Offshore
Photo
โ App Economy Insights
Trumpโs steep tariffs on Chinese imports are shaking up the markets.
๐ค This post is sponsored by @HelloRyse
Investors are moving into private markets for stability.
One smart home disruptor is leading the charge, with 10+ patents, an Amazon partnership, and $10M+ in revenue. Now sold in 127 Best Buy locations.
This tech startup is following the acquisition blueprint of Ring ($1.2B) and Nest ($3.2B).
With 200% YoY growth and support from investors like Daymond John, itโs a rare chance to invest before their next big move.
Our readers can earn up to 25% in bonus shares: https://t.co/OGJbNmtbE8
tweet
Trumpโs steep tariffs on Chinese imports are shaking up the markets.
๐ค This post is sponsored by @HelloRyse
Investors are moving into private markets for stability.
One smart home disruptor is leading the charge, with 10+ patents, an Amazon partnership, and $10M+ in revenue. Now sold in 127 Best Buy locations.
This tech startup is following the acquisition blueprint of Ring ($1.2B) and Nest ($3.2B).
With 200% YoY growth and support from investors like Daymond John, itโs a rare chance to invest before their next big move.
Our readers can earn up to 25% in bonus shares: https://t.co/OGJbNmtbE8
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Offshore
Photo
โ Finding Compounders
Warren Buffett
Donโt Let Emotions Guide Your Investment Decisions https://t.co/gPqTC989Dr
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Warren Buffett
Donโt Let Emotions Guide Your Investment Decisions https://t.co/gPqTC989Dr
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Offshore
Video
โ The All-In Podcast
Chamath and Larry Summers Debate the Market Reaction to Trump's Tariffs
@LHSummers:
"If this is such a terrific thing, why do markets think it's so terrible for the American economy?"
"Maybe the market's just completely wrong ... but the job of markets is to look forward."
"It's to look passed the immediate."
"It's to see what the long run consequences are going to be."
"And markets are making a pretty devastatingly negative judgment on this step."
@chamath:
"โLarry, that's not true."
"โSo let's just establish a couple facts about 'the markets.'"
"Number one, there are two markets and they behave totally differently, and sometimes inversely to each other."
"There's the stock market and there's the bond market."
1) Stocks: mean reversion
"With respect to the stock market, what they are debating, and you're right Larry, is what is the effective long-term rate of return a dollar needs to generate in order to pay me back that dollar?"
โ"That is what the fundamental stock market does."
"And what we've seen for many years with trade imbalances, trade deficits, and close-to-zero interest rates, of which more of that happened under Democrats than Republicans, we have allowed the stock market to inflate past historical averages."
"โWhat we've actually seen happen in the last week is what most people would call mean reversion."
โ"The stock market is still way above where it was last year, two years ago, three years ago."
"What has happened is that the forward multiples have compressed. So that's number one. That's a fact."
2) Bonds: it's possible a major trade blew up
"And then with respect to bonds, what we are seeing now is there are two very complicated issues."
"In the last two days, we saw one part of the bond market totally get out of whack."
"And what we know is that the yields changed materially in a very acute way, which is atypical of how the bond market typically digests a philosophical change in approach to policy."
"โWhat we heard in the last 24 hours is a lot of this move may have been attributed to an enormous levered bet on US treasuries by a Japanese hedge fund."
"โIt will take three, and four, and five, and six weeks for us to really know."
3) Private credit: something to watch closely
"โSeparately, what we do know, though, where the structural complexity of the market โ and this is where, Larry, I agree with you โ is acute and important to observe is in the credit markets for private companies."
"And that is where you have to pay a lot of attention."
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Chamath and Larry Summers Debate the Market Reaction to Trump's Tariffs
@LHSummers:
"If this is such a terrific thing, why do markets think it's so terrible for the American economy?"
"Maybe the market's just completely wrong ... but the job of markets is to look forward."
"It's to look passed the immediate."
"It's to see what the long run consequences are going to be."
"And markets are making a pretty devastatingly negative judgment on this step."
@chamath:
"โLarry, that's not true."
"โSo let's just establish a couple facts about 'the markets.'"
"Number one, there are two markets and they behave totally differently, and sometimes inversely to each other."
"There's the stock market and there's the bond market."
1) Stocks: mean reversion
"With respect to the stock market, what they are debating, and you're right Larry, is what is the effective long-term rate of return a dollar needs to generate in order to pay me back that dollar?"
โ"That is what the fundamental stock market does."
"And what we've seen for many years with trade imbalances, trade deficits, and close-to-zero interest rates, of which more of that happened under Democrats than Republicans, we have allowed the stock market to inflate past historical averages."
"โWhat we've actually seen happen in the last week is what most people would call mean reversion."
โ"The stock market is still way above where it was last year, two years ago, three years ago."
"What has happened is that the forward multiples have compressed. So that's number one. That's a fact."
2) Bonds: it's possible a major trade blew up
"And then with respect to bonds, what we are seeing now is there are two very complicated issues."
"In the last two days, we saw one part of the bond market totally get out of whack."
"And what we know is that the yields changed materially in a very acute way, which is atypical of how the bond market typically digests a philosophical change in approach to policy."
"โWhat we heard in the last 24 hours is a lot of this move may have been attributed to an enormous levered bet on US treasuries by a Japanese hedge fund."
"โIt will take three, and four, and five, and six weeks for us to really know."
3) Private credit: something to watch closely
"โSeparately, what we do know, though, where the structural complexity of the market โ and this is where, Larry, I agree with you โ is acute and important to observe is in the credit markets for private companies."
"And that is where you have to pay a lot of attention."
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โ Dimitry Nakhla | Babylon Capitalยฎ
10 High-Quality Stocks on Sale ๐ต
1. MercadoLibre $MELI | NTM P/E 43x ๐ค
2. MSCI Inc $MSCI | NTM P/E 32x ๐
3. Mastercard $MA | NTM P/E 32x ๐ณ
4. Amazon $AMZN | NTM P/E 29x ๐ฆ
5. S&P Global $SPGI | NTM P/E 27x ๐
6. Synopsys $SNPS | NTM P/E 27x ๐พ
7. ASML Holding $ASML | NTM P/E 25x โ๏ธ
8. Google $GOOG | NTM P/E 18x โ๏ธ
9. Lam Research $LRCX | NTM P/E 18x ๐จ๏ธ
10. Novo Nordisk $NVO | NTM P/E 17x ๐งฌ
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10 High-Quality Stocks on Sale ๐ต
1. MercadoLibre $MELI | NTM P/E 43x ๐ค
2. MSCI Inc $MSCI | NTM P/E 32x ๐
3. Mastercard $MA | NTM P/E 32x ๐ณ
4. Amazon $AMZN | NTM P/E 29x ๐ฆ
5. S&P Global $SPGI | NTM P/E 27x ๐
6. Synopsys $SNPS | NTM P/E 27x ๐พ
7. ASML Holding $ASML | NTM P/E 25x โ๏ธ
8. Google $GOOG | NTM P/E 18x โ๏ธ
9. Lam Research $LRCX | NTM P/E 18x ๐จ๏ธ
10. Novo Nordisk $NVO | NTM P/E 17x ๐งฌ
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Offshore
Photo
โ Quiver Quantitative
Wow.
In May, we noticed a US politician buying stock in a German arms manufacturer.
The stock has now risen 195% since we posted this report.
195%
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Wow.
In May, we noticed a US politician buying stock in a German arms manufacturer.
The stock has now risen 195% since we posted this report.
195%
BREAKING: Representative Susie Lee just bought stock in the German arms manufacturer Rheinmetall, $RNMBY.
She is the first U.S. politician we have seen buy Rheinmetall stock.
Lee sits on the House Appropriations Subcommittee on Military Construction. https://t.co/hiNwf8AsRK tweet
Offshore
Photo
โ The Kobeissi Letter
Volatility in US Treasuries has been truly historic:
The 10-year note yield surged over 50 basis points in one week, marking the largest weekly increase since 2001.
Over the last 40 years, there have been just a few other occurrences when the 10-year note saw such a significant rise.
The 30-year Treasury yield has experienced daily swings of up to 32 basis points, the largest since 2020.
Keep watching the bond market.
tweet
Volatility in US Treasuries has been truly historic:
The 10-year note yield surged over 50 basis points in one week, marking the largest weekly increase since 2001.
Over the last 40 years, there have been just a few other occurrences when the 10-year note saw such a significant rise.
The 30-year Treasury yield has experienced daily swings of up to 32 basis points, the largest since 2020.
Keep watching the bond market.
tweet
Offshore
Photo
โ Dimitry Nakhla | Babylon Capitalยฎ
RT @DimitryNakhla: A quality valuation analysis on $MELI ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 42.45x
โข1-Year Mean: 47.73x
As you can see, $MELI appears to be trading below fair value
Going forward, investors can receive ~12% MORE in earnings per share ๐ง ***
Before we get into valuation, letโs take a look at why $MELI is a great business
BALANCE SHEETโ
โขCash & Short-Term Inv: $3.70B
โขLong-Term Debt: $2.82B
$MELI has a strong balance sheet, an ok BB+ S&P Credit Rating & 48x FFO Interest Coverage
RETURN ON CAPITAL๐โก๏ธโ
โข2019: (4.8%)
โข2020: 3.7%
โข2021: 8.1%
โข2022: 14.7%
โข2023: 25.7%
โข2024: 23.0%
RETURN ON EQUITY๐โก๏ธโ
โข2019: (14.2%)
โข2020: (0.1%)
โข2021: 5.2%
โข2022: 28.7%
โข2023: 40.3%
โข2024: 51.5%
$MELI has strong and improved return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2019: $2.30B
โข2024: $20.78B
โขCAGR: 55.30%
FREE CASH FLOWโ
โข2019: $314.29M
โข2024: $7.05B
โขCAGR: 86.32%
NORMALIZED EPSโ
โข2019: ($3.71)
โข2024: $37.69
SHARE BUYBACKSโ
โข2019 Shares Outstanding: 48.69M
โขLTM Shares Outstanding: 50.70M
MARGINS๐โก๏ธโ
โขLTM Gross Margins: 52.7%
โขLTM Operating Margins: 12.7%
โขLTM Net Income Margins: 9.2%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~12% MORE in EPS
Using Benjamin Grahamโs 2G rule of thumb, $MELI has to grow earnings at a 21.23% 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 (21.23%) required growth rate:
2025E: $47.04 (24.8% YoY)
2026E: $65.23 (38.7% YoY)
2027E: $85.38 (30.9% YoY)
$MELI has an ok track record of meeting analyst estimates ~2 years out, but letโs assume $MELI ends 2027 with $85.38 in EPS & see its CAGR potential assuming different multiples
38x P/E: $3244๐ต โฆ ~19.5% CAGR
36x P/E: $3073๐ต โฆ ~17.2% CAGR
34x P/E: $2902๐ต โฆ ~14.7% CAGR
32x P/E: $2732๐ต โฆ ~12.2% CAGR
30x P/E: $2561๐ต โฆ ~9.6% CAGR
As you can see, $MELI appears to have attractive return potential IF we assume >32 earnings (a multiple well-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 ๐
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 $1996๐ต are buying a great business for a great price, with a decent margin of safety โ these growth rates have to be revised down substantially for $MELI to miss the mark, even if the company grows earnings at 22% CAGR over the next 5 years, shareholders will likely end up with a great result
I consider $MELI a steal closer to $1790๐ต (~10% below todayโs price) where I can reasonably expect ~11% CAGR while assuming a very conservative 26x end multiple, ensuring a large margin of safety
#stocks #investing
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ: ๐๐ก๐ข๐ฌ ๐ข๐ฌ ๐๐๐ ๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐. ๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐๐ฏ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ.
๐๐ก๐ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ข๐ฌ ๐ข๐ง๐ญ๐๐ง๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ง๐จ๐ญ ๐๐ ๐๐จ๐ง๐ฌ๐ญ๐ซ๐ฎ๐๐ ๐๐ฌ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐ ๐ญ๐จ ๐ฆ๐๐๐ญ ๐ญ๐ก๐ ๐ฌ๐ฉ๐๐๐ข๐๐ข๐ ๐ง๐๐๐๐ฌ ๐จ๐ ๐๐ง๐ฒ ๐ข๐ง๐๐ข๐ฏ๐ข๐๐ฎ๐๐ฅ ๐จ๐ซ ๐ฌ๐ข๐ญ๐ฎ๐๐ญ๐ข๐จ๐ง. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐ข๐ฌ ๐ง๐จ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐จ๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ.[...]
RT @DimitryNakhla: A quality valuation analysis on $MELI ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 42.45x
โข1-Year Mean: 47.73x
As you can see, $MELI appears to be trading below fair value
Going forward, investors can receive ~12% MORE in earnings per share ๐ง ***
Before we get into valuation, letโs take a look at why $MELI is a great business
BALANCE SHEETโ
โขCash & Short-Term Inv: $3.70B
โขLong-Term Debt: $2.82B
$MELI has a strong balance sheet, an ok BB+ S&P Credit Rating & 48x FFO Interest Coverage
RETURN ON CAPITAL๐โก๏ธโ
โข2019: (4.8%)
โข2020: 3.7%
โข2021: 8.1%
โข2022: 14.7%
โข2023: 25.7%
โข2024: 23.0%
RETURN ON EQUITY๐โก๏ธโ
โข2019: (14.2%)
โข2020: (0.1%)
โข2021: 5.2%
โข2022: 28.7%
โข2023: 40.3%
โข2024: 51.5%
$MELI has strong and improved return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2019: $2.30B
โข2024: $20.78B
โขCAGR: 55.30%
FREE CASH FLOWโ
โข2019: $314.29M
โข2024: $7.05B
โขCAGR: 86.32%
NORMALIZED EPSโ
โข2019: ($3.71)
โข2024: $37.69
SHARE BUYBACKSโ
โข2019 Shares Outstanding: 48.69M
โขLTM Shares Outstanding: 50.70M
MARGINS๐โก๏ธโ
โขLTM Gross Margins: 52.7%
โขLTM Operating Margins: 12.7%
โขLTM Net Income Margins: 9.2%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~12% MORE in EPS
Using Benjamin Grahamโs 2G rule of thumb, $MELI has to grow earnings at a 21.23% 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 (21.23%) required growth rate:
2025E: $47.04 (24.8% YoY)
2026E: $65.23 (38.7% YoY)
2027E: $85.38 (30.9% YoY)
$MELI has an ok track record of meeting analyst estimates ~2 years out, but letโs assume $MELI ends 2027 with $85.38 in EPS & see its CAGR potential assuming different multiples
38x P/E: $3244๐ต โฆ ~19.5% CAGR
36x P/E: $3073๐ต โฆ ~17.2% CAGR
34x P/E: $2902๐ต โฆ ~14.7% CAGR
32x P/E: $2732๐ต โฆ ~12.2% CAGR
30x P/E: $2561๐ต โฆ ~9.6% CAGR
As you can see, $MELI appears to have attractive return potential IF we assume >32 earnings (a multiple well-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 ๐
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 $1996๐ต are buying a great business for a great price, with a decent margin of safety โ these growth rates have to be revised down substantially for $MELI to miss the mark, even if the company grows earnings at 22% CAGR over the next 5 years, shareholders will likely end up with a great result
I consider $MELI a steal closer to $1790๐ต (~10% below todayโs price) where I can reasonably expect ~11% CAGR while assuming a very conservative 26x end multiple, ensuring a large margin of safety
#stocks #investing
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ: ๐๐ก๐ข๐ฌ ๐ข๐ฌ ๐๐๐ ๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐. ๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐๐ฏ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ.
๐๐ก๐ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ข๐ฌ ๐ข๐ง๐ญ๐๐ง๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ง๐จ๐ญ ๐๐ ๐๐จ๐ง๐ฌ๐ญ๐ซ๐ฎ๐๐ ๐๐ฌ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐ ๐ญ๐จ ๐ฆ๐๐๐ญ ๐ญ๐ก๐ ๐ฌ๐ฉ๐๐๐ข๐๐ข๐ ๐ง๐๐๐๐ฌ ๐จ๐ ๐๐ง๐ฒ ๐ข๐ง๐๐ข๐ฏ๐ข๐๐ฎ๐๐ฅ ๐จ๐ซ ๐ฌ๐ข๐ญ๐ฎ๐๐ญ๐ข๐จ๐ง. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐ข๐ฌ ๐ง๐จ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐จ๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ.[...]
Offshore
โ Dimitry Nakhla | Babylon Capitalยฎ RT @DimitryNakhla: A quality valuation analysis on $MELI ๐ง๐ฝโโ๏ธ โขNTM P/E Ratio: 42.45x โข1-Year Mean: 47.73x As you can see, $MELI appears to be trading below fair value Going forward, investors can receive ~12% MORE inโฆ
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐, ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ ๐จ๐ซ ๐๐๐๐ฎ๐ซ๐๐๐ฒ.
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