Value Investing AAPL the compounder |
- AAPL the compounder
- Quadriga Insights - MS European Annual Hedge Fund Forum Barcelona 2020 - Diego Parrilla
- Matt Levine - If You Want Hertz, Have Some Hertz
- Question regarding Teradyne (TER) latest 10Q - "trade account receivables" - selling to third-party
- Lemonade's S-1: Solving the Market for Lemons
- Peter Kolchinsky and Kush Parmar on Investing in Biotech
| Posted: 13 Jun 2020 03:17 AM PDT I was taking a closer look at AAPL, the $1.4 trillion market cap behemoth. The business definitely qualifies as one with a wide moat as it consistently generates high ROIC and impressive margins. NOPAT and FCF growth has been consistent too, at around 5% CAGR in the last five years. The wide moat gives us confidence that AAPL is very likely to be able to generate this same CAGR in earnings going forward for the next decade. However, buying it at 25x earnings today and exiting at the same 25x merely gives 5% CAGR. A consistent 5% CAGR over a decade is not shabby but not exciting and could be below the cost of capital for some investors. Am I missing something? Should we expect AAPL's earnings to accelerate (and therefore perhaps have higher exit multiple too)? Or am I under-estimating the compounding rate of AAPL such that attributing 5% is too low? In comparison, Berkshire bought into the company around 2016. Back then, Apple was compounding NOPAT and FCF at a similar 5% CAGR, with equally high ROIC. However, the PE was much lower at around 10 - 15x. I welcome some thoughts. Stay well and have a good weekend! [link] [comments]  |
| Quadriga Insights - MS European Annual Hedge Fund Forum Barcelona 2020 - Diego Parrilla Posted: 12 Jun 2020 11:41 PM PDT |
| Matt Levine - If You Want Hertz, Have Some Hertz Posted: 12 Jun 2020 09:36 AM PDT |
| Question regarding Teradyne (TER) latest 10Q - "trade account receivables" - selling to third-party Posted: 13 Jun 2020 05:32 AM PDT Hi all, I have been following the subreddit for a while now and I have to say I am a big fan of reading some of the in-depth analysis provided here. Some of the old links to letters are fascinating and I have learned a ton just following along. Anyways, one of the company's I have been researching over the past almost year is Teradyne. While reading their latest 10Q, I come across the below paragraph under their revenue section which describes them selling their accounts receivables to third-parties. I am unfamiliar with the mechanics of this and how the below works, if someone could point me in the right direction for a resource or provide a quick explainer that would be great. From 10Q: Accounts Receivable Teradyne sells certain trade accounts receivables on a non-recourse basis to third-party financial institutions pursuant to factoring agreements. Teradyne accounts for these transactions as sales of receivables and presents cash proceeds as a cash provided by operating activities in the consolidated statements of cash flows. Total trade accounts receivable sold under the factoring agreements were $46.8 million and $41.7 million for the three months ended March 29, 2020 and March 31, 2019, respectively. Factoring fees for the sales of receivables were recorded in interest expense and were not material. I am looking for a possible reason that they might sell their accounts receivables and if this is possibly any type of red flag? When I peruse Google, it seems that a typical reason that a company would sell accounts receivables is to raise cash, but TER typically has a good amount of cash on hand. I appreciate any help, [link] [comments]  |
| Lemonade's S-1: Solving the Market for Lemons Posted: 12 Jun 2020 09:02 AM PDT |
| Peter Kolchinsky and Kush Parmar on Investing in Biotech Posted: 12 Jun 2020 08:58 AM PDT |
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