Offshore
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InsideArbitrage
$HSIC Henry Schein shares rise (+3.15% pre-market) as it announces 👇👇
▪️ Strategic Investment by KKR,
▪️ Board Changes
▪️ Preliminary Unaudited Financial Results and 2025 Financial Guidance 🔹 GAAP Q4 net income: $94M ($0.74/share) 🔹 FY 2024: $390M ($3.05/share)
▪️ Increased share repurchase plan by $500 million (~5% of its current market cap) with $250 million to be executed through accelerated share repurchases
📉 The company has been regularly buying back its shares - reducing shares outstanding by 11%+ over the last 4 yrs as seen from the graph below
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$HSIC Henry Schein shares rise (+3.15% pre-market) as it announces 👇👇
▪️ Strategic Investment by KKR,
▪️ Board Changes
▪️ Preliminary Unaudited Financial Results and 2025 Financial Guidance 🔹 GAAP Q4 net income: $94M ($0.74/share) 🔹 FY 2024: $390M ($3.05/share)
▪️ Increased share repurchase plan by $500 million (~5% of its current market cap) with $250 million to be executed through accelerated share repurchases
📉 The company has been regularly buying back its shares - reducing shares outstanding by 11%+ over the last 4 yrs as seen from the graph below
tweet
Offshore
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InsideArbitrage
Third Point, which owns 9.9% of Soho House’s $SHCO stock, believes that it is undervalued and that the company would generate more value for shareholders as a private business.
🏠@ThirdPointLLC plans to engage with the board to discuss the potential sale and possible alternatives.
🏠Third Point may participate in the take-private offer, that Soho entered with Chairman Ron Burkle, by rolling over its equity stake or providing financing.
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Third Point, which owns 9.9% of Soho House’s $SHCO stock, believes that it is undervalued and that the company would generate more value for shareholders as a private business.
🏠@ThirdPointLLC plans to engage with the board to discuss the potential sale and possible alternatives.
🏠Third Point may participate in the take-private offer, that Soho entered with Chairman Ron Burkle, by rolling over its equity stake or providing financing.
Soho House $SHCO received an offer from a new third-party consortium to acquire the company for $9.00 per share.
✴️The offer is conditioned on certain significant shareholders, including Soho's Executive Chairman, Ron Burkle, and The Yucaipa Companies, rolling over their equity interests as part of the transaction.
✴️ The Board has formed an independent Special Committee to evaluate the offer. tweet
Offshore
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Startup Archive
Rippling founder Parker Conrad on the opportunity in building “compound startups”
Y Combinator CEO Garry Tan points out that the classic startup advice is “do one thing and do it extremely well,” but Parker took a different approach building Rippling that he calls the “compound startup.” He set out to solve multiple problems for their customers simultaneously.
Parker elaborates on this:
“I think it actually resembles a lot of software companies that were built 20+ years ago. If you look at companies like SAP, Oracle, and Microsoft, they actually look like compound software businesses… What happened is I think there was this moment in time where it really was possible to do one narrow thing because there was so much greenfield territory in software as everything shifted from on-prem to the cloud. You could go out and do this really narrow thing and turn it into a SaaS company. Almost all of these things ended up — at least for a period of time — being worth low-single-digit billions of dollars. And it was really easy to find a niche.”
But Parker believes this approach is suboptimal because it limits the types of problems you can solve for your customers — especially big customers.
“You can actually just wipe out a lot of work and make things function much better if you can take on a whole host of interrelated applications and build one comprehensive solution.”
Parker argues that if you can solve multiple problems for your customers with parallel applications, your product/market fit becomes much more powerful and harder to displace.
The other argument in favor of the compound startup approach is that sales and marketing has gotten much harder and less efficient for software businesses:
“You see this at every stage, but over the last five years, public companies are spending 50% more on sales and marketing, but they’re adding 10% less in new ARR with that increase in spend. Fundamentally, the business model for a lot of software is just broken. There’s too many businesses.”
Parker also believes AI sales agents will completely destroy outbound as a channel if they do eventually end up working.
Video source: @ycombinator (2025)
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Rippling founder Parker Conrad on the opportunity in building “compound startups”
Y Combinator CEO Garry Tan points out that the classic startup advice is “do one thing and do it extremely well,” but Parker took a different approach building Rippling that he calls the “compound startup.” He set out to solve multiple problems for their customers simultaneously.
Parker elaborates on this:
“I think it actually resembles a lot of software companies that were built 20+ years ago. If you look at companies like SAP, Oracle, and Microsoft, they actually look like compound software businesses… What happened is I think there was this moment in time where it really was possible to do one narrow thing because there was so much greenfield territory in software as everything shifted from on-prem to the cloud. You could go out and do this really narrow thing and turn it into a SaaS company. Almost all of these things ended up — at least for a period of time — being worth low-single-digit billions of dollars. And it was really easy to find a niche.”
But Parker believes this approach is suboptimal because it limits the types of problems you can solve for your customers — especially big customers.
“You can actually just wipe out a lot of work and make things function much better if you can take on a whole host of interrelated applications and build one comprehensive solution.”
Parker argues that if you can solve multiple problems for your customers with parallel applications, your product/market fit becomes much more powerful and harder to displace.
The other argument in favor of the compound startup approach is that sales and marketing has gotten much harder and less efficient for software businesses:
“You see this at every stage, but over the last five years, public companies are spending 50% more on sales and marketing, but they’re adding 10% less in new ARR with that increase in spend. Fundamentally, the business model for a lot of software is just broken. There’s too many businesses.”
Parker also believes AI sales agents will completely destroy outbound as a channel if they do eventually end up working.
Video source: @ycombinator (2025)
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Offshore
Video
Startup Archive
RT @ArthurMacwaters: Parker gave a great talk about this at a YC reunion recently
He pointed out that building a hyperspecialized company that carefully avoids markets held by large incumbents is actually dumb
You have to kill some giants to become the king.
So take on the incumbents and do the stack better
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RT @ArthurMacwaters: Parker gave a great talk about this at a YC reunion recently
He pointed out that building a hyperspecialized company that carefully avoids markets held by large incumbents is actually dumb
You have to kill some giants to become the king.
So take on the incumbents and do the stack better
Rippling founder Parker Conrad on the opportunity in building “compound startups”
Y Combinator CEO Garry Tan points out that the classic startup advice is “do one thing and do it extremely well,” but Parker took a different approach building Rippling that he calls the “compound startup.” He set out to solve multiple problems for their customers simultaneously.
Parker elaborates on this:
“I think it actually resembles a lot of software companies that were built 20+ years ago. If you look at companies like SAP, Oracle, and Microsoft, they actually look like compound software businesses… What happened is I think there was this moment in time where it really was possible to do one narrow thing because there was so much greenfield territory in software as everything shifted from on-prem to the cloud. You could go out and do this really narrow thing and turn it into a SaaS company. Almost all of these things ended up — at least for a period of time — being worth low-single-digit billions of dollars. And it was really easy to find a niche.”
But Parker believes this approach is suboptimal because it limits the types of problems you can solve for your customers — especially big customers.
“You can actually just wipe out a lot of work and make things function much better if you can take on a whole host of interrelated applications and build one comprehensive solution.”
Parker argues that if you can solve multiple problems for your customers with parallel applications, your product/market fit becomes much more powerful and harder to displace.
The other argument in favor of the compound startup approach is that sales and marketing has gotten much harder and less efficient for software businesses:
“You see this at every stage, but over the last five years, public companies are spending 50% more on sales and marketing, but they’re adding 10% less in new ARR with that increase in spend. Fundamentally, the business model for a lot of software is just broken. There’s too many businesses.”
Parker also believes AI sales agents will completely destroy outbound as a channel if they do eventually end up working.
Video source: @ycombinator (2025) tweet
Offshore
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Dimitry Nakhla | Babylon Capital®
ASML Holding $ASML Q4 Earnings Report🎯
Rev: €9.26B vs €9.02B est ✅ | +28% YoY
EPS: €6.85 vs €6.73 est ✅ | +31% YoY
___
Net bookings: €7.09B vs €3.53B est ✅
___
Guidance 📈
Rev Q1 2025: €7.5B-€8.0B vs €7.25B est ✅
Rev FY 2025: €30B-€35B vs $32.02B est ✅ https://t.co/BpEGp9OFEX
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ASML Holding $ASML Q4 Earnings Report🎯
Rev: €9.26B vs €9.02B est ✅ | +28% YoY
EPS: €6.85 vs €6.73 est ✅ | +31% YoY
___
Net bookings: €7.09B vs €3.53B est ✅
___
Guidance 📈
Rev Q1 2025: €7.5B-€8.0B vs €7.25B est ✅
Rev FY 2025: €30B-€35B vs $32.02B est ✅ https://t.co/BpEGp9OFEX
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Offshore
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InsideArbitrage
UK's Competition and Markets Authority (CMA) announced the launch of the merger inquiry for the acquisition of ChampionX $CHX by Schlumberger $SLB.
🧪The initial period will commence on January 30, 2025.
🧪The deadline for @CMAgovUK to announce its decision on whether to refer the merger for a phase 2 investigation is March 27, 2025.
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UK's Competition and Markets Authority (CMA) announced the launch of the merger inquiry for the acquisition of ChampionX $CHX by Schlumberger $SLB.
🧪The initial period will commence on January 30, 2025.
🧪The deadline for @CMAgovUK to announce its decision on whether to refer the merger for a phase 2 investigation is March 27, 2025.
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InsideArbitrage
$CPF Board authorizes new $30 million share repurchase program (4% of its current market cap) which replaces the prior $20 million share repurchase plan of January 2024
Q4 & FY 2024 Highlights
💰 Net Income: $11.3M ($0.42/share) Q4 | $53.4M ($1.97/share) FY
📈Net interest margin rose to 3.17%, up 10 bps from 3.07% last quarter
💵 Dividends & Buybacks: Quarterly dividend up 3.8% to $0.27/share | New $30M repurchase plan for 2025
🏦 Milestone: Central Pacific Bank joins the Federal Reserve System
▪️ In 2024, the company repurchased 49,960 shares for $0.9M (avg. $18.92/share) and returned $29.1M to shareholders via dividends and buybacks. 💰📈
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$CPF Board authorizes new $30 million share repurchase program (4% of its current market cap) which replaces the prior $20 million share repurchase plan of January 2024
Q4 & FY 2024 Highlights
💰 Net Income: $11.3M ($0.42/share) Q4 | $53.4M ($1.97/share) FY
📈Net interest margin rose to 3.17%, up 10 bps from 3.07% last quarter
💵 Dividends & Buybacks: Quarterly dividend up 3.8% to $0.27/share | New $30M repurchase plan for 2025
🏦 Milestone: Central Pacific Bank joins the Federal Reserve System
▪️ In 2024, the company repurchased 49,960 shares for $0.9M (avg. $18.92/share) and returned $29.1M to shareholders via dividends and buybacks. 💰📈
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Quiver Quantitative
The national debt increased by about $647M in the first week of Trump’s presidency.
Obviously too early for this to mean anything yet, it’s noisy data, but here’s how that compares to past years over a similar time period:
2024: +$58B
2023: +$3B
2022: +$51B
2021: +$3B
2020: +$33B
2019: +$2B
2018: +$236M
2017: -$10B
2016: +$30B
Planning on posting updates as more policies get enacted, and we get a larger sample size.
tweet
The national debt increased by about $647M in the first week of Trump’s presidency.
Obviously too early for this to mean anything yet, it’s noisy data, but here’s how that compares to past years over a similar time period:
2024: +$58B
2023: +$3B
2022: +$51B
2021: +$3B
2020: +$33B
2019: +$2B
2018: +$236M
2017: -$10B
2016: +$30B
Planning on posting updates as more policies get enacted, and we get a larger sample size.
tweet
Offshore
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Dimitry Nakhla | Babylon Capital®
6 months ago I suggested $DHR was trading for a substantial premium at $240💵 & that I’d be more interested closer to $200💵
After its Q4 earnings report, $DHR shares are down ~6% & down over the past 6 months
___
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)”
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% below tod[...]
6 months ago I suggested $DHR was trading for a substantial premium at $240💵 & that I’d be more interested closer to $200💵
After its Q4 earnings report, $DHR shares are down ~6% & down over the past 6 months
___
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)”
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% below tod[...]