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https://x.com/i/lists/1669153613199835138?t=R0mCicxs7zfJE_yOAek4gQ&s=09
Librarian Capital
Pepsi $PEP FY24Q3
Q3 revenue +1%, EBIT +6%, EPS +5% (all ex-FX)
"Subdued category trends in N America"
Beverages NA vol. -3%, revenue +1% organic
Fritzo NA volume -1.5%, revenue -1% organic
FY24 outlook
Revenue +LSD organic (was 4%)
Core EPS up "at least 8%" ex-FX (unchanged) https://t.co/lEOf0cfVHC
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Hidden Value Gems
I am excited to announce the launch of the third Investment Masterclass. I will share:
➡️How you can apply my investment method in practice to generate solid returns
➡️Where to find new investment ideas
➡️Practical application of critical valuation tools and methods
➡️Portfolio management (position weights, taking profits and dealing with losers)
➡️How to avoid typical investment mistakes
Participants will receive a complimentary Investment Analysis package (proprietary Excel templates for valuation and financial analysis and an Investment Checklist).
Register today to secure your place and receive an early-bird discount 👇🏽
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Librarian Capital
How to use headlines to frame an issue, FT and political donations edition
Unite gave £573.9k to 88 Labour MPs
FT headline: "Unite gives more than £500,000 to Labour MPs"
Arden gave £46.8k to 39 Labour MPs*
FT headline: "Arden funded 1 in 10 Labour MPs"
* as candidates https://t.co/G0Oaw3p6hf
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Librarian Capital
Vistry $VTY vs. inflation:
"Within our Partnerships model we have fixed revenue agreements ... We pass an element of cost risk to our subcontractors, including a sensible level of cost contingency and / or fixed price allowances to cover some level of inflation" (2023 annual) https://t.co/Eo49uvNZKM
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Librarian Capital
Imperial Brands $IMB FY24 pre-close
"Trading in line with expectations"
Tobacco & NGP revenue growth "strengthened" ex-FX
Gained share in US; lost in Germany, UK
FY25 capital return £2.8bn (FY24: £2.4bn)
£1.25bn buybacks
£1.5bn dividends (40.08p x 2)
Quarterly payments in FY26 https://t.co/GFzJ7w1YNk
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Hidden Value Gems
$GKP.L to pay $20m interim dividend and launch $10m buyback, around 8% total shareholder returns. This comes on top of $15m interim dividend in July and $10m buyback earlier this year. https://t.co/0rz9fZ1tOj
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Hidden Value Gems
Missed this @WSJ article on BNSF hiring Ed Harris, the 74-year old railroad veteran who is best known for precision scheduling.
“The strategy aims to cut costs in part by running trains on tighter schedules, removing excess equipment, and trying to get more cargo on a return trip rather than having a train return empty.”
The main conclusion is that BNSF has room for improvement as it keeps underperforming: ‘23 operating earnings down 14% vs 8% decline at $UNP
$BRK.B
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AkhenOsiris
$AMZN
Mizuho:
"We recently completed our quarterly AWS customer survey with a leading channel partner. Key points: (1) Increased investments in workload migration as regional banks raised their estimates from $40bn to $60bn over the next 5 years; (2) Enterprise customers are committed to Gen-AI investments; (3) Spending forecast for AWS in FY24 was raised from 22% to 25% YoY growth due to further improvements in core consumption. With that in mind, we have increased conviction on AWS acceleration and our above-the-Street revenue growth forecast of 20% for FY24. While we are positive structurally, the stock could be range-bound near-term due to potential revisions of Kuiper and normalization of margins at AWS. Maintain AMZN at Outperform, $240PT."
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Quiver Quantitative
Robinhood's Chief Legal Officer, Dan Gallagher, is reportedly favored to replace Gary Gensler, if Trump is elected.
We have seen Gallagher, and other Robinhood executives, donate thousands of dollars this election cycle.
Track live on Quiver. https://t.co/BB7uNpYiRm
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Quiver Quantitative
🚨 Elon Musk's America PAC has been ramping up spending.
We estimate that $11M has already been spent so far this month.
Here's where that money has been going 🧵 https://t.co/2ZIIBkqAAf
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Stock Analysis Compilation
Artisan Partners on Argenx $ARGX US
Thesis: Argenx’s Vyvgart presents a significant growth opportunity, with blockbuster potential in multiple autoimmune conditions, making it a biotech leader to watch.
(Extract from their Q2 letter) https://t.co/NQwu4yLQgZ
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Quiver Quantitative
This is wild.
We posted a report on a suspicious purchase of Fair Isaac stock by Representative Josh Gottheimer in May.
$FICO has now risen 67% since the trade.
It's a credit scoring service.
Gottheimer sits on the House Financial Services Committee. https://t.co/7F5IfVNXac
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Value Spotlight (Andrew Sather)
2 Ways to Check your WACC vs ROIC Calculations (Tutorial)
$JACK https://t.co/P7PY1gZWQu
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Investing visuals
An iconic business battle: Pepsi $PEP vs. CocaCola $KO 🥊 Who’s your pick?
❤️ Like for Pepsi $PEP
🔁 Retweet for CocaCola $KO
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Stock Analysis Compilation
TCW on Target Corporation $TGT US
Thesis: Target’s ongoing transformation into a leading omnichannel retailer, supported by new management and strategic partnerships, makes it an attractive investment for long-term growth.
(Extract from their Q2 letter) https://t.co/2nWyftGyK8
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Librarian Capital
Not pump & dump, Saudi SWF & Nintendo edition
$NTDOY
How it started . . .
How it's going. https://t.co/LGkfU9tmLN
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Hidden Value Gems
I am excited to announce the launch of the third Investment Masterclass. I will share:
➡️How I apply my unique investment method in practice to generate above-average returns
➡️Where to find new investment ideas
➡️Practical application of critical valuation tools and methods
➡️Portfolio management (position weights, taking profits and dealing with losers)
➡️How to avoid typical investment mistakes
Participants will receive a complimentary Investment Analysis package (proprietary Excel templates for valuation and financial analysis and an Investment Checklist).
Register today to secure your place and receive an early-bird discount 👇🏽
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Librarian Capital
$HAYPP shares now 30%+ down from 3-Sep peak https://t.co/EflCOfE1jq
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Librarian Capital
Spirax $SPX price & valuation snapshots (Evenlode)
"Significant valuation de-rating (from 45x to 23x)"
"Operational headwinds" include "Covid-related destocking at Watson-Marlow’s biopharmaceutical customers, and the global downturn in industrial production demand" https://t.co/J1TfRon8AO
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Librarian Capital
"China Slaps Levy on European Brandy" (Bloomberg)
"Importers will have to pay a deposit of as much as 39% of the value of brandy ... The document specifically mentioned European spirits makers controlled by Remy Cointreau SA and Pernod Ricard SA"
$RCO -7%, $RI -3.5%
China imposed a levy on brandy from the European Union, escalating a trade dispute days after the bloc’s decision to boost tariffs on Chinese electric vehicles https://t.co/4Eb5zraS2G
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Hidden Value Gems
Great piece by @paulg on whether you should follow your passion: “When To Do What You Love”
🧵👇🏼
1️⃣ “If your main goal is to make money, you can't usually afford to work on what interests you the most. People pay you for doing what they want, not what you want. But there's an obvious exception: when you both want the same thing. For example, if you love football, and you're good enough at it, you can get paid a lot to play it.”
1/6
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Hidden Value Gems
“[Unlike] inverting and the disinverting yield curves, and the Index of Leading Economic Indicators (LEI), S&P 500 operating forward earnings has been a remarkably useful guide. We've often observed that it doesn't anticipate recessions, but it is a very good coincident indicator of actual EPS when the economy is expanding.”
@yardeni on leading economic indicators
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Stock Analysis Compilation
Harris Associates on Embotelladora Andina $ANDINAB CI
Thesis: Despite political headwinds, Andina’s stable earnings growth and strong market position in Latin America’s refillable bottle space present a unique value opportunity.
(Extract from their Q2 letter) https://t.co/NYu7QUP3PL
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Stock Analysis Compilation
Third Point on Intercontinental Exchange $ICE US
Thesis: ICE’s powerful AI potential, combined with its dominant market position, presents a compelling long-term growth and value re-rating opportunity.
(Extract from their Q2 letter) https://t.co/x44kYgpndd
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Librarian Capital
Weekly Update: trying this out next Monday (14-Oct)
https://t.co/mJT2dePHtQ
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Quiver Quantitative
RT @InsiderRadar: 🚨Insider Trading Alert
New Fortress Energy Inc, $NFE, sees major insider buy:
🔹CEO: ~$49,999,993 purchase on Oct 1
Largest insider purchase in 5 years
The shares traded up 5.4% last Friday, but have dropped 4.5% this morning https://t.co/NE75u9uHCZ
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Investing visuals
✨New: Investing Visuals is now on Instagram! ✨
Get a quick look at all my visuals in one place. Follow me there: @investingvisuals
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Librarian Capital
FT: "This year (John Lewis) posted its first full-year profit after 3 consecutive years of losses"
This is likely misleading as it includes exceptionals, including non-cash impairments on shop values
JL's PBT Before Exceptionals was positive in FY22-23 https://t.co/GoVH7rghlq
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Dimitry Nakhla | Babylon Capital®
A sober valuation analysis on $BABA 🧘🏽♂️
•NTM P/E Ratio: 12.59x
•5-Year Mean: 16.36x
•NTM FCF Yield: 8.43%
•5-Year Mean: 5.62%
As you can see, $BABA appears to be trading below fair value
Going forward, investors can receive ~30% MORE in earnings per share & ~50% MORE in FCF per share 🧠***
Before we get into valuation, let’s take a look at $BABA quality characteristics
BALANCE SHEET✅
•Cash & Short-Term Inv: $61.77B
•Long-Term Debt: $24.50B
$BABA has a great balance sheet & 20x FFO Interest Coverage Ratio
RETURN ON CAPITAL🆗
•2020: 8.9%
•2021: 8.3%
•2022: 7.3%
•2023: 7.8%
•2024: 10.1%
•LTM: 9.9%
RETURN ON EQUITY🆗
•2020: 18.9%
•2021: 14.6%
•2022: 4.3%
•2023: 5.9%
•2024: 6.4%
•LTM: 5.7%
$BABA return metrics are lackluster, however it’s important to note that $BABA championed double-digit ROIC & ROE in prior years (2014-2018) & that the recent decline may be temporary
REVENUES✅
•2019: $56.15B
•2024: $130.35B
•CAGR: 18.34%
FREE CASH FLOW🆗
•2019: $17.21B
•2024: $20.84B
•CAGR: 3.90%
NORMALIZED EPS✅
•2019: $5.58
•2024: $8.60
•CAGR: 9.03%
SHARE BUYBACKS🆗➡️✅
•2019 Shares Outstanding: 2.62B
•LTM Shares Outstanding: 2.51B
By reducing its shares outstanding 4.2%, $BABA increased its EPS by 4.4% (assuming 0 growth)
MARGINS🆗
•LTM Gross Margins: 37.9%
•LTM Operating Margins: 14.0%
•LTM Net Income Margins: 7.3%
Margins have compressed substantially, a rebound in margin expansion would could be very bullish for $BABA shareholders
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~30% MORE in EPS & ~50% MORE in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $BABA has to grow earnings at a 6.30% 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 (6.30%) required growth rate:
2024A: $8.60 (14.1% YoY) *FY Mar
2025E: $8.91 (0.5% YoY)
2026E: $9.90 (11.1% YoY)
$BABA has an ok track record of meeting analyst estimates ~2 years out, but let’s assume $BABA ends 2026 with $9.90 in EPS & see its CAGR potential assuming different multiples
16x P/E: $158.40💵 … ~24.1% CAGR
15x P/E: $148.50💵 … ~18.9% CAGR
14x P/E: $138.60💵 … ~13.7% CAGR
13x P/E: $128.70💵 … ~8.3% CAGR
As you can see, $BABA appears to have attractive return potential if we assume >14x multiple, a valuation that may can be justified by its reduced growth rate & still has the potential to expand as China’s stimulus cycle just begins
Yet, it’s important to note the history of regulatory & political risks associated with $BABA as this creates a level of uncertainty & unpredictability
Today at $117💵 $BABA appears to be a great consideration for investment, albeit with risks that can justify leaving out of a portfolio of businesses
#stocks #investing
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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 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬 𝐨𝐫 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲.
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Librarian Capital
"Winemaker Duckhorn Agrees to Be Taken Private in $1.95bn Deal" (WSJ)
"Butterfly Equity ... has offered to buy (it) for $11.10 a share, more than 2x its $5.40 closing share price last week"
$BF.B owns 21.4% of Duckhorn, after wine business sale in FY24; now worth ~$350m https://t.co/n1AmJj6tR0
Winemaker Duckhorn Agrees to Be Taken Private in $1.95 Billion Deal https://t.co/JkiCYqCZdn
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