Offshore
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Hidden Value Gems
Economy is too complex to draw conclusions from just one chart, but this one made me pause...
60-day delinquencies are back to the GFC level, although this has not translated into much higher credit spreads yet. https://t.co/uYQhebA6X8
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Economy is too complex to draw conclusions from just one chart, but this one made me pause...
60-day delinquencies are back to the GFC level, although this has not translated into much higher credit spreads yet. https://t.co/uYQhebA6X8
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Offshore
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Stock Analysis Compilation
Baron Capital on Tips Industries $TIPSINDLTD IN
Thesis: Tips Industries is poised for strong growth, riding the wave of India's digital transformation with a monetization strategy that promises substantial returns
(Extract from their Q2 letter) https://t.co/XbXijCKLm7
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Baron Capital on Tips Industries $TIPSINDLTD IN
Thesis: Tips Industries is poised for strong growth, riding the wave of India's digital transformation with a monetization strategy that promises substantial returns
(Extract from their Q2 letter) https://t.co/XbXijCKLm7
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Offshore
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Stock Analysis Compilation
Munro on ASMI $ASMI NA
Thesis: ASM International is a key enabler in the semiconductor industry's transition to advanced logic chips, poised for strong growth driven by its leadership in Atomic Layer Deposition technology
(Extract from their Q2 letter) https://t.co/9JMzZ4RRbS
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Munro on ASMI $ASMI NA
Thesis: ASM International is a key enabler in the semiconductor industry's transition to advanced logic chips, poised for strong growth driven by its leadership in Atomic Layer Deposition technology
(Extract from their Q2 letter) https://t.co/9JMzZ4RRbS
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Offshore
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Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: A sober valuation analysis on $GOOG 🧘🏽♂️
•NTM P/E Ratio: 18.63x
•10-Year Mean: 24.56x
•NTM FCF Yield: 4.59%
•10-Year Mean: 4.34%
As you can see, $GOOG appears to be trading below fair value
Going forward, investors can receive ~31% MORE in earnings per share & ~6% MORE 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 ~31% MORE in EPS & ~16% MORE in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $GOOG has to grow earnings at a 9.32% 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 (9.32%) required growth rate:
2024E: $7.63 (31.5% YoY) *FY Dec
2025E: $8.69 (14.0% 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
23x P/E: $229.31💵 … ~20.5% CAGR
22x P/E: $219.34💵 … ~18.3% CAGR
21x P/E: $209.37💵 … ~16.0% CAGR
20x P/E: $199.40💵 … ~13.6% CAGR
19x P/E: $189.43💵 … ~11.2% CAGR
As you can see, $GOOG appears to have attractive return potential EVEN if we assume >19x earnings (a multiple well below its 5-year & 10-year mean)
At >20x earnings, $GOOG CAGR potential is excellent & it’s not unreasonable for the business to even trade for ~23x (given its growth rate, moat, balance sheet, & exemplary capital allocation)
Today at $149.50💵 $GOOG appears to be a strong consideration for investment
#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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RT @DimitryNakhla: A sober valuation analysis on $GOOG 🧘🏽♂️
•NTM P/E Ratio: 18.63x
•10-Year Mean: 24.56x
•NTM FCF Yield: 4.59%
•10-Year Mean: 4.34%
As you can see, $GOOG appears to be trading below fair value
Going forward, investors can receive ~31% MORE in earnings per share & ~6% MORE 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 ~31% MORE in EPS & ~16% MORE in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $GOOG has to grow earnings at a 9.32% 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 (9.32%) required growth rate:
2024E: $7.63 (31.5% YoY) *FY Dec
2025E: $8.69 (14.0% 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
23x P/E: $229.31💵 … ~20.5% CAGR
22x P/E: $219.34💵 … ~18.3% CAGR
21x P/E: $209.37💵 … ~16.0% CAGR
20x P/E: $199.40💵 … ~13.6% CAGR
19x P/E: $189.43💵 … ~11.2% CAGR
As you can see, $GOOG appears to have attractive return potential EVEN if we assume >19x earnings (a multiple well below its 5-year & 10-year mean)
At >20x earnings, $GOOG CAGR potential is excellent & it’s not unreasonable for the business to even trade for ~23x (given its growth rate, moat, balance sheet, & exemplary capital allocation)
Today at $149.50💵 $GOOG appears to be a strong consideration for investment
#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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Offshore
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Librarian Capital
Nobody rings a bell at the top, UK specialty chem edition
Croda CFO Jez Maiden announced exit in Nov-22
11 months AFTER the peak
$CRDA down 40% since announcement
Treatt CFO Richard Hope announced exit in Jun-21
6 months BEFORE the peak
$TET down 60% since announcement https://t.co/ZEzDXJtSri
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Nobody rings a bell at the top, UK specialty chem edition
Croda CFO Jez Maiden announced exit in Nov-22
11 months AFTER the peak
$CRDA down 40% since announcement
Treatt CFO Richard Hope announced exit in Jun-21
6 months BEFORE the peak
$TET down 60% since announcement https://t.co/ZEzDXJtSri
tweet
Offshore
Photo
Librarian Capital
Nobody rings a bell at the top, UK specialty chem edition
Croda CFO Jez Maiden announced exit in Nov-22
11 months AFTER the peak
$CRDA down 40% since announcement
Treatt CFO Richard Hope announced exit in Jun-21
6 months BEFORE the peak
$TET down 60% since announcement https://t.co/frBW2llOVE
tweet
Nobody rings a bell at the top, UK specialty chem edition
Croda CFO Jez Maiden announced exit in Nov-22
11 months AFTER the peak
$CRDA down 40% since announcement
Treatt CFO Richard Hope announced exit in Jun-21
6 months BEFORE the peak
$TET down 60% since announcement https://t.co/frBW2llOVE
tweet