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https://x.com/i/lists/1669153613199835138?t=R0mCicxs7zfJE_yOAek4gQ&s=09
InsideArbitrage
Staffing 360 $STAF held a special meeting of stockholders on February 3, 2025 -
The meeting was held to vote on two proposals: approving the Planned Merger with Atlantic International $ATLN and approving the option to adjourn the meeting.
The majority approved the Adjournment Proposal, and the meeting was then adjourned to February 10, 2025.
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Dimitry Nakhla | Babylon Capital®
Since hitting my target accumulation price, shares of MercadoLibre $MELI have rallied +15%
This is a bit unfortunate as I would’ve preferred for $MELI stock to continue declining & reach an even lower level so I could add another tranche of shares https://t.co/NggebbFgsC
$MELI traded below my target accumulation price of $1,700 for less than 48 hours 🎯 https://t.co/QUeCkbQz0z
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Stock Analysis Compilation
Aoris on Sherwin-Williams $SHW US
Thesis: Sherwin-Williams is the world's largest paint and coatings company with a dominant market share in the US professional painters segment and exclusive supply agreements with major home builders.
(Extract from their Q4 letter) https://t.co/abGbRu8lDk
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Dimitry Nakhla | Babylon Capital®
After properly assessing the company’s overvaluation, here’s a brief update on $MANH
Using 2027 EPS estimate of $5.85:
45x P/E: $263.25💵 … ~14.5% CAGR
40x P/E: $234.00💵 … ~7.9% CAGR
35x P/E: $204.75💵 … ~1.0% CAGR
I’d have to assume >40x given today’s estimates which leaves me with no margin of safety
While it is an excellent business, I’d likely get more interested in $MANH closer to $170💵 where I could reasonably expect double-digit CAGR while assuming a 35x multiple
10 months ago I shared my analysis on $MANH suggesting it was overvalued at $257💵
I suggested revisiting the stock at $179💵
Despite a strong run, $MANH just plummeted -23% post-Q4 earnings 📉
As I stated in my analysis:
“As you can see, we’d have to assume well above a 60x multiple in order for $MANH to have attractive return potential
While this could happen, this assumption leaves us with no margin of safety, especially considering that the multiple does not appear to be justified by the growth rate
In fact, in the last 10 years, $MANH multiple expanded by ~84% — implying that multiple expansion has contributed heavily to its returns
While $MANH is a quality business that I hope to own at some point, I don’t consider it anywhere near the buy zone today at $257.50💵
Instead, I’d start to get interested (*interested*) closer to 50x earnings or at $179💵 — 30% below today’s price”
#stocks #investing
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Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: 10 months ago I shared my analysis on $MANH suggesting it was overvalued at $257💵
I suggested revisiting the stock at $179💵
Despite a strong run, $MANH just plummeted -23% post-Q4 earnings 📉
As I stated in my analysis:
“As you can see, we’d have to assume well above a 60x multiple in order for $MANH to have attractive return potential
While this could happen, this assumption leaves us with no margin of safety, especially considering that the multiple does not appear to be justified by the growth rate
In fact, in the last 10 years, $MANH multiple expanded by ~84% — implying that multiple expansion has contributed heavily to its returns
While $MANH is a quality business that I hope to own at some point, I don’t consider it anywhere near the buy zone today at $257.50💵
Instead, I’d start to get interested (*interested*) closer to 50x earnings or at $179💵 — 30% below today’s price”
#stocks #investing
A sober valuation analysis on $MANH 🧘🏽♂️
•NTM P/E Ratio: 70.66x
•5-Year Mean: 61.90x
•NTM FCF Yield: 1.63%
•5-Year Mean: 2.11%
As you can see, $MANH appears to be trading above fair value
Going forward, investors can receive ~12% LESS in earnings per share & ~23% LESS in FCF per share 🧠***
Before we get into valuation, let’s take a look at why $MANH is a quality business
BALANCE SHEET✅
•Cash & Total Inv: $270.74M
•Long-Term Debt: $0
$MANH has a strong balance sheet
RETURN ON CAPITAL✅
•2018: 91.0%
•2019: 66.3%
•2020: 46.2%
•2021: 49.1%
•2022: 63.4%
•2023: 69.4%
RETURN ON EQUITY✅
•2018: 65.0%
•2019: 59.3%
•2020: 48.3%
•2021: 47.1%
•2022: 54.0%
•2023: 69.9%
$MANH has solid return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2013: $414.52M
•2023: $928.73M
•CAGR: 8.40%
FREE CASH FLOW✅
•2013: $84.65M
•2023: $241.49M
•CAGR: 11.05%
NORMALIZED EPS✅
•2013: $0.92
•2023: $3.74
•CAGR: 15.05%
SHARE BUYBACKS✅
•2014 Shares Outstanding: 75.84M
•LTM Shares Outstanding: 62.61M
By reducing its shares outstanding ~17.4%, $MANH increased its EPS by ~21.0% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 53.6%
•LTM Operating Margins: 22.6%
•LTM Net Income Margins: 19.0%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~12% LESS in EPS & ~23% LESS in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $MANH has to grow earnings at a 35.33% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be less than the (35.33%) required growth rate:
2024E: $3.77 (0.7% YoY) *FY Dec
2025E: $4.36 (15.9% YoY)
2026E: $5.08 (16.4% YoY)
$MANH has a solid track record of meeting analyst estimates ~2 years out, but let’s assume $MANH ends 2026 with $5.08 in EPS & see its CAGR potential assuming different multiples
60x P/E: $304.80💵 … ~6.1% CAGR
57x P/E: $289.56💵 … ~4.2% CAGR
54x P/E: $274.32💵 … ~2.2% CAGR
As you can see, we’d have to assume well above a 60x multiple in order for $MANH to have attractive return potential
While this could happen, this assumption leaves us with no margin of safety, especially considering that the multiple does not appear to be justified by the growth rate
In fact, in the last 10 years, $MANH multiple expanded by ~84% — implying that multiple expansion has contributed heavily to its returns
While $MANH is a quality business that I hope to own at some point, I don’t consider it anywhere near the buy zone today at $257.50💵
Instead, I’d start to get interested (*interested*) closer to 50x earnings or at $179💵 — 30% below today’s price
#stocks #investing
___
𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️: 𝐓𝐡𝐢𝐬 𝐢𝐬 𝐍𝐎𝐓 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐀𝐝𝐯𝐢[...]
Value Spotlight (Andrew Sather)
Palantir's insane ROIC (Tutorial)
$PLTR https://t.co/WBEcpfj3oA
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Quiver Quantitative
NEW: We just released a dashboard that lets you track proposed bills and see:
- AI analysis of the bill text
- Bill sponsors, their corporate donors, and portfolios
- Companies lobbying on the bill
- Politicians trading stock in those companies
I'm hoping to add bill cost estimates soon.
Follow here for updates.
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Quiver Quantitative
Pelosi's purchase of Tempus AI call options:
How it started........how it's going https://t.co/rz6D4ca5yP
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Stock Analysis Compilation
Ace River Capital on RCI Hospitality $RICK US
Thesis: RCI Hospitality’s strong acquisition pipeline and innovative tech platform offer unique growth opportunities in the adult entertainment industry
(Extract from their Q4 letter) https://t.co/yGACd9FJGx
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InsideArbitrage
RT @ReutersLegal: United Steelworkers president David McCall filed a motion to dismiss a lawsuit filed against him by US Steel and Nippon Steel, the union said https://t.co/JpHmwD9QSi https://t.co/trFTnw3jyn
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InsideArbitrage
The acquisition of Avid Bioservices $CDMO by GHO Capital Partners and Ampersand Capital Partners was completed on February 5, 2025.
It took 91 days for the deal to be completed.
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Quiver Quantitative
RT @QuiverCongress: Representative Brian Fitzpatrick just introduced a bipartisan bill to make 9/11 a federal holiday.
Follow here for updates. https://t.co/oEH2AWqmLp
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Dimitry Nakhla | Babylon Capital®
$FICO stock is down -24% from its highs 📉
2025-2028 EPS CAGR estimate of +23.8% 📊
Assuming $FICO stock ends 2028 with $55.94E in EPS, here’s its return potential:
50x - 12.4% CAGR
45x - 9.3% CAGR
40x - 5.8% CAGR
35x - 2.1% CAGR https://t.co/KwhKjPFw8Y
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Startup Archive
Jony Ive: “You have to reject reason to innovate”
“If it hasn’t been done and it’s of value, there’s really good reasons it’s not been done. And so when you’re confronted with those reasons, you’ve got two choices. You can say, ‘Oh, that’s a very good reason, I’m sorry for bothering you.’ Or you can say, ‘I don’t believe that. I’m going to find out more.’”
Jony Ive continues:
“George Bernard Shaw talked bout how you have to reject reason to innovate. You have to say, ‘We understand. This is all very reasonable. But I’m going to ignore you completely.’ And if you're a fairly sensitive person, ignoring very smart people is really difficult… [But] that decision to ignore expert option happens every single time we do something that’s new.”
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Startup Archive
Ben Horowitz on why Al Davis's "nobody cares" advice to Bill Parcells might be "the best CEO advice ever":
"When things go wrong in your company, nobody cares. The press doesn’t care, your investors don’t care, your board doesn’t care, your employees don’t care, even your mama doesn’t care. Nobody cares.
And they are right not to care. A great reason for failing won’t preserve one dollar for your investors, won’t save one employee’s job, or get you one new customer. It especially won’t make you feel one bit better when you shut down your company and declare bankruptcy.
All the mental energy that you use to elaborate your misery would be far better used trying to find the one, seemingly impossible way out of your current mess. It’s best to spend zero time on what you could have done and all of your time on what you might do. Because in the end, nobody cares, just run your company."
Nobody Cares by @bhorowitz https://t.co/Eu0yA9rlfJ
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Capital Employed
Another batch of excellent Q4 2024 letters just added.
Including excellent letters from...
@Whit_Huguley
@dsmoak98
@HorizonKinetics
108 letters in total now.
This is a treasure trove of insights and potential ideas… 👇
https://t.co/Dndl7wcMwK https://t.co/7mQM7SnLeq
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Quiver Quantitative
RT @InsiderRadar: 🚨BREAKING: New CEO Insider Purchase
The CEO of $MBX has just reported purchasing $535K of the company's stock, increasing his ownership stake by 6%.
This is the first insider trade he has reported since the company had its IPO last September.
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Dimitry Nakhla | Babylon Capital®
Another reputable & successful hedge fund just made one of their biggest adds to their holdings — a stock I suggested was attractive 💸
The stock?
$TMO 🔬
As of the latest 13F filing, William Von Mueffling increased Cantillon’s $TMO position by ~16% https://t.co/DJ50oVx6SZ
Two months ago I stated:
“I’d be more interested in $TMO closer to $500💵 (8% below today’s price) where I can reasonably expect ~11% to ~12% CAGR while assuming a 23x - 24x end multiple, ensuring a margin of safety”
$TMO traded at my target price for less than 24 hours 📈 https://t.co/r2awaMkY7L
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𝐜𝐞. 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. - Dimitry Nakhla | Babylon Capital® tweet
Stock Analysis Compilation
Aristotle International Equity on Cameco $CCO CN
Thesis: Cameco is well-positioned to benefit from the robust demand for nuclear energy, supported by its tier-one assets, strategic contracts, and increasing production outlook.
(Extract from their Q4 letter) https://t.co/tYYVjFNv1Q
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Stock Analysis Compilation
Aristotle Core Equity on CrowdStrike Holdings $CRWD US
Thesis: CrowdStrike Holdings is well-positioned for substantial growth in the cloud cybersecurity market due to its innovative products, early-mover advantage, and strong customer retention in the face of increasing cyber threats.
(Extract from their Q4 letter)
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Startup Archive
iPhone co-creator Tony Fadell on how to choose a company to work for
The most important question to ask yourself, Tony believes, is:
“What do you want to learn, and who do you want to learn from?”
He explains:
“Don’t just go and say ‘I want to work at Google’ or ‘I want to work at Apple’. You want to go to a certain team with a certain set of people and work with them on something that you’re really curious about… Most people go where they can make the most money in their position, but you should be starting with the ‘why’: what’s your curiosity and what do you want to learn? I took the lowest job on the totem pole at General Magic because I wanted to get in there to work with the right team… The way you figure out what you want to do in life is by figuring out what you don’t want to do.”
Video source: @lexfridman (2022)
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InsideArbitrage
RT @Reuters: Renault to defend its interests amid reports of end of Honda-Nissan merger talks https://t.co/EMJUTSnQpI https://t.co/kyvkYERsAl
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Investing visuals
Alphabet $GOOGL full Q4 2024 earnings breakdown👇 https://t.co/wnJfXsYTAU
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App Economy Insights
$UBER Uber Q4 FY24:
• Gross bookings +21% Y/Y fxn to $44.2B.
• Revenue +20% Y/Y to $12.0B ($190M beat).
• Adj. EBITDA +44% Y/Y to $1.8B ($10M miss).
Q1 FY25 guidance:
• Gross bookings ~$42.8B ($43.5B expected).
• Adjusted EBITDA ~$1.84B (in-line). https://t.co/WLPNfQDgBV
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InsideArbitrage
The InsideArbitrage Buyback Wednesdays is out!
"Significant Stock Repurchases at Twilio and DNOW"
👉 Full Article link in the final tweet!
🧵1/n https://t.co/UiXFJ0bsyn
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Stock Analysis Compilation
Nightview Capital on Goldman Sachs $GS US
Thesis: Goldman Sachs is poised for sustained growth due to its leadership in investment banking and strong performance in asset and wealth management.
(Extract from their Q4 letter) https://t.co/odHbqazCEO
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Stock Analysis Compilation
Nightview Capital on Hyatt $H US
Thesis: Hyatt is well-positioned for long-term growth through its asset-light model, strong loyalty program, luxury focus, and global expansion strategy.
(Extract from their Q4 letter) https://t.co/GUvc4n5Bua
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Stock Analysis Compilation
Platinium AM on Uber $UBER US
Thesis: Uber is well-positioned to thrive in the autonomous vehicle market despite current competition, leveraging its existing business expertise as a cooperative partner for Waymo and Tesla.
(Extract from their Q4 letter) https://t.co/Y0ZgprBMhI
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Startup Archive
RT @foundertribune: Nobody Cares by @bhorowitz https://t.co/Eu0yA9rlfJ
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