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Librarian Capital
JD Sports $JD FY25H1 (ending 3-Aug)
Sales +0.7% LfL, +6.4% organic, +6.8% ex-FX
"Organic" includes +5.7% from new space
North America sales +10.7% organic
EBIT +26% in £
JD North America + Finish Line stores flattish
Hibbett $HIBB contributed 10 days to half-year
Shares -3.6% https://t.co/F5fOZkwRsp
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JD Sports $JD FY25H1 (ending 3-Aug)
Sales +0.7% LfL, +6.4% organic, +6.8% ex-FX
"Organic" includes +5.7% from new space
North America sales +10.7% organic
EBIT +26% in £
JD North America + Finish Line stores flattish
Hibbett $HIBB contributed 10 days to half-year
Shares -3.6% https://t.co/F5fOZkwRsp
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Stock Analysis Compilation
Artemis Finds on Lindt & Sprüngli $LISP SW
Thesis: Lindt’s strong pricing power and untapped potential in emerging markets make it a sweet addition, especially amid concerns over cocoa volatility.
(Extract from their Q2 letter) https://t.co/YeZe5e5BQ9
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Artemis Finds on Lindt & Sprüngli $LISP SW
Thesis: Lindt’s strong pricing power and untapped potential in emerging markets make it a sweet addition, especially amid concerns over cocoa volatility.
(Extract from their Q2 letter) https://t.co/YeZe5e5BQ9
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Dimitry Nakhla | Babylon Capital®
A sober valuation analysis on $ELV 🧘🏽♂️
•NTM P/E Ratio: 12.90x
•5-Year Mean: 14.04x
•NTM FCF Yield: 6.15%
•5-Year Mean: 6.90%
As you can see, $ELV appears to be trading somewhere near fair value
Going forward, investors can expect to receive ~9% MORE in earnings per share & ~12% LESS in FCF per share🧠***
Before we get into valuation, let’s take a look at why $ELV is a quality business
BALANCE SHEET✅
•Cash & Equivalents: $6.50B
•Total Investments: $37.15B
•Long-Term Debt: $24.56B
$ELV has a strong balance sheet, an A S&P Credit Rating & 1.94x FFO Interest Coverage Ratio (temporarily lower FFO)
RETURN ON CAPITAL✅
•2019: 12.3%
•2020: 14.7%
•2021: 14.3%
•2022: 13.4%
•2023: 14.7%
•LTM: 14.1%
RETURN ON EQUITY✅
•2019: 16.0%
•2020: 14.1%
•2021: 17.7%
•2022: 16.3%
•2023: 15.8%
•LTM: 16.6%
$ELV has solid return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2013: $71.02B
•2023: $171.34B
•CAGR: 9.20%
FREE CASH FLOW✅
•2013: $2.41B
•2023: $6.77B
•CAGR: 10.88%
NORMALIZED EPS✅
•2013: $8.52
•2023: $33.14
•CAGR: 14.54%
SHARE BUYBACKS✅
•2013 Shares Outstanding: 303.80M
•LTM Shares Outstanding: 234.95M
By reducing its shares outstanding ~22.6%, $ELV increases its EPS by ~29.1% (assuming 0 growth)
MARGINS🆗
•LTM Gross Margins: 9.4%
•LTM Operating Margins: 6.1%
•LTM Net Income Margins: 3.9%
PAID DIVIDENDS✅
•2013: $1.50
•2023: $5.92
•CAGR: 14.71%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~9% MORE in EPS & ~12% LESS in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $ELV has to grow earnings at a 6.45% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be greater than the (6.45%) required growth rate:
2024E: $37.26 (12.4% YoY) *FY Dec
2025E: $41.70 (11.9% YoY)
2026E: $46.96 (12.6% YoY)
$ELV has a great track record of meeting analyst estimates ~2 years out, so let’s assume $ELV ends 2026 with $46.96 in EPS & see its CAGR potential assuming different multiples
15x P/E: $704.40💵 … ~17.7% CAGR
14x P/E: $657.44💵 … ~14.2% CAGR
13x P/E: $610.48💵 … ~10.5% CAGR
12x P/E: $563.52💵 … ~6.7% CAGR
As you can see, $ELV has attractive CAGR potential if we assume a >13x multiple (below its 14.04x 5-year mean & below its 14.22x 10-year mean)
More importantly, 13x is MORE than reasonable for a business that’s growing earnings at a >10% rate & has a strong history of linear earnings growth ( $ELV has increased EPS annually since 2008 🎯)
I also like the negative price correlation $ELV can have, relative to tech, in the short-term … adding a layer of safety in a portfolio
In short, $ELV appears to be a worthwhile consideration at $500💵 (pre-market price)
However, knowing that health insurers often face volatility amid the perception of political risks (among other things), it’s wise to piece in & perhaps add a second tranche at ~$460💵
#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 $ELV 🧘🏽♂️
•NTM P/E Ratio: 12.90x
•5-Year Mean: 14.04x
•NTM FCF Yield: 6.15%
•5-Year Mean: 6.90%
As you can see, $ELV appears to be trading somewhere near fair value
Going forward, investors can expect to receive ~9% MORE in earnings per share & ~12% LESS in FCF per share🧠***
Before we get into valuation, let’s take a look at why $ELV is a quality business
BALANCE SHEET✅
•Cash & Equivalents: $6.50B
•Total Investments: $37.15B
•Long-Term Debt: $24.56B
$ELV has a strong balance sheet, an A S&P Credit Rating & 1.94x FFO Interest Coverage Ratio (temporarily lower FFO)
RETURN ON CAPITAL✅
•2019: 12.3%
•2020: 14.7%
•2021: 14.3%
•2022: 13.4%
•2023: 14.7%
•LTM: 14.1%
RETURN ON EQUITY✅
•2019: 16.0%
•2020: 14.1%
•2021: 17.7%
•2022: 16.3%
•2023: 15.8%
•LTM: 16.6%
$ELV has solid return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2013: $71.02B
•2023: $171.34B
•CAGR: 9.20%
FREE CASH FLOW✅
•2013: $2.41B
•2023: $6.77B
•CAGR: 10.88%
NORMALIZED EPS✅
•2013: $8.52
•2023: $33.14
•CAGR: 14.54%
SHARE BUYBACKS✅
•2013 Shares Outstanding: 303.80M
•LTM Shares Outstanding: 234.95M
By reducing its shares outstanding ~22.6%, $ELV increases its EPS by ~29.1% (assuming 0 growth)
MARGINS🆗
•LTM Gross Margins: 9.4%
•LTM Operating Margins: 6.1%
•LTM Net Income Margins: 3.9%
PAID DIVIDENDS✅
•2013: $1.50
•2023: $5.92
•CAGR: 14.71%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~9% MORE in EPS & ~12% LESS in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $ELV has to grow earnings at a 6.45% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be greater than the (6.45%) required growth rate:
2024E: $37.26 (12.4% YoY) *FY Dec
2025E: $41.70 (11.9% YoY)
2026E: $46.96 (12.6% YoY)
$ELV has a great track record of meeting analyst estimates ~2 years out, so let’s assume $ELV ends 2026 with $46.96 in EPS & see its CAGR potential assuming different multiples
15x P/E: $704.40💵 … ~17.7% CAGR
14x P/E: $657.44💵 … ~14.2% CAGR
13x P/E: $610.48💵 … ~10.5% CAGR
12x P/E: $563.52💵 … ~6.7% CAGR
As you can see, $ELV has attractive CAGR potential if we assume a >13x multiple (below its 14.04x 5-year mean & below its 14.22x 10-year mean)
More importantly, 13x is MORE than reasonable for a business that’s growing earnings at a >10% rate & has a strong history of linear earnings growth ( $ELV has increased EPS annually since 2008 🎯)
I also like the negative price correlation $ELV can have, relative to tech, in the short-term … adding a layer of safety in a portfolio
In short, $ELV appears to be a worthwhile consideration at $500💵 (pre-market price)
However, knowing that health insurers often face volatility amid the perception of political risks (among other things), it’s wise to piece in & perhaps add a second tranche at ~$460💵
#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
Third Point on Apple $AAPL US
Thesis: Apple's unmatched app ecosystem and upcoming AI capabilities could unlock a new growth cycle, making it a must-watch for investors anticipating major AI-driven revenue boosts.
(Extract from their Q2 letter) https://t.co/i4hwEkU1pz
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Third Point on Apple $AAPL US
Thesis: Apple's unmatched app ecosystem and upcoming AI capabilities could unlock a new growth cycle, making it a must-watch for investors anticipating major AI-driven revenue boosts.
(Extract from their Q2 letter) https://t.co/i4hwEkU1pz
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Ahmad Jivraj
Joel Greenblatt, Columbia Business School prof returned 40% per year for 20 years...$1000 became $836,683.
Here are 4 ways he said you can beat the market:
1️⃣ A Focus on Small Caps. There is less analyst coverage so less information flow. Small caps have more opportunity to find mis-priced stocks.
2️⃣ Activist Investing: Can generate alpha but not worth the pain, he says.
3️⃣ Special situations: Another less efficient area of the market.
4️⃣ Superior knowledge in an industry. This one's my favorite. Anyone can do this one.
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Joel Greenblatt, Columbia Business School prof returned 40% per year for 20 years...$1000 became $836,683.
Here are 4 ways he said you can beat the market:
1️⃣ A Focus on Small Caps. There is less analyst coverage so less information flow. Small caps have more opportunity to find mis-priced stocks.
2️⃣ Activist Investing: Can generate alpha but not worth the pain, he says.
3️⃣ Special situations: Another less efficient area of the market.
4️⃣ Superior knowledge in an industry. This one's my favorite. Anyone can do this one.
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Offshore
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Librarian Capital
Smithson $SSON exited TechnologyOne $TNE in Sep
"Unsustainably high rating" after "strong performance"
New position in MonotaRO, Japanese "online industrial products distributor"
NAV -0.5% in Sep-24 (£)
NAV now +1.8% YTD vs. MSCI World SMID +6.9%
$FEVR among top Sep detractors https://t.co/w4IVvZa3GR
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Smithson $SSON exited TechnologyOne $TNE in Sep
"Unsustainably high rating" after "strong performance"
New position in MonotaRO, Japanese "online industrial products distributor"
NAV -0.5% in Sep-24 (£)
NAV now +1.8% YTD vs. MSCI World SMID +6.9%
$FEVR among top Sep detractors https://t.co/w4IVvZa3GR
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Investing visuals
Tesla $TSLA deliveries are out👇
🔹 462,890 vs. est. 463,897 (up +6%, slight miss)
🔹Stock is down -6% on the news
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Tesla $TSLA deliveries are out👇
🔹 462,890 vs. est. 463,897 (up +6%, slight miss)
🔹Stock is down -6% on the news
Tesla $TSLA is reporting quarterly delivery numbers on Tuesday. A quick preview:
🔹Expected deliveries of 465k, up 7% y/y
🔹Deliveries increased by 9% in March and 5% in June https://t.co/ZeQFZ9PlIh tweet