⁠Investing visuals
After a massive run, semi’s like $NVDA, $ASML, $AVGO are on sale today following the DeepSeek news.

Opportunity or healthy correction?🤔 https://t.co/6lj8OxIGKh
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⁠InsideArbitrage
QXO $QXO Launches Hostile Tender Offer to Acquire Beacon Roofing $BECN for $11 Billion in Cash -
✴️QXO will commence a tender offer to acquire all outstanding shares of Beacon for $124.25 per share, representing a 4.92% premium from the stock’s last close.
✴️QXO plans to complete the acquisition promptly after the tender offer expires in 20 business days, on February 24, 2025.

https://t.co/HXmmy0WylJ

Building-Products Distributor QXO $QXO Launching Hostile Bid for Beacon $BECN - WSJ
✴️QXO is preparing to take its all-cash offer to acquire Beacon Roofing Supply directly to shareholders after being rebuffed several times.
✴️QXO is planning to launch a hostile bid for Beacon as soon as Monday.
✴️It will offer to buy all shares outstanding of Beacon for $124.25 per share, the same price it previously proposed. That would value Beacon at $7.7 billion, or roughly $11 billion including debt. - InsideArbitrage
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⁠Startup Archive
Sam Altman on the importance of momentum and why burnout doesn’t come from working too hard

“I was told, and I thought for a long time, that you get burned out from working too hard. At least in my own experience, what I’ve found is that burnout actually comes from failing and things not working.”

Sam continues:

“Momentum is really energizing. The lack of momentum is super draining. And I find that I have infinite energy to work on things that I find interesting and that are working, and almost none to work on things that I either don’t find interesting or aren’t working.”

He offers the following advice to startup founders:

“I think you see a lot of founders try something and fail, and they assume that they just can’t work hard enough or don’t have enough energy or passion or whatever. And that’s actually not true. It’s just that that thing didn’t work. And what you should do is shut that company down, go on vacation, and try again.”

He concludes:

“When you look at really successful people and say, How do they get all those things done? It’s that they have the benefit of momentum. And momentum is energizing.”

Video source: @ycombinator (2016)
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⁠InsideArbitrage
World Media and Entertainment Universal Inc; a subsidiary of AMTD IDEA Group $AMTD and AMTD Digital Inc. $HKD announced that it has entered into a business combination agreement with Black Spade Acquisition II Co. $BSII at an equity value of approximately USD 488 million. https://t.co/8FNUaC2I5L
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⁠Stock Analysis Compilation
Platinium AM on Zoetis $ZTS US

Thesis: Zoetis is the leading global innovator in animal medicine, with strong growth and promising new treatments for Osteoarthritis in pets, despite concerns over pricing and regulatory adjustments.

(Extract from their Q4 letter) https://t.co/t6QKmg9skc
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⁠Quiver Quantitative
Nancy Pelosi sold $1.3M of Nvidia stock last month.

$NVDA has fallen 17% today. https://t.co/W60hk8R8FT
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⁠Dimitry Nakhla | Babylon Capital®
2 weeks ago I stated: “I am more inclined to buy $NVDA closer to $120💵 where I could reasonably expect ~12% CAGR assuming a 27x end multiple, ensuring a decent margin of safety”

Now that $NVDA stock traded down to my target price, I’ll share an updated analysis tomorrow 🔔 https://t.co/mTGHSkUvwD

A quality valuation analysis on $NVDA 🧘🏽‍♂️

•NTM P/E Ratio: 33.80x
•1-Year Mean: 37.21x

•NTM FCF Yield: 2.67%
•1-Year Mean: 2.39%

As you can see, $NVDA appears to be trading somewhere near 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 $NVDA is a quality business

BALANCE SHEET✅
•Cash & Short-Term Inv: $38.49B
•Long-Term Debt: $8.46B

$NVDA has a strong balance sheet, an AA- S&P Credit Rating, & 236x FFO Interest Coverage Ratio

RETURN ON CAPITAL✅
•2020: 19.1%
•2021: 19.1%
•2022: 26.0%
•2023: 16.2%
•2024: 60.5%
•LTM: 92.4%

RETURN ON EQUITY✅
•2020: 26.0%
•2021: 29.8%
•2022: 44.8%
•2023: 17.9%
•2024: 91.5%
•LTM: 127.2%

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

REVENUES✅
•2020: $16.68B
•2025E: $129.14B
•CAGR: 63.89%

FREE CASH FLOW✅
•2020: $4.27B
•2025E: $64.54B
•CAGR: 72.13%

NORMALIZED EPS✅
•2020: $0.14
•2025E: $2.95
•CAGR: 83.96%

SHARE BUYBACKS🆗 (nominal change)
•2019 Shares Outstanding: 25.00B
•LTM Shares Outstanding: 24.86B

MARGINS✅
•LTM Gross Margins: 75.9%
•LTM Operating Margins: 62.7%
•LTM Net Income Margins: 55.7%

***NOW TO VALUATION 🧠

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

Using Benjamin Graham’s 2G rule of thumb, $NVDA has to grow earnings at a 16.90% CAGR over the next several years to justify its valuation

Today, analysts anticipate 2026 - 2027 EPS growth over the next few years to be more than the (16.90%) required growth rate:

2025E: $2.95 (127.9% YoY) *FY Jan

2026E: $4.45 (50.5% YoY)
2027E: $5.61 (26.1% YoY)

$NVDA has an excellent track record of meeting analyst estimates ~2 years out, so let’s assume $NVDA ends 2027 with $5.61 in EPS & see its CAGR potential assuming different multiples

32x P/E: $178.88💵 … ~15.5% CAGR

31x P/E: $173.29💵 … ~13.7% CAGR

30x P/E: $167.70💵 … ~11.9% CAGR

29x P/E: $162.11💵 … ~10.1% CAGR

28x P/E: $156.52💵 … ~8.2% CAGR

As you can see, $NVDA appears to have attractive return potential IF we assume >30x earnings, a multiple generally below its historical averages & a multiple that’s justified given the company’s growth rate & moat

$NVDA is a fair consideration today at $133💵

I am more inclined to buy $NVDA closer to $120💵 where I could reasonably expect ~12% CAGR assuming a 27x end multiple, ensuring a decent margin of safety

What stands out to me is $NVDA consistent ability to exceed ambitious expectations, not just meeting but significantly beating estimates. This impressive performance has justified its previously demanding valuation, with the company effectively growing into its premium valuation 👌🏽

#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. �[...]

�𝐚𝐬𝐭 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® tweet