Thomas | heyapollo.com
UPDATE April 5 ETF Flows

Bitcoin ETFs Total Inflows +3K 🚀

New 9 ETFs + 5.9K BTC
Total Bitcoin Held in ETFs 846K BTC

Highlights:
Blackrock + 4.5K #BTC
GBTC -2.9K #BTC

Follow our ETF Tracker to see all the details. https://t.co/dFRzRqAJ0x
tweet

Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: A sober valuation analysis on $UNH 🧘🏽‍♂️

•NTM P/E Ratio: 16.50x
•5-Year Mean: 19.67x

•NTM FCF Yield: 6.84%
•5-Year Mean: 5.86%

As you can see, $UNH appears to be trading below fair value

Going forward, investors can receive ~19% MORE in earnings per share & ~17% MORE in FCF per share 🧠***

Before we get into valuation, let’s take a look at why $UNH is a great business

BALANCE SHEET✅
•Cash & Total Inv: $75.34B
•Long-Term Debt: $58.26B

$UNH has a strong balance sheet, an A+ S&P Credit Rating & 8.96x FFO Interest Coverage

RETURN ON CAPITAL✅
•2019: 18.6%
•2020: 19.1%
•2021: 19.1%
•2022: 19.4%
•2023: 19.1%

RETURN ON EQUITY✅
•2019: 24.1%
•2020: 23.8%
•2021: 24.1%
•2022: 25.4%
•2023: 25.0%

$UNH has strong return metrics, highlighting the financial efficiency of the business

REVENUES✅
•2013: $122.49B
•2023: $371.62B
•CAGR: 11.73%

FREE CASH FLOW✅
•2013: $5.68B
•2023: $25.68B
•CAGR: 16.28%

NORMALIZED EPS✅
•2013: $5.50
•2023: $25.12
•CAGR: 16.40%

PAID DIVIDENDS✅
•2013: $1.05
•2023: $7.29
•CAGR: 21.38%

SHARE BUYBACKS✅
•2013 Shares Outstanding: 1.02B
•LTM Shares Outstanding: 0.94B

By reducing its shares outstanding ~7.8%, $UNH increased its EPS by ~8.4% (assuming 0 growth)

MARGINS✅
•LTM Gross Margins: 14.6%
•LTM Operating Margins: 8.7%
•LTM Net Income Margins: 6.0%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive ~19% MORE in EPS & ~17% more in FCF per share

Using Benjamin Graham’s 2G rule of thumb, $UNH has to grow earnings at a 8.25% CAGR over the next several years to justify its valuation

Today, analysts anticipate 2024 - 2025 EPS growth over the next few years to be more than the (8.25%) required growth rate

However, consider the recent Medicare Rate Decision, I’ve assumed only a 10% EPS growth rate for 2025 & 2026 💡 (well below the current expected rates of 12.8% for both years):

2024E: $27.77 (10.6% YoY) *FY Dec
2025E: $30.54 (10.0% YoY)
2026E: $33.59 (10.0% YoY)

$UNH has an excellent track record of meeting analyst estimates ~2 years out, so let’s assume $UNH ends 2026 with $33.59 in EPS & see its CAGR potential assuming different multiples

19x P/E: $638.21💵 … ~14.3% CAGR

18x P/E: $604.62💵 … ~12.1% CAGR

17x P/E: $571.03💵 … ~9.9% CAGR

As you can see, $UNH appears to have attractive return potential even if we assume 18x earnings (a multiple below both its 5-year & 10-year mean) & a reduced growth rate

That’s a great rate of return for an excellent capital allocator & wide-moat recession-proof business like $UNH

Today at $458💵 $UNH appears to be a strong consideration for investment

However, keep in mind how volatile $UNH (and all health insurers) can get amid regulatory & political risks

Those considering $UNH would be wise to piece into the position, leaving room for additional purchases if $UNH continues to trade down to an even more attractive valuation

E.g. 1/3 of the purchase at $458💵, another 1/3 at $410💵, & 1/3 at $380💵

#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 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞, 𝐛𝐮𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬 𝐨𝐫 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲.
tweet

Hidden Value Gems
Had some questions about Kistos on my blog. My latest update was in Nov 2023. A bit puzzled by the gas storage deal, especially with so few details revealed. Ok to hold the stock, but not rushing to buy more with so many other cheap oil companies around.
Am I missing anything?
$KIST.L
tweet

Antonio Linares
Nothing will irritate European regulators more than $TSLA Robotaxis making public transport redundant.

I can’t wait.
tweet

Daniel
Li Lu, the "Asian Warren Buffett", turns 58 today!

He is a Chinese-born Superinvestor who has achieved a compounded annual return of about 30% for over 25 years.

To celebrate his Birthday, here are his 9 Keys to Successful Investing👇🏼 https://t.co/xJ8x6IXsud
tweet

Antonio Linares
Up 317% since. Will be at least a 10 bagger if my thesis plays out.

Do you think it will play out?

I have now doubled the number of $SPOT shares I own at $97.50/share. - Antonio Linares
tweet

Giuliano
Charlie Munger used to speak about the two types of knowledge that exist in this world.

Max Planck was the father of Quantum Mechanics. He did a lot of conferences in Europe. Once, his chaffeur, after memorizing the speech, said to him:

"Would you mind, Professor Planck, if I gave the lecture this time?"

Planck said that he could. Then the chaffeur gets in front of everybody and gave the whole conference on quantum mechanics. It went perfectly.

After he finished, a Professor stood up in the public and asked something, to which the chaffeur replied:

"Well, I'm surprised that in an advanced city like Munich I get such an elementary question. I'm going to ask my chaffeur to reply."

The two types of knowledge are Planck's knowledge and the chaffeur's knowledge. Planck had paid the dues and knew the thing. The latter had simply memorized the speech.

It's crucial to detect who has Planck knowledge and deposit confidence and value in them.
tweet

Giuliano
Yesterday, I had the absolute pleasure to have a conversation with @alc2022.

Antonio is brilliant. (Link below) https://t.co/mI7jxuqaY6
tweet

The Long Investor
RT @WOLF_Financial: 65 terms every investor needs to know:

(It took me 4 years and $100,000 to learn what I'll teach you in the next 90 seconds)
tweet

The Long Investor
Geo Political risks:

An actual War between Ukraine and Russia

An actual Israeli invasion of Palestine and an all out war between Iran and Israel.

Both Geo Political risks have existed and the US market climbs to all time highs.

These are Geo Politcal risks

What’s not a Geo Political risk in comparison is China.
tweet