AkhenOsiris
Everyone can exhale now...Steve Cohen says DeepSeek is bullish for AI.
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AkhenOsiris
@Kantrowitz Good job there with the Judge. Not the process that matters, but the output, which is verifiable. Must be hard trying to get through all the others talking nonsense on TV 😂
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AkhenOsiris
RT @TechFundies: 3'd party contact leads tech practice on west coast for Accenture.

Supportive of ramp in AI proof-of-concepts w/ more success in IT / employee support desks followed by customer support.

Mentioned repeatedly that cost / AI query is a hurdle for adoption so supports view that decreasing cost will open up adoption / TAM.

Highlights
-Supports customers in communications, media, tech and fin svcs.

-Almost every customer is multi-cloud. Used to see AI workloads go to $GOOGL, enterprise to $MSFT and web/mobile to $AMZN. Now everything is landing everywhere.

-Customers focused on proof-of-concepts in 2024 mostly leveraging Azure / OpenAI. Saw uptick in usage of AMZN / GOOGL as well in 2H.

-At least 25% of these POCs moving into production in 2025.

-Saw very large uptick in software companies working on agentic solutions last qtr.

-One challenge for roll-outs has been that cost of AI is prohibitively expensive – lots of customer support volume adds up [Supportive of view that AI gets cheaper and opens up market].

-Low-hanging fruit has been IT and HR helpdesk support. Problem is tailor-made for GenAI.

-Can use $NOW Assist or build on your own by prompt engineering Azure OpenAI. If volumes very high and cost of $NOW expensive, somewhat better off attempting a homegrown solution. See 25-30% complete resolution of tickets.

-In IT / HR helpdesk, 100% agentic automation is happening w/ 30-35% of ticket volumes, copilot happening for 40% of tickets and rest is entirely humans.

-$CRM Agentforce also seeing POCs. Works well if you have medium ticket volume because pricing is very expensive. A customer issue that takes 3-5 conversations ends up costing $6-8 / ticket and is too high. Again, if volumes very high, then makes sense to try to prompt engineer on own. Expect 1/3 of POCs on employee help desk to convert to pilots.

-Have had reasonable success testing $CRM AgentForce for sales development rep – coaching, lead nurturing, follow-up all automated. Emerging area is marketing automation – campaign generation / execution across channels – not quite there yet and more of a copilot for now w/ human in the loop.

-On-premise builds are not easy. Fine tuning is expensive and requires totally different data center architecture focused on GPUs / cooling issues / etc. Better have a really good use case to pursue AI builds internally. Som of largest clients who are trying to do AI on-premise running into issues where their data centers simply aren’t configured correctly.[ie just use cloud / packaged software]

-Starting to see ecosystem build abstraction so inference can go off $NVDA GPUs to $AMZN Inferentia or $AMD or whomever. Very little of this is in production.

-POC’s are ramping quickly, conversion to production happening more slowly especially as customers move away from low-hanging fruit type use cases.
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⁠Dimitry Nakhla | Babylon Capital®
10 months ago I shared my analysis on $MANH suggesting it was overvalued at $257💵

I suggested revisiting the stock at $179💵

Despite a strong run, $MANH just plummeted -23% post-Q4 earnings

As I stated in my analysis:

“As you can see, we’d have to assume well above a 60x multiple in order for $MANH to have attractive return potential

While this could happen, this assumption leaves us with no margin of safety, especially considering that the multiple does not appear to be justified by the growth rate

In fact, in the last 10 years, $MANH multiple expanded by ~84% — implying that multiple expansion has contributed heavily to its returns

While $MANH is a quality business that I hope to own at some point, I don’t consider it anywhere near the buy zone today at $257.50💵

Instead, I’d start to get interested (*interested*) closer to 50x earnings or at $179💵 — 30% below today’s price”

#stocks #investing

A sober valuation analysis on $MANH 🧘🏽‍♂️

•NTM P/E Ratio: 70.66x
•5-Year Mean: 61.90x

•NTM FCF Yield: 1.63%
•5-Year Mean: 2.11%

As you can see, $MANH appears to be trading above fair value

Going forward, investors can receive ~12% LESS in earnings per share & ~23% LESS in FCF per share 🧠***

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

BALANCE SHEET✅
•Cash & Total Inv: $270.74M
•Long-Term Debt: $0

$MANH has a strong balance sheet

RETURN ON CAPITAL✅
•2018: 91.0%
•2019: 66.3%
•2020: 46.2%
•2021: 49.1%
•2022: 63.4%
•2023: 69.4%

RETURN ON EQUITY✅
•2018: 65.0%
•2019: 59.3%
•2020: 48.3%
•2021: 47.1%
•2022: 54.0%
•2023: 69.9%

$MANH has solid return metrics, highlighting the financial efficiency of the business

REVENUES✅
•2013: $414.52M
•2023: $928.73M
•CAGR: 8.40%

FREE CASH FLOW✅
•2013: $84.65M
•2023: $241.49M
•CAGR: 11.05%

NORMALIZED EPS✅
•2013: $0.92
•2023: $3.74
•CAGR: 15.05%

SHARE BUYBACKS✅
•2014 Shares Outstanding: 75.84M
•LTM Shares Outstanding: 62.61M

By reducing its shares outstanding ~17.4%, $MANH increased its EPS by ~21.0% (assuming 0 growth)

MARGINS✅
•LTM Gross Margins: 53.6%
•LTM Operating Margins: 22.6%
•LTM Net Income Margins: 19.0%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive ~12% LESS in EPS & ~23% LESS in FCF per share

Using Benjamin Graham’s 2G rule of thumb, $MANH has to grow earnings at a 35.33% 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 (35.33%) required growth rate:

2024E: $3.77 (0.7% YoY) *FY Dec
2025E: $4.36 (15.9% YoY)
2026E: $5.08 (16.4% YoY)

$MANH has a solid track record of meeting analyst estimates ~2 years out, but let’s assume $MANH ends 2026 with $5.08 in EPS & see its CAGR potential assuming different multiples

60x P/E: $304.80💵 … ~6.1% CAGR

57x P/E: $289.56💵 … ~4.2% CAGR

54x P/E: $274.32💵 … ~2.2% CAGR

As you can see, we’d have to assume well above a 60x multiple in order for $MANH to have attractive return potential

While this could happen, this assumption leaves us with no margin of safety, especially considering that the multiple does not appear to be justified by the growth rate

In fact, in the last 10 years, $MANH multiple expanded by ~84% — implying that multiple expansion has contributed heavily to its returns

While $MANH is a quality business that I hope to own at some point, I don’t consider it anywhere near the buy zone today at $257.50💵

Instead, I’d start to get interested (*interested*) closer to 50x earnings or at $179💵 — 30% below today’s price

#stocks #investing
___

𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️: 𝐓𝐡𝐢𝐬 𝐢𝐬 𝐍𝐎𝐓 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐀𝐝𝐯𝐢𝐜𝐞. 𝐁𝐚𝐛𝐲𝐥𝐨𝐧 �[...]

�𝐚𝐩𝐢𝐭𝐚𝐥® 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® tweet

⁠Dimitry Nakhla | Babylon Capital®
10 months ago I shared my analysis on $MANH suggesting it was overvalued at $257💵

I suggested revisiting the stock at $179💵

Despite a strong run, $MANH just plummeted -23% post-Q4 earnings 📉

As I stated in my analysis:

“As you can see, we’d have to assume well above a 60x multiple in order for $MANH to have attractive return potential

While this could happen, this assumption leaves us with no margin of safety, especially considering that the multiple does not appear to be justified by the growth rate

In fact, in the last 10 years, $MANH multiple expanded by ~84% — implying that multiple expansion has contributed heavily to its returns

While $MANH is a quality business that I hope to own at some point, I don’t consider it anywhere near the buy zone today at $257.50💵

Instead, I’d start to get interested (*interested*) closer to 50x earnings or at $179💵 — 30% below today’s price”

#stocks #investing

A sober valuation analysis on $MANH 🧘🏽‍♂️

•NTM P/E Ratio: 70.66x
•5-Year Mean: 61.90x

•NTM FCF Yield: 1.63%
•5-Year Mean: 2.11%

As you can see, $MANH appears to be trading above fair value

Going forward, investors can receive ~12% LESS in earnings per share & ~23% LESS in FCF per share 🧠***

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

BALANCE SHEET✅
•Cash & Total Inv: $270.74M
•Long-Term Debt: $0

$MANH has a strong balance sheet

RETURN ON CAPITAL✅
•2018: 91.0%
•2019: 66.3%
•2020: 46.2%
•2021: 49.1%
•2022: 63.4%
•2023: 69.4%

RETURN ON EQUITY✅
•2018: 65.0%
•2019: 59.3%
•2020: 48.3%
•2021: 47.1%
•2022: 54.0%
•2023: 69.9%

$MANH has solid return metrics, highlighting the financial efficiency of the business

REVENUES✅
•2013: $414.52M
•2023: $928.73M
•CAGR: 8.40%

FREE CASH FLOW✅
•2013: $84.65M
•2023: $241.49M
•CAGR: 11.05%

NORMALIZED EPS✅
•2013: $0.92
•2023: $3.74
•CAGR: 15.05%

SHARE BUYBACKS✅
•2014 Shares Outstanding: 75.84M
•LTM Shares Outstanding: 62.61M

By reducing its shares outstanding ~17.4%, $MANH increased its EPS by ~21.0% (assuming 0 growth)

MARGINS✅
•LTM Gross Margins: 53.6%
•LTM Operating Margins: 22.6%
•LTM Net Income Margins: 19.0%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive ~12% LESS in EPS & ~23% LESS in FCF per share

Using Benjamin Graham’s 2G rule of thumb, $MANH has to grow earnings at a 35.33% 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 (35.33%) required growth rate:

2024E: $3.77 (0.7% YoY) *FY Dec
2025E: $4.36 (15.9% YoY)
2026E: $5.08 (16.4% YoY)

$MANH has a solid track record of meeting analyst estimates ~2 years out, but let’s assume $MANH ends 2026 with $5.08 in EPS & see its CAGR potential assuming different multiples

60x P/E: $304.80💵 … ~6.1% CAGR

57x P/E: $289.56💵 … ~4.2% CAGR

54x P/E: $274.32💵 … ~2.2% CAGR

As you can see, we’d have to assume well above a 60x multiple in order for $MANH to have attractive return potential

While this could happen, this assumption leaves us with no margin of safety, especially considering that the multiple does not appear to be justified by the growth rate

In fact, in the last 10 years, $MANH multiple expanded by ~84% — implying that multiple expansion has contributed heavily to its returns

While $MANH is a quality business that I hope to own at some point, I don’t consider it anywhere near the buy zone today at $257.50💵

Instead, I’d start to get interested (*interested*) closer to 50x earnings or at $179💵 — 30% below today’s price

#stocks #investing
___

𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️: 𝐓𝐡𝐢𝐬 𝐢𝐬 𝐍𝐎𝐓 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐀𝐝𝐯𝐢𝐜𝐞. 𝐁𝐚𝐛𝐲𝐥𝐨�[...]

� 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® tweet

⁠Dimitry Nakhla | Babylon Capital®
This week’s reading material 📖

“Informed by successful, evolutionary strategies, Prasad outlines his counterintuitive principles for a long-term gain.

He provides three mantras of investing:

1. Avoid big risks;
2. Buy high-quality at a fair price;
3. And be very lazy.” https://t.co/zxVkLjgojl
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⁠InsideArbitrage
💊 $MRK Merck Boosts Buyback & Declares Q2 2025 Dividend!

🔹 Adds $10 Billion to its stock repurchase plan (4% of its $246.5B market cap) 📈
🔹 No expiration date, follows a similar 2018 $10 billion buyback boost
🔹 $2.9B still available under prior programs
🔹 2024: Repurchased $817 million (7 million shares) of its common stock under the prior program till September
🔹2023: $8.8B returned to shareholders ($7.4B dividends, $1.3B buybacks) – leaning more on dividends than repurchases💰

https://t.co/jbgkKGyk1U
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