Equity Analyst researching high-quality companies at Best Anchor Stocks and Invirtiendo en Calidad. Spanish account: @InvEnCalidad
Madrid, Spain
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In-depth reports I have published on S*stack so far...
- Deere $DE (free)
- FRP Holdings $FRPH
- Five Below $FIVE
- Diageo $DEO
- Hermès $HESAY
- Atlas Copco $ATCO.B
- Stevanato $STVN (free)
- Keysight $KEYS
- Zoetis $ZTS
- Judges Scientific $JDG.L
- Medpace $MEDP
- Trupanion $TRUP
- AAON $AAON
Currently looking into two other interesting companies
The library will keep getting longer!
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1/ Sharing some semiconductor-related content now that semis are back (they never left)
First, a simple visual that explains the industry's structure. People who already know the industry might find this basic, but I struggled to find something similar when doing my research
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I prepared the following summary graph of the semiconductor industry as part of one of the articles of Best Anchor Stocks.
Hope you enjoy it! 👇
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1. Elon Musk takes a 9% stake on $TWTR
2. Shares jump 25% on the news
3. Elon Musk just made 25% gain without the company changing one bit
4. The market acknowledges 25% as the new risk-free rate
Who said investing was difficult?
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I tried to make a one-pager to serve as a quick intro to the semiconductor industry but, unfortunately, I needed three pages 😅
This first page goes over the types of chips and how a chip is made.
Hope you enjoy it and feel free to share if you do!
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Pretty sure Andy Jassy's 2024 shareholder letter will be quoted in 10 years
$AMZN
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A couple of weeks ago I prepared an $ASML 45+ slide deck for a presentation I gave.
Thinking about uploading it here if people are interested.
Like/RT if you'd like to see it here and I might upload it tomorrow
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François Rochon, founder of Giverny Capital, has achieved a 30-year 15.7% CAGR.
His annual letters are a must read for any LT quality investor.
I compiled them all in one PDF (+350 pgs). You can download it from the link below!
🔗drive.google.com/file/d/1xmk…
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Created this simplified ROIC Cheat Sheet.
It's already said in the sheet, but this is mainly applicable to more mature companies, not so much to young companies in their early growth stages.
Hope you enjoy! 👇
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4 PDF’s that I consider are key for any investor to read:
1. Peter Lynch’s articles
2. Berkshire’s shareholder letters (Warren Buffett)
3. Nomad shareholder letters (Nick Sleep)
4. Fundsmith’s shareholder letters (Terry Smith)
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Nick Sleep’s letter to Warren Buffett telling him that they will be forced to sell Berkshire Hathaway’s shares
This is how long term investors talk between them 👇
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I summarized @McKinsey's 10 sources of competitive advantage in one image and included some examples that I think fit the description (list is not exhaustive, of course)
Can you think of any more examples?
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One of the things I love about investing is second-order thinking.
Who would’ve thought a 2-century-old Japanese porcelain maker would benefit from AI?
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Morgan Stanley’s Wide Moat Businesses
Which ones do you strongly disagree with and which ones do you think are missing?
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"A bull market is when you check your stocks every day to see how much they went up. A bear market is when you don't bother to look anymore."
John Hammerslough
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During the past week, I asked 23 investors to tell me their highest conviction holding and a short pitch about the company.
I thought that this information could add value to Fintwit although remember that you should always do your own DD.
Let’s go!
//THREAD//
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Sources of competitive advantage according to McKinsey with some companies for each type (my additions)
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A while ago I prepared a 3-pager about semiconductors to serve as a starter to the industry.
Here it is 👇
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👀 $TDOC (Teladoc) at a glance!
If you want to take a quick glance at the global leader in the telehealth industry then this thread is for you!
Lets go! ⬇️
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This framework I shared months ago is still relevant today.
Ideally every investor would like to sell at the start of worsening fundamentals, but sometimes it takes a couple of Qs to get to this conclusion.
Over the LT, selling early is a costlier mistake than selling late.
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Some books out of my library that I believe any investor should read.
Would add two more (I have them in kindle version):
1. 100 baggers by @chriswmayer
2. Investing for growth by T. Smith
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Prepared this very simple framework to decide when to sell a position.
The mistakes that really hurt come from selling great companies too soon.
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$MSFT dumping even before a human being has time to read its earnings
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1/ Recently finished reading Capital Returns and I wanted to bring here some important lessons for investors.
(Thoughts are scattered in no particular order)
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1/ Last week, François Rochon, founder of Giverny Capital gave me an hour of his time to talk about investing.
We talked about topics such as valuation, what makes a high-quality company...
Giverny Capital has achieved a mid double-digit CAGR for a whopping 30 years
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One of the most important charts for long-term investors
Haters will say it was all the Fed
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1/ Yesterday I gave a presentation to some investors on Deere $DE
I thought it would be a good idea to upload the presentation here
Let's go!👇
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Forget about the CFA exam, you only need these two documents to become an investor:
1. Andrew Lahde farewell letter
2. "Everything is priced in" (WallSt Bets)
The rest is noise.
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1/ Valuation is a critical topic for any investor, although it's a highly subjective one.
Subjectivity starts with the proper method to use. Below you can find two of the most popular methods with their advantages and drawbacks 👇
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1/ Warren Buffett's shareholder letters are famous in the investor community, and rightly so.
However, a lot can be learnt from another exceptional capital allocator, Mark Leonard, $CSU's founder.
I have compiled all his letters in one PDF
🔗drive.google.com/file/d/187r…
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$ADYEY at a glance
In this thread I will try to summarise one of the strongest value propositions in the payment Industry: Adyen.
Without further a do, let’s get started!
/THREAD/
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François Rochon talks about 4 levels of risk in his latest annual letter:
1/ Diversification
2/ Quality
3/ Valuation
4/ Behaviour
He believes #2 is the most important of all and I’d say #4 is typically overlooked
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I prepared a one-pager on Adyen.
I tried to fit as much as I could in the space I had but there's obviously much more to the company.
Hope you enjoy it! 👇
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Adobe spent virtually all operating cash flow repurchasing shares this quarter
$ADBE
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If insider screener is not playing tricks on me here...4 notable insider purchases at $ASML for roughly €0.5 million each, including CEO and CFO
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Briefly looked at a list of electrical grid infra beneficiaries and let me tell you that the company that's up "only" 150% over the last 5 years is a massive underperformer on this list
Wow
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$PLTR | Enabling data-driven decision making
This time I decided to deep dive $PLTR. This time I also built up a presentation with the main aspects of the company so people that don't want to read the full document can have an idea of the company!
invesquotes.substack.com/p/p…
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$APPS | A one-of-a-kind company
Digital Turbine is a unique company which is executing very well but is subject to important third-party risks that should not be ignored by investors.
Hope you enjoy this deep dive!👇
theglobalinvestor.substack.c…
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A fund manager monetizing an investment blog is kind of a red flag no?
Your investors are paying you a fee to (theoretically) have exclusive access to an edge but you are giving that edge away to another set of investors for a different fee
Strange
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1/ A perfect market timer who bought the market at its lowest PE in 1920 (4.8x) and sold at peak PE (44.2x) in 1999 would've realized a 14.5% 79-year CAGR.
From this 14.5%...
- 2.8%/year was attributable to multiple expansion
- 11.7%/year was attributable to biz performance
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1/ Last week I uploaded pt. 1 of an $ASML presentation I gave to some investors. I discussed topics such as the industry, what the company does, financials, moat etc.
In Part 2 I will talk about management, capital allocation, risks, and valuation
Let's get on with it 👇
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Capital allocation is the most important activity for any company.
Here's a short framework to understand it better 👇
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Adyen $ADYEY is significantly down today (-28%) after reporting H1 earnings. Have not gone into a lot of detail yet, but most of it seems caused by management being long-term oriented and countercyclical, and of course, because it was richly valued.
Some months ago a built this one-pager (it's outdated), but maybe it gives those of you interested in the company a quick overview.
👍
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There are only three truths in life:
1) Death
2) Taxes
3) When stocks go up people are bullish and when they go down they are bearish
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People last year: "I will like this stock when it gets cut in half."
People this year after that stock is cut in half: "I will like this stock when it's cut in half."
I mean...what's your investment strategy? Wait until you get it for free?
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People:
“I hate $FB due to all the privacy issues”
Also people:
“Wow Tiktok is great!”
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I prepared this summary about Phil Fisher's advice on when to buy and when to sell, as described in Common Stocks and Uncommon Profits.
Highly recommend the book if you haven't read it yet.
Hope you enjoy!
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$FB on Reels monetization
"We’re creating a variety of opportunities for creators to earn money for their reels. Our Reels Play bonus program, part of our $1 billion creator investment, pays eligible creators up to $35,000 a month based on the views of their qualifying reels."
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A company with +$1 billion in revenue trading above 50x sales is expensive no matter how long you deem the runway to be.
At such multiples you would have to see sales grow at a 30% CAGR for a decade and exit at a 10x sales multiple for a 10% stock price CAGR…none of these seem conservative
Not saying it can’t happen, but one must be aware that they are betting against base rates (ie., very few companies achieve such a feat)
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1/ Being able to know what an asset is worth is an essential tool for any investor.
There are many valuation methods with historical multiples and the discounted cash flow model being the most used. They both have drawbacks:
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Decided to do this one-pager on $TDOC
It's nothing too specific but writing it down helped me understand where the company is at.
Sentiment is very negative right now, but might change once the company becomes profitable (which I think will happen fairly soon)
Disc.: Long
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I have just published the most detailed article I have ever shared publicly.
It's on Deere $DE and pretty much explains everything there's to know about the business (I share the outline below).
If you enjoy it I would highly appreciate your share as it took quite a bit of work.
🔗 to s-stack in profile
Enjoy!
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AMD $AMD giving away 10% of the business to acquire revenue from OpenAI is great because the stock is up but...how is OpenAI going to fund all its open commitments going forward? Don't want to be a skeptic and discuss things I don't own but it's (to a minimum) starting to get a bit worrying no?
At least AMD structured the deal so that warrants are contingent on certain milestones...
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1/ If you're looking at P/Es in isolation, you're doing it wrong.
ROIC plays a critical role in determining what an appropriate multiple is for any given company. High returns matter, even if you can't see them at first sight.
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I am thinking on preparing a one-pager (I’ll maybe need two pages) on the semiconductor industry with the basics
- What is a chip
- How it’s made
- Different players
- Geopolitical tensions…
Would you be interested? Like this tweet if you would!
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Fundsmith's 2021 Shareholder Letter came out earlier this year.
13 pages of pure wisdom by Terry Smith and his team.
Small thread to highlight some of the things I found most interesting
🧵
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Crazy how most people take for granted that a company with run rate revenue above half a trillion is still growing double digits
$AMZN
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Built a checklist with 🇺🇸🇨🇦🇪🇺 companies in "boring" industries out of the current spotlight (avoided tech and semis) with...
✅ ROE > 15%
✅ 3Y Rev CAGR > 5%
✅ +ve FCF/share
✅ GM > 40%
✅ NI margin > 15%
✅ Beta < 1.2
✅ P/E (NTM) < 30x
36 results, ordered by industry
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For the last couple of months, I have been doing some visuals about a wide variety of topics. The objective is to try to simplify complex concepts.
I decided to do a thread with all of these visuals, and here it is! 🧵
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📚 I've compiled a 'Resources library' that includes the articles/reads that have shaped me the most as an investor over the last couple of years.
Currently has +2,000 pages of what I consider to be high-quality investment content.
It includes links to all the relevant documents and can be found for free at bestanchorstocks(.)com in the navigation bar.
Feel free to share if you found value in this.
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Didn’t buy $GOOG at $2,000 thinking it was “too expensive”
The stock is +37% from those levels and probably will buy it now
It’s the same mistake over and over again
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Still one of the most impressive pictures out there.
Scale brought problems, problems brought solutions and solutions were eventually converted into business lines
$AMZN
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This is probably one of the most legendary presentations out there. It was conducted by Sergio Marchionne back when he led Chrysler (also led Fiat and Ferrari)
Understanding capital cycles is a very important task for any investor, more so in industries where the margin for error is thin
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Bought the iPad Pro today, including the Apple Pencil. My thoughts after using it are exactly the same as with every $AAPL product:
Before buying it 👉 The product is very expensive
After buying it 👉 The product is worth every dollar spent on it
You have to pay for quality
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My ideal screener:
1. Revenue growth > 5%
2. ROIC > 15%
3. No debt
4. No losses on a cash flow basis in the past 10 years
5. High insider ownership
6. CAGR Total return over the past 5 years > 10%
7. FCF margin > 0%
8. Country with political stability
From here I like to look at compensation structure and margins and then I can start the qualitative analysis
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There are an increasing number of accounts saying things like:
"I'm 22 and I have a net worth of $2 million. Want to know how I did it? I left my 9/5 and started to invest."
Surely there are some cases that are true but 99% must be BS
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If you ever read something I post, I hope it's this tweet.
Yesterday, Valencia, the city I currently live in, was devastated by some intense rain and floods. Many people have lost it all and unfortunately more than 70 people have also lost their lives.
I've set up a fundraiser to help these people start in a better position and I'll be very grateful if you'd donate for the cause (however small the donation is, it's welcome).
I don't know how much we'll be able to accumulate, but I am sure it will be put to good use. Here's the link: gofund.me/3765aadc
Thank you very much and please consider sharing so it gets to the most amount of people possible ❤️
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$ABNB | Disrupting the accommodation industry
The past few weeks I decided to deep dive on Airbnb. I knew I loved the product but was curious to know if I would love the company as a long term investment too!
Hope you enjoy it!
invesquotes.substack.com/p/a…
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The best investments are not found in the stock market
Realizing this makes you a better person and investor
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The fact that $FB is dropping more than 3% on something that was already announced in the Q2 Earnings Call demonstrates the short memory the market has
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This quote by Tom Walsh (BG) is now one of my all-time favs:
"The industry does look cyclical but that obsession on the perfect entry/exit point can blind you to the structural opportunity, it's there to blind you to the excellence of the underlying business and the LT prospects when you stretch it out of the 5,10, 20 years."
There are many great cyclical industries, and trying to time entries and exits to perfection is a fool's errand as long as there's an underlying secular tailwind.
In fact, I would go as far as to say that investors' obsession trying to time tops and bottoms in cyclical industries brings great opportunities for those living by the quote above.
And if I had to translate that quote into an image, it would be this one. From $TXN's capital market update:
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