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Stock Analysis Compilation
Arauca Capital on Moberg Pharma $MOB SS
Moberg Pharma’s MOB-015 shows strong market leadership and growth potential in Europe, with promising prospects for wider commercialization in the coming years
(Extract from their Q2 letter) https://t.co/9YhHJr70aT
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Arauca Capital on Moberg Pharma $MOB SS
Moberg Pharma’s MOB-015 shows strong market leadership and growth potential in Europe, with promising prospects for wider commercialization in the coming years
(Extract from their Q2 letter) https://t.co/9YhHJr70aT
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Hidden Value Gems
Robinhood has one of the highest option trading costs if bid/offer spreads are included which are 7% in their case.
I think cash equity brokers should also be judged on this, especially for small-caps.
$HOOD https://t.co/X9TUOaIpn3
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Robinhood has one of the highest option trading costs if bid/offer spreads are included which are 7% in their case.
I think cash equity brokers should also be judged on this, especially for small-caps.
$HOOD https://t.co/X9TUOaIpn3
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Librarian Capital
Nicotine pouches: Finnish parliamentary committee supports changing the Tobacco Act to include pouches
Nicotine pouches will thus be subject to sales permits, nicotine limits, flavor limits, age restrictions, etc.
Regulation is catching up
$PM $BATS $HAYPP https://t.co/Y91TgBO1HQ
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Nicotine pouches: Finnish parliamentary committee supports changing the Tobacco Act to include pouches
Nicotine pouches will thus be subject to sales permits, nicotine limits, flavor limits, age restrictions, etc.
Regulation is catching up
$PM $BATS $HAYPP https://t.co/Y91TgBO1HQ
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Hidden Value Gems
Exor to host H1 2024 conference call tomorrow 👇🏼
I hope they keep things simple - we want higher value per share, not new structures, committees, VC investments, more new faces and so on.
#Exor $EXO.AS https://t.co/DtgsYK9XRO
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Exor to host H1 2024 conference call tomorrow 👇🏼
I hope they keep things simple - we want higher value per share, not new structures, committees, VC investments, more new faces and so on.
#Exor $EXO.AS https://t.co/DtgsYK9XRO
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Stock Analysis Compilation
VGI Partners on Deutsche Börse AG $DB1 GR
Deutsche Börse’s diversified portfolio and cyclical tailwinds, along with its strategic acquisitions, position it for long-term growth at an attractive valuation
(Extract from their Q2 letter) https://t.co/tTTt3E8o3Y
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VGI Partners on Deutsche Börse AG $DB1 GR
Deutsche Börse’s diversified portfolio and cyclical tailwinds, along with its strategic acquisitions, position it for long-term growth at an attractive valuation
(Extract from their Q2 letter) https://t.co/tTTt3E8o3Y
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Dimitry Nakhla | Babylon Capital®
A sober valuation analysis on $PYPL 🧘🏽♂️
•NTM P/E Ratio: 17.24x
•All-Time Mean: 29.77x
•NTM FCF Yield: 7.79%
•All-Time Mean: 5.02%
As you can see, $PYPL appears to be trading below fair value
Going forward, investors can receive ~72% MORE in earnings per share & ~55% MORE in FCF per share 🧠***
Before we get into valuation, let’s take a look at why $PYPL is a good business
BALANCE SHEET✅
•Cash & Short-Term Inv: $13.62B
•Long-Term Debt: $9.73B
$PYPL has an excellent balance sheet, an A- S&P Credit Rating, & 20.78x FFO Interest Coverage
RETURN ON CAPITAL✅
•2019: 12.4%
•2020: 11.5%
•2021: 13.6%
•2022: 12.7%
•2023: 14.8%
•LTM: 15.8%
RETURN ON EQUITY✅
•2019: 15.2%
•2020: 22.7%
•2021: 20.0%
•2022: 11.5%
•2023: 20.5%
•LTM: 22.0%
$PYPL has strong return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2018: $15.45B
•2023: $29.77B
•CAGR: 14.01%
FREE CASH FLOW❌*
•2018: $4.66B
•2023: $4.22B
•Decrease: (9.44%)
*LTM FCF is $6.70B 📈
*Also, FCF in 2017 was $1.86B, so FCF rose ~150% in 2018 start date (“normalizing” the decline above)
NORMALIZED EPS✅
•2018: $2.42
•2023: $5.10
•CAGR: 16.07%
SHARE BUYBACKS✅
•2015 Shares Outstanding: 1.20B
•LTM Shares Outstanding: 1.08B
By reducing its shares outstanding by 10.0%, $PYPL increased its EPS by 11.1% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 39.6%
•LTM Operating Margins: 17.1%
•LTM Net Income Margins: 14.3%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~72% MORE in EPS & ~55% MORE in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $PYPL has to grow earnings at an 8.62% 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 (8.62%) required growth rate:
2024E: $4.41 (-13.5% YoY) *FY Dec
2025E: $4.83 (9.5% YoY)
2026E: $5.40 (11.7% YoY)
$PYPL has an ok track record of meeting analyst estimates ~2 years out, but let’s assume $PYPL ends 2026 with $5.40 in EPS & see its CAGR potential assuming different multiples
20x P/E: $108.00💵 … ~15.6% CAGR
19x P/E: $102.60💵 … ~13.0% CAGR
18x P/E: $97.20💵 … ~10.4% CAGR
As you can see, $PYPL appears to have attractive return potential if we assume >18x earnings & aggressive return potential if we assume >20x earnings
The 🔑 isn't a mean reversion in $PYPL's multiple, but a modest increase (still below its historical average) - a reasonable and safe assumption
Everyone wanted $PYPL when it traded 50x earnings, not many wanted it when it traded for 12x earnings ☯️
There’s STILL negative sentiment around $PYPL and this sentiment is already being changed as management continues to make progress towards its goals as we’ve seen in the most recent quarters
Today at $77.67💵 $PYPL still appears to be a strong consideration for investment (albeit, with some turnaround & competitive risks)
#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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A sober valuation analysis on $PYPL 🧘🏽♂️
•NTM P/E Ratio: 17.24x
•All-Time Mean: 29.77x
•NTM FCF Yield: 7.79%
•All-Time Mean: 5.02%
As you can see, $PYPL appears to be trading below fair value
Going forward, investors can receive ~72% MORE in earnings per share & ~55% MORE in FCF per share 🧠***
Before we get into valuation, let’s take a look at why $PYPL is a good business
BALANCE SHEET✅
•Cash & Short-Term Inv: $13.62B
•Long-Term Debt: $9.73B
$PYPL has an excellent balance sheet, an A- S&P Credit Rating, & 20.78x FFO Interest Coverage
RETURN ON CAPITAL✅
•2019: 12.4%
•2020: 11.5%
•2021: 13.6%
•2022: 12.7%
•2023: 14.8%
•LTM: 15.8%
RETURN ON EQUITY✅
•2019: 15.2%
•2020: 22.7%
•2021: 20.0%
•2022: 11.5%
•2023: 20.5%
•LTM: 22.0%
$PYPL has strong return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2018: $15.45B
•2023: $29.77B
•CAGR: 14.01%
FREE CASH FLOW❌*
•2018: $4.66B
•2023: $4.22B
•Decrease: (9.44%)
*LTM FCF is $6.70B 📈
*Also, FCF in 2017 was $1.86B, so FCF rose ~150% in 2018 start date (“normalizing” the decline above)
NORMALIZED EPS✅
•2018: $2.42
•2023: $5.10
•CAGR: 16.07%
SHARE BUYBACKS✅
•2015 Shares Outstanding: 1.20B
•LTM Shares Outstanding: 1.08B
By reducing its shares outstanding by 10.0%, $PYPL increased its EPS by 11.1% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 39.6%
•LTM Operating Margins: 17.1%
•LTM Net Income Margins: 14.3%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~72% MORE in EPS & ~55% MORE in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $PYPL has to grow earnings at an 8.62% 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 (8.62%) required growth rate:
2024E: $4.41 (-13.5% YoY) *FY Dec
2025E: $4.83 (9.5% YoY)
2026E: $5.40 (11.7% YoY)
$PYPL has an ok track record of meeting analyst estimates ~2 years out, but let’s assume $PYPL ends 2026 with $5.40 in EPS & see its CAGR potential assuming different multiples
20x P/E: $108.00💵 … ~15.6% CAGR
19x P/E: $102.60💵 … ~13.0% CAGR
18x P/E: $97.20💵 … ~10.4% CAGR
As you can see, $PYPL appears to have attractive return potential if we assume >18x earnings & aggressive return potential if we assume >20x earnings
The 🔑 isn't a mean reversion in $PYPL's multiple, but a modest increase (still below its historical average) - a reasonable and safe assumption
Everyone wanted $PYPL when it traded 50x earnings, not many wanted it when it traded for 12x earnings ☯️
There’s STILL negative sentiment around $PYPL and this sentiment is already being changed as management continues to make progress towards its goals as we’ve seen in the most recent quarters
Today at $77.67💵 $PYPL still appears to be a strong consideration for investment (albeit, with some turnaround & competitive risks)
#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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Stock Analysis Compilation
Harris Associates on First Citizens BancShares $FCNCA
First Citizens BancShares’ strategic acquisitions, including the value-accretive Silicon Valley Bank purchase, position it for substantial growth, with shares trading at an attractive discount
(Extract from their Q2 letter) https://t.co/3LLGfjz2ld
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Harris Associates on First Citizens BancShares $FCNCA
First Citizens BancShares’ strategic acquisitions, including the value-accretive Silicon Valley Bank purchase, position it for substantial growth, with shares trading at an attractive discount
(Extract from their Q2 letter) https://t.co/3LLGfjz2ld
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