⁠Invest In Assets 📈
Amazon's 10-year revenue CAGR from its business segments: https://t.co/BENOooT2oC
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⁠iinvested
2Q'24 Conestoga Capital Advisors, LLC new buys $ULS, $MSA, $SPXC, $AGYS, $ERII, $UTI

Read the full quarterly letter here:
https://t.co/WRGkdL2eBG https://t.co/zbzTN8A0g1
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⁠Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: A sober valuation analysis on $GOOG 🧘🏽‍♂️

•NTM P/E Ratio: 20.89x
•10-Year Mean: 23.59x

•NTM FCF Yield: 4.14%
•10-Year Mean: 4.17%

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

Going forward, investors can receive ~13% MORE in earnings per share & roughly the same in FCF per share 🧠***

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

BALANCE SHEET✅
•Cash & Short-Term Inv: $100.73B
•Long-Term Debt: $11.88B

$GOOG has a strong balance sheet, an AA+ S&P Credit Rating & 303x FFO Interest Coverage

RETURN ON CAPITAL✅
•2019: 16.4%
•2020: 16.2%
•2021: 27.6%
•2022: 26.1%
•2023: 28.1%
•LTM: 30.9%

RETURN ON EQUITY✅
•2019: 18.1%
•2020: 19.0%
•2021: 32.1%
•2022: 23.6%
•2023: 27.4%
•LTM: 30.9%

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

REVENUES✅
•2013: $55.52B
•2023: $307.39
•CAGR: 18.66%

FREE CASH FLOW✅
•2013: $11.30B
•2023: $69.50B
•CAGR: 19.91%

NORMALIZED EPS✅
•2013: $2.19
•2023: $5.80
•CAGR: 10.22%

SHARE BUYBACKS✅
•2018 Shares Outstanding: 14.07B
•LTM Shares Outstanding: 12.58B

By reducing its shares outstanding ~10.5%, $GOOG increased its EPS by ~11.7% (assuming 0 growth)

MARGINS✅
•LTM Gross Margins: 57.6%
•LTM Operating Margins: 31.0%
•LTM Net Income Margins: 26.7%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive ~13% MORE in EPS & roughly the same in FCF per share

Using Benjamin Graham’s 2G rule of thumb, $GOOG has to grow earnings at a 10.45% CAGR over the next several years to justify its valuation

Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be more than the (10.45%) required growth rate:

2024E: $7.62 (31.5% YoY) *FY Dec
2025E: $8.68 (13.9% YoY)
2026E: $9.97 (14.8% YoY)

$GOOG has an excellent track record of meeting analyst estimates ~2 years out, so let’s assume $GOOG ends 2026 with $9.97 in EPS & see its CAGR potential assuming different multiples

24x P/E: $239.28💵 … ~16.7% CAGR

23x P/E: $229.31💵 … ~14.6% CAGR

22x P/E: $219.34💵 … ~12.5% CAGR

As you can see, $GOOG appears to have attractive return potential if we assume >22x earnings (a multiple below its 5-year & 10-year mean)

At 23x - 24x earnings, $GOOG CAGR potential is excellent & it’s not unreasonable for the business to trade for ~24x (given current growth rate estimates, its moat, balance sheet, & exemplary capital allocation)

Today at $168.00💵 $GOOG appears to be an attractive consideration for investment

$GOOG presents excellent value & a wide margin of safety closer to $150💵 or ~10% below today’s price

At $150💵, investors can reasonably expect ~13.4% CAGR even assuming 20x earnings

#stocks #investing $GOOGL
___

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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⁠Quality Stocks
🇺🇸 Exciting News! My latest article on Alphabet $GOOGL is now live!

Head over to the link in my bio to read it

🔍 In the article, I delve into Alphabet's business model, its diversification strategies, and overall corporate strategy

💡 I also cover the company's AI advancements, analyze key metrics, assess potential risks and opportunities, and provide a fair value estimation.

Don't miss out!
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⁠Matt McGarry
This sent the announcement!

If you're on my email list, check it out.

Tomorrow is the most important day for me this year:

1) My daughter's 3rd birthday party. Hello Kitty theme. Still much to do and prepare for.

2) I'm announcing a new product in my newsletter.

I just wrapped up the message going out to 25k+ subscribers.

Nervous for both 😅 - Matt McGarry
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⁠Stock Analysis Compilation
Loomis Sayles on Alnylam $ALNY US

Thesis: Alnylam's innovative biotech platform and substantial late-stage pipeline present a significant growth opportunity, with the company poised to transition to profitability and long-term value creation

(Extract from their Q2 letter) https://t.co/Atp9F7jV0r
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⁠Invest In Assets 📈
RT @InvestInAssets: Top European Quality Stocks 💎

Sweden 🇸🇪
- Evolution Gaming
- Atlas Copco
- Lifco

Italy 🇮🇹
- Luxottica
- Moncler
- Ferrari

Spain 🇪🇸
- Clinica Baviera
- Amadeus
- Inditex

Netherlands 🇳🇱
- Topicus
- Adyen
- ASML

Denmark 🇩🇰
- Novo Nordisk
- Coloplast
- DSV

What else?
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⁠Quality Stocks
🛡 Rough week for the European defense sector. The market used the lower than expected 2025 German defense budget as an excuse for profit taking after 18 good months

Is this consolidation an (beginning of an) opportunity?
🇸🇪 Saab $SAAB -8.0%
🇩🇪 Rheinmetall $RHM -4.8%
🇬🇧 BAE Systems $BAE -2.8%
🇫🇷 Dassault Aviation $AM -2.1%
🇮🇹 Leonardo $LDO -1.8%
🇳🇴 Kongsberg $KOG -0.1%
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⁠App Economy Insights
📊 This Week in Visuals:

👷 Home Depot
✅ Intuit
🔒 Palo Alto Networks
❄️ Snowflake
👔 Workday
💻 Zoom
🚲 Peloton
https://t.co/2ScYqLBwaz
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⁠Quality Stocks
💡 Share 3 stocks currently in your watchlist and your investment thesis for each

I begin 👇

🇺🇸 Amazon $AMZN. Besides e-commerce and AWS, the strategy to become a one-stop shop for business needs is interesting. Good potential upside on margins. Almost the same price than in 2020 and reasonable fwd PE

🇦🇺 Netwealth $NWL. The Australian AJ Bell. I like the business model "platform + investment". I need a better price but the drop due to the results might be a sign of a future consolidatiob

🇨🇦 Lululemon $LULU. Even if the company reduces its outlooks, the stock remains reasonably valued. The potential growth coming from international development and new store openings is interesting. The sector has been beaten down and I also watch other companies like $DECK $ONON $SKX
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