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https://x.com/i/lists/1669153613199835138?t=R0mCicxs7zfJE_yOAek4gQ&s=09
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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LRCX $NVDA $MSFT $CRM $VRTX $TMO $AAPL etc.
This was my Achilles Heel when I first started my investment journey in 2016. I was TOO focused on valuation & lower multiples rather than QUALITY & growth at a reasonable price.
So when you’re building your club of equities, don’t buy a bench player in place of Lionel Messi or Cristiano Ronaldo. You’d just be downgrading your team & winning less.
If you made it this far, hope this helped!
Feel free to share your starting XI 😉
#stocks #investing - Dimitry Nakhla | Babylon Capital® tweet
Dimitry Nakhla | Babylon Capital®
$BF.B more than halved since Nov 2020 📉
This is what happens when you pay 47x earnings for a consumer staple stock that’s not growing EPS at a rate that justifies an aggressive multiple
It doesn’t matter that it’s a Dividend Aristocrat selling alcoholic beverages https://t.co/VkLRS1e6tH
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Stock Analysis Compilation
Artisan Partners on Intapp $INTA US
Thesis: Intapp’s AI-powered, purpose-built software solutions position it for expansion in the professional and financial services sectors
(Extract from their Q3 letter) https://t.co/s8tAKIxWXc
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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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Dimitry Nakhla | Babylon Capital®
After Liverpool’s exceptional match, beating Tottenham 6-3, & a brace from both @MoSalah and @LuisFDiaz19 I can’t help but re-share this FUT themed post
If you haven’t already, take a few minutes to read this and elevate your investment decisions 🎯
Attention investors ‼️ — I am SURE this post will sharpen your investing mindset and skills. Take a couple minutes to read it in full - it'll be a game-changer for your investment journey.
Yesterday I shared a poll asking if you thought $BMY was undervalued or a value trap, given its 17.32% FCF Yield.
Before I share my opinion, I believe it’s CRITICAL to emphasize the importance of being selective when building a portfolio.
Imagine you were the manager of a fútbol club (in this case Liverpool FC 😉) and you have to choose your Starting XI.
Would you add $BMY? .. More on this later.
You can see my Starting XI in the photo below.
It’s a club of exceptional businesses that have wide moats, pristine balance sheets, excellent returns on invested capital and quality revenues & earnings.
$BMY on the other hand doesn’t really fit in this club as it fails to meet these standards.
Another way to demonstrate this is if you were building a fútbol club & you could choose ANY footballer, I’m sure your club may look something like this:
Cristiano Ronaldo, Lionel Messi, Kylian Mbappe, Vinicius Jr, Jude Bellingham, Alison Becker, Virgil Van Dyke, David Alaba, Kyle Walker, Trent Alexander Arnold, & Ilkay Gundogan.
INVESTING IS NO DIFFERENT.
You have the opportunity to build a SUPERTEAM of quality businesses & nobody is forcing you to buy “subpar players” for your club.
As Warren Buffett even said:
“I could improve your ultimate financial welfare by giving you a ticket with only 20 slots in it so that you had 20 punches—representing all the investments that you got to make in a lifetime.”
The mistake MANY investors make is NOT being SELECTIVE enough.
Why add a subpar player to your squad when you could buy Ronaldo?
You’ll become a better investor and enhance your financial welfare by focusing on buying the world’s BEST & MOST QUALITY business when they trade at a fair or better valuation. This should be your focus.
Do not let the daily noise of the market sway you into buying a subpar company just because it trades for a low multiple.
So this brings us to $BMY.
Although $BMY may “appear” undervalued due to its low multiple & high FCF Yield, it could be a value trap and does not belong in my “superteam” of companies.
In short, it lacks many of the qualities I mentioned for the other businesses & has a poor history of performance.
Just have a look at the long-term growth of $BMY Revenues, EPS, & Balance Sheet and you’ll be very unimpressed.
Sure, $BMY may “have moments of excellence” (as any footballer may have in the occasional game) with nice rallies off its lows, but this doesn’t make $BMY a consistent performer for my club.
Yes, it’s important to consider the future when investing (which isn’t even bright for $BMY at the moment). However, it doesn’t mean we should forget about the poor performances $BMY has had over the last 15 years.
I wouldn’t want to count on a player who’s been performing poorly over 15 seasons and hope that this player will finally show me moments of consistent brilliance for the next 5 seasons.
Also, we should to be wise and consider the opportunity cost of owning subpar businesses over excellent businesses over the years.
I am sure there are many investors who have owned $BMY for the last ~5 years in hopes that $BMY would eventually see it supposed “value” realized.
Meanwhile, the same investors would have been better off, owning more shares of companies like $V $MA $GOOG $META $ASML $[...]
Quiver Quantitative
Rep. Ro Khanna (D) just said:
"It is outrageous that the Department of Defense is spending $32 billion a year on consultants and the federal government $70 billion"
Khanna is one of the only congressmen who we have not seen taking corporate PAC money.
cc: @DOGE, @elonmusk https://t.co/0zUS3pf5DW
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Quiver Quantitative
RT @InsiderRadar: $FREY stock has risen another 22% this morning, and is now up over 55% since we reported this insider purchase last week https://t.co/1qu6dBD3EV
🚨BREAKING: New CFO Insider Purchase
The interim CFO of $FREY has reported the purchase of ~$900K of the company's stock, increasing his ownership stake by 421%.
The stock had fallen over 82% since its IPO in 2021.
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