Sunday 22nd January 2023 Thesis BUY Activision Blizzard (ATVI) shares for $75 in anticipation of Microsoft (MSFT) acquiring them for $95 in September 2023, after the likely approval by US, UK and EU competition committees. If successful, it returns 27% in 8 months, representing a 36% annualised rate of return. If the deal doesn’t goContinue reading “Buy ATVI? Heads I win, Tails I win?”
Author Archives: equityanalyst13
The key headwind Wayfair has faced may well be online demand returning to past norms
Saturday 21st January 2023 Since hitting its peak valuation of $33bn, or $330 per share in the Summer of 2021, Wayfair has: It is unsurprising shares fell ~90% to $33 over the period. My analysis of St. Louis Fed Economic data in conjunction with relevant quarterly segment sales data of the main US home goodsContinue reading “The key headwind Wayfair has faced may well be online demand returning to past norms”
eXp World Holdings – a valuable pyramid scheme for US estate agents?
Friday 20th January 2023 I recently read a write-up on eXp World Holding (NasdaqGM:EXPI), an online real-estate brokerage firm in the US on Value Investors’ Club, here. The “pyramid scheme” nature of acquiring and retaining real-estate agents, combined with the revenue-share nature of paying them, may well provide a durable moat for this business, enablingContinue reading “eXp World Holdings – a valuable pyramid scheme for US estate agents?”
High returns mainly come from low P/E stocks… but it’s mainly because there are more of them
Thursday 5th January 2023 Over the past two decades, stocks with a price-to-earnings ratio of less than 30x have represented about 80% of all stocks with a market cap over $1bn. It is for this reason that about 80% of stocks that generate five-year compounded returns of over 10% have been stocks that started outContinue reading “High returns mainly come from low P/E stocks… but it’s mainly because there are more of them”
Why does Buffett have 40% of his portfolio invested in Apple?
Wednesday 4th January 2023 As of November 2022, Berkshire Hathaway owned 895m shares in Apple (APPL). This position was valued at $124bn, roughly 40% of the $296bn in marketable securities managed by Warren Buffett and his portfolio managers: Todd Combs and Ted Weschler. Why does one of the greatest investors of all time have soContinue reading “Why does Buffett have 40% of his portfolio invested in Apple?”
Thoughts on the investment question Buffett asks daily and the three questions he considers each week
In November 2022, the 32nd Annual Graham and Dodd Breakfast featured Todd Combs, one of the two portfolio managers allocating capital for Warren Buffett. Source: Instagram @heilbrunncenter In it, Combs explained how one question is constantly asked, usually daily, and that is: “Is the moat wider or narrower on any of their businesses?” Furthermore, heContinue reading “Thoughts on the investment question Buffett asks daily and the three questions he considers each week”
ARLP: A poor capital allocator benefitting from record coal prices
BackgroundARLP is the second-largest coal producer in the eastern United States. It makes and sells “steam coal” – coal burned to produce steam for the production of electricity – for utilities and industrial companies. Looking at historic financials (Exhibit 1), we can see the business has seen a near doubling in quarterly sales from $319mContinue reading “ARLP: A poor capital allocator benefitting from record coal prices”
The biggest threat to the financial system: UST Liquidity
Thursday 29 December 2022 This article draws on insights from the FT Film “Fractured markets: the big threats to the financial system“ Summary There are concerns that a policy mistake could lead to a a sell off in the currently illiquid, US Treasury market, similar to that seen in British Gilts in September 2022. WereContinue reading “The biggest threat to the financial system: UST Liquidity”
Latest on China-Taiwan
28 Dec ’22, “Taiwan to bolster military readiness“From 2024, compulsory military service for men will be extended from the current four months to a year and conscripts’ pay will be quadrupled to bring it in line with the minimum wage. This follows two days after Beijing staged the largest air manoeuvres around Taiwan in fourContinue reading “Latest on China-Taiwan”
Overview of the key players in the global semiconductor industry
Companies that make chips Source: Counterpoint research Nature of business: The more advanced the chips being made the more capital intensive the process. For example, TSMC’s capital expenditure for 2022 will be $36bn, and in December 2022 it announced plans to triple its investment in Arizona from $12b to $40b in the coming years, whereContinue reading “Overview of the key players in the global semiconductor industry”
The Equity Analyst 