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https://x.com/i/lists/1669153613199835138?t=R0mCicxs7zfJE_yOAek4gQ&s=09
InsideArbitrage
Getty Images $GETY and Shutterstock $SSTK to Merge in a $3.7 Billion Deal -
📸Shutterstock shareholders can choose one of three options at closing: $28.85 in cash per share, 13.67 shares of Getty Images stock per share, or a combination of 9.17 Getty Images shares and $9.50 in cash per Shutterstock share.
📸The merged company will be called Getty Images Holdings, Inc. and will keep trading on the New York Stock Exchange under the symbol “GETY.”
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Hidden Value Gems
Food for thought from Ruchir Sharma via @FT
🧵 👇🏼
Ten trends to watch in 2025
1️⃣ Return of the contrarians
History shows that the global economy and markets move in cycles, not straight trend lines. Contrarian investing is rooted in these patterns.
1/11 https://t.co/wkMwOKI2Lp
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InsideArbitrage
🚀 $ULTA Ulta Beauty announced that David C. Kimbell has stepped down as CEO and Board member, effective January 6, 2025.
Kecia L. Steelman, currently President and Chief Operating Officer, has been appointed as the new CEO. Kimbell will remain with the company as an advisor through June 28, 2025
Kecia Steelman has been with Ulta Beauty since 2014, holding key roles such as Chief Store Operations Officer and COO.
💼 Steelman’s compensation as CEO includes a base salary of $1.35 million
📈 David C. Kimbell, who served as CEO since 2021, led Ulta to achieve over $11 billion in annual revenue and a 55% return on equity.
Strong Financial Performance: Under Kimbell’s leadership, the company delivered strong financial performance, with current earnings per share at $25.04.
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InsideArbitrage
Ansys $ANSS entered an agreement to sell its PowerArtist business to Keysight Technologies $KEYS -
✴️Ansys and Synopsys $SNPS determined that the sale of PowerArtist was necessary to obtain regulatory approval for Synopsys' acquisition of Ansys.
✴️Synopsys' acquisition of Ansys is pending regulatory approvals and is expected to close in the first half of 2025.
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Quiver Quantitative
RT @QuiverCongress: JUST IN: @RepBrianFitz has introduced legislation to create congressional term limits.
It would limit Representatives to 6 terms, and limit Senators to 2 terms.
Follow here for updates. https://t.co/Cba8E8l21d
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Dimitry Nakhla | Babylon Capital®
Less than 2 months ago I stated:
“Today at $672💵 $ASML appears to be a STRONG consideration for investment, albeit with extreme volatility”
$ASML shares increased +14% since ✅
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See the analysis below for a detailed explanation of WHY it was a strong consideration then👇🏽 https://t.co/AKReJSOSHA
A sober valuation analysis on $ASML 🧘🏽♂️
•NTM P/E Ratio: 27.32x
•10-Year Mean: 31.07x
•NTM FCF Yield: 3.41%
•10-Year Mean: 3.11%
As you can see, $ASML appears to be trading below fair value
Going forward, investors can receive ~13% MORE in earnings per share & ~10% MORE in FCF per share🧠***
Before we get into valuation, let’s take a look at why $ASML is an excellent business (*Financials in USD*)
BALANCE SHEET✅
•Cash & Short Term Inv: $5.57B
•Long-Term Debt: $5.24B
$ASML has a strong balance sheet & 31x FFO Interest Coverage
RETURN ON CAPITAL✅
•2019: 17.5%
•2020: 21.6%
•2021: 43.8%
•2022: 48.0%
•2023: 48.7%
•LTM: 38.0%
RETURN ON EQUITY✅
•2019: 21.4%
•2020: 26.9%
•2021: 49.0%
•2022: 59.4%
•2023: 70.4%
•LTM: 49.2%
$ASML has excellent return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2013: $7.22B
•2023: $30.42B
•CAGR: 15.46%
FREE CASH FLOW*
• $ASML FCF is very sporadic due to heavy capital expenditures & isn’t necessarily the most reliable way to analyze the company’s value
NORMALIZED EPS✅
•2013: $3.17
•2023: $21.65
•CAGR: 21.18%
SHARE BUYBACKS✅
•2018 Shares Outstanding: $426.40M
•LTM Shares Outstanding: 393.80M
By reducing its shares outstanding ~7.6%, $ASML increased its EPS by ~8.2% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 51.1%
•LTM Operating Margins: 30.7%
•LTM Net Income Margins: 26.4%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~13% MORE in EPS & 10% MORE in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $ASML has to grow earnings at a 13.61% 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 (13.61%) required growth rate:
2024E: $20.22 (-4.0% YoY) *FY Dec
2025E: $24.66 (21.9% YoY)
2026E: $31.31 (27.0% YoY)
2027E: $38.22 (22.8% YoY)
$ASML has a decent track record of meeting analyst estimates ~2 years out. HOWEVER, let’s be conservative & assume $ASML ends 2027 with $35.00*** in EPS (~8% below current estimates) & see its CAGR potential assuming different multiples:
29x P/E: $1,015💵 … ~15.2% CAGR
28x P/E: $980💵 … ~13.9% CAGR
27x P/E: $945💵 … ~12.6% CAGR
26x P/E: $910💵 … ~11.2% CAGR
As you can see, $ASML appears to have attractive return potential EVEN if we assume greater or equal to 26x EPS (below its 10-year mean, current multiple, & justified given its quality, moat & growth rate)
Today at $672💵 $ASML appears to be a strong consideration for investment, albeit with extreme volatility
Additionally, we have some margin of safety by relying on a lower multiple, lower growth rate
As I’ve stated before, given its volatility, however, it’s wise to piece into $ASML — this way, you enhance your margin of safety while also positioning yourself to “win-win” if the stock moves up or down in the short-term 💵
#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 𝐢𝐧𝐯𝐞𝐬[...]
Stock Analysis Compilation
Polen Capital on Exlservice $EXLS US
Thesis: Exlservice is leading the charge in data transformation with 95% renewal rates and strong AI partnerships—discover why this overlooked tech player is a must-watch
(Extract from their Q3 letter) https://t.co/d0Pltn6pQV
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AkhenOsiris
If even Emirates Bank is seeing the fruits, AI is so fucking on like donkey kong.
Jokes aside, been hearing similar anecdotal stories from non-tech and definitely not tech-savvy companies. Maybe 2025 is an inflection year of sorts.Third-party contact works in digital transformation at Emirates Bank.- TechStockFundamentals
GenAI deployment going very well for them across a number of functional areas. The efficiency gains are definitely there.
Seems like 1) all this new Gen AI functionality mostly gets deployed across $AMZN, $MSFT and $GOOGL, and 2) Gen AI functionality boosting cost efficiency more than revenue for companies so maybe economic impact is more on margins.
Highlights
-Centralized team understands business requirements and deploys GenAI against it
-Vast majority of development on $MSFT Azure / OpenAI. Using infra deployed locally.
-In HR, mainly using AI to screen thousands of job applications per open role. Ranks candidates along w/ description. Have had good success here and have hired candidates that were top-ranked by AI.
-Use AI to help HR write job descriptions
-Use AI to help onboard new customers. Have to run names through various checklists and lots of little things can go wrong as many people share names. Keep a human in loop for exceptions.
-Use AI when screening new customers to see if any negative media or involvement that warrants attention.
-Use AI to help with regulation. AI digests new regulatory articles that are lengthy / nuanced, summarizes changes, and then reviews all existing contracts to see which ones may need to be amended. Also important that AI can translate different languages so can not only read regulation in Arabic but also see what changes to contracts in English are required.
-Use AI in contact center to help agents. AI can provide proposed solutions which is helpful for agents running into a new issue. AI also very helpful because have customers from Russia / China / etc. and might need agent to be able to read their statement to resolve issues. AI can translate all this.
-There is demand for local AI models bc Arabic has multiple dialects.
-Don’t fine-tune models but do have to put in place a lot of guardrails to reduce hallucination.
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Investing visuals
NVIDIA is inches away from being the most valuable company in the world.
Here's the company at a glance👇 https://t.co/3g2kb52w9A
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Quiver Quantitative
RT @QuiverCongress: JUST IN: Representative @VernBuchanan has introduced legislation to make daylight savings time permanent.
Follow here for updates. https://t.co/YuYewvKbQt
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Investing visuals
Geopolitical tension is one of the main risks that $ASML is facing. Here's a breakdown of its revenue by geography 👇 https://t.co/mCJVzJwEoy
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InsideArbitrage
RT @WSJbusiness: Nippon Steel’s U.S. Steel Acquisition Plan Referred to Biden for Review https://t.co/ST7x4B2B6Y
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InsideArbitrage
TPG $TPG in Talks to Acquire Solar Firm Altus Power $AMPS - Reuters
If the talks between TPG Rise Climate and Altus are successful, a deal could be signed in the coming weeks. https://t.co/VlvX4rdMVF
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Quiver Quantitative
RT @InsiderRadar: In early October, we reported on a massive insider purchase at $NFE.
The stock has now risen 55% in total since this trade was reported, with a 22% gain today. https://t.co/W9bBNBxprq
🚨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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Quiver Quantitative
RT @InsiderRadar: 🚨BREAKING: New Insider Purchase
A director of $LOW has reported the purchase of ~$250K of the company's stock.
This is the first insider buy we have seen at the company in over 3 years.
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Startup Archive
Naval Ravikant: “The future will be almost all startups”
“I firmly believe that the efficient size of a company is shrinking very rapidly, and so the future will be almost all startups.”
In the clip below from a 2012 interview, Naval speculates that information technology will reverse the centralizing force of economies of scale following the Industrial Revolution.
“I think the contract work trend is going to increase, and I think the size of your average company is going to decrease. I think we’re going to see more and more billion dollar businesses built by four or five people, and it’ll stay at that.”
He doesn’t think we’ll see many more companies like Facebook or Google with tens of thousands of employees:
“I think any entrepreneur worth their salt could today build Facebook with a few hundred people… Facebook and Google are in the situation that large companies end up in where the founders know that 80% of the people are not really needed, they just don’t know which 80%.”
Video source: @PandoDaily (2012)
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InsideArbitrage
Stryker $SYK Acquires Inari Medical $NARI in an All-Cash Deal Worth $4.9 Billion :
🩺Under the terms of the agreement, Stryker will commence a tender offer for all outstanding shares of Inari’s common stock for $80 per share in cash, representing a premium of 60.74% from the stock’s last close.
🩺The deal is expected to close by the end of the first quarter of 2025.
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Quiver Quantitative
RT @QuiverCongress: NEW: @RepMikeLevin has introduced legislation to provide a tax credit for purchases of safe gun storage devices. https://t.co/SK1r7ZUzwv
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App Economy Insights
$AMD reveals next-gen chips at CES:
💼 Dell Pro PCs: 1st with Ryzen AI PRO.
💻 Ryzen AI 300/200: AI for all budgets.
🖥️ Ryzen AI Max: 128GB memory, 50 TOPS.
🎮 Ryzen Z2 & 9950X3D: New gaming CPUS.
What caught your eye?
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𝐭𝐦𝐞𝐧𝐭 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. - Dimitry Nakhla | Babylon Capital® tweet
Dimitry Nakhla | Babylon Capital®
A snapshot view of $BKNG & $ABNB ✈️
$BKNG NTM P/E: 24.13x
$ABNB NTM P/E: 33.05x
$BKNG 3-Year EPS CAGR*: 17.02%
$ABNB 3-Year EPS CAGR*: 19.91%
Is $ABNB 37% valuation premium over $BKNG justified? … 💬
*Forecasted EPS Growth 2025-2028 📊 https://t.co/RPZoGEofXL
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Quiver Quantitative
Intapp stock has now risen 101% since Representative Josh Gottheimer's purchase in April.
He is the only member of Congress who we have ever seen trade $INTA. https://t.co/Ld3hNE3MPy
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Quiver Quantitative
RT @QuiverCongress: JUST IN: @RepAndyBiggsAZ just introduced legislation to allow NASA to establish a research center for deep space and interplanetary research.
Follow here for updates. https://t.co/i2MUWh9n3g
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Quiver Quantitative
RT @QuiverCongress: JUST IN: Representative @laurenboebert has introduced legislation to abolish the ATF.
Follow here for updates. https://t.co/qc694YeJrn
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Stock Analysis Compilation
THB AM on Hawkins $HWKN US
Thesis: Hawkins leverages strategic acquisitions and cost synergies to dominate niche markets and drive robust cash flow growth
(Extract from their Q3 letter) https://t.co/ijuXHQwOsy
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Quiver Quantitative
BREAKING: Senator Shelley Moore Capito just disclosed a purchase of stock in GE Aerospace, $GE.
GE Aerospace makes jet engines for military aircraft.
Capito sits on the Senate Appropriations Subcommittee on Defense, which oversees defense spending. https://t.co/CamVzQV09F
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Hidden Value Gems
Another profit warning from $VTY.L now expecting £250mn profit in FY24 instead of £300mn, due to delays in some projects and turning down less attractive transactions.
Remains on my watchlist for now… https://t.co/PNN0XGxvTW
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InsideArbitrage
NeueHealth $NEUE to be Taken Private by New Enterprise Associates In a Deal Worth $1.3 Billion -
⚕️Holders of NeueHealth common stock will receive $7.33 per share in cash, representing a 70.07% premium from the stock’s last close.
⚕️The deal includes a 30-day “go-shop” period ending on January 23, allowing the company to consider competing proposals.
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Stock Analysis Compilation
Curreen Capital on VF Corp $VFC US
Thesis: VF Corp’s turnaround under new leadership and its strong apparel brands create an attractive risk-reward opportunity
(Extract from their Q3 letter) https://t.co/WUgJCO7SPv
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Stock Analysis Compilation
Diamond Hill on Perma-Fix Environmental Service $PESI US
Thesis: Perma-Fix’s deep regulatory moat and long-term contracts drive significant upside in hazardous waste disposal.
(Extract from their Q3 letter) https://t.co/vBvqvor05B
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