Quiver Quantitative
BREAKING: Senator Markwayne Mullin just filed new stock trades.

One trade caught our eye:

He bought up to $50K of UnitedHealth stock, $UNH.

Mullin sits on the Senate Committee on Health.

Full trade list up on Quiver.
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Yellowbrick Investing
$HOFV

High risk trade idea - long $HOFV

Hall of Fame Village is SPAC that has had a cursed existence as a public co. Largest shareholder and debt owner, IRG and Stuart Lichter have a deal to take company private for $0.90 (+76% return from current stock price of $0.51).

If the deal falls thru, the equity is worthless and will file BK. Market is pricing the odds at 50/50 that deal goes thru. That seems too low.

The tension in the story is the PIPE notes (8% converts) have not provided consents for the transaction. IRG owns 43% of the $32m outstanding PIPEs. The deal is being held hostage by ~$18m worth of PIPE notes. The project has had bunch of delays and cost overruns. My analysis suggests HOVF has negative net worth of ~$80m at the moment. The PIPE notes are junior to most of the other debt meaning their recovery is significantly at risk in BK restructure. It seems to me the path of least resistance for the PIPE holders is to play ball here.

The shareholder vote has been secured. It appears (very limited information flow given it's a nanocap OTC stock) the rest of the conditions for the merger have been met.

City of Canton approved additional incentives for the project on Monday. Lichter/IRG just announced an extension of the termination date to Oct 17th (from Sept 30th) and an increase of $3m to their credit facility. Both are signs the buyer wants to get a deal done.

Stock price is at $0.51. Upside is +76% if the deal goes thru. Downside is likely -100%. Very risky, but decent "bet" given the fact pattern. Size the position accordingly - Dr. Hugh Akston
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Yellowbrick Investing
We might need to just shut the government down for good and start over because this is all so fucking stupid https://t.co/NafIsJUyOf
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App Economy Insights
$NKE NIKE snaps its losing streak.

Revenue grew +1% Y/Y, ending a series of five straight quarters of declines.

Is the turnaround real, or is it too early to celebrate? https://t.co/pQgaIG4UdQ
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AkhenOsiris
Started with the usual degen screenshots but we have progressed to a full on dick swinging contest from the all-stars 🍿
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AkhenOsiris
The rich will get richer...top 10% will need to do 90%+ of the consumer spending

Hill I will die on:

AI = Permanent Massive Job Losses Ahead

Yes, new industries will be born but will it be enough to make up for the reckoning ahead.

1.Jim Farley (CEO, Ford): “AI will replace half of all white-collar workers in the US.”
2.Dario Amodei (CEO, Anthropic): “White-collar bloodbath” — up to 50% of entry roles gone in 5 yrs.
3.Andy Jassy (CEO, Amazon): “We will need fewer people … this will reduce our total corporate workforce.”
4.Allison Kirkby (CEO, BT Group): AI could make layoffs “even deeper” than planned.
5.Arvind Krishna (CEO, IBM): ~7,800 roles could be automated out; paused hiring in replaceable areas.
6.Doug McMillon (CEO, Walmart): “AI is going to change literally every job.”
7.Marc Benioff (CEO, Salesforce): Cut 4,000 support jobs; AI now handles ~50% of calls.
8.Sebastian Siemiatkowski (CEO, Klarna): Workforce shrank from ~5,500 to ~3,000 via AI efficiency.
9.Jamie Dimon (CEO, JPMorgan Chase): AI will “take over jobs in certain departments” while creating others.
10.Sam Altman (CEO, OpenAI): Entire job categories will be “totally, totally gone.”
11.Jensen Huang (CEO, Nvidia): “Some jobs will be lost.”
12.Satya Nadella (CEO, Microsoft): AI will automate parts of many jobs.
13.Sundar Pichai (CEO, Alphabet/Google): AI will “transform jobs,” including eliminating some.
14.Elon Musk (CEO, Tesla / SpaceX / X): Warns AI / automation could “destroy jobs.”
15.Bill Gates (Co-founder, Microsoft): Automation / AI may wipe out many roles; has advocated policies to manage it.
https://t.co/1eK22p8MxM Gawdat (former Google X exec): “AI will wipe out jobs … even CEOs might be replaced.”
17.Geoffrey Hinton (AI pioneer): Warns of a future where “we may no longer be needed.”
18.Andrew Ng (AI researcher / entrepreneur): Says routine legal, clerical, coding work is under threat.
19.Kai-Fu Lee (CEO, Sinovation Ventures / ex-Google China): Predicts “routine cognitive work” will vanish.
20.Dilip Shanghvi (MD, Sun Pharma): Warns AI / automation will shrink roles in pharma / industry.
21.Eric Schmidt (former CEO, Google): Has cautioned that AI’s evolution has trade-offs, including job displacement.
22.Steve Wozniak (co-founder, Apple): Warned superintelligence may bring unprecedented disruption to work and society.
23.Yoshua Bengio (AI researcher / leader): Has voiced concerns about automation and risks to employment systems.
24.Stuart Russell (CS / AI leader): Argues AI control must address displacement and job risk.
25.Dov Seidman (former CEO, LSI / author): Has spoken publicly about AI’s threat to professional jobs and ethics.
26.Reid Hoffman (co-founder, LinkedIn): Warned AI tools will outpace many incumbents, displacing roles.
27.Jensen Huang (again, to emphasize contrast): even he concedes “some jobs will be lost.”
28.Mark Cuban (entrepreneur / investor): Frequently warns AI will disrupt many professions and reduce demand for human labor.
29.Jack Ma (co-founder, Alibaba): Historically warned that automation will replace people if they don’t upskill.
30.Eric Yuan (CEO, Zoom): Has acknowledged that machine intelligence / automation could “replace many tasks people do today.” -  Q-Cap 
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Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: A quality valuation analysis on $LRCX 🧘🏽‍♂️

•NTM P/E Ratio: 16.66x
•10-Year Mean: 20.20x

•NTM FCF Yield: 6.80%
•10-Year Mean: 5.51%

As you can see, $LRCX appears to be trading below fair value

Going forward, investors can receive ~21% MORE in earnings per share & ~23% MORE in FCF per share 🧠***

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

BALANCE SHEET✅
•Cash & Short-Term Inv: $5.67B
•Long-Term Debt: $4.48B

$LRCX has a strong balance sheet, an A- S&P Credit Rating & 25x FFO Interest Coverage

RETURN ON CAPITAL✅
•2021: 40.0%
•2022: 46.8%
•2023: 39.3%
•2024: 31.3%
•LTM: 34.9%

RETURN ON EQUITY✅
•2021: 69.8%
•2022: 74.8%
•2023: 62.3%
•2024: 45.7%
•LTM: 50.4%

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

REVENUES✅
•2014: $4.61B
•2024: $14.91B
•CAGR: 12.45%

FREE CASH FLOW✅
•2014: $571.55M
•2024: $4.26B
•CAGR: 22.24%

NORMALIZED EPS✅
•2014: $0.44
•2024: $3.03
•CAGR: 21.28%

PAID DIVIDENDS✅
•2019: $0.44
•2024: $0.80
•CAGR: 12.70%

SHARE BUYBACKS✅
•2015 Shares Outstanding: 1.77B
•LTM Shares Outstanding: 1.30B

By reducing its shares outstanding ~26%, $LRCX increased its EPS by ~35% (assuming 0 growth)

MARGINS✅
•LTM Gross Margins: 47.7%
•LTM Operating Margins: 29.7%
•LTM Net Income Margins: 26.5%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive ~21% MORE in EPS & ~23% MORE in FCF per share

Using Benjamin Graham’s 2G rule of thumb, $LRCX has to grow earnings at an 8.33% CAGR over the next several years to justify its valuation

Today, analysts anticipate 2025 - 2028 EPS growth over the next few years to be more than the (8.33%) required growth rate:

2025E: $3.75 (23.7% YoY) *FY Jun
2026E: $3.88 (3.6% YoY)
2027E: $4.65 (19.8% YoY)
2028E: $5.50 (18.3% YoY)

$LRCX has a decent track record of meeting analyst estimates ~2 years out, but let’s assume $LRCX ends FY 2028 with $5.50 in EPS & see its CAGR potential assuming different multiples:

20x P/E: $110.00💵 … ~20.2% CAGR

19x P/E: $104.50💵 … ~18.3% CAGR

18x P/E: $99.00💵 … ~16.4% CAGR

17x P/E: $93.50💵 … ~14.3% CAGR

16x P/E: $88.00💵 … ~12.2% CAGR

While it’s certainly reasonable for $LRCX to trade for 18x - 20x, I wouldn’t want to rely on that assumption as it doesn’t leave us with a substantial margin of safety

Yet, $LRCX still appears to have attractive return potential if we assume 16x - 17x, a multiple that’s justified by its excellent capital allocation, wide moat & growth rate

Moreover, $LRCX derives a large portion of its revenues from memory chip production, which is a strong growth driver for the company

~40% of revenue comes from recurring-like services, making $LRCX more predictable softening sector volatility

Today at $63💵 $LRCX appears to be a great consideration, with some margin of safety

Given its high uncertainty, I’d buy in tranches and leave some room to add more if it declines further, e.g. 1/3 at $63, 1/3 at $55, 1/3 at $50
___

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.

𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐨𝐛𝐭𝐚𝐢𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞, 𝐛𝐮𝐭 𝐢𝐬 𝐧𝐨𝐭 �[...]

�𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬 𝐨𝐫 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲.
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Umesh
Facts! 😹

We continue to burn billions so that we can train AI models to make cute cat videos! https://t.co/ftaFRFkqRe - Bindu Reddy
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