The Institutional Limited Partner
Private Equity Market Update
Exit activity has shrunk in Q1 2024 to a 3-year low. No wonder why secondary volumes are increasing both LPs & GPs turn to the secondary market for liquidity reasons.
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Antonio Linares
Two trucks full of $TSLA cars.

Is this a sign? https://t.co/CLViMwIucg
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Antonio Linares
Seems like the market though that $AMD could chip away at $NVDA’s marketshare in two quarters.

It will take 5 years at least, in case of success.

@alc2022 Morning, what were thoughts on $AMD? A bit uninspring no? - Ryan
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Hidden Value Gems
Spending 8+ hours without the internet is hard. Not sure what is easier - staying without caffeine or internet 💺

As a value investor, I couldn't afford $35 on flight wifi (my monthly broadband cost) 🛜

Besides, you can focus better without distracting messages…

Hello America 🙌🇺🇸
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The Long Investor
RT @TheLongInvest: $PFE Earnings due on Weds before the market opens.

$22 would be the sweet spot to add

But has this beaten down stock got the ability to drop another 15% to get there?

Trying to catch the bottom is normally not a good idea. https://t.co/cN5K7uaQNa

$PFE bounced within the 0. 618 Fib - 0.78 Fib in 2009

It is showing signs of bouncing in this range now too.

It may be the ultimate cyclical stock and a 5.95% dividend too.

Very attractive long term hold. https://t.co/2cD5yeGfnl - The Long Investor
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 Q-Cap 
In the grand tapestry of market dynamics, each stock inevitably navigates its share of trials. Yet within this flux, discernment prevails: between enduring oblivion and transient setback lies the fertile ground of opportunity, where astute investors distinguish between the perishable and the perennial.
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Brandon Beylo
You won't find the answer to "proper diversification" in any investment textbook.

And that's because they won't tell you that the answer is equal parts Korean BBQ and Copper.

#NowYouKnow
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Brandon Beylo
Congrats to all those that survived the Metals Bear Market of 2024.

Remember, you all are heroes.

#copper #gold #silver https://t.co/GpyMf2zoKY
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Dimitry Nakhla | Babylon Capital®
I will be sharing an updated analysis on $SBUX tomorrow morning — in short, the earnings report was very poor & despite its value proposition, I believe it’s wise to approach the next few quarters with patience, allowing for the “sand to settle”

#stocks #investing

A sober valuation analysis on $SBUX 🧘🏽‍♂️

•NTM P/E Ratio: 21.32x
•10-Year Mean: 28.64x

•NTM FCF Yield: 4.22%
•10-Year Mean: 3.17%

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

Going forward, investors can expect to receive ~34% MORE in earnings per share & ~33% MORE in FCF per share🧠***

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

BALANCE SHEET🆗
•Cash & Equivalents: $3.95B
•Long-Term Debt: $13.59B

$SBUX has a decent balance sheet, a BBB+ S&P Credit Rating & 10.92x FFO Interest Coverage Ratio

RETURN ON CAPITAL✅
•2018: 34.9%
•2019: 76.4%
•2020: 9.0%
•2021: 25.5%
•2022: 29.1%
•2023: 33.2%

RETURN ON EQUITY🆗
•2018: 136.2%
•2019: (142.2%)
•2020: (13.2%)
•2021: (64.1%)
•2022: (46.9%)
•2023: (49.4%)

$SBUX has solid return metrics, highlighting the financial efficiency of the business

REVENUES✅
•2013: $14.87B
•2023: $35.98B
•CAGR: 9.23%

FREE CASH FLOW✅
•2013: $1.76B
•2023: $3.68B
•CAGR: 7.65%

NORMALIZED EPS✅
•2013: $1.10
•2023: $3.54
•CAGR: 12.39%

SHARE BUYBACKS✅
•2013 Shares Outstanding: 1.52B
•LTM Shares Outstanding: 1.15B

By reducing its shares outstanding ~24%, $SBUX increased its EPS by ~31% (assuming 0 growth)

MARGINS✅
•LTM Gross Margins: 27.4%
•LTM Operating Margins: 15.4%
•LTM Net Income Margins: 11.5%

PAID DIVIDENDS✅
•2013: $0.45
•2023: $2.16
•CAGR: 16.98%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive ~34% MORE in EPS & ~33% MORE in FCF per share

Using Benjamin Graham’s 2G rule of thumb, $SBUX has to grow earnings at an 10.62% 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 (10.13%) required growth rate:

2024E: $4.01 (13.3% YoY) *FY Sep
2025E: $4.65 (16.0% YoY)
2026E: $5.36 (15.3% YoY)

$SBUX has a good track record of meeting analyst estimates ~2 years out, BUT let’s assume $SBUX ends 2026 with $5.10 in EPS (5% below current estimates) & see its CAGR potential assuming different multiples

22x P/E: $112.20💵 … ~13.1% CAGR

21x P/E: $107.10💵 … ~11.0% CAGR

20x P/E: $102.00💵 … ~8.9% CAGR

As you can see EVEN when we assume a 20x - 21x multiple (a level that has rarely been breached in the past decade as you’ll see in the P/E chart) AND EVEN when we assume a 5% lower earnings estimate in 2026, $SBUX has attractive CAGR potential

So, there’s already a decent margin of safety 💪🏽

When we assume >22x (also well below its 10-year average and on the lower end of its valuation range), $SBUX has the potential to compound in the mid-teens

$SBUX appears to be an attractive consideration today at $88.00💵

$SBUX reports earnings today after close 🗓️

#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. - Dimitry Nakhla | Babylon Capital®
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