Offshore
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Stock Analysis Compilation
Focus Capital on Kingsgate $KCN AU
Thesis: Kingsgate’s operational turnaround and rising gold prices signal a strong recovery potential, with the market’s skepticism presenting an attractive buying opportunity
(Extract from their Q3 letter) https://t.co/uHXtObjxlh
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Focus Capital on Kingsgate $KCN AU
Thesis: Kingsgate’s operational turnaround and rising gold prices signal a strong recovery potential, with the market’s skepticism presenting an attractive buying opportunity
(Extract from their Q3 letter) https://t.co/uHXtObjxlh
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Offshore
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Stock Analysis Compilation
Harding Loevner on Lotus Bakeries $LOTB BB
Thesis: Lotus Bakeries' strong brand recognition and growth potential, driven by rising global demand for Biscoff, offer a compelling opportunity as the company expands into untapped markets.
(Extract from their Q3 letter) https://t.co/mx1Z7UmE4n
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Harding Loevner on Lotus Bakeries $LOTB BB
Thesis: Lotus Bakeries' strong brand recognition and growth potential, driven by rising global demand for Biscoff, offer a compelling opportunity as the company expands into untapped markets.
(Extract from their Q3 letter) https://t.co/mx1Z7UmE4n
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Offshore
Video
Startup Archive
Y Combinator Partners on DoorDash, Instacart, and doing things that don’t scale
Apoorva Mehta’s idea for Instacart was to let users order their groceries with the tap of a button.
Some founders might’ve spent months trying to negotiate corporate partnerships with grocery stores like Trade Joe’s or Whole Foods before starting this business. But the first thing Apoorva did was test whether this was something people even wanted.
His team took their YC money, went to Trader Joe’s and bought one of every item. They then rented a photography studio, took pictures of every item, wrote down the prices, and posted it all to their website. When an order came in, they bought the item from Trader Joe’s and delivered it.
This allowed them to prove that Instacart was something customers wanted, and only once they hit scale did they negotiate partnerships with large grocery chains.
YC Partner Tom Blomfield sums up the core advantage this approach that Paul Graham advocates for in his essay Do Things That Don’t Scale:
“In the cases where you do things that don’t scale and it turns out no one wants it, that’s actually a good thing because you’ve saved yourself months or years of building something no one wants… And by doing this stuff that doesn’t scale, you can give the appearance of that service or product already existing by basically faking it manually, pulling the strings in the background, and doing tons of hard work yourself to deliver that incredible white glove experience to customers.”
YC CEO Garry Tan adds:
“Doing things that don’t scale lets you experiment, fail fast, and try new things. It lets you test your assumptions before you spend months building a product.”
YC Partners Diana Hu and Michael Seibel discuss another great example of this: DoorDash.
Even though the team was a technical group of Stanford engineering students and MBAs, they built the MVP with a tech stack of Google Drive to upload menus, a simple HTML/CSS website, a Google Form to take orders, and Find My Friends as their dispatch system to track drivers.
Diana comments:
“They could have done the fancy thing and build out a dynamic site with real-time tracking, but the founders were very pragmatic. That was not the hardest thing to prove.”
Usually the hardest thing to prove is that your product is something people want.
Video source: @ycombinator (2024)
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Y Combinator Partners on DoorDash, Instacart, and doing things that don’t scale
Apoorva Mehta’s idea for Instacart was to let users order their groceries with the tap of a button.
Some founders might’ve spent months trying to negotiate corporate partnerships with grocery stores like Trade Joe’s or Whole Foods before starting this business. But the first thing Apoorva did was test whether this was something people even wanted.
His team took their YC money, went to Trader Joe’s and bought one of every item. They then rented a photography studio, took pictures of every item, wrote down the prices, and posted it all to their website. When an order came in, they bought the item from Trader Joe’s and delivered it.
This allowed them to prove that Instacart was something customers wanted, and only once they hit scale did they negotiate partnerships with large grocery chains.
YC Partner Tom Blomfield sums up the core advantage this approach that Paul Graham advocates for in his essay Do Things That Don’t Scale:
“In the cases where you do things that don’t scale and it turns out no one wants it, that’s actually a good thing because you’ve saved yourself months or years of building something no one wants… And by doing this stuff that doesn’t scale, you can give the appearance of that service or product already existing by basically faking it manually, pulling the strings in the background, and doing tons of hard work yourself to deliver that incredible white glove experience to customers.”
YC CEO Garry Tan adds:
“Doing things that don’t scale lets you experiment, fail fast, and try new things. It lets you test your assumptions before you spend months building a product.”
YC Partners Diana Hu and Michael Seibel discuss another great example of this: DoorDash.
Even though the team was a technical group of Stanford engineering students and MBAs, they built the MVP with a tech stack of Google Drive to upload menus, a simple HTML/CSS website, a Google Form to take orders, and Find My Friends as their dispatch system to track drivers.
Diana comments:
“They could have done the fancy thing and build out a dynamic site with real-time tracking, but the founders were very pragmatic. That was not the hardest thing to prove.”
Usually the hardest thing to prove is that your product is something people want.
Video source: @ycombinator (2024)
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Offshore
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Dimitry Nakhla | Babylon Capital®
$AMZN trades near its lowest P/OCF since 2010 (average P/OCF of ~24x since)💵
Let’s see $AMZN CAGR potential assuming lower multiple on 2026 P/OCF Estimates ($16.86):
16x P/OCF: $296.76💵 … 15% CAGR
17x P/OCF: $286.62💵 … 18% CAGR
18x P/OCF: $303.48💵 … 21% CAGR
#stocks https://t.co/Tap6ZQF6zJ
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$AMZN trades near its lowest P/OCF since 2010 (average P/OCF of ~24x since)💵
Let’s see $AMZN CAGR potential assuming lower multiple on 2026 P/OCF Estimates ($16.86):
16x P/OCF: $296.76💵 … 15% CAGR
17x P/OCF: $286.62💵 … 18% CAGR
18x P/OCF: $303.48💵 … 21% CAGR
#stocks https://t.co/Tap6ZQF6zJ
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Offshore
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App Economy Insights
📉 Celsius went from red-hot to ice-cold.
$CELH is down 70% from its 2024 peak.
What went wrong?
⚡️Let's visualize energy drinks economics.
https://t.co/fsmWLdGUhz
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📉 Celsius went from red-hot to ice-cold.
$CELH is down 70% from its 2024 peak.
What went wrong?
⚡️Let's visualize energy drinks economics.
https://t.co/fsmWLdGUhz
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Offshore
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Dimitry Nakhla | Babylon Capital®
A quality valuation analysis on $META 🧘🏽♂️
•NTM P/E Ratio: 23.14x
•5-Year Mean: 22.52x
•NTM FCF Yield: 3.17%
•5-Year Mean: 3.66%
As you can see, $META appears to be trading near fair value
Going forward, investors can expect to receive ~3% LESS in earnings per share & ~13% LESS in FCF per share🧠***
Before we get into valuation, let’s take a look at why $META is a quality business
BALANCE SHEET✅
•Cash & Equivalents: $70.90B
•Long-Term Debt: $28.82B
$META has an excellent balance sheet, an AA- S&P Credit Rating & 138x FFO Interest Coverage Ratio
RETURN ON CAPITAL✅
•2019: 26.0%
•2020: 23.5%
•2021: 33.7%
•2022: 22.0%
•2023: 26.3%
•LTM: 30.4%
RETURN ON EQUITY✅
•2019: 20.0%
•2020: 25.4%
•2021: 31.1%
•2022: 18.5%
•2023: 28.0%
•LTM: 36.1%
$META has great return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2018: $55.84B
•2023: $134.90B
•CAGR: 19.29%
FREE CASH FLOW✅
•2018: $15.36B
•2023: $43.85B
•CAGR: 23.34%
NORMALIZED EPS✅
•2018: $7.57
•2023: $14.87
•CAGR: 14.45%
SHARE BUYBACKS✅
•2018 Shares Outstanding: 2.92B
•LTM Shares Outstanding: 2.62B
By reducing its shares outstanding ~10.2%, $META increased its EPS by ~11.3% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 81.5%
•LTM Operating Margins: 41.6%
•LTM Net Income Margins: 35.6%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~3% LESS in EPS & ~13% LESS in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $META has to grow earnings at an 11.07% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2026 EPS growth over the next few years to be greater than the (11.07%) required growth rate:
2024E: $22.61 (52.0% YoY) *FY Dec
2025E: $25.36 (12.2% YoY)
2026E: $28.84 (13.7% YoY)
$META has a decent track record of meeting analyst estimates ~2 years out, so let’s assume $META ends 2026 with $28.84 in EPS & see its CAGR potential assuming different multiples
26x P/E: $749.84💵 … ~14.7% CAGR
25x P/E: $721.00💵 … ~12.6% CAGR
24x P/E: $692.16💵 … ~10.5% CAGR
23x P/E: $663.32💵 … ~8.3% CAGR
22x P/E: $634.48💵 … ~6.1% CAGR
As you can see, $META appears to have double-digit CAGR potential if we assume >24x earnings, a multiple above its 5-year average (22.50x), however 24x is a multiple that’s justified given its mid-teens earnings growth rate, balance sheet, visionary CEO & investments in AI & LLMs
As I’ve mentioned before: “… the increased investment in future growth and necessary Al development, which has the potential to lead to better growth prospects, should be viewed with a bullish tone rather than a bearish one” — (which can lead to a sustainable re-rating over the next few years)
Today at $565💵 $META appears to be fairly valued, so those buying today won’t have a margin of safety and will be relying heavily on estimates being met
I’d consider $META a great buy ~$515💵, offering ~11% CAGR assuming 22x 2026 est
#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 quality valuation analysis on $META 🧘🏽♂️
•NTM P/E Ratio: 23.14x
•5-Year Mean: 22.52x
•NTM FCF Yield: 3.17%
•5-Year Mean: 3.66%
As you can see, $META appears to be trading near fair value
Going forward, investors can expect to receive ~3% LESS in earnings per share & ~13% LESS in FCF per share🧠***
Before we get into valuation, let’s take a look at why $META is a quality business
BALANCE SHEET✅
•Cash & Equivalents: $70.90B
•Long-Term Debt: $28.82B
$META has an excellent balance sheet, an AA- S&P Credit Rating & 138x FFO Interest Coverage Ratio
RETURN ON CAPITAL✅
•2019: 26.0%
•2020: 23.5%
•2021: 33.7%
•2022: 22.0%
•2023: 26.3%
•LTM: 30.4%
RETURN ON EQUITY✅
•2019: 20.0%
•2020: 25.4%
•2021: 31.1%
•2022: 18.5%
•2023: 28.0%
•LTM: 36.1%
$META has great return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2018: $55.84B
•2023: $134.90B
•CAGR: 19.29%
FREE CASH FLOW✅
•2018: $15.36B
•2023: $43.85B
•CAGR: 23.34%
NORMALIZED EPS✅
•2018: $7.57
•2023: $14.87
•CAGR: 14.45%
SHARE BUYBACKS✅
•2018 Shares Outstanding: 2.92B
•LTM Shares Outstanding: 2.62B
By reducing its shares outstanding ~10.2%, $META increased its EPS by ~11.3% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 81.5%
•LTM Operating Margins: 41.6%
•LTM Net Income Margins: 35.6%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~3% LESS in EPS & ~13% LESS in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $META has to grow earnings at an 11.07% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2026 EPS growth over the next few years to be greater than the (11.07%) required growth rate:
2024E: $22.61 (52.0% YoY) *FY Dec
2025E: $25.36 (12.2% YoY)
2026E: $28.84 (13.7% YoY)
$META has a decent track record of meeting analyst estimates ~2 years out, so let’s assume $META ends 2026 with $28.84 in EPS & see its CAGR potential assuming different multiples
26x P/E: $749.84💵 … ~14.7% CAGR
25x P/E: $721.00💵 … ~12.6% CAGR
24x P/E: $692.16💵 … ~10.5% CAGR
23x P/E: $663.32💵 … ~8.3% CAGR
22x P/E: $634.48💵 … ~6.1% CAGR
As you can see, $META appears to have double-digit CAGR potential if we assume >24x earnings, a multiple above its 5-year average (22.50x), however 24x is a multiple that’s justified given its mid-teens earnings growth rate, balance sheet, visionary CEO & investments in AI & LLMs
As I’ve mentioned before: “… the increased investment in future growth and necessary Al development, which has the potential to lead to better growth prospects, should be viewed with a bullish tone rather than a bearish one” — (which can lead to a sustainable re-rating over the next few years)
Today at $565💵 $META appears to be fairly valued, so those buying today won’t have a margin of safety and will be relying heavily on estimates being met
I’d consider $META a great buy ~$515💵, offering ~11% CAGR assuming 22x 2026 est
#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
Miller Value on United Natural Foods $UNFI US
Thesis: UNFI’s strategic transformation plan and asset optimization offer a significant upside potential, supported by market share gains and a large margin expansion opportunity.
(Extract from their Q3 letter) https://t.co/X273zqp5RX
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Miller Value on United Natural Foods $UNFI US
Thesis: UNFI’s strategic transformation plan and asset optimization offer a significant upside potential, supported by market share gains and a large margin expansion opportunity.
(Extract from their Q3 letter) https://t.co/X273zqp5RX
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Quiver Quantitative
We recently caught a STOCK Act violation by Senator Markwayne Mullin.
He bought stock in a company called Stride, $LRN.
It's a for-profit education company.
Mullin sits on the Senate Committee on Education.
The stock has now risen 39% since his trade. https://t.co/SKvrpIb0vm
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We recently caught a STOCK Act violation by Senator Markwayne Mullin.
He bought stock in a company called Stride, $LRN.
It's a for-profit education company.
Mullin sits on the Senate Committee on Education.
The stock has now risen 39% since his trade. https://t.co/SKvrpIb0vm
tweet