Offshore
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Dimitry Nakhla | Babylon Capital®
Booking Holdings $BKNG Q4 2024 Report 🗓️
•Rev: $5.47B (+14% YoY) vs $5.18B est
•EPS: $41.55 (+30% YoY) vs $35.89 est https://t.co/5fl3cDXpxA
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Booking Holdings $BKNG Q4 2024 Report 🗓️
•Rev: $5.47B (+14% YoY) vs $5.18B est
•EPS: $41.55 (+30% YoY) vs $35.89 est https://t.co/5fl3cDXpxA
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Offshore
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App Economy Insights
$MELI MercadoLibre Q4 FY24:
• Revenue +37% Y/Y to $6.1B ($120M beat).
📦 Commerce +44% Y/Y to $3.6B.
💳 Fintech +29% Y/Y to $2.5B.
• GMV +8% to $14.5B.
• TPV +33% Y/Y to $58.9B.
• EPS $12.61 ($5.05 beat). https://t.co/ue1l4q8tF2
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$MELI MercadoLibre Q4 FY24:
• Revenue +37% Y/Y to $6.1B ($120M beat).
📦 Commerce +44% Y/Y to $3.6B.
💳 Fintech +29% Y/Y to $2.5B.
• GMV +8% to $14.5B.
• TPV +33% Y/Y to $58.9B.
• EPS $12.61 ($5.05 beat). https://t.co/ue1l4q8tF2
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Offshore
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Stock Analysis Compilation
Clearbridge Canadian Equity Strategy on Parkland $PKI US
Thesis: Parkland is a leading fuel and petroleum marketer with a strong cash flow, active deleveraging, and a focus on shareholder returns despite facing challenges in 2024.
(Extract from their Q4 letter) https://t.co/kX2wf6Ljsm
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Clearbridge Canadian Equity Strategy on Parkland $PKI US
Thesis: Parkland is a leading fuel and petroleum marketer with a strong cash flow, active deleveraging, and a focus on shareholder returns despite facing challenges in 2024.
(Extract from their Q4 letter) https://t.co/kX2wf6Ljsm
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Offshore
Video
Quiver Quantitative
Pete Hegseth just announced that the Department of Defense is planning on refocusing, not cutting, 8% of the military budget: https://t.co/C8i2IDrUgv
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Pete Hegseth just announced that the Department of Defense is planning on refocusing, not cutting, 8% of the military budget: https://t.co/C8i2IDrUgv
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Quiver Quantitative
RT @InsiderRadar: 🚨BREAKING: CEO and CFO Insider Purchases at $NE
The CEO of $NE has just reported a $350k purchase of the company's stock, and the CFO has reported purchasing $223k.
This is the first insider purchase reported by the CEO in over 4 years.
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RT @InsiderRadar: 🚨BREAKING: CEO and CFO Insider Purchases at $NE
The CEO of $NE has just reported a $350k purchase of the company's stock, and the CFO has reported purchasing $223k.
This is the first insider purchase reported by the CEO in over 4 years.
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Hidden Value Gems
Will $BABA case change from a deep value/turnaround into a Meme stock like $GME now ? 😀
"Investor Ryan Cohen, known for his involvement with GameStop, increased his stake in Alibaba to approximately $1 billion, further boosting the stock's performance. Cohen's investment underscores the confidence in Alibaba's growth prospects, especially among meme-stock traders."
h/t @gurufocus
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Will $BABA case change from a deep value/turnaround into a Meme stock like $GME now ? 😀
"Investor Ryan Cohen, known for his involvement with GameStop, increased his stake in Alibaba to approximately $1 billion, further boosting the stock's performance. Cohen's investment underscores the confidence in Alibaba's growth prospects, especially among meme-stock traders."
h/t @gurufocus
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Offshore
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Finding Compounders
“He equated buying stocks with buying a truckload of pigs”
How Mr Womack Made a Killing by John Train https://t.co/PDfksO90lT
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“He equated buying stocks with buying a truckload of pigs”
How Mr Womack Made a Killing by John Train https://t.co/PDfksO90lT
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Offshore
Video
Startup Archive
Jeff Bezos explains the idea of “paper cut” teams
“There are big things that are really important to manage — and by the way, it’s astonishingly hard to focus on just the big things. Even though they’re obvious, they’re really hard to focus on. But in addition to that, there are all these tiny customer deficiencies. We call those ‘paper cuts,’ and we make long lists of them. Then we have dedicated teams that go fix paper cuts. That’s because the teams that are working on the big issues never get to the paper cuts. They never work their way down the list. They’re working on big things — as they should and as you want them to — so you need special teams who are charged with fixing paper cuts.”
Video source: @lexfridman (2023)
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Jeff Bezos explains the idea of “paper cut” teams
“There are big things that are really important to manage — and by the way, it’s astonishingly hard to focus on just the big things. Even though they’re obvious, they’re really hard to focus on. But in addition to that, there are all these tiny customer deficiencies. We call those ‘paper cuts,’ and we make long lists of them. Then we have dedicated teams that go fix paper cuts. That’s because the teams that are working on the big issues never get to the paper cuts. They never work their way down the list. They’re working on big things — as they should and as you want them to — so you need special teams who are charged with fixing paper cuts.”
Video source: @lexfridman (2023)
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Offshore
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Investing visuals
Why I believe Nebius $NBIS has a lot of potential (hint: it is not their hardware business) 👇
$NBIS is a so called "Neo-Cloud" business. Providing GPU compute capacity to other businesses. Due to their own high-tech datacenter they can do so at competitive pricing.
But...this is where the near to mid-term growth is and only a part of what makes $NBIS compelling to me. The most interesting part is their vertically integrated offerings.
A full stack AI platform: from bare metal hardware consisting of GPU & datacenters, to managed cloud clusters, to a software stack they are building on top of it.
To me, its software stack is the most interesting part long term. If GPU's become a commodity, their biggest driver of growth could be the software ecosystem that they are currently building. Toloka is a great example growing 140% YoY. The more they build on top of their own infrastructure, the wider $NBIS moat will become.
Oh and let's not forget $NBIS autonomous driving and delivery robots (Avride) plus its EdTech business (Tripleten).
Love it.
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Why I believe Nebius $NBIS has a lot of potential (hint: it is not their hardware business) 👇
$NBIS is a so called "Neo-Cloud" business. Providing GPU compute capacity to other businesses. Due to their own high-tech datacenter they can do so at competitive pricing.
But...this is where the near to mid-term growth is and only a part of what makes $NBIS compelling to me. The most interesting part is their vertically integrated offerings.
A full stack AI platform: from bare metal hardware consisting of GPU & datacenters, to managed cloud clusters, to a software stack they are building on top of it.
To me, its software stack is the most interesting part long term. If GPU's become a commodity, their biggest driver of growth could be the software ecosystem that they are currently building. Toloka is a great example growing 140% YoY. The more they build on top of their own infrastructure, the wider $NBIS moat will become.
Oh and let's not forget $NBIS autonomous driving and delivery robots (Avride) plus its EdTech business (Tripleten).
Love it.
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Offshore
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Dimitry Nakhla | Babylon Capital®
2 months ago I stated:
“I consider $MELI a strong buy closer to $1,700💵 (~9% below today’s price)”
Since reaching my target accumulation price, $MELI stock rallied +40% ✅
___
As I suggested in the post attached below👇🏽
“$MELI boasts an expansive growth trajectory, fueled by powerful network effects that should drive sustained momentum
Key factors contributing to its promising outlook include 🔑
1. Margin expansion
2. Unparalleled access to Latin America's burgeoning economy
3. Network effects that produce self-reinforcing dynamics ensuring long-term competitiveness, among other things
Those buying $MELI today at $1856💵 are buying it for a fair price, with little margin of safety — however, these growth rates have to be revised down substantially for $MELI to miss the mark, even if the company grows earnings at 25% CAGR over the next 5 years, shareholders will likely end up with a decent return
I consider $MELI a strong buy closer to $1,700💵 (~9% below today’s price) where I can reasonably expect ~14% CAGR while assuming a 36x end multiple, ensuring some margin of safety”
A quality valuation analysis on $MELI 🧘🏽♂️
•NTM P/E Ratio: 49.60x
•1-Year Mean: 48.36x
As you can see, $MELI appears to be trading near fair value
Going forward, investors can receive roughly the same in earnings per share 🧠***
Before we get into valuation, let’s take a look at why $MELI is a great business
BALANCE SHEET✅
•Cash & Short-Term Inv: $6.67B
•Long-Term Debt: $3.04B
$MELI has a strong balance sheet, an ok BB+ S&P Credit Rating & 20x FFO Interest Coverage
RETURN ON CAPITAL🆗➡️✅
•2019: (4.8%)
•2020: 3.7%
•2021: 8.1%
•2022: 14.2%
•2023: 25.3%
•LTM: 20.1%
RETURN ON EQUITY🆗➡️✅
•2019: (14.2%)
•2020: (0.1%)
•2021: 5.2%
•2022: 28.7%
•2023: 40.3%
•LTM: 42.6%
$MELI has strong and improved return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2018: $1.44B
•2023: $14.47B
•CAGR: 58.64%
FREE CASH FLOW✅
•2018: $133.35M
•2023: $4.63B
•CAGR: 203.29%
NORMALIZED EPS✅
•2018: ($0.82)
•2023: $22.84
SHARE BUYBACKS❌
•2013 Shares Outstanding: 44.53M
•LTM Shares Outstanding: 51.28M
MARGINS🆗➡️✅
•LTM Gross Margins: 52.5%
•LTM Operating Margins: 11.4%
•LTM Net Income Margins: 7.8%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive roughly the same in EPS
Using Benjamin Graham’s 2G rule of thumb, $MELI has to grow earnings at a 24.80% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2026 EPS growth over the next few years to be more than the (24.80%) required growth rate:
2024E: $33.59 (47.1% YoY) *FY Dec
2025E: $45.76 (36.2% YoY)
2026E: $62.50 (36.6% YoY)
$MELI has an ok track record of meeting analyst estimates ~2 years out, but let’s assume $MELI ends 2026 with $62.50 in EPS & see its CAGR potential assuming different multiples
40x P/E: $2500💵 … ~15.5% CAGR
38x P/E: $2375💵 … ~12.7% CAGR
36x P/E: $2250💵 … ~9.7% CAGR
34x P/E: $2125💵 … ~6.7% CAGR
As you can see, $MELI appears to have attractive return potential IF we assume >38x earnings (a multiple justified by its growth rate & moat)
$MELI boasts an expansive growth trajectory, fueled by powerful network effects that should drive sustained momentum
Key factors contributing to its promising outlook include 🔑
1. Margin expansion
2. Unparalleled access to Latin America's burgeoning economy
3. Network effects that produce self-reinforcing dynamics ensuring long-term competitiveness, among other things
Those buying $MELI today at $1856💵 are buying it for a fair price, with little margin of safety — however, these growth rates have to be revised down substantially for $MELI t[...]
2 months ago I stated:
“I consider $MELI a strong buy closer to $1,700💵 (~9% below today’s price)”
Since reaching my target accumulation price, $MELI stock rallied +40% ✅
___
As I suggested in the post attached below👇🏽
“$MELI boasts an expansive growth trajectory, fueled by powerful network effects that should drive sustained momentum
Key factors contributing to its promising outlook include 🔑
1. Margin expansion
2. Unparalleled access to Latin America's burgeoning economy
3. Network effects that produce self-reinforcing dynamics ensuring long-term competitiveness, among other things
Those buying $MELI today at $1856💵 are buying it for a fair price, with little margin of safety — however, these growth rates have to be revised down substantially for $MELI to miss the mark, even if the company grows earnings at 25% CAGR over the next 5 years, shareholders will likely end up with a decent return
I consider $MELI a strong buy closer to $1,700💵 (~9% below today’s price) where I can reasonably expect ~14% CAGR while assuming a 36x end multiple, ensuring some margin of safety”
A quality valuation analysis on $MELI 🧘🏽♂️
•NTM P/E Ratio: 49.60x
•1-Year Mean: 48.36x
As you can see, $MELI appears to be trading near fair value
Going forward, investors can receive roughly the same in earnings per share 🧠***
Before we get into valuation, let’s take a look at why $MELI is a great business
BALANCE SHEET✅
•Cash & Short-Term Inv: $6.67B
•Long-Term Debt: $3.04B
$MELI has a strong balance sheet, an ok BB+ S&P Credit Rating & 20x FFO Interest Coverage
RETURN ON CAPITAL🆗➡️✅
•2019: (4.8%)
•2020: 3.7%
•2021: 8.1%
•2022: 14.2%
•2023: 25.3%
•LTM: 20.1%
RETURN ON EQUITY🆗➡️✅
•2019: (14.2%)
•2020: (0.1%)
•2021: 5.2%
•2022: 28.7%
•2023: 40.3%
•LTM: 42.6%
$MELI has strong and improved return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2018: $1.44B
•2023: $14.47B
•CAGR: 58.64%
FREE CASH FLOW✅
•2018: $133.35M
•2023: $4.63B
•CAGR: 203.29%
NORMALIZED EPS✅
•2018: ($0.82)
•2023: $22.84
SHARE BUYBACKS❌
•2013 Shares Outstanding: 44.53M
•LTM Shares Outstanding: 51.28M
MARGINS🆗➡️✅
•LTM Gross Margins: 52.5%
•LTM Operating Margins: 11.4%
•LTM Net Income Margins: 7.8%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive roughly the same in EPS
Using Benjamin Graham’s 2G rule of thumb, $MELI has to grow earnings at a 24.80% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2026 EPS growth over the next few years to be more than the (24.80%) required growth rate:
2024E: $33.59 (47.1% YoY) *FY Dec
2025E: $45.76 (36.2% YoY)
2026E: $62.50 (36.6% YoY)
$MELI has an ok track record of meeting analyst estimates ~2 years out, but let’s assume $MELI ends 2026 with $62.50 in EPS & see its CAGR potential assuming different multiples
40x P/E: $2500💵 … ~15.5% CAGR
38x P/E: $2375💵 … ~12.7% CAGR
36x P/E: $2250💵 … ~9.7% CAGR
34x P/E: $2125💵 … ~6.7% CAGR
As you can see, $MELI appears to have attractive return potential IF we assume >38x earnings (a multiple justified by its growth rate & moat)
$MELI boasts an expansive growth trajectory, fueled by powerful network effects that should drive sustained momentum
Key factors contributing to its promising outlook include 🔑
1. Margin expansion
2. Unparalleled access to Latin America's burgeoning economy
3. Network effects that produce self-reinforcing dynamics ensuring long-term competitiveness, among other things
Those buying $MELI today at $1856💵 are buying it for a fair price, with little margin of safety — however, these growth rates have to be revised down substantially for $MELI t[...]