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If the stock market is like a horse race, this is one stable with a dozen very competitive horses in the race. Biggest digital advertiser in the world, by a long shot. YouTube, which has yet to be monetized. Waymo is the leader in autonomous driving. No dividend.
(Analysts’ price target is $126.41)One of the best competitors of ADBE. Been around for ages. Everything from construction to engineering. 12-month price target of $260. Remember, it's all about the earnings. A formidable company, expects FCF this year to be $2B-2.2B. Should benefit from generative AI, especially 3D models. No dividend.
(Analysts’ price target is $236.14)Imaging and printing, personal computing, SaaS. Proceeds from SHOP and NVDA were used to buy this one. Reminds him of ORCL. Strong cashflows, mature business, stable market share, returning significant amounts back to shareholders, progress on efficiencies. Attractive PE in mid-teens. Price target of $39.50. Different from HPE stock. Yield is 3.59%.
(Analysts’ price target is $29.30)NVEI trades at 4X sales; 17X 2023 earnings.
It has $240M net cash (as of last report) and EPS is expected to grow about 15% this year and 20% in 2024.
Cash flow is positive ($258M in 12 months). Its current P/E is very low vs its historical averages, but it has been public less than three years.
Its last quarter was decent and it generally beats expectations (7 for 8).
It just completed a $1.3B acquisition of Paya which will use up its cash (and more) but looks good for longer term growth.
We like its risk/return potential from current levels.
In a normal market we would expect its P/E to move to the 25X range, so 'potential' stock gains are good if it executes well and the overall market co-operates.
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DPM is now trading at 7.0x times' Forward P/E. In the 4Q, DPM’s revenue declined -8% to $152.9M, compared to last year of $166.4M and EPS wass $0.24, beating estimates of $0.20.
The balance sheet is strong, with net cash of $419M. Trailing twelve-month cash flow declined around -8% compared to $253M last year.
Based on consensus estimates, sales are expected to grow by 15%, while EPS is expected to grow by 28% next year.
The company has been executing really well.
The company has been growing and returning capital (dividends and buybacks) over the last few years, DPM also recently updated its three-year outlook with strong production levels – 270,000 per year, improved cost structures and lower capex spending.
We think the recent earnings report is solid.
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NVEE has grown its sales and earnings on a five-year CAGR basis by 21.1% and 29.5%, respectively.
Its share price has grown by 23.2% on a five-year CAGR basis.
It has a 20.7X P/E, 12.8X EV/EBITDA, and a 2.8X P/B, which are all around its five-year historical averages of 19.6X, 12.4X, and 2.9X, respectively.
We would consider NVEE to be at a reasonable price today.
Although, it might continue to pullback further.
We like its management team, its disciplined approach to acquisitions, and its growth potential and execution.
We would be OK with buying here today for a long-term position.
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Investor Psychology Mistake: The Conservatism Bias is the tendency to give too little weight to new information (the short report), therefore people fail to modify their prior beliefs as much as the new information would warrant. Cognitive dissonance bias occurs when newly acquired information conflicts with preexisting understandings. People will go to great lengths to defend their view despite new information (It happens in the uranium and gold sectors as well).
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Why inflation is so sticky is the biggest question now. Data lately has not been encouraging. Food was up 10.1% January YOY (Russian invasion, bad harvests), though Walmart is limiting food price increases with its own private food label. Housing prices are up 7.9% because there is a shortage of 3-6 million homes in the US. Wages are up 4.4%. More immigration would help, but is politically unpopular. We need to see huge bankruptcies to lower employment, unfortunately. There are signs of hope, of lower inflation: TJX is reported a good outlook today, and when TJX does well, the apparel industry is not. Zip Recruiter just issued a lower forecast (and shares tanked), but this means there are fewer job openings. These indicate that the Fed is on the right track, but their rate hikes take time to have an effect on the economy.
A new ETF. When he approaches AI, it's like autonomous driving. He can either pick the OEM, or go after the picks and shovels. It's all about data. We now have tremendous amounts of data, and AI is applying machine learning and deep learning into that to make interpretations. The big thing about AI these days is that there's enough data and power processing, you can put in a number of words and AI will predict the next words. They can do this because there's so much more data and the processing is so much faster. The ETF is the chicken way out. Instead, go after the picks and shovels: the data aggregators like DDOG, power processing like NVDA, or the network side like AVGO or CSCO.