on Chain Bridge Bancorp $CBNA US
Thesis: CBNA's unique political clientele, high returns, and zero credit risk make it a compelling play in the regional banking sector, with acquisition potential.
(Extract from their Q3 letter, link to the analysis in SAC#64) https://t.co/kj1waXWZKJ
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Offshore
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Quiver Quantitative
RT @InsiderRadar: 🚨 JUST IN: New CEO Insider Purchase
The CEO of $PAL just reported the purchase of ~$500K of the company's stock.
This is the first insider buy we have ever seen him make, since the company's IPO earlier this year. https://t.co/ODB27f3IU9
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RT @InsiderRadar: 🚨 JUST IN: New CEO Insider Purchase
The CEO of $PAL just reported the purchase of ~$500K of the company's stock.
This is the first insider buy we have ever seen him make, since the company's IPO earlier this year. https://t.co/ODB27f3IU9
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Investing visuals
RT @ZeevyInvesting: Is Palantir $PLTR in a bubble? 🤔
Let’s look at the facts, as there is quite some debate going on about this on X👇
Valuation ⚖️
• Trades at 39x enterprise value/next-twelve-months revenue: 89% higher than the next-highest software company, Samsara, at 20.6x
• Price-to-sales ratio (forward): 40.3x, vs. a 3-year average of 14.5x
• Price-to-free-cash-flow (forward): 125x, vs. a 3-year average of 68x
Quick conclusion 🔍
All metrics are highly elevated. Does this mean $PLTR is overvalued? Not necessarily. Let’s examine the fundamentals:
• Revenue growth has accelerated to 30%
• Net retention increased to 118% (best-in-class)
• Rule of 40 score: 68 (elite)
• Total customers up +39%
• Very strong balance sheet
My Take 📜
$PLTR is a stellar business with strong execution, positioning itself as the go-to data & AI platform. But to justify its valuation, expectations are sky-high. Here are two potential scenarios:
Scenario 1 – The NVIDIA $NVDA Play 📈
$PLTR fundamentals catch up to its valuation, similar to $NVDA's story. If $PLTR delivers, today’s price might be justified.
Scenario 2 – The Cloudflare $NET Play 📉
Expectations are too high. Even with strong execution, $PLTR may struggle to meet them. This can possibly lead to a significant stock drop similar to Cloudflare in 2022 which declined -80% after a massive run of +500%
--Which scenario do you think will play out?--
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RT @ZeevyInvesting: Is Palantir $PLTR in a bubble? 🤔
Let’s look at the facts, as there is quite some debate going on about this on X👇
Valuation ⚖️
• Trades at 39x enterprise value/next-twelve-months revenue: 89% higher than the next-highest software company, Samsara, at 20.6x
• Price-to-sales ratio (forward): 40.3x, vs. a 3-year average of 14.5x
• Price-to-free-cash-flow (forward): 125x, vs. a 3-year average of 68x
Quick conclusion 🔍
All metrics are highly elevated. Does this mean $PLTR is overvalued? Not necessarily. Let’s examine the fundamentals:
• Revenue growth has accelerated to 30%
• Net retention increased to 118% (best-in-class)
• Rule of 40 score: 68 (elite)
• Total customers up +39%
• Very strong balance sheet
My Take 📜
$PLTR is a stellar business with strong execution, positioning itself as the go-to data & AI platform. But to justify its valuation, expectations are sky-high. Here are two potential scenarios:
Scenario 1 – The NVIDIA $NVDA Play 📈
$PLTR fundamentals catch up to its valuation, similar to $NVDA's story. If $PLTR delivers, today’s price might be justified.
Scenario 2 – The Cloudflare $NET Play 📉
Expectations are too high. Even with strong execution, $PLTR may struggle to meet them. This can possibly lead to a significant stock drop similar to Cloudflare in 2022 which declined -80% after a massive run of +500%
--Which scenario do you think will play out?--
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Ahmad Jivraj
1/8
The Investor's Drawdown
Inspired by “The Struggle” by @bhorowitz
Every investor starts with a vision of success.
You will study the markets diligently and build a diversified portfolio.
You will make smart, calculated decisions based on thorough research.
Your strategy will be sound, and your patience infinite.
It's going to be absolutely perfect.
Then, the market turns against you.
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1/8
The Investor's Drawdown
Inspired by “The Struggle” by @bhorowitz
Every investor starts with a vision of success.
You will study the markets diligently and build a diversified portfolio.
You will make smart, calculated decisions based on thorough research.
Your strategy will be sound, and your patience infinite.
It's going to be absolutely perfect.
Then, the market turns against you.
tweet
Offshore
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Stock Analysis Compilation
Deep Sail Capital on Cellebrite $CLBT
Thesis: CLBT's robust growth trajectory and expanding margins set the stage for significant EBITDA outperformance, bolstered by a large untapped market for its solutions.
(Extract from their Q3 letter, link to the analysis in SAC#64) https://t.co/9HChoamJHE
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Deep Sail Capital on Cellebrite $CLBT
Thesis: CLBT's robust growth trajectory and expanding margins set the stage for significant EBITDA outperformance, bolstered by a large untapped market for its solutions.
(Extract from their Q3 letter, link to the analysis in SAC#64) https://t.co/9HChoamJHE
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Offshore
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Dimitry Nakhla | Babylon Capital®
4 months ago I suggested $DHR was trading for a substantial premium at $240💵 & that I’d be more interested closer to $200💵
Since then, $DHR shares traded slightly down ~4% while the indexes have rallied ✅
As I stated in the analysis (post shared below):
“As you can see, $DHR needs to trade above 32x to have attractive return potential
While possible, I wouldn’t want to rely on that assumption as it doesn’t leave us with any margin of safety
While the 10-year mean multiple is 25.18x, I’d be content relying on somewhere closer to 27x - 28x earnings given $DHR quality, culture, competitive advantage, earnings growth rate & the quality of earnings, & long-term tailwinds in the sector
Yet, even at 27x - 28x earnings, the return potential outlook is bleak
Today at $240💵 $DHR is trading at a substantial premium
I’d become interested in $DHR closer to $200💵 or at ~25.50x NTM earnings (roughly 16.7% below today’s price)”
#stocks #investing"
A sober valuation analysis on $DHR 🧘🏽♂️
•NTM P/E Ratio: 30.69x
•10-Year Mean: 25.18x
•NTM FCF Yield: 4.34%
•10-Year Mean: 3.24%
As you can see, $DHR appears to be trading above fair value
Going forward, investors can receive ~18% LESS in earnings per share & ~25% LESS in FCF per share 🧠***
Before we get into valuation, let’s take a look at why $DHR is a quality business
BALANCE SHEET✅
•Cash & Short-Term Inv: $7.03B
•Long-Term Debt: $16.42B
$DHR has a great balance sheet, an A- S&P Credit Rating, & 22x FFO Interest Coverage
RETURN ON CAPITAL🆗*
•2019: 6.2%
•2020: 7.8%
•2021: 10.3%
•2022: 10.7%
•2023: 7.4%
•LTM: 7.2%
*ROIC relatively low partly due to $DHR growth strategy (acquisitions, capital allocation, etc)
RETURN ON EQUITY🆗
•2019: 8.3%
•2020: 10.8%
•2021: 12.8%
•2022: 13.3%
•2023: 8.2%
•LTM: 7.8%
$DHR has decent return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2018: $17.05B
•2023: $23.89B
•CAGR: 6.97%
FREE CASH FLOW✅
•2018: $3.44B
•2023: $5.78B
•CAGR: 10.93%
NORMALIZED EPS✅
•2018: $7.58
•2023: $4.52
•CAGR: 10.89%
SHARE BUYBACKS❌
•2018 Shares Outstanding: 0.70B
•LTM Shares Outstanding: 0.74B
MARGINS✅
•LTM Gross Margins: 58.9%
•LTM Operating Margins: 21.9%
•LTM Net Income Margins: 17.1%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~18% LESS in EPS & ~25% LESS in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $DHR has to grow earnings at a 15.35% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be less than the (15.35%) required growth rate:
2024E: $7.62 (0.5% YoY) *FY Dec
2025E: $8.74 (14.8% YoY)
2026E: $9.71 (11.0% YoY)
$DHR has a decent track record of meeting analyst estimates ~2 years out, so let’s assume $DHR ends 2026 with $9.71 in EPS & see its CAGR potential assuming different multiples
32x P/E: $310.72💵 … ~11.3% CAGR
28x P/E: $271.88💵 … ~5.5% CAGR
27x P/E: $262.16💵 … ~4.0% CAGR
26x P/E: $252.46💵 … ~2.5% CAGR
25x P/E: $242.75💵 … ~1.0% CAGR
As you can see, $DHR needs to trade above 32x to have attractive return potential
While possible, I wouldn’t want to rely on that assumption as it doesn’t leave us with any margin of safety
While the 10-year mean multiple is 25.18x, I’d be content relying on somewhere closer to 27x - 28x earnings given $DHR quality, culture, competitive advantage, earnings growth rate & the quality of earnings, & long-term tailwinds in the sector
Yet, even at 27x - 28x earnings, the return potential outlook is bleak
Today at $240💵 $DHR is trading at a substantial premium
I’d become interested in $DHR closer to $200💵 or at ~25.50x NTM earnings (roughly 16.7% b[...]
4 months ago I suggested $DHR was trading for a substantial premium at $240💵 & that I’d be more interested closer to $200💵
Since then, $DHR shares traded slightly down ~4% while the indexes have rallied ✅
As I stated in the analysis (post shared below):
“As you can see, $DHR needs to trade above 32x to have attractive return potential
While possible, I wouldn’t want to rely on that assumption as it doesn’t leave us with any margin of safety
While the 10-year mean multiple is 25.18x, I’d be content relying on somewhere closer to 27x - 28x earnings given $DHR quality, culture, competitive advantage, earnings growth rate & the quality of earnings, & long-term tailwinds in the sector
Yet, even at 27x - 28x earnings, the return potential outlook is bleak
Today at $240💵 $DHR is trading at a substantial premium
I’d become interested in $DHR closer to $200💵 or at ~25.50x NTM earnings (roughly 16.7% below today’s price)”
#stocks #investing"
A sober valuation analysis on $DHR 🧘🏽♂️
•NTM P/E Ratio: 30.69x
•10-Year Mean: 25.18x
•NTM FCF Yield: 4.34%
•10-Year Mean: 3.24%
As you can see, $DHR appears to be trading above fair value
Going forward, investors can receive ~18% LESS in earnings per share & ~25% LESS in FCF per share 🧠***
Before we get into valuation, let’s take a look at why $DHR is a quality business
BALANCE SHEET✅
•Cash & Short-Term Inv: $7.03B
•Long-Term Debt: $16.42B
$DHR has a great balance sheet, an A- S&P Credit Rating, & 22x FFO Interest Coverage
RETURN ON CAPITAL🆗*
•2019: 6.2%
•2020: 7.8%
•2021: 10.3%
•2022: 10.7%
•2023: 7.4%
•LTM: 7.2%
*ROIC relatively low partly due to $DHR growth strategy (acquisitions, capital allocation, etc)
RETURN ON EQUITY🆗
•2019: 8.3%
•2020: 10.8%
•2021: 12.8%
•2022: 13.3%
•2023: 8.2%
•LTM: 7.8%
$DHR has decent return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2018: $17.05B
•2023: $23.89B
•CAGR: 6.97%
FREE CASH FLOW✅
•2018: $3.44B
•2023: $5.78B
•CAGR: 10.93%
NORMALIZED EPS✅
•2018: $7.58
•2023: $4.52
•CAGR: 10.89%
SHARE BUYBACKS❌
•2018 Shares Outstanding: 0.70B
•LTM Shares Outstanding: 0.74B
MARGINS✅
•LTM Gross Margins: 58.9%
•LTM Operating Margins: 21.9%
•LTM Net Income Margins: 17.1%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~18% LESS in EPS & ~25% LESS in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $DHR has to grow earnings at a 15.35% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be less than the (15.35%) required growth rate:
2024E: $7.62 (0.5% YoY) *FY Dec
2025E: $8.74 (14.8% YoY)
2026E: $9.71 (11.0% YoY)
$DHR has a decent track record of meeting analyst estimates ~2 years out, so let’s assume $DHR ends 2026 with $9.71 in EPS & see its CAGR potential assuming different multiples
32x P/E: $310.72💵 … ~11.3% CAGR
28x P/E: $271.88💵 … ~5.5% CAGR
27x P/E: $262.16💵 … ~4.0% CAGR
26x P/E: $252.46💵 … ~2.5% CAGR
25x P/E: $242.75💵 … ~1.0% CAGR
As you can see, $DHR needs to trade above 32x to have attractive return potential
While possible, I wouldn’t want to rely on that assumption as it doesn’t leave us with any margin of safety
While the 10-year mean multiple is 25.18x, I’d be content relying on somewhere closer to 27x - 28x earnings given $DHR quality, culture, competitive advantage, earnings growth rate & the quality of earnings, & long-term tailwinds in the sector
Yet, even at 27x - 28x earnings, the return potential outlook is bleak
Today at $240💵 $DHR is trading at a substantial premium
I’d become interested in $DHR closer to $200💵 or at ~25.50x NTM earnings (roughly 16.7% b[...]