Spekulatius

For a cannibal to work, you need a cheap stock with a low earnings multiple not an expensive one. The best case scenario is that your cheap cannibal becomes an expensive compounder but then the buyback magic really doesn’t now worth any more - see AZO or AAPL.

Consensus forecast. Looks like consensus is for a loss in Q1, which is much weaker than last year. Part of the issue is with increased vehicle depreciation expenses due to used car prices becoming weaker apparently. I am surprised by the violent stock reaction and didn’t expect it just reading the earnings release.

$CAR down from ~$170 to $113 since discussed here. Weak operating results and a ton of leverage do this. I think 2024 results are going to be way down, it seems.

You must be looking at a different stock then. $AN last quarterly earnings were $5.04/ share and 2024 consensus forecast is for $19.3/ share which at $143 is a 7.4x PE.

Sold remainder of my CVS (in taxable account) and a smidge of VNT (in an tax deferred account low on cash)

It’s not just that, some analog devices can’t be miniaturized, because they don’t work binary. Sometimes you need to generate a certain current or power output and a too small device structure won’t be able to do with without overheating. Same with a sensor - if you want to capture some photons , you may need the receptive area to be of a certain size etc.

B21 public flight. Beautiful bird. Seems on schedule too:

I have pro, but got the 50% off, so it’s fairly cheap for me. I think beyond some lesser used features, the features are pretty much the same and if you are on the fence because of cost, just chose Plus - you can always switch later. Also get a referral code from an existing user. It might give you a discount, but I am not sure.

Some of their fabs run ~1um feature size process. Bleeding edge is 3nm or 0.003um feature size. 1 um is basically “steampunk” tech for semiconductors. It does mean it can’t be a good business, but I found it remarkable.

$FI - 37 years of double digit earnings growth. Who would have thought (I have a decent sized position )

I think it’s a pretty contrarian viewpoint to invest in China, just looking at the charts. If you want to see positive sentiment look at everything related to tech and AI - that’s a whole other level than buying something on dips and low metrics.

Merger agreements are always an interesting read, since they explain the background of the merger - in this case between APA and CPE. Looks like there were a total of 7 different suitors for CPE /Company A - G in discussions from late 2021 until 2024. Seems like everyone is talking to everyone else about combining Permian assets. https://www.sec.gov/Archives/edgar/data/1841666/000119312524021134/d664038ds4.htm#toc664038_49

Reduced CNHI yesterday (they have earnings on 2/14) and MBB.DE (tender). Both did well for me.

Google Bard has become much better than ChatGPT when you stick to the free version.

What Einhorn is saying that starting in 2019 he realized that GM trading at a PE of 5 doesn’t matter, since they were not paying a large dividend or buying back a lot of stock back then. So shareholder yield (buyback and dividends ) was quite low, despite the low PE. He is now preferably looking at stocks with a high shareholders yield.

The Chinese economy just need some stimulus - like strippers buying the empty homes on credit. This isn’t exactly a hard problem to solve.

lol:

One thing I have learned is that it’s hard to make money on a stock when management works against you as the owner. It’s hard enough to make money when management is on your side, but if they are decidedly not, I think it’s time to move on, unless there is a path to get rid of them. This applies even more so to nano or small caps than to larger business.

You can only forecast things you can control. An oil company can’t control prices, they will make a forecast around and assumed price band and forecast production typically, but they can’t forecast earnings. Almost any company will start their operating year with a forecast for internal budgeting purposes. That will include Capex , investment and staffing plans.

@schin The Sparkassen and Raiffeisen banks resemble credit unions in the US and were designed as member serving and state/city serving institutions , so they are zombies by design. They, as well as banks in general also have been hurt by ZIRP, which means that things should actually get better for them.

Here it is. 2* rated. I have seen worse. The gist is he states that that FFH is a mediocre underwriter and investor. No credit for recent improvements in profitability and hard market don’t last forever. Worth about book. Equity Report FFH 1-2024 MS.pdf

Anyone likes $GTLS (Chart Industries). I have never followed the name, but had some time to kill and managed to listening on a Sumzero pitch on Zoom last week and found the setup compelling enough to buy a small starter position right away. The stock got wrecked due to the high debt load from the pending Howden acquisition, but the presenter made a good case that the acquisition is transformative for GTLS and makes the business more predicable. GTLS share price has been super volatile in the past. What I Iike about them is that they are in various of the gas handing value chain (pumps, heat exchangers, LNG handling), are kind of s Swiss Army knife offering if we get more into hydrogen, LNG projects etc. I was looking for plays into this that are not overpriced and had my eyes set on APD, but did not like recent comment s from management there. GTLS is way riskier, but if they execute well and things go their way, the earnings potential should be much larger too. Of course, so is the downside.

Mobius starts to like China:

@schin Which zombie companies in Europe are you talking about? Care to mention specific examples?

If passive is truly becoming more and more dominant and value agnostic, than the opportunities for value investors should only increase as there is less and less competition. So the problem with passive taking over the investing business is somewhat self limiting. If truly nobody cares about valuation any more, the few that do should be able to find extraordinary opportunities. I don’t think it will be as easy as buying all low PE or low P/B stocks, you can simply automate that process and it is ridiculous to assume it’s going to be that easy.