⁠Quiver Quantitative
Nancy Pelosi has made $1.6M in the stock market so far this morning, per our estimates: https://t.co/oraqK971Ps
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⁠Stock Analysis Compilation
Diamond Hill on Astrana Health $ASTH US

Thesis: Astrana Health's focus on value-based care and its growth potential in new markets make it a strong long-term investment.

(Extract from their Q2 letter) https://t.co/idHGMdgoqB
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⁠Investing visuals
Would you rather invest in Tesla $TSLA or BYD $BYD?🔍👇 https://t.co/IEaTTq9yRh
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⁠Hidden Value Gems
An interesting stock idea by @PatientCM 👉🏼 $PLAY

“Dave & Busters is an entertainment attraction, offering games and food.  It’s recently been pressured by low-end consumer weakness.  It bought its prime competitor Main Event in 2022 with Main Event’s CEO, Chris Morris, assuming leadership. 

Morris’s strategic plan includes improvements in pricing, remodeling, cost savings, events and more.

It estimates changes will improve EBITDA by $680-915M, a significant amount relative to the current 2024 estimated base of $528M.  Early results are promising.

Dave & Busters has solid unit economics and attractive returns on capital. The company has been aggressively buying back stock, shrinking shares outstanding by 19% since the beginning of 2023.

We see solid growth prospects and strong cash generation as the company exits its current investment cycle. We think Dave & Busters can earn $8-9 per share in free cash flow in 3 years.  At a 10x multiple, we believe the stock would be worth mid-$80s, which implies a compound rate of ~35% per year.”
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⁠Stock Analysis Compilation
Diamond Hill on Synovus Financial $SNV US

Thesis: Synovus Financial’s improved credit quality and undervalued position offer a strong opportunity for growth as market conditions normalize

(Extract from their Q2 letter) https://t.co/hUj5ElaRNZ
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⁠Dimitry Nakhla | Babylon Capital®
RT @OptionsMustang: Genius, what an analysis on $MCD, today at $310. Thanks Dimitry, making huge difference in my part time trading options

A sober valuation analysis on $MCD 🧘🏽‍♂️

•NTM P/E Ratio: 21.24x
•10-Year Mean: 23.35x

•NTM FCF Yield: 4.53%
•10-Year Mean: 4.07%

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

Going forward, investors can receive ~10% MORE in earnings per share & ~11% MORE in FCF per share 🧠***

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

BALANCE SHEET🆗
•Cash & Short-Term Inv: $838.00M
•Long-Term Debt: $37.21B

$MCD has a decent balance sheet*, a BBB+ S&P Credit Rating, & ~7x FFO Interest Coverage Ratio

* $MCD owns plenty of land, with a total value of $7.08B as of Dec 2023

RETURN ON CAPITAL✅
•2019: 22.0%
•2020: 16.4%
•2021: 21.7%
•2022: 23.1%
•2023: 23.4%
•LTM: 25.5%

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

REVENUES🆗
•2018: $21.26B
•2023: $25.49B
•CAGR: 3.69%

FREE CASH FLOW✅
•2018: $4.22B
•2023: $7.25B
•CAGR: 11.43%

NORMALIZED EPS✅
•2013: $5.55
•2023: $11.94
•CAGR: 7.96%

SHARE BUYBACKS✅
•2013 Shares Outstanding: 1.00B
•LTM Shares Outstanding: 726.85M

By reducing its shares outstanding 27.3%, $MCD increased its EPS by 37.5% (assuming 0 growth)

MARGINS✅
•LTM Gross Margins: 57.0%
•LTM Operating Margins: 45.7%
•LTM Net Income Margins: 32.2%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive ~10% MORE in EPS & ~11% MORE in FCF per share

Using Benjamin Graham’s 2G rule of thumb, $MCD has to grow earnings at a 10.62% CAGR over the next several years to justify its valuation

Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be less than the (10.62%) required growth rate:

2024E: $12.01 (0.6% YoY) *FY Dec
2025E: $13.16 (9.6% YoY)
2026E: $14.33 (8.9% YoY)

$MCD has a good track record of meeting analyst estimates ~2 years out, so let’s assume $MCD ends 2026 with $14.33 in EPS & see its CAGR potential assuming different multiples

24x P/E: $343.92💵 … ~14.2% CAGR

23x P/E: $329.59💵 … ~12.3% CAGR

22x P/E: $315.26💵 … ~10.4% CAGR

21 P/E: $300.93💵 … ~8.4% CAGR

As you can see, $MCD appears to have attractive return potential IF we assume >22x earnings, a multiple below its 10-year mean & a multiple that’s not too far off from 20x which is where $MCD has a history of bottoming at — implying a decent margin of safety

Today at $261💵 $MCD appears to be a worthwhile consideration for investment, especially for investors looking to establish a position in a strong dividend grower with relatively low volatility

#stocks #investing
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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. - Dimitry Nakhla | Babylon Capital®
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⁠Investing visuals
A little content tip: if you're looking for high quality visuals about investing, you should definitely follow @carbonfinancex 👇

Great style and very informative. Keep them coming!👌

Despite the usual market turbulence during an election year, the S&P 500 $SPX shows no signs of slowing down.

The index continues to hit all-time highs, trading more than 20% above Wall Street’s 2024 consensus, according to The New York Times.

Which sectors are leading the charge?

Unsurprisingly, the information technology sector takes the top spot with a 32% YTD return, followed by communication services at 28%.

Perhaps unexpected, in third place is the utilities sector, which is up 25%.

The sector’s return over the last year marks its best 12-month performance this century, per Barrons.

What’s driving utilities?

Two key factors: lower interest rates, which drives investors toward dividend-heavy stocks, and higher energy demand needed to fuel the AI revolution. - carbonfinance
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