4
https://x.com/i/lists/1669153613199835138?t=R0mCicxs7zfJE_yOAek4gQ&s=09
Capital Employed
What the fudge. That's nuts.
"South Korea is also implementing a policy to boost the stock market where excess cash on the balance sheet will be taxed"
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iinvested
3Q'24 Upslope Capital Management on $CME, $CMPO
More fund letters here:
https://t.co/ccjFhSPQ2v https://t.co/y7lcdPaLQk
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Stock Analysis Compilation
Black Bear VP on ARCH Resources $ARCH US
Thesis: The merger between ARCH and CONSOL is set to create modest synergies as global demand for metallurgical coal rises, driven by development in Asia and limited supply
(Extract from their Q3 letter) https://t.co/1SQBbJEXE7
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Startup Archive
RT @rvivek: Also known as the Parkinson's law: Work expands to fill the available time
Keith Rabois tells the story of Elon Musk observing interns waiting in line for coffee at SpaceX
Keith is asked how Elon Musk gets so much done, to which he replies:
“If you approach every day and every week of your life with the question, ‘What did you accomplish this week?’ I think that compounds, and very few people do that. I think that’s the number one ingredient.”
As for the second ingredient, Keith tells a story he heard from some friends at SpaceX where Elon observed a line of interns piling up around the coffee machine. This prompted Elon to send a memo to the company asking:
“Why are all the interns wasting all this time? If you feel like you have nothing better to do than waiting in line, you’re at the wrong company. And by the way, I’m installing cameras to make sure that we don’t have lines at the coffee shop.”
Keith believes that stamping out entitlement and expecting people to accomplish things every day also compounds over decades in Elon’s career. He recalls a principle PayPal cofounder Max Levchin taught him where he compares startups to gas in chemistry:
“Gas expands to the size of the container… If you tell people they have a month, it’ll take a month. If you tell people it takes two weeks, it’ll take two weeks. Tell them a week, it’ll take a week. So you want to constantly compress the container size because those accomplishments add up over months, quarters, years, and decades.”
Video source: @imchrisvasquez (2024)
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Startup Archive
RT @foundertribune: Steve Jobs and "Nice CEOs" by @pmarca https://t.co/flEgfiBzXG
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Stock Analysis Compilation
Alphyn Capital Management on Cogent Communications $CCOI US
Thesis: Cogent offers strong upside potential through 'hidden asset' monetization and wave revenue growth, with a target of $500 million in operating profits over the coming years
(Extract from their Q3 letter) https://t.co/b92wl0K1pI
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Investing visuals
Microsoft $MSFT: A great company at a fair price💎👇 https://t.co/FSKZjMOB8a
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iinvested
3Q'24 Blue Tower Asset Management on $WCC
More fund letters here:
https://t.co/ccjFhSPQ2v https://t.co/4f0fS1qCIu
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Ahmad Jivraj
McDonald’s should start a hedge fund lol
The McRib is back. BTC historically goes up >2x after the McRib returns. Don't fade the McRib.
Not financial advice. https://t.co/HSsEcWHj2a
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Dimitry Nakhla | Babylon Capital®
“You know, tomorrow morning a stock that we have been following for seven or ten years could suddenly drop 40% in price, and we need to act quickly because a lot of those inefficiencies don't last very long.
It might last a few days, a few weeks, and then it's gone. So, we're spending a lot of our time figuring out where we want to invest and then waiting for that catalyst.”
— Dev Kantesaria 🗣️
$ASML
#stocks #investing
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App Economy Insights
What are you watching this week?
• Monday: $SAP.
• Tuesday: $VZ, $TXN, $GM, $LMT, $FI, $MCO.
• Wednesday: $TSLA, $LRCX, $KO, $IBM, $NOW, $BA, $T, $TMUS.
• Thursday: $AAL, $APPF, $LUV, $UPS.
All visualized in our PRO coverage next Saturday. https://t.co/7pVhGnz8zm
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Stock Analysis Compilation
Alphyn Capital Management on Fairfax Financial $FFH
Thesis: FFH, with solid insurance operations and a $66 billion investment portfolio, is positioned for continued growth, aiming for $4 billion in operating income and international expansion
(Extract from their Q3 letter) https://t.co/rZ9O6KHsn9
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Dimitry Nakhla | Babylon Capital®
A sober valuation analysis on $LRCX 🧘🏽♂️
•NTM P/E Ratio: 20.35x
•10-Year Mean: 19.80x
•NTM FCF Yield: 4.72%
•10-Year Mean: 5.57%
As you can see, $LRCX appears to be trading somewhere near fair value & over fair value
Going forward, investors can receive ~3% LESS in earnings per share & ~15% LESS 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: $5.84B
•Long-Term Debt: $4.46B
$LRCX has a strong balance sheet, an A- S&P Credit Rating & 25x FFO Interest Coverage
RETURN ON CAPITAL✅
•2020: 24.0%
•2021: 40.0%
•2022: 46.8%
•2023: 39.3%
•2024: 31.3%
RETURN ON EQUITY✅
•2020: 45.7%
•2021: 69.8%
•2022: 74.8%
•2023: 62.3%
•2024: 45.7%
$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: $4.25B
•CAGR: 22.23%
NORMALIZED EPS✅
•2014: $0.44
•2024: $3.03
•CAGR: 21.28%
PAID DIVIDENDS✅
•2019: $0.44
•2024: $0.80
•CAGR: 12.70%
SHARE BUYBACKS✅
•2014 Shares Outstanding: 1.74B
•LTM Shares Outstanding: 1.32B
By reducing its shares outstanding ~24%, $LRCX increased its EPS by ~31% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 47.6%
•LTM Operating Margins: 29.0%
•LTM Net Income Margins: 25.7%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~3% LESS in EPS & ~15% LESS in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $LRCX has to grow earnings at a 10.18% 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 (10.18%) required growth rate:
2025E: $3.58 (18.1% YoY) *FY Jun
2026E: $4.40 (23.0% YoY)
2027E: $4.97 (12.8% YoY)
$LRCX has a decent track record of meeting analyst estimates ~2 years out, but let’s assume $LRCX ends 2027 with $4.97 in EPS & see its CAGR potential assuming different multiples:
22x P/E: $109.34💵 … ~17.5% CAGR
21x P/E: $104.37💵 … ~15.4% CAGR
20x P/E: $99.40💵 … ~13.4% CAGR
19x P/E: $94.43💵 … ~11.3% CAGR
18x P/E: $89.46💵 … ~9.2% CAGR
While it’s certainly reasonable for $LRCX to trade for 21x - 22x, 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 19x - 20x, a multiple that’s arguably justified by its excellent capital allocation & wide moat
Moreover, $LRCX derives a large portion of its revenues from memory chip production, which is a strong growth driver for the company
Today at $72.84💵 $LRCX appears to be a decent consideration, albeit with little margin of safety
Given its high uncertainty (with little margin of safety), I’d get more interested in $LRCX closer to $63💵 (9.3% below today’s price) where I can reasonably expect 12.76% CAGR while assuming 17x earnings
#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.
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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Startup Archive
RT @ChetanChawla: “Gas expands to the size of the container… If you tell people they have a month, it’ll take a month. If you tell people it takes two weeks, it’ll take two weeks. Tell them a week, it’ll take a week. So you want to constantly compress the container size because those accomplishments add up over months, quarters, years, and decades.”
@rabois on Parkinson’s Principle
#Startup #FounderMode
Keith Rabois tells the story of Elon Musk observing interns waiting in line for coffee at SpaceX
Keith is asked how Elon Musk gets so much done, to which he replies:
“If you approach every day and every week of your life with the question, ‘What did you accomplish this week?’ I think that compounds, and very few people do that. I think that’s the number one ingredient.”
As for the second ingredient, Keith tells a story he heard from some friends at SpaceX where Elon observed a line of interns piling up around the coffee machine. This prompted Elon to send a memo to the company asking:
“Why are all the interns wasting all this time? If you feel like you have nothing better to do than waiting in line, you’re at the wrong company. And by the way, I’m installing cameras to make sure that we don’t have lines at the coffee shop.”
Keith believes that stamping out entitlement and expecting people to accomplish things every day also compounds over decades in Elon’s career. He recalls a principle PayPal cofounder Max Levchin taught him where he compares startups to gas in chemistry:
“Gas expands to the size of the container… If you tell people they have a month, it’ll take a month. If you tell people it takes two weeks, it’ll take two weeks. Tell them a week, it’ll take a week. So you want to constantly compress the container size because those accomplishments add up over months, quarters, years, and decades.”
Video source: @imchrisvasquez (2024)
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Startup Archive
Keith Rabois tells the story of Elon Musk observing interns waiting in line for coffee at SpaceX
Keith is asked how Elon Musk gets so much done, to which he replies:
“If you approach every day and every week of your life with the question, ‘What did you accomplish this week?’ I think that compounds, and very few people do that. I think that’s the number one ingredient.”
As for the second ingredient, Keith tells a story he heard from some friends at SpaceX where Elon observed a line of interns piling up around the coffee machine. This prompted Elon to send a memo to the company asking:
“Why are all the interns wasting all this time? If you feel like you have nothing better to do than waiting in line, you’re at the wrong company. And by the way, I’m installing cameras to make sure that we don’t have lines at the coffee shop.”
Keith believes that stamping out entitlement and expecting people to accomplish things every day also compounds over decades in Elon’s career. He recalls a principle PayPal cofounder Max Levchin taught him where he compares startups to gas in chemistry:
“Gas expands to the size of the container… If you tell people they have a month, it’ll take a month. If you tell people it takes two weeks, it’ll take two weeks. Tell them a week, it’ll take a week. So you want to constantly compress the container size because those accomplishments add up over months, quarters, years, and decades.”
Video source: @imchrisvasquez (2024)
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Capital Employed
Another big batch of quarterly letters added. 56 added so far with more to come 👇
https://t.co/z8VTurKKQI https://t.co/SPdJhBURvE
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Stock Analysis Compilation
Pernas Research on Upwork $UPWK US
Thesis: Upwork, despite recent concerns over growth and AI disruption, presents a strong long-term investment opportunity with 70% upside potential driven by continued demand for freelancers
(Extract from their Q3 letter) https://t.co/riu7I8zjNi
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Stock Analysis Compilation
Royce IP on Kyndryl Holdings $KD
Thesis: Kyndryl is in the process of repricing contracts and implementing transformational measures, with a focus on improving margins as it strengthens its leadership position in IT infrastructure services
(Extract from their Q3 letter) https://t.co/3wTiANBTOJ
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Startup Archive
RT @jordanjoecooper: The world would be a better place if more people really cared and pushed people to do their very best work.
Reminds me of @jasonfried talking about how much awful software he saw that made him mad.
I agree , for every amazing product there seems to be a hundred or more absolutely dire ones.
Marc Andreessen on Steve Jobs:
"The standards have to be enforced. If the standards aren’t enforced, then the standards slip. This is the role of the CEO in any company. Some care and some don’t. Great CEOs care a lot. Steve cared a lot."
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Startup Archive
Marc Andreessen on Steve Jobs:
"The standards have to be enforced. If the standards aren’t enforced, then the standards slip. This is the role of the CEO in any company. Some care and some don’t. Great CEOs care a lot. Steve cared a lot."
Steve Jobs and "Nice CEOs" by @pmarca https://t.co/flEgfiBzXG
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Startup Archive
Sam Altman on the Paul Graham advice that not enough people take to heart
“One of the things that Paul Graham used to say that I think never became venerated advice to the degree it should have is this idea that you should try to be relentlessly resourceful. Surprisingly often, if you just keep looking for new attack vectors on a problem in front of you, you can figure it out. And I think this is one of the most important skills in life… it works in almost all scenarios.”
Sam recalls trying to get a deal done with a mobile operator that risked killing his first startup when he was 19 years old:
“They didn’t really work with startups or technology companies in general, and we probably tried 30 different paths into this company…. [Then] the key decision maker said, I’m finally going to meet with you because I want you to stop bothering us.”
He continues:
“You can just keep doing that until something works. And I think most people — at the first ignored email or at least the second — would just stop.”
Video source: @HarvardHBS (2024)
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iinvested
RT @East72Dynasty: Our quarterly report for September is attached. The company pumping oil out of the Yemeni boat is Boskalis, which HAL Trust $HAL.AS acquired the 54% "minority" in 2022. For 3x EV/EB ITDA. In our view, it marks a turning point for HAL after some years. We dig deeply into this secretive entity which we hold. We also update $BOL.PA galaxy and $DIE.BR https://t.co/qvfJOms3tF
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Stock Analysis Compilation
Brasada on Camden Property Trust $CPT US
Thesis: Camden Property Trust presents a long-term opportunity with favorable demographic trends, offering attractive returns as interest rates stabilize and apartment supply peaks
(Extract from their Q3 letter) https://t.co/RJiaKvB9sQ
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Stock Analysis Compilation
Royce IP on Mativ Holdings $MATV US
Thesis: Mativ Holdings is at a turnaround point with improving demand, cost-saving initiatives, and significant debt reduction following the divestiture of its Engineered Papers business
(Extract from their article) https://t.co/uwXfgHfyVB
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iinvested
3Q'24 Patient Capital Management on $QXO, $PLAY
https://t.co/ElUS4IoqIz
More fund letters here:
https://t.co/ccjFhSQnS3 https://t.co/LsSqtiZN8j
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App Economy Insights
📊 This Week in Visuals:
⚙️ TSMC $TSM
💼 UnitedHealth $UNH
💊 Johnson & Johnson $JNJ
💳 American Express $AXP
🦾 Intuitive Surgical $ISRG
🛩️ United Airlines $UAL
https://t.co/8fI94jPeUn
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Dimitry Nakhla | Babylon Capital®
So I’m in Lake Como / Menaggio & look what made a surprise guest appearance $AMZN
For those who’ve been, you may appreciate $AMZN logistics even more now ahaha 🇮🇹📦💸
#stocks #investing https://t.co/BWAdA2pDOx
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Startup Archive
RT @mikemcg0: Interesting idea @rabois learned from @mlevchin comparing startups to gas:
"Gas expands to the size of the container… If you tell people they have a month, it’ll take a month. If you tell people it takes two weeks, it’ll take two weeks... So you want to constantly compress the container size because those accomplishments add up over months, quarters, years, and decades."
Keith Rabois tells the story of Elon Musk observing interns waiting in line for coffee at SpaceX
Keith is asked how Elon Musk gets so much done, to which he replies:
“If you approach every day and every week of your life with the question, ‘What did you accomplish this week?’ I think that compounds, and very few people do that. I think that’s the number one ingredient.”
As for the second ingredient, Keith tells a story he heard from some friends at SpaceX where Elon observed a line of interns piling up around the coffee machine. This prompted Elon to send a memo to the company asking:
“Why are all the interns wasting all this time? If you feel like you have nothing better to do than waiting in line, you’re at the wrong company. And by the way, I’m installing cameras to make sure that we don’t have lines at the coffee shop.”
Keith believes that stamping out entitlement and expecting people to accomplish things every day also compounds over decades in Elon’s career. He recalls a principle PayPal cofounder Max Levchin taught him where he compares startups to gas in chemistry:
“Gas expands to the size of the container… If you tell people they have a month, it’ll take a month. If you tell people it takes two weeks, it’ll take two weeks. Tell them a week, it’ll take a week. So you want to constantly compress the container size because those accomplishments add up over months, quarters, years, and decades.”
Video source: @imchrisvasquez (2024)
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iinvested
3Q'24 Cooper Investors Global Equity Fund (Unhedged) on $TKO
More fund letters here:
https://t.co/ccjFhSPQ2v https://t.co/k7I1RLw0hu
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Stock Analysis Compilation
Rockwood Strategic on Facilities by ADF $ADF LN
Thesis: Facilities by ADF, with high barriers to entry and growth from TV/Film demand, offers attractive margins and strategic acquisition potential, making it a promising investment for the future
(Extract from their Q3 letter) https://t.co/TqozLuQxWb
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