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Dimitry Nakhla | Babylon Capital®
RT @MattWalshBlog: A roof with a direct sightline to the stage was not secured by secret service. Our choices here are extreme unbelievable negligence or something much worse.
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RT @MattWalshBlog: A roof with a direct sightline to the stage was not secured by secret service. Our choices here are extreme unbelievable negligence or something much worse.
The Shooter at the Trump Rally in Pennsylvania can be seen Dead on the Roof of a nearby Building, after being Killed by U.S. Secret Service Agents. https://t.co/6eUpiqfCeL tweet
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Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: A sober valuation analysis on $MA 🧘🏽♂️
•NTM P/E Ratio: 30.34x
•10-Year Mean: 31.23x
•NTM FCF Yield: 3.59%
•10-Year Mean: 3.43%
As you can see, $MA appears to be trading slightly below fair value
Going forward, investors can receive ~3% MORE in earnings per share & ~5% MORE in FCF per share 🧠***
Before we get into valuation, let’s take a look at why $MA is a super business
BALANCE SHEET✅
•Cash & Short Term Inv: $7.66B
•Long-Term Debt: $13.54B
$MA has a strong balance sheet, an A+ S&P Credit Rating & 19.79x FFO Interest Coverage
RETURN ON CAPITAL✅
•2019: 62.9%
•2020: 40.6%
•2021: 45.7%
•2022: 58.5%
•2023: 61.1%
•LTM: 64.1%
RETURN ON EQUITY✅
•2019: 141.4%
•2020: 102.5%
•2021: 124.7%
•2022: 144.0%
•2023: 167.4%
•LTM: 186.3%
$MA has excellent return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2013: $8.31B
•2023: $25.10B
•CAGR: 11.68%
FREE CASH FLOW✅
•2013: $3.98B
•2023: $11.61B
•CAGR: 11.30%
NORMALIZED EPS✅
•2013: $2.61
•2023: $12.26
•CAGR: 16.73%
PAID DIVIDENDS✅
•2013: $0.29
•2023: $2.37
•CAGR: 23.37%
SHARE BUYBACKS✅
•2013 Shares Outstanding: 1.21B
•LTM Shares Outstanding: 939M
By reducing its shares outstanding ~22.4%, $MA increased its EPS by ~28.8% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 100.0%
•LTM Operating Margins: 58.1%
•LTM Net Income Margins: 46.1%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~3% MORE in EPS & ~5% MORE in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $MA has to grow earnings at a 15.17% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be slightly more than the (15.17%) required growth rate:
2024E: $14.26 (16.3% YoY) *FY Dec
2025E: $16.58 (16.2% YoY)
2026E: $19.39 (17.0% YoY)
$MA has a good track record of meeting analyst estimates ~2 years out, but let’s assume $MA ends 2026 with $19.39 in EPS & see its CAGR potential assuming different multiples
31x P/E: $601.09💵 … ~13.4% CAGR
29.5x P/E: $572.00💵 … ~11.2% CAGR
28x P/E: $542.92💵 … ~9.0% CAGR
As you can see, $MA appears to have attractive return potential if we assume greater or equal to 29.5x earnings (slightly below the 10-year mean & justified given its quality & growth rate)
While there isn’t a great margin of safety today, $MA is such a high-quality business & has the potential to compound in the mid teens for the next 5 years & companies with strong & consistent earnings growth tend to look cheap years later (even if we thought they were “expensive” at the time)
Today at $440💵 $MA appears to be a worthwhile consideration for investment
#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.
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RT @DimitryNakhla: A sober valuation analysis on $MA 🧘🏽♂️
•NTM P/E Ratio: 30.34x
•10-Year Mean: 31.23x
•NTM FCF Yield: 3.59%
•10-Year Mean: 3.43%
As you can see, $MA appears to be trading slightly below fair value
Going forward, investors can receive ~3% MORE in earnings per share & ~5% MORE in FCF per share 🧠***
Before we get into valuation, let’s take a look at why $MA is a super business
BALANCE SHEET✅
•Cash & Short Term Inv: $7.66B
•Long-Term Debt: $13.54B
$MA has a strong balance sheet, an A+ S&P Credit Rating & 19.79x FFO Interest Coverage
RETURN ON CAPITAL✅
•2019: 62.9%
•2020: 40.6%
•2021: 45.7%
•2022: 58.5%
•2023: 61.1%
•LTM: 64.1%
RETURN ON EQUITY✅
•2019: 141.4%
•2020: 102.5%
•2021: 124.7%
•2022: 144.0%
•2023: 167.4%
•LTM: 186.3%
$MA has excellent return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2013: $8.31B
•2023: $25.10B
•CAGR: 11.68%
FREE CASH FLOW✅
•2013: $3.98B
•2023: $11.61B
•CAGR: 11.30%
NORMALIZED EPS✅
•2013: $2.61
•2023: $12.26
•CAGR: 16.73%
PAID DIVIDENDS✅
•2013: $0.29
•2023: $2.37
•CAGR: 23.37%
SHARE BUYBACKS✅
•2013 Shares Outstanding: 1.21B
•LTM Shares Outstanding: 939M
By reducing its shares outstanding ~22.4%, $MA increased its EPS by ~28.8% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 100.0%
•LTM Operating Margins: 58.1%
•LTM Net Income Margins: 46.1%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~3% MORE in EPS & ~5% MORE in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $MA has to grow earnings at a 15.17% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be slightly more than the (15.17%) required growth rate:
2024E: $14.26 (16.3% YoY) *FY Dec
2025E: $16.58 (16.2% YoY)
2026E: $19.39 (17.0% YoY)
$MA has a good track record of meeting analyst estimates ~2 years out, but let’s assume $MA ends 2026 with $19.39 in EPS & see its CAGR potential assuming different multiples
31x P/E: $601.09💵 … ~13.4% CAGR
29.5x P/E: $572.00💵 … ~11.2% CAGR
28x P/E: $542.92💵 … ~9.0% CAGR
As you can see, $MA appears to have attractive return potential if we assume greater or equal to 29.5x earnings (slightly below the 10-year mean & justified given its quality & growth rate)
While there isn’t a great margin of safety today, $MA is such a high-quality business & has the potential to compound in the mid teens for the next 5 years & companies with strong & consistent earnings growth tend to look cheap years later (even if we thought they were “expensive” at the time)
Today at $440💵 $MA appears to be a worthwhile consideration for investment
#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.
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Dimitry Nakhla | Babylon Capital®
If you carefully watch the assassination attempt on President Trump, you will notice that Trump tilts his head at the PRECISE moment the shot is taken.
That’s what saved his life.
Otherwise it would’ve went through the back of his skull.
GOD’S PLAN.
#Trump2024 #Trump
tweet
If you carefully watch the assassination attempt on President Trump, you will notice that Trump tilts his head at the PRECISE moment the shot is taken.
That’s what saved his life.
Otherwise it would’ve went through the back of his skull.
GOD’S PLAN.
#Trump2024 #Trump
tweet
Dimitry Nakhla | Babylon Capital®
20 Stocks That Have Maintained A ROIC Of 20% Or More For The Last 5 Years 💸
💳 Visa $V
🍎 Apple $AAPL
🏢 NVR Inc $NVR
🚗 Copart $CPRT
🤖 Fortinet $FTNT
🔩 Fastenal $FAST
💵 Paychex $PAYX
📐 Graco Inc $GGG
📈 MSCI Inc $MSCI
🚿 A O Smith $AOS
💵 Mastercard $MA
☁️ Microsoft $MSFT
📲 Taiwan Semi $TSM
⚙️ W W Grainger $GWW
💰Automatic Data $ADP
🖨️ Lam Research $LRCX
🎥 Meta Platforms $META
🐶 Idexx Laboratories $IDXX
🫀 Edwards Lifesciences $EW
🚛 Old Dominion Freight $ODFL
#stocks #investing
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20 Stocks That Have Maintained A ROIC Of 20% Or More For The Last 5 Years 💸
💳 Visa $V
🍎 Apple $AAPL
🏢 NVR Inc $NVR
🚗 Copart $CPRT
🤖 Fortinet $FTNT
🔩 Fastenal $FAST
💵 Paychex $PAYX
📐 Graco Inc $GGG
📈 MSCI Inc $MSCI
🚿 A O Smith $AOS
💵 Mastercard $MA
☁️ Microsoft $MSFT
📲 Taiwan Semi $TSM
⚙️ W W Grainger $GWW
💰Automatic Data $ADP
🖨️ Lam Research $LRCX
🎥 Meta Platforms $META
🐶 Idexx Laboratories $IDXX
🫀 Edwards Lifesciences $EW
🚛 Old Dominion Freight $ODFL
#stocks #investing
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iinvested
Very good write-up from Headwaters Capital on $CLMB
More fund letters here:
https://t.co/HhAAZQRRKy https://t.co/vPa2igEPIS
tweet
Very good write-up from Headwaters Capital on $CLMB
More fund letters here:
https://t.co/HhAAZQRRKy https://t.co/vPa2igEPIS
tweet
AkhenOsiris
Sounds like hyperscalers 2025 capex won't see a blip. Maybe more color (or confirmation) during their earnings next week.
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Sounds like hyperscalers 2025 capex won't see a blip. Maybe more color (or confirmation) during their earnings next week.
Nvidia has raised orders 25% for TSMC to manufacture its latest AI chips, Blackwell-architecture GPUs, on 4nm process, media report, citing unnamed supply chain sources, who also said production of the new chips will begin soon and could prompt TSMC to raise full year guidance. Strong demand for AI servers with the new Nvidia chips is being driven by Amazon, Google, Meta, Microsoft, server maker Dell, more. 1/2 $NVDA $TSM $AMZN $GOOGL $META $MSFT $DELL #semiconductors money.udn.com/money/story/56… - Dan Nystedttweet