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https://x.com/i/lists/1669153613199835138?t=R0mCicxs7zfJE_yOAek4gQ&s=09
Dimitry Nakhla | Babylon Capital®
Having Trouble Finding Undervalued Quality Compounders w Market Near Highs❓
Here Are 7 Reasonably Valued Quality Stocks | P/E | EPS Growth Estimates | LTM ROIC 💸
💳 Visa $V
•NTM P/E: 27.24x
•10-Year Mean: 28.17x
•2024E: $9.92 (13.1% YoY)
•2025E: $11.07 (11.6% YoY)
•2026E: $12.54 (13.3% YoY)
•LTM ROIC: 35.7%
🖨️ ASML Holding $ASML
•NTM P/E: 29.39x
•10-Year Mean: 31.10x
•2024E: $18.83 (-5.4% YoY)
•2025E: $29.54 (56.9% YoY)
•2026E: $34.34 (16.3% YoY)
•LTM ROIC: 39.7%
💵 Mastercard $MA
•NTM P/E: 32.81x
•10-Year Mean: 31.42x
•2024E: $14.32 (16.8% YoY)
•2025E: $16.57 (15.7% YoY)
•2026E: $19.33 (16.7% YoY)
•LTM ROIC: 65.7%
✈️ Booking Holdings $BKNG
•NTM P/E: 21.78x
•10-Year Mean: 26.80x
•2024E: $174.59 (14.7% YoY)
•2025E: $200.86 (15.0% YoY)
•2026E: $235.73 (17.4% YoY)
•LTM ROIC: 48.4%
📦 Amazon $AMZN
•P/OCF: 18.13x
•10-Year Mean: 24.25x
•2024E: $11.20 (38.2% YoY)
•2025E: $13.22 (18.0% YoY)
•2026E: $16.53 (25.0% YoY)
•LTM ROIC: 13.8%
🖱️ Alphabet $GOOG $GOOGL
•NTM P/E: 19.96x
•10-Year Mean: 23.59x
•2024E: $7.64 (31.7% YoY)
•2025E: $8.71 (14.0% YoY)
•2026E: $10.02 (15.0% YoY)
•LTM ROIC: 30.9%
👜 Moët Hennessy Louis V $LVMH $MC
•NTM P/E: 19.43x
•10-Year Mean: 23.95x
•2024E: €29.71 (-2.0% YoY)
•2025E: €32.86 (10.6% YoY)
•2026E: €35.66 (8.5% YoY)
•LTM ROIC: 19.1%
#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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Investing visuals
Business battle: Intel $INTC vs AMD $AMD 🥊✨
If you had to choose one to invest in for the next decade, which would it be?👇
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Stock Analysis Compilation
Greenhaven Road on Burford $BUR LN
Burford’s $6.2B judgment against Argentina, with interest accruing daily, presents a highly attractive risk/reward opportunity as the company works through its backlog of cases
(Extract from their Q2 letter) https://t.co/GX7LSFfQE7
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Librarian Capital
No real answers to this - I don't think there is one
That's the point. An interest rate differential of 25 bps makes no difference to business fundamentals
Trading stocks on your view of rate decisions is betting on being right on TWO things - the decision and how market reacts
Suppose you and a friend were to meet a deity
The deity offers to give you each a special power:
Both of you can predict Fed rate a year from now
You will be accurate to 25bps; your friend to 50bps
Equities only; no derivatives
Can you make more money than your friend? How?
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Stock Analysis Compilation
Smithson on Melexis $MELE BB
Melexis’ low-cost, high-functionality sensors are poised to ride the wave of growing automotive and smart technology demand
(Extract from their Q1 letter) https://t.co/dixSsuUOTf
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Librarian Capital
They don’t ring a bell at the top, governance edition
Campari $CPR: "(New) plan … allows the dominant shareholder to sell half their shares (or more) without losing control of the company” (7-Aug-23)
Shares have since fallen ~40%
CEO Matteo Fantacchiotti has just resigned https://t.co/o4hk28PuDd
Some comments on Campari corporate governance.
https://t.co/rCZtoGgZrf
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Dimitry Nakhla | Babylon Capital®
One month ago I stated:
“Today at $3,618.86💵 $BKNG appears to be a decent consideration for investment”
Since then, $BKNG shares rallied +11.70% ✅
As I suggested in the post attached below👇🏽
“As you can see, $BKNG appears to have attractive return potential if we assume >19x earnings, a valuation below both its current & 3-year mean (allowing for slight multiple compression, an added layer of a margin of safety)
Also, $BKNG EPS growth rate ( >10%) more than justifies a >20x multiple”
#stocks #investing
A sober valuation analysis on $BKNG 🧘🏽♂️
•NTM P/E Ratio: 19.75x
•3-Year Mean: 21.24x
•NTM FCF Yield: 5.63%
•3-Year Mean: 4.79%
As you can see, $BKNG appears to be trading below fair value
Going forward, investors can receive ~7% MORE in earnings per share & ~17% MORE in FCF per share 🧠***
Before we get into valuation, let’s take a look at why $BKNG is a great business
BALANCE SHEET✅
•Cash & Short-Term Inv: $16.33B
•Long-Term Debt: $13.36B
$BKNG has a great balance sheet, an A- S&P Credit Rating, & 8.41x FFO Interest Coverage Ratio
RETURN ON CAPITAL✅
•2019: 33.3%
•2020: 2.7%
•2021: 14.2%
•2022: 29.1%
•2023: 47.3%
•LTM: 48.4%
$BKNG has strong ROIC, highlighting the financial efficiency of the business
REVENUES✅
•2013: $6.79B
•2023: $21.37B
•CAGR: 12.14%
FREE CASH FLOW✅
•2013: $2.22B
•2023: $7.00B
•CAGR: 12.16%
NORMALIZED EPS✅
•2013: $41.72
•2023: $152.22
•CAGR: 13.81%
SHARE BUYBACKS✅
•2013 Shares Outstanding: 52.41M
•LTM Shares Outstanding: 35.04M
By reducing its shares outstanding 33%, $BKNG increased its EPS by 50% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 97.8%
•LTM Operating Margins: 66.9%
•LTM Net Income Margins: 53.9%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~7% MORE in EPS & ~17% MORE in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $BKNG has to grow earnings at a 9.88% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be just more than (9.88%) required growth rate:
2024E: $175.64 (15.4% YoY) *FY Dec
2025E: $201.51 (14.7% YoY)
2026E: $236.96 (17.6% YoY)
$BKNG has a decent track record of meeting analyst estimates ~2 years out, so let’s assume $BKNG ends 2026 with $236.96 in EPS & see its CAGR potential assuming different multiples
21x P/E: $4,976.16💵 … ~15.5% CAGR
20x P/E: $4,739.20💵 … ~13.1% CAGR
19x P/E: $4,502.24💵 … ~10.7% CAGR
18x P/E: $4,265.28💵 … ~8.2% CAGR
17x P/E: $4,028.32💵 … ~5.6% CAGR
As you can see, $BKNG appears to have attractive return potential if we assume >19x earnings, a valuation below both its current & 3-year mean (allowing for slight multiple compression, an added layer of a margin of safety)
Also, $BKNG EPS growth rate ( >10%) more than justifies a >20x multiple
Today at $3,618.86💵 $BKNG appears to be a decent consideration for investment
I’d consider $BKNG a great purchase closer to $3,400 (~18.50x multiple) roughly 6% below today’s share price or at $3,400.00💵
This is where I can reasonably expect ~11% CAGR assuming a conservative 18x 2026 earnings estimates, a large margin of safety
#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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Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: 7 Reasons WHY $BKNG (Booking Holdings) Should Be On Your Watchlist 💸
1️⃣ $BKNG has grown revenue for 19 out of the last 20 years
2️⃣ $BKNG has increased earnings per share (EPS) for 19 out of the last 20 years
3️⃣ Strong & consistent ROIC (drop in 2020 due to global restrictions)
4️⃣ Opportunity for growth in operating and net income margins
5️⃣ A fortress balance sheet with $16.33B in cash & $13.36B in long term debt
6️⃣ Aggressive share buybacks (33% decrease in shares outstanding since 2013 leading to a 50% boost in EPS)
7️⃣ $BKNG recently initiated a $35.00 per share dividend that will likely grow at an attractive rate (8% - 11%)
#stocks #investing
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Stock Analysis Compilation
Harris Associates on Corebridge Financial $CRBG US
Thesis: Corebridge offers a strong market position in retirement solutions with a diversified earnings profile, making it an attractive investment at a discount following reduced AIG ownership
(Extract from their Q2 letter) https://t.co/utFKooQHty
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Quiver Quantitative
I built a trading bot that buys stocks that are:
A) Being bought by members of Congress
B) Spending lots money on lobbying
C) Recipients of government contracts.
It's been doing well recently.
The portfolio holdings are tracked live on my site: https://t.co/YKcLmhxjRY
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Librarian Capital
Philip Morris $PM share price ($) vs. LVMH $MC (€)
PM outperformed LVMH by ~60 ppt last 6 months (ignoring FX and dividends)
6 months ago, PM was ~60 ppt behind on a L5Y basis (visible in how they are currently close on L5Y basis)
Stocks are simple but not easy https://t.co/0PooRjEQQY
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Stock Analysis Compilation
Baron Capital on Tenet Healthcare $THC US
Thesis: Tenet Healthcare is strategically shifting to outpatient services, unlocking value through growth in its high-margin ASC business while streamlining operations
(Extract from their Q2 letter) https://t.co/8xISgQbRxs
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Quiver Quantitative
RT @InsiderRadar: Envista stock has now risen 18% since these insider purchases were made in August
🚨Insider Trading Alert
Envista Holdings, $NVST, sees major insider buys:
🔹CEO: ~$506,100 purchase on Aug 13
🔹CFO: ~$400,607 purchase on Aug 12
Largest insider purchases in 5 years.
The stock is up 4% today. https://t.co/JGXRgrE45I
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Stock Analysis Compilation
Davis fund on Tyson Foods $TSN US
Thesis: Tyson Foods offers a compelling value opportunity with its strong market position and cost advantages, poised to rebound as meat industry margins normalize
(Extract from their Q2 letter) https://t.co/9wuhwHeiXM
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Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: My TipRanks Weekly 💯
Top 1.86% among ~756K investors 👌🏽
#stocks #investing https://t.co/NnrkNInc3x
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Value Spotlight (Andrew Sather)
High non-interest bearing liabilities in Invested Capital for ROIC (Tutorial):
$LLY https://t.co/VfbCi7T86f
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Librarian Capital
$HAYPP: I am disappointed to be misunderstood by so many of you, especially as we have been publishing our thoughts on Tobacco stocks since 2019 https://t.co/b9FW2Hk2im
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Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: 20 Stocks ROIC >20% & Have More Cash and Equivalents to Long-Term Debt 💵
📈 Nvidia $NVDA
🏢 NVR Inc $NVR
🚗 Copart $CPRT
🤖 Fortinet $FTNT
🔩 Fastenal $FAST
💵 Paychex $PAYX
📐 Graco Inc $GGG
🚿 A O Smith $AOS
☁️ Microsoft $MSFT
🖱️ Alphabet $GOOG
📲 Taiwan Semi $TSM
🖨️ Lam Research $LRCX
💽 ASML Holding $ASML
🎥 Meta Platforms $META
💾 Applied Materials $AMAT
✈️ Booking Holdings $BKNG
🏥 Medpace Holdings $MEDP
🫀 Edwards Lifesciences $EW
🚛 Old Dominion Freight $ODFL
🧬 Vertex Pharmaceuticals $VRTX
#stocks #investing
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Librarian Capital
J Stern & Co World Stars Global Equity performance
L5Y +14.1% p.1. (gross) vs. MSCI World +13.1%
Aug YTD +19.0% vs. MSCI World +16.7%
YTD biggest contributor: IT
YTD biggest detractor: Consumer Staples
Consumer names include Pernod Ricard $RI, Diageo $DGE, L'Oréal $OR https://t.co/Dg2AkprBy5
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Hidden Value Gems
Such a weird statement with all due respect to the company.
$GAW.L https://t.co/uVIQ6NhbvE
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Hidden Value Gems
This latest piece by IEA as well as other oil market analyses suggest that the oil demand is quite weak this (+0.8mb/d in 1H24) with OPEC playing the key role in balancing the market. Non-OPEC supply is c. +1.5mb/d with more production expected next year (driven by Brazil and Guyana).
Even though I try to avoid macro forecasts, it looks like more downside for oil prices.
Would not rush to add to the oil holdings on recent correction, better to be cautious.
PS: I know IEA is often wrong and there is tension in the Middle East, but still ...
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Librarian Capital
Suppose you and a friend were to meet a deity
The deity offers to give you each a special power:
Both of you can predict Fed rate a year from now
You will be accurate to 25bps; your friend to 50bps
Equities only; no derivatives
Can you make more money than your friend? How?
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AkhenOsiris
25 or 50?
- 25
- 50
- Doesn't matter
- This poll sucks
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Librarian Capital
TCI's Microsoft $MSFT stake in 13-F filings
31-Mar-23: 15,299,188 shares
30-Jun-23: 11,845,241 shares
31-Sep-23: No entry
31-Dec-23: 10,638,165 shares
30-Jun-24: 10,531,890 shares (latest) https://t.co/QXA34xxXRG
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Librarian Capital
All tobacco stocks are down today 2-4% today
$MO $PM $BTI $IMBBY
(ADR / US OTC versions used for $ prices)
Occam's razor suggests rate expectations (linked to US retail sales data today) as most likely reason
h/t @ChrisPavese https://t.co/4k6TowgTWV
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Stock Analysis Compilation
Harris Associates on Equifax $EFX US
Thesis: Equifax, with its strong market position and ongoing cloud transformation, is well-positioned for growth, making it an undervalued opportunity in the high-quality information services sector
(Extract from their Q2 letter) https://t.co/p7r0AGBBvq
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Hidden Value Gems
The $CNX fans will find this exciting. I used to own them but out now as FCF has been weakening, production flat, 7% FCF yield not so high.
But the buyback seems to be doing its magic … https://t.co/k9eYPVMyrN
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Librarian Capital
Philip Morris $PM sells Vectura for £150m ($198m)
Also £148m ($195m) potential earn-outs (up to 2039)
Acquired for £852m ($1.2bn) in 2021
Buyer is Molex
"Unwarranted opposition to PMI’s transformation has impacted Vectura’s scientific engagement & commercial CDMO relationships" https://t.co/HCNe6Tc8hp
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Librarian Capital
"L’Oréal: New 52-Week Low, but Fears on China Likely Misplaced"
Shares are a good defensive asset, with a reasonable valuation, solid long-term EPS growth and minimal capital risk $OR $EL $ELF
https://t.co/zDuAFSdyf4 https://t.co/kD10ZjG1mb
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