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Finding Compounders
Warren Buffett on inflation proof businesses
These are the types of businesses you want to own in an inflationary environment https://t.co/te92C4V1L5
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Warren Buffett on inflation proof businesses
These are the types of businesses you want to own in an inflationary environment https://t.co/te92C4V1L5
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Offshore
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Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: A quality valuation analysis on $INTU 🧘🏽♂️
•NTM P/E Ratio: 29.70x
•10-Year Mean: 33.57x
•NTM FCF Yield: 3.49%
•10-Year Mean: 3.68%
As you can see, $INTU appears to be trading somewhere below fair value & near fair value
Going forward, investors can receive ~12% MORE in earnings per share & ~5% LESS in FCF per share 🧠***
Before we get into valuation, let’s take a look at why $INTU is a good business
BALANCE SHEET✅
•Cash & Short-Term Inv: $3.36B
•Long-Term Debt: $5.63B
$INTU has a strong balance sheet, an A- S&P Credit Rating & 22x FFO Interest Coverage
RETURN ON CAPITAL✅
•2019: 43.9%
•2020: 25.2%
•2021: 19.7%
•2022: 10.7%
•2023: 13.1%
•2024: 15.4%
RETURN ON EQUITY✅
•2019: 47.4%
•2020: 41.2%
•2021: 27.5%
•2022: 15.7%
•2023: 14.1%
•2024: 16.6%
$INTU has strong return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2014: $4.24B
•2024: $16.29B
•CAGR: 14.40%
FREE CASH FLOW✅
•2014: $1.34B
•2024: $4.69B
•CAGR: 13.34%
NORMALIZED EPS✅
•2014: $3.49
•2024: $16.94
•CAGR: 17.11%
PAID DIVIDENDS✅
•2014: $0.76
•2024: $3.60
•CAGR: 16.82%
SHARE BUYBACKS🆗
•2014 Shares Outstanding: 291.00M
•LTM Shares Outstanding: 284.00M
By reducing its shares outstanding ~2.4%, $INTU increased its EPS by ~2.5% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 79.6%
•LTM Operating Margins: 23.1%
•LTM Net Income Margins: 17.6%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~12% MORE in EPS & ~5% LESS in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $INTU has to grow earnings at a 14.85% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be slightly less than the (14.85%) required growth rate:
2025E: $19.29 (13.9% YoY) *FY Jul
2026E: $22.08 (14.4% YoY)
2027E: $25.14 (13.9% YoY)
$INTU has a great track record of meeting analyst estimates ~2 years out, but let’s assume $INTU ends 2027 with $25.14 in EPS & see its CAGR potential assuming different multiples:
32x P/E: $804.48💵 … ~14.3% CAGR
31x P/E: $779.34💵 … ~12.9% CAGR
30x P/E: $754.20💵 … ~11.4% CAGR
29x P/E: $729.06💵 … ~9.9% CAGR
28x P/E: $703.92💵 … ~8.3% CAGR
While it’s certainly reasonable for $INTU to trade for 32x, I wouldn’t want to rely on that assumption as it doesn’t leave us with a substantial margin of safety
Yet, given its quality, moat, predictability, & growth rate, I am comfortable relying on 29x - 31x multiple, making $INTU a good purchase today at $585💵
I consider $INTU a strong purchase with a substantial margin of safety closer to $545💵, or ~27.60x NTM earnings (~6% below todays price)
Given today’s estimates, at $545💵 I can reasonably expect ~10% CAGR while assuming an attractive & conservative 27x multiple
___
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 𝐧[...]
RT @DimitryNakhla: A quality valuation analysis on $INTU 🧘🏽♂️
•NTM P/E Ratio: 29.70x
•10-Year Mean: 33.57x
•NTM FCF Yield: 3.49%
•10-Year Mean: 3.68%
As you can see, $INTU appears to be trading somewhere below fair value & near fair value
Going forward, investors can receive ~12% MORE in earnings per share & ~5% LESS in FCF per share 🧠***
Before we get into valuation, let’s take a look at why $INTU is a good business
BALANCE SHEET✅
•Cash & Short-Term Inv: $3.36B
•Long-Term Debt: $5.63B
$INTU has a strong balance sheet, an A- S&P Credit Rating & 22x FFO Interest Coverage
RETURN ON CAPITAL✅
•2019: 43.9%
•2020: 25.2%
•2021: 19.7%
•2022: 10.7%
•2023: 13.1%
•2024: 15.4%
RETURN ON EQUITY✅
•2019: 47.4%
•2020: 41.2%
•2021: 27.5%
•2022: 15.7%
•2023: 14.1%
•2024: 16.6%
$INTU has strong return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2014: $4.24B
•2024: $16.29B
•CAGR: 14.40%
FREE CASH FLOW✅
•2014: $1.34B
•2024: $4.69B
•CAGR: 13.34%
NORMALIZED EPS✅
•2014: $3.49
•2024: $16.94
•CAGR: 17.11%
PAID DIVIDENDS✅
•2014: $0.76
•2024: $3.60
•CAGR: 16.82%
SHARE BUYBACKS🆗
•2014 Shares Outstanding: 291.00M
•LTM Shares Outstanding: 284.00M
By reducing its shares outstanding ~2.4%, $INTU increased its EPS by ~2.5% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 79.6%
•LTM Operating Margins: 23.1%
•LTM Net Income Margins: 17.6%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~12% MORE in EPS & ~5% LESS in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $INTU has to grow earnings at a 14.85% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be slightly less than the (14.85%) required growth rate:
2025E: $19.29 (13.9% YoY) *FY Jul
2026E: $22.08 (14.4% YoY)
2027E: $25.14 (13.9% YoY)
$INTU has a great track record of meeting analyst estimates ~2 years out, but let’s assume $INTU ends 2027 with $25.14 in EPS & see its CAGR potential assuming different multiples:
32x P/E: $804.48💵 … ~14.3% CAGR
31x P/E: $779.34💵 … ~12.9% CAGR
30x P/E: $754.20💵 … ~11.4% CAGR
29x P/E: $729.06💵 … ~9.9% CAGR
28x P/E: $703.92💵 … ~8.3% CAGR
While it’s certainly reasonable for $INTU to trade for 32x, I wouldn’t want to rely on that assumption as it doesn’t leave us with a substantial margin of safety
Yet, given its quality, moat, predictability, & growth rate, I am comfortable relying on 29x - 31x multiple, making $INTU a good purchase today at $585💵
I consider $INTU a strong purchase with a substantial margin of safety closer to $545💵, or ~27.60x NTM earnings (~6% below todays price)
Given today’s estimates, at $545💵 I can reasonably expect ~10% CAGR while assuming an attractive & conservative 27x multiple
___
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 𝐧[...]
Offshore
Dimitry Nakhla | Babylon Capital® RT @DimitryNakhla: A quality valuation analysis on $INTU 🧘🏽♂️ •NTM P/E Ratio: 29.70x •10-Year Mean: 33.57x •NTM FCF Yield: 3.49% •10-Year Mean: 3.68% As you can see, $INTU appears to be trading somewhere below fair value…
𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬 𝐨𝐫 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲.
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Offshore
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Startup Archive
RT @twistartups: Palmer thinks hardcore hobbyists make the best employees, because they'd already be obsessing about the subject and the product. Do you agree? Is it possible to get really good at your job if you didn't already LOVE that field to begin with? https://t.co/UoXWbd21ML
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RT @twistartups: Palmer thinks hardcore hobbyists make the best employees, because they'd already be obsessing about the subject and the product. Do you agree? Is it possible to get really good at your job if you didn't already LOVE that field to begin with? https://t.co/UoXWbd21ML
Palmer Luckey on what he looks for when hiring people at Anduril
“The most important advice that I can give people is to work on projects that you care about. Don’t look to school — whether it’s college or the state-mandated educational system. Don’t look to them to tell you, ‘Here’s what electronics projects you should be working on.’”
There’s two reasons Palmer gives aspiring young innovators this advice:
“Schools are often years (sometimes decades) behind what industry and hobbyists are actually doing.”
“When you’re working on something that you’re only doing for yourself, you’re going to make way better decisions in what you teach yourself and how you do things.”
In fact, this is also what he looks for when hiring people at Anduril:
“When I hire people at Anduril, I look for people who have done projects that were outside of what their work paid them to do or what their school made them do because that means they’re the type of person who is willing to work on things with their own money and their own time because they want to bring something to this world that wouldn’t have existed otherwise.”
Palmer continues:
“That’s what drive you to learn the most. That’s what drives you to have the right attitude around all this stuff.”
Video source: @ShawnRyan762 (2025) tweet
Offshore
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Ahmad Jivraj
Some great podcast episodes listed here
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Some great podcast episodes listed here
I’m a little late but time for some of my favorite podcasts from 2024. Starting it off was my favorite pod of the year. The @ShaneAParrish interview with Chris Davis. Loved this one. https://t.co/bJyqGkhFxV tweet
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Finding Compounders
Do stocks provide a sufficient hedge against inflation ? https://t.co/UdqeLDbTtu
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Do stocks provide a sufficient hedge against inflation ? https://t.co/UdqeLDbTtu
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Offshore
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