Offshore
Photo
iinvested
3Q'24 Silver Beach Capital on $BN, $WSC
More fund letters here:
https://t.co/ccjFhSPQ2v https://t.co/tHdCO5FvQ8
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3Q'24 Silver Beach Capital on $BN, $WSC
More fund letters here:
https://t.co/ccjFhSPQ2v https://t.co/tHdCO5FvQ8
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Offshore
Photo
Stock Analysis Compilation
Optimist Fund on First Advantage $FA US
Thesis: First Advantage’s strategic acquisition and strong growth trajectory make it a standout investment in the background check industry
(Extract from their Q3 letter) https://t.co/q2TrojSzi9
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Optimist Fund on First Advantage $FA US
Thesis: First Advantage’s strategic acquisition and strong growth trajectory make it a standout investment in the background check industry
(Extract from their Q3 letter) https://t.co/q2TrojSzi9
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Offshore
Video
Startup Archive
Alexis Ohanian tells the story of how a 1-hour brainstorm led to the idea for Reddit
Co-founders Alexis and Steve Huffman technically started the company in 2005 while undergrads at the University of Virginia. The original product was called My Mobile Menu (”MMM”), and their goal was to let people order food from their phones.
During spring break, the two college seniors decided to drive from Virginia to Boston to attend a talk Paul Graham was giving.
Surprised that two college students drove all the way from Virginia to attend his talk, Paul let them buy him a drink and pitch him their startup idea after the talk.
Three weeks later, Paul announces Y Combinator and the Reddit founders applied. Alexis and Steve went back up to interview for the inaugural batch but were rejected.
As Alexis explains, Paul called them the next morning:
“We like you guys. We just don’t like the idea. It’s too early for mobile. If you’re willing to kill this company, we’ll let you into the program.”
They were working on MMM for a year but decided to scrap it and got on the next train back to Boston.
They now needed a new idea, so Paul sat down with the two founders and said:
“Forget mobile. Build something on the web. What problems do you guys have every single day?”
Steve was a heavy Slashdot user and Alexis read a bunch of news sites every morning. Paul then mentioned the social bookmarking web service Delicious/Popular:
“The byproduct of people bookmarking reference material to look at later was an interesting kind of zeitgeist. But it was only a zeitgeist for reference material—not what was new.”
That’s how they decided to build something similar to social bookmarking but solely for ephemeral news of the day. And from this brainstorming session, Steve and Alexis put Reddit on the path of becoming “the front page of the Internet.”
Video source: @twistartups @jason (2013)
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Alexis Ohanian tells the story of how a 1-hour brainstorm led to the idea for Reddit
Co-founders Alexis and Steve Huffman technically started the company in 2005 while undergrads at the University of Virginia. The original product was called My Mobile Menu (”MMM”), and their goal was to let people order food from their phones.
During spring break, the two college seniors decided to drive from Virginia to Boston to attend a talk Paul Graham was giving.
Surprised that two college students drove all the way from Virginia to attend his talk, Paul let them buy him a drink and pitch him their startup idea after the talk.
Three weeks later, Paul announces Y Combinator and the Reddit founders applied. Alexis and Steve went back up to interview for the inaugural batch but were rejected.
As Alexis explains, Paul called them the next morning:
“We like you guys. We just don’t like the idea. It’s too early for mobile. If you’re willing to kill this company, we’ll let you into the program.”
They were working on MMM for a year but decided to scrap it and got on the next train back to Boston.
They now needed a new idea, so Paul sat down with the two founders and said:
“Forget mobile. Build something on the web. What problems do you guys have every single day?”
Steve was a heavy Slashdot user and Alexis read a bunch of news sites every morning. Paul then mentioned the social bookmarking web service Delicious/Popular:
“The byproduct of people bookmarking reference material to look at later was an interesting kind of zeitgeist. But it was only a zeitgeist for reference material—not what was new.”
That’s how they decided to build something similar to social bookmarking but solely for ephemeral news of the day. And from this brainstorming session, Steve and Alexis put Reddit on the path of becoming “the front page of the Internet.”
Video source: @twistartups @jason (2013)
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Offshore
Video
App Economy Insights
📊 This Week in Visuals:
$LOW, $ADI, $DELL, $CRWD, $WDAY, $ADSK, $TGT, $HPQ, $ZM, $NTNX, $BBY, $MANU.
Check out the latest earnings!👇
https://t.co/znLp86XBZp https://t.co/nrHaKrCoI9
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📊 This Week in Visuals:
$LOW, $ADI, $DELL, $CRWD, $WDAY, $ADSK, $TGT, $HPQ, $ZM, $NTNX, $BBY, $MANU.
Check out the latest earnings!👇
https://t.co/znLp86XBZp https://t.co/nrHaKrCoI9
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Offshore
Photo
Stock Analysis Compilation
TCW on Omnicom Group $OMC US
Thesis: Omnicom leverages its iconic brands and diverse services to drive innovation and global expansion, underpinned by attractive valuations
(Extract from their Q3 letter) https://t.co/UxbXQbJUaH
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TCW on Omnicom Group $OMC US
Thesis: Omnicom leverages its iconic brands and diverse services to drive innovation and global expansion, underpinned by attractive valuations
(Extract from their Q3 letter) https://t.co/UxbXQbJUaH
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Offshore
Photo
App Economy Insights
What are you watching this week?
• Monday: $ZS.
• Tuesday: $CRM, $OKTA.
• Wednesday: $CHWY, $S, $SNPS.
• Thursday: $ASAN, $DOCU, $GTLB, $HPE, $IOT, $LULU, $PATH, $VEEV.
All visualized in our PRO coverage next Saturday! https://t.co/9EOio4h4KA
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What are you watching this week?
• Monday: $ZS.
• Tuesday: $CRM, $OKTA.
• Wednesday: $CHWY, $S, $SNPS.
• Thursday: $ASAN, $DOCU, $GTLB, $HPE, $IOT, $LULU, $PATH, $VEEV.
All visualized in our PRO coverage next Saturday! https://t.co/9EOio4h4KA
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Offshore
Video
Startup Archive
Sequoia partner Michael Moritz explains why Bill Gates had the radio removed from his car dashboard
When asked what founder obsession looks like, Moritz gives two examples.
The first is Apoorva Mehta, founder & CEO of Instacart. Before investing in Instacart, Michael asked Apoorva how he got into the business of grocery delivery.
Apoorva responded that after toying with a variety of other businesses, he decided Instacart was the one for him when the idea of the business was “the last thing he thought about when he went to sleep and the first thing that he thought about when he woke up in the morning.”
Moritz comments:
“To me, that was as good a definition of obsession as any I’ve heard… it’s sort of that full on experience that you can never stop thinking about and you don’t switch off.”
His other example is Bill Gates.
When Microsoft was still private and quite small in the 1980s, Bill gave Michael a ride to the airport. When Michael asked him why the radio was missing from the dashboard, Bill said he had it taken out:
“If I’ve got the radio, I’m afraid that I’ll switch it on and I won’t be thinking about Microsoft.”
Moritz quips, “That’s obsession.”
Video source: @StanfordGSB (2019)
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Sequoia partner Michael Moritz explains why Bill Gates had the radio removed from his car dashboard
When asked what founder obsession looks like, Moritz gives two examples.
The first is Apoorva Mehta, founder & CEO of Instacart. Before investing in Instacart, Michael asked Apoorva how he got into the business of grocery delivery.
Apoorva responded that after toying with a variety of other businesses, he decided Instacart was the one for him when the idea of the business was “the last thing he thought about when he went to sleep and the first thing that he thought about when he woke up in the morning.”
Moritz comments:
“To me, that was as good a definition of obsession as any I’ve heard… it’s sort of that full on experience that you can never stop thinking about and you don’t switch off.”
His other example is Bill Gates.
When Microsoft was still private and quite small in the 1980s, Bill gave Michael a ride to the airport. When Michael asked him why the radio was missing from the dashboard, Bill said he had it taken out:
“If I’ve got the radio, I’m afraid that I’ll switch it on and I won’t be thinking about Microsoft.”
Moritz quips, “That’s obsession.”
Video source: @StanfordGSB (2019)
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Offshore
Photo
Dimitry Nakhla | Babylon Capital®
A quality & valuation analysis on $KLAC 🧘🏽♂️
•NTM P/E Ratio: 20.87x
•10-Year Mean: 20.04x
•NTM FCF Yield: 4.81%
•10-Year Mean: 4.94%
As you can see, $KLAC appears to be trading somewhere near fair value
Going forward, investors can receive about the same in earnings per share &
FCF per share 🧠***
Before we get into valuation, let’s take a look at why $KLAC is a good business
BALANCE SHEET✅
•Cash & Short-Term Inv: $4.63B
•Long-Term Debt: $5.88B
$KLAC has a strong balance sheet, an A- S&P Credit Rating & 10.71x FFO Interest Coverage
RETURN ON CAPITAL✅
•2020: 25.4%
•2021: 32.8%
•2022: 41.3%
•2023: 42.0%
•2024: 34.0%
RETURN ON EQUITY✅
•2020: 45.3%
•2021: 68.6%
•2022: 139.2%
•2023: 156.9%
•2024: 87.8%
$KLAC has strong return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2014: $2.93B
•2024: $9.81B
•CAGR: 12.84%
FREE CASH FLOW✅
•2014: $711.38M
•2024: $3.03B
•CAGR: 15.59%
NORMALIZED EPS✅
•2014: $$3.55
•2024: $23.74
•CAGR: 20.92%
PAID DIVIDENDS✅
•2019: $3.00
•2024: $5.65
•CAGR: 13.49
SHARE BUYBACKS✅
•2014 Shares Outstanding: 168.12M
•LTM Shares Outstanding: 135.63M
By reducing its shares outstanding ~19%, $KLAC increased its EPS by ~23% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 59.7%
•LTM Operating Margins: 37.6%
•LTM Net Income Margins: 28.9%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive about the same in EPS & FCF per share
Using Benjamin Graham’s 2G rule of thumb, $KLAC has to grow earnings at a 10.44% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be more than the (10.44%) required growth rate:
2025E: $30.66 (29.2% YoY) *FY Jun
2026E: $33.00 (7.6% YoY)
2027E: $37.47 (13.6% YoY)
$KLAC has a decent track record of meeting analyst estimates ~2 years out, but let’s assume $KLAC ends 2027 with $37.47 in EPS & see its CAGR potential assuming different multiples:
22x P/E: $824.34💵 … ~10.9% CAGR
21x P/E: $786.87💵 … ~8.9% CAGR
20x P/E: $749.40💵 … ~6.9% CAGR
19x P/E: $711.93💵 … ~4.8% CAGR
18x P/E: $674.46💵 … ~2.7% CAGR
While it’s certainly reasonable for $KLAC to trade for >22x, I wouldn’t want to rely on that assumption as it doesn’t leave us with a substantial margin of safety
While $KLAC has a wide moat & exemplary capital allocation, I’d want to ensure some margin of safety
Today at $647💵 $KLAC appears to be fully valued
I’d get more interested in $KLAC closer to $580💵 (~10% below today’s price) where I can reasonably expect double digit CAGR while assuming 19x earnings
#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 $KLAC 🧘🏽♂️
•NTM P/E Ratio: 20.87x
•10-Year Mean: 20.04x
•NTM FCF Yield: 4.81%
•10-Year Mean: 4.94%
As you can see, $KLAC appears to be trading somewhere near fair value
Going forward, investors can receive about the same in earnings per share &
FCF per share 🧠***
Before we get into valuation, let’s take a look at why $KLAC is a good business
BALANCE SHEET✅
•Cash & Short-Term Inv: $4.63B
•Long-Term Debt: $5.88B
$KLAC has a strong balance sheet, an A- S&P Credit Rating & 10.71x FFO Interest Coverage
RETURN ON CAPITAL✅
•2020: 25.4%
•2021: 32.8%
•2022: 41.3%
•2023: 42.0%
•2024: 34.0%
RETURN ON EQUITY✅
•2020: 45.3%
•2021: 68.6%
•2022: 139.2%
•2023: 156.9%
•2024: 87.8%
$KLAC has strong return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2014: $2.93B
•2024: $9.81B
•CAGR: 12.84%
FREE CASH FLOW✅
•2014: $711.38M
•2024: $3.03B
•CAGR: 15.59%
NORMALIZED EPS✅
•2014: $$3.55
•2024: $23.74
•CAGR: 20.92%
PAID DIVIDENDS✅
•2019: $3.00
•2024: $5.65
•CAGR: 13.49
SHARE BUYBACKS✅
•2014 Shares Outstanding: 168.12M
•LTM Shares Outstanding: 135.63M
By reducing its shares outstanding ~19%, $KLAC increased its EPS by ~23% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 59.7%
•LTM Operating Margins: 37.6%
•LTM Net Income Margins: 28.9%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive about the same in EPS & FCF per share
Using Benjamin Graham’s 2G rule of thumb, $KLAC has to grow earnings at a 10.44% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be more than the (10.44%) required growth rate:
2025E: $30.66 (29.2% YoY) *FY Jun
2026E: $33.00 (7.6% YoY)
2027E: $37.47 (13.6% YoY)
$KLAC has a decent track record of meeting analyst estimates ~2 years out, but let’s assume $KLAC ends 2027 with $37.47 in EPS & see its CAGR potential assuming different multiples:
22x P/E: $824.34💵 … ~10.9% CAGR
21x P/E: $786.87💵 … ~8.9% CAGR
20x P/E: $749.40💵 … ~6.9% CAGR
19x P/E: $711.93💵 … ~4.8% CAGR
18x P/E: $674.46💵 … ~2.7% CAGR
While it’s certainly reasonable for $KLAC to trade for >22x, I wouldn’t want to rely on that assumption as it doesn’t leave us with a substantial margin of safety
While $KLAC has a wide moat & exemplary capital allocation, I’d want to ensure some margin of safety
Today at $647💵 $KLAC appears to be fully valued
I’d get more interested in $KLAC closer to $580💵 (~10% below today’s price) where I can reasonably expect double digit CAGR while assuming 19x earnings
#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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5 elite software companies with >30% free cash flow margins. A short thread🧵👇
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5 elite software companies with >30% free cash flow margins. A short thread🧵👇
Whose your favorite? $PLTR $CRWD $PANW $VEEV $NOW
#1 - Palantir $PLTR: Empowering organizations with advanced AI and data platforms to solve complex challenges at scale https://t.co/TpPAvr1p16
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