Antonio Linares
The problem with working in a traditional work setting is that you spend 90% of your time worrying about things that are not investment theses.

I believe this is why most funds don’t work. Groups of people can’t produce good investment ideas.
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Antonio Linares
RT @mindthelongterm: @alc2022 X is great for the discoverability of ideas, the work still has to be done...this will never change.
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Giuliano
"If everybody is thinking alike, then somebody isn't thinking"
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Antonio Linares
$SPOT and $PLTR shareholders during 2022, only to then rise above the ashes https://t.co/jLlSxIHX1q
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Giuliano
Fascinating read.

The scientific approach is a key to finding the truth.

While finance is not technically a science, taking the scientific (or "evidence") approach to understanding its many puzzles can be helpful.

A great read Richard Feynman (1974):

h/t @Giuliano_Mana

https://t.co/Vvi5qT1hhY - Ryan Telford
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Giuliano
I think this is the best book I’ve read. https://t.co/5JvrwFkW4d
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The Long Investor
$SPY results https://t.co/Ryd14eyeSY
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Antonio Linares
To compete with $TSLA in AI, you have to get as good in manufacturing as them.

This is near impossible at this stage and only gets harder.
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The Institutional Limited Partner
Q1 2024 - Secondary Market Update
~20% growth in deal volume vs Q1 2023. Volume is estimated between $27-32 billion, according to PJT Park Hill. FY2024E projected at $135Bn.

LP-led deals account for 65%, GP-led deals for 30%, and Structured solutions for 5% of the market volume.

Pricing slightly improved for LP-led deals depending on the asset class.
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Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: A sober valuation analysis on $META 🧘🏽‍♂️

•NTM P/E Ratio: 21.61x
•5-Year Mean: 22.34x

•NTM FCF Yield: 4.39%
•5-Year Mean: 3.69%

As you can see, $META appears to be slightly undervalued

Going forward, investors can expect to receive ~3% MORE in earnings per share & ~19% MORE in FCF per share🧠***

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

BALANCE SHEET✅
•Cash & Equivalents: $58.12B
•Long-Term Debt: $18.39B

$META has an excellent balance sheet, an AA- S&P Credit Rating & 171x FFO Interest Coverage Ratio

RETURN ON CAPITAL✅
•2018: 29.2%
•2019: 26.0%
•2020: 23.5%
•2021: 33.7%
•2022: 22.0%
•2023: 26.3%

RETURN ON EQUITY✅
•2018: 27.9%
•2019: 20.0%
•2020: 25.4%
•2021: 31.1%
•2022: 18.5%
•2023: 28.0%

$META has great return metrics, highlighting the financial efficiency of the business

REVENUES✅
•2018: $55.84B
•2023: $134.90B
•CAGR: 19.29%

FREE CASH FLOW✅
•2018: $15.35B
•2023: $43.84B
•CAGR: 23.35%

NORMALIZED EPS✅
•2018: $7.57
•2023: $14.87
•CAGR: 14.45%

SHARE BUYBACKS✅
•2018 Shares Outstanding: 2.92B
•LTM Shares Outstanding: 2.63B

By reducing its shares outstanding ~9.9%, $META increased its EPS by ~10.9% (assuming 0 growth)

MARGINS✅
•LTM Gross Margins: 81.4%
•LTM Operating Margins: 39.8%
•LTM Net Income Margins: 32.1%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive ~3% MORE in EPS & ~19% MORE in FCF per share

Using Benjamin Graham’s 2G rule of thumb, $META has to grow earnings at a 10.81% CAGR over the next several years to justify its valuation

Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be greater than the (10.81%) required growth rate:

2024E: $19.98 (34.3% YoY)
2025E: $23.05 (15.4% YoY)
2026E: $26.66 (15.7% YoY)

$META has a decent track record of meeting analyst estimates ~2 years out, so let’s assume $META ends 2026 with $26.66 in EPS & see its CAGR potential assuming different multiples

24x P/E: $639.84💵 … ~15.4% CAGR

23x P/E: $613.18💵 … ~13.6% CAGR

22x P/E: $586.52💵 … ~11.7% CAGR

21x P/E: $559.86💵 … ~9.8% CAGR

As you can see, $META appears to have double-digit CAGR potential if we assume >21x earnings, a multiple below its 5-year average (22.34x) and a multiple below what may be justified given its mid-teens earnings growth rate

I also believe that Mark Zuckerberg will continue to execute exceptionally well, as he has always done

Furthermore, the increased investment in future growth and necessary Al development, which has the potential to lead to better growth prospects, should be viewed with a bullish tone rather than a bearish one

Today at $441💵 $META appears to be a good consideration for investment

#stocks #investing
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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.
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Antonio Linares
Im hindsight the world will understand that $TSLA was just abstracting physical constraints away to be able to fully focus on software.
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