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Finding Compounders
Ever heard of Bernard Baruch ?
Me neither, till I read this article.
It's a must read, on a great investor https://t.co/keRjsOOmnl
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Ever heard of Bernard Baruch ?
Me neither, till I read this article.
It's a must read, on a great investor https://t.co/keRjsOOmnl
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Mads Capital
American big tech is innovative and all with the AI stuff
But have you thought about European banks? https://t.co/6wC4GKyL1J
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American big tech is innovative and all with the AI stuff
But have you thought about European banks? https://t.co/6wC4GKyL1J
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Mads Capital
a company designing graphics cards will decide the fate of the universe today https://t.co/nbdSlxq4Q2
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a company designing graphics cards will decide the fate of the universe today https://t.co/nbdSlxq4Q2
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Mads Capital
https://t.co/y1pCDtPhLa
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https://t.co/y1pCDtPhLa
Someone find me one Wikipedia page where virtually every fact or quote is a complete fabrication. tweet
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Mads Capital
https://t.co/z7bSEf92FF
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https://t.co/z7bSEf92FF
1) We are short AppLovin $APP, an AdTech platform for mobile games. Having peaked at $173 billion in market cap, we believe AppLovin could go down as the single largest stock promotion unraveling since at least the GFC. Our full report is now available on our website, https://t.co/RE8Wi3tuti tweet
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Stock Analysis Compilation
Cooper Investors Endowment Fund on BlueScope Steel (BSL) $BSL AU
Thesis: BlueScope Steel is a strategically positioned steel manufacturer poised to benefit from a rebound in residential construction and favorable tariffs, following its shift to branded products and attractive asset-backed valuations.
(Extract from their Q4 letter)
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Cooper Investors Endowment Fund on BlueScope Steel (BSL) $BSL AU
Thesis: BlueScope Steel is a strategically positioned steel manufacturer poised to benefit from a rebound in residential construction and favorable tariffs, following its shift to branded products and attractive asset-backed valuations.
(Extract from their Q4 letter)
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Dimitry Nakhla | Babylon Capital®
Yesterday I stated:
“Given its quality, moat, predictability, & growth rate, I am comfortable relying on 28x - 30x multiple, making $INTU a good purchase today at $560💵”
Today, $INTU opened +13%✅
As I suggested in the post attached below👇🏽
“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 28x - 30x multiple, making $INTU a good purchase today at $560💵
I consider $INTU a strong purchase with a substantial margin of safety closer to $525💵, or ~27.60x NTM earnings (~7% below todays price)
Given today’s estimates, at $525💵 I can reasonably expect ~10% CAGR while assuming an attractive & conservative 26x multiple”
A quality valuation analysis on $INTU 🧘🏽♂️
•NTM P/E Ratio: 28.74x
•10-Year Mean: 33.55x
•NTM FCF Yield: 3.60%
•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 ~16% MORE in earnings per share & ~2% 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 ~16% MORE in EPS & ~2% LESS in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $INTU has to grow earnings at a 14.37% 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 (14.37%) required growth rate:
2025E: $19.32 (14.1% YoY) *FY Jul
2026E: $22.13 (14.5% YoY)
2027E: $25.09 (13.4% YoY)
$INTU has a great track record of meeting analyst estimates ~2 years out, but let’s assume $INTU ends 2027 with $25.09 in EPS & see its CAGR potential assuming different multiples:
32x P/E: $802.88💵 … ~16.1% CAGR
31x P/E: $777.79💵 … ~14.6% CAGR
30x P/E: $752.70💵 … ~13.0% CAGR
29x P/E: $727.61💵 … ~11.5% CAGR
28x P/E: $702.52💵 … ~10.0% 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 28x - 30x multiple, making $INTU a good purchase today at $560💵
I consider $INTU a strong purchase with a substantial margin of safety closer to $525💵, or ~27.60x NTM earnings (~7% below todays price)
Given today’s estimates, at $525💵 I can reasonably expect ~10% CAGR while assuming an attractive & conservative 26x multiple
___
𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️: 𝐓𝐡𝐢𝐬 𝐢𝐬 𝐍𝐎𝐓 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐀[...]
Yesterday I stated:
“Given its quality, moat, predictability, & growth rate, I am comfortable relying on 28x - 30x multiple, making $INTU a good purchase today at $560💵”
Today, $INTU opened +13%✅
As I suggested in the post attached below👇🏽
“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 28x - 30x multiple, making $INTU a good purchase today at $560💵
I consider $INTU a strong purchase with a substantial margin of safety closer to $525💵, or ~27.60x NTM earnings (~7% below todays price)
Given today’s estimates, at $525💵 I can reasonably expect ~10% CAGR while assuming an attractive & conservative 26x multiple”
A quality valuation analysis on $INTU 🧘🏽♂️
•NTM P/E Ratio: 28.74x
•10-Year Mean: 33.55x
•NTM FCF Yield: 3.60%
•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 ~16% MORE in earnings per share & ~2% 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 ~16% MORE in EPS & ~2% LESS in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $INTU has to grow earnings at a 14.37% 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 (14.37%) required growth rate:
2025E: $19.32 (14.1% YoY) *FY Jul
2026E: $22.13 (14.5% YoY)
2027E: $25.09 (13.4% YoY)
$INTU has a great track record of meeting analyst estimates ~2 years out, but let’s assume $INTU ends 2027 with $25.09 in EPS & see its CAGR potential assuming different multiples:
32x P/E: $802.88💵 … ~16.1% CAGR
31x P/E: $777.79💵 … ~14.6% CAGR
30x P/E: $752.70💵 … ~13.0% CAGR
29x P/E: $727.61💵 … ~11.5% CAGR
28x P/E: $702.52💵 … ~10.0% 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 28x - 30x multiple, making $INTU a good purchase today at $560💵
I consider $INTU a strong purchase with a substantial margin of safety closer to $525💵, or ~27.60x NTM earnings (~7% below todays price)
Given today’s estimates, at $525💵 I can reasonably expect ~10% CAGR while assuming an attractive & conservative 26x multiple
___
𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️: 𝐓𝐡𝐢𝐬 𝐢𝐬 𝐍𝐎𝐓 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐀[...]