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Wall St Engine
Berkshire Hathaway $BRK shares are down over 5% after Warren Buffett, who’s led the company for nearly 60 years, announced over the weekend he’ll step down as CEO by year-end. Greg Abel has been officially named his successor. Buffett will stay on as Chairman. https://t.co/1IudXwxVmO
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Berkshire Hathaway $BRK shares are down over 5% after Warren Buffett, who’s led the company for nearly 60 years, announced over the weekend he’ll step down as CEO by year-end. Greg Abel has been officially named his successor. Buffett will stay on as Chairman. https://t.co/1IudXwxVmO
WARREN BUFFETT TO STEP DOWN AS BERKSHIRE CEO AT YEAR-END
Warren Buffett just announced that the time has come for Greg Abel to take over as CEO of Berkshire Hathaway at the end of this year. He said he’ll formally bring it to the board of directors tomorrow.
END OF AN ERA! https://t.co/KJdAaYCxcG tweet
Wall St Engine
$HIMS NAMES AMAZON VETERAN NADIR KABBANI AS COO
Hims & Hers has hired Nader Kabbani, a longtime Amazon exec who helped launch Amazon Pharmacy and led the PillPack acquisition, as Chief Operating Officer. He steps in as the company pushes further into areas like blood testing and personalized health care.
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$HIMS NAMES AMAZON VETERAN NADIR KABBANI AS COO
Hims & Hers has hired Nader Kabbani, a longtime Amazon exec who helped launch Amazon Pharmacy and led the PillPack acquisition, as Chief Operating Officer. He steps in as the company pushes further into areas like blood testing and personalized health care.
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Offshore
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Quiver Quantitative
Wow.
Last year, we noticed a US politician buying stock in a German arms manufacturer.
We posted this report.
Rheinmetall stock has now risen 217% since the trade.
Not a typo: 217% https://t.co/EyxWhgXLa7
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Wow.
Last year, we noticed a US politician buying stock in a German arms manufacturer.
We posted this report.
Rheinmetall stock has now risen 217% since the trade.
Not a typo: 217% https://t.co/EyxWhgXLa7
tweet
Wall St Engine
Selected ISM Respondent Comments – April Report:
"Uncertainty remains the dominating theme as the U.S. government has been maddeningly inconsistent with tariff implementation." – Real Estate, Rental & Leasing
"Our business is in a state of crisis with uncertainty caused by both the ongoing trade war and the threats to federal funding of programs." – Public Administration
"Generally, pricing is lower, but there is some uncertainty of actual, final costs due to tariffs." – Other Services
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Selected ISM Respondent Comments – April Report:
"Uncertainty remains the dominating theme as the U.S. government has been maddeningly inconsistent with tariff implementation." – Real Estate, Rental & Leasing
"Our business is in a state of crisis with uncertainty caused by both the ongoing trade war and the threats to federal funding of programs." – Public Administration
"Generally, pricing is lower, but there is some uncertainty of actual, final costs due to tariffs." – Other Services
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Wall St Engine
TD COWEN: PRICE HIKES FROM TARIFFS EXPECTED TO APPEAR IN MAY INFLATION REPORT
The first signs of tariff-related cost pass-throughs to consumers are expected to appear in the May inflation report. The most significant impact will likely emerge over the summer as businesses and retailers deplete lower-cost inventories. For April, core inflation is expected to remain subdued, driven by softening travel and hotel rates and persistently high retail inventories. However, already-strained consumers are in a challenging position—facing a choice between absorbing higher prices from tariffs or increased costs stemming from shipping surcharges.
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TD COWEN: PRICE HIKES FROM TARIFFS EXPECTED TO APPEAR IN MAY INFLATION REPORT
The first signs of tariff-related cost pass-throughs to consumers are expected to appear in the May inflation report. The most significant impact will likely emerge over the summer as businesses and retailers deplete lower-cost inventories. For April, core inflation is expected to remain subdued, driven by softening travel and hotel rates and persistently high retail inventories. However, already-strained consumers are in a challenging position—facing a choice between absorbing higher prices from tariffs or increased costs stemming from shipping surcharges.
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App Economy Insights
RT @EconomyApp: $BRK Berkshire Hathaway Q1 FY25.
"The one problem with the investment business is that things don't come along in an orderly fashion." ~ Warren Buffett.
• Net profit $4.7B.
• Segment margin 13% (-1pp Y/Y).
• Investment losses (unrealized) $6.4B.
• Cash and short-term securities $348B.
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RT @EconomyApp: $BRK Berkshire Hathaway Q1 FY25.
"The one problem with the investment business is that things don't come along in an orderly fashion." ~ Warren Buffett.
• Net profit $4.7B.
• Segment margin 13% (-1pp Y/Y).
• Investment losses (unrealized) $6.4B.
• Cash and short-term securities $348B.
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Offshore
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Dimitry Nakhla | Babylon Capital®
A quality valuation analysis on $ASML 🧘🏽♂️
•NTM P/E Ratio: 26.34x
•10-Year Mean: 31.08x
•NTM FCF Yield: 3.39%
•10-Year Mean: 3.09%
As you can see, $ASML appears to be trading below fair value
Going forward, investors can receive ~18% MORE in earnings per share & ~10% MORE in FCF per share🧠***
Before we get into valuation, let’s take a look at why $ASML is an excellent business (*Financials in USD*)
BALANCE SHEET✅
•Cash & Short Term Inv: $9.85B
•Long-Term Debt: $3.98B
$ASML has a strong balance sheet & 70x FFO Interest Coverage
RETURN ON CAPITAL✅
•2021: 43.8%
•2022: 48.0%
•2023: 48.7%
•2024: 38.3%
•LTM: 48.2%
RETURN ON EQUITY✅
•2021: 49.0%
•2022: 59.4%
•2023: 70.4%
•2024: 47.4%
•LTM: 55.6%
$ASML has excellent return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2014: $7.09B
•2024: $29.28B
•CAGR: 15.23%
FREE CASH FLOW*
• $ASML FCF is very sporadic due to heavy capital expenditures & isn’t necessarily the most reliable way to analyze the company’s value
NORMALIZED EPS✅
•2014: $3.15
•2024: $20.03
•CAGR: 20.31%
SHARE BUYBACKS✅
•2018 Shares Outstanding: 426.40M
•LTM Shares Outstanding: 393.30M
By reducing its shares outstanding ~7.7%, $ASML increased its EPS by ~8.3% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 52.0%
•LTM Operating Margins: 33.8%
•LTM Net Income Margins: 28.3%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~18% MORE in EPS & 10% MORE in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $ASML has to grow earnings at a 13.17% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be more than the (13.17%) required growth rate:
2025E: $26.60 (21.6% YoY) *FY Dec
2026E: $30.75 (15.6% YoY)
2027E: $37.29 (20.7% YoY)
$ASML has a decent track record of meeting analyst estimates ~2 years out. HOWEVER, let’s be conservative & assume $ASML ends 2027 with $35.00*** in EPS (~6% below current estimates) & see its CAGR potential assuming different multiples:
29x P/E: $1,015💵 … ~17.0% CAGR
28x P/E: $980💵 … ~15.4% CAGR
27x P/E: $945💵 … ~13.9% CAGR
26x P/E: $910💵 … ~12.3% CAGR
25x P/E: $875💵 … ~10.7% CAGR
As you can see, $ASML appears to have attractive return potential EVEN if we assume greater or equal to 25x EPS (below its 10-year mean, current multiple, & justified given its quality, moat & growth rate)
Today at $687💵 $ASML appears to be a strong consideration for investment, albeit with extreme volatility
Additionally, we have some margin of safety by relying on a lower multiple & lower growth rate
As I’ve stated before, given its volatility, however, it’s wise to piece into $ASML — this way, you enhance your margin of safety while also positioning yourself to “win-win” if the stock moves up or down in the short-term 💵
#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 𝐬�[...]
A quality valuation analysis on $ASML 🧘🏽♂️
•NTM P/E Ratio: 26.34x
•10-Year Mean: 31.08x
•NTM FCF Yield: 3.39%
•10-Year Mean: 3.09%
As you can see, $ASML appears to be trading below fair value
Going forward, investors can receive ~18% MORE in earnings per share & ~10% MORE in FCF per share🧠***
Before we get into valuation, let’s take a look at why $ASML is an excellent business (*Financials in USD*)
BALANCE SHEET✅
•Cash & Short Term Inv: $9.85B
•Long-Term Debt: $3.98B
$ASML has a strong balance sheet & 70x FFO Interest Coverage
RETURN ON CAPITAL✅
•2021: 43.8%
•2022: 48.0%
•2023: 48.7%
•2024: 38.3%
•LTM: 48.2%
RETURN ON EQUITY✅
•2021: 49.0%
•2022: 59.4%
•2023: 70.4%
•2024: 47.4%
•LTM: 55.6%
$ASML has excellent return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2014: $7.09B
•2024: $29.28B
•CAGR: 15.23%
FREE CASH FLOW*
• $ASML FCF is very sporadic due to heavy capital expenditures & isn’t necessarily the most reliable way to analyze the company’s value
NORMALIZED EPS✅
•2014: $3.15
•2024: $20.03
•CAGR: 20.31%
SHARE BUYBACKS✅
•2018 Shares Outstanding: 426.40M
•LTM Shares Outstanding: 393.30M
By reducing its shares outstanding ~7.7%, $ASML increased its EPS by ~8.3% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 52.0%
•LTM Operating Margins: 33.8%
•LTM Net Income Margins: 28.3%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~18% MORE in EPS & 10% MORE in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $ASML has to grow earnings at a 13.17% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be more than the (13.17%) required growth rate:
2025E: $26.60 (21.6% YoY) *FY Dec
2026E: $30.75 (15.6% YoY)
2027E: $37.29 (20.7% YoY)
$ASML has a decent track record of meeting analyst estimates ~2 years out. HOWEVER, let’s be conservative & assume $ASML ends 2027 with $35.00*** in EPS (~6% below current estimates) & see its CAGR potential assuming different multiples:
29x P/E: $1,015💵 … ~17.0% CAGR
28x P/E: $980💵 … ~15.4% CAGR
27x P/E: $945💵 … ~13.9% CAGR
26x P/E: $910💵 … ~12.3% CAGR
25x P/E: $875💵 … ~10.7% CAGR
As you can see, $ASML appears to have attractive return potential EVEN if we assume greater or equal to 25x EPS (below its 10-year mean, current multiple, & justified given its quality, moat & growth rate)
Today at $687💵 $ASML appears to be a strong consideration for investment, albeit with extreme volatility
Additionally, we have some margin of safety by relying on a lower multiple & lower growth rate
As I’ve stated before, given its volatility, however, it’s wise to piece into $ASML — this way, you enhance your margin of safety while also positioning yourself to “win-win” if the stock moves up or down in the short-term 💵
#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 𝐬�[...]