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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
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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.
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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.
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Offshore
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Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: A quality valuation analysis on $MELI 🧘🏽♂️
•NTM P/E Ratio: 42.45x
•1-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 🧠***
Before we get into valuation, let’s take a look at why $MELI is a great business
BALANCE SHEET✅
•Cash & Short-Term Inv: $3.70B
•Long-Term Debt: $2.82B
$MELI has a strong balance sheet, an ok BB+ S&P Credit Rating & 48x FFO Interest Coverage
RETURN ON CAPITAL🆗➡️✅
•2019: (4.8%)
•2020: 3.7%
•2021: 8.1%
•2022: 14.7%
•2023: 25.7%
•2024: 23.0%
RETURN ON EQUITY🆗➡️✅
•2019: (14.2%)
•2020: (0.1%)
•2021: 5.2%
•2022: 28.7%
•2023: 40.3%
•2024: 51.5%
$MELI has strong and improved return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2019: $2.30B
•2024: $20.78B
•CAGR: 55.30%
FREE CASH FLOW✅
•2019: $314.29M
•2024: $7.05B
•CAGR: 86.32%
NORMALIZED EPS✅
•2019: ($3.71)
•2024: $37.69
SHARE BUYBACKS❌
•2019 Shares Outstanding: 48.69M
•LTM Shares Outstanding: 50.70M
MARGINS🆗➡️✅
•LTM Gross Margins: 52.7%
•LTM Operating Margins: 12.7%
•LTM Net Income Margins: 9.2%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~12% MORE in EPS
Using Benjamin Graham’s 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 let’s assume $MELI ends 2027 with $85.38 in EPS & see its CAGR potential assuming different multiples
38x P/E: $3244💵 … ~19.5% CAGR
36x P/E: $3073💵 … ~17.2% CAGR
34x P/E: $2902💵 … ~14.7% CAGR
32x P/E: $2732💵 … ~12.2% CAGR
30x P/E: $2561💵 … ~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 🔑
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 $1996💵 are buying a great business for a great price, with a decent margin of safety — 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 $1790💵 (~10% below today’s price) where I can reasonably expect ~11% CAGR while assuming a very conservative 26x end multiple, ensuring a large margin of safety
#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.[...]
RT @DimitryNakhla: A quality valuation analysis on $MELI 🧘🏽♂️
•NTM P/E Ratio: 42.45x
•1-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 🧠***
Before we get into valuation, let’s take a look at why $MELI is a great business
BALANCE SHEET✅
•Cash & Short-Term Inv: $3.70B
•Long-Term Debt: $2.82B
$MELI has a strong balance sheet, an ok BB+ S&P Credit Rating & 48x FFO Interest Coverage
RETURN ON CAPITAL🆗➡️✅
•2019: (4.8%)
•2020: 3.7%
•2021: 8.1%
•2022: 14.7%
•2023: 25.7%
•2024: 23.0%
RETURN ON EQUITY🆗➡️✅
•2019: (14.2%)
•2020: (0.1%)
•2021: 5.2%
•2022: 28.7%
•2023: 40.3%
•2024: 51.5%
$MELI has strong and improved return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2019: $2.30B
•2024: $20.78B
•CAGR: 55.30%
FREE CASH FLOW✅
•2019: $314.29M
•2024: $7.05B
•CAGR: 86.32%
NORMALIZED EPS✅
•2019: ($3.71)
•2024: $37.69
SHARE BUYBACKS❌
•2019 Shares Outstanding: 48.69M
•LTM Shares Outstanding: 50.70M
MARGINS🆗➡️✅
•LTM Gross Margins: 52.7%
•LTM Operating Margins: 12.7%
•LTM Net Income Margins: 9.2%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~12% MORE in EPS
Using Benjamin Graham’s 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 let’s assume $MELI ends 2027 with $85.38 in EPS & see its CAGR potential assuming different multiples
38x P/E: $3244💵 … ~19.5% CAGR
36x P/E: $3073💵 … ~17.2% CAGR
34x P/E: $2902💵 … ~14.7% CAGR
32x P/E: $2732💵 … ~12.2% CAGR
30x P/E: $2561💵 … ~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 🔑
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 $1996💵 are buying a great business for a great price, with a decent margin of safety — 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 $1790💵 (~10% below today’s price) where I can reasonably expect ~11% CAGR while assuming a very conservative 26x end multiple, ensuring a large margin of safety
#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.[...]
Offshore
Dimitry Nakhla | Babylon Capital® RT @DimitryNakhla: A quality valuation analysis on $MELI 🧘🏽♂️ •NTM P/E Ratio: 42.45x •1-Year Mean: 47.73x As you can see, $MELI appears to be trading below fair value Going forward, investors can receive ~12% MORE in…
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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Finding Compounders
Asked whether he considers himself a superinvestor, Schloss demurs: "Well, I don't like to lose money."
A Forbes article on Walter Schloss https://t.co/abPlbfkPzg
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Asked whether he considers himself a superinvestor, Schloss demurs: "Well, I don't like to lose money."
A Forbes article on Walter Schloss https://t.co/abPlbfkPzg
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Offshore
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The Kobeissi Letter
BREAKING: Gold fund net inflows have hit a record $80 BILLION year-to-date.
This is 2 TIMES more than the previous high set in the full year 2020.
Investors are pouring money into gold at a record pace as the market uncertainty has skyrocketed.
As a result, gold prices have rallied 22% year-to-date and have outperformed every other major asset class.
Gold prices have also hit 52 all-time highs over the last year, posting the best streak in 12 years.
Gold is the global safe haven.
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BREAKING: Gold fund net inflows have hit a record $80 BILLION year-to-date.
This is 2 TIMES more than the previous high set in the full year 2020.
Investors are pouring money into gold at a record pace as the market uncertainty has skyrocketed.
As a result, gold prices have rallied 22% year-to-date and have outperformed every other major asset class.
Gold prices have also hit 52 all-time highs over the last year, posting the best streak in 12 years.
Gold is the global safe haven.
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App Economy Insights
📺 US TV Time March 2025:
Streaming 43.8% (+5.3pp Y/Y).
• YouTube 12.0% (+2.3pp Y/Y).
• Netflix 7.9% (-0.1pp Y/Y).
• Disney apps 5.0% (+0.3pp Y/Y).
• Prime Video 3.5% (+0.7pp Y/Y).
• Roku Channel 2.2% (+0.8pp Y/Y).
$GOOG $NFLX $AMZN $DIS $ROKU
Source: Nielsen https://t.co/evseYPQB4V
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📺 US TV Time March 2025:
Streaming 43.8% (+5.3pp Y/Y).
• YouTube 12.0% (+2.3pp Y/Y).
• Netflix 7.9% (-0.1pp Y/Y).
• Disney apps 5.0% (+0.3pp Y/Y).
• Prime Video 3.5% (+0.7pp Y/Y).
• Roku Channel 2.2% (+0.8pp Y/Y).
$GOOG $NFLX $AMZN $DIS $ROKU
Source: Nielsen https://t.co/evseYPQB4V
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