Bear’s Den Idea Forum
While MYST’s generalist events typically offer a diverse set of ideas, they were shocked by the extremely high percentage (>70%) of Consumer-related Shorts (Cheesecake Factory, Dollarama, Ebay, Elf Beauty, Hertz, O'Reilly Automotive, Simply Good Foods, Utz Brands) presented last week! Other themes included companies facing funding issues (AST SpaceMobile, Hawaiian Electric Industries, HTZ) or exhibiting accounting red flags (CAKE, EBAY, UTZ) and stocks priced for perfection (CME Group, DOL CN, Loar Holdings, ORLY).
The ideas presented at MYST’s previous Bear’s Den Forum (Jun 24) dramatically outperformed over 1-month period (~71% hit rate, +7.4% average alpha).
Edition: 195
- 20 September, 2024
Consumer Discretionary
BABA’s transformation from China’s eBay to China’s Microsoft continues - the group’s AI strategy involves both the development of its open-source LLM model (Qwen), which has performed well on benchmarks in China, and investment in Chinese AI startups. This strategy has already proven successful with Moonshot and MiniMax developing popular AI applications. BABA provides these start-ups with credits that can be used for training or inference, which has driven growing demand for AI services on AliCloud. Although GPU supply is a constraint, Blue Lotus sees domestic breakthroughs in semiconductor equipment providing BABA with an avenue to expand its supply of AI compute and expects the group (and Tencent) to reinvent China’s software industry.
Edition: 193
- 23 August, 2024
Communications
Using Cash Flow Returns On Investments based valuation tools, Meta Platforms is looking significantly undervalued. ROCGA’s portal has been built using the Cash Flow Returns On Investments methodology. It allows you to identify, research and value listed companies. They have 15 years of clean fundamental data and you can model and assess companies in seconds. Current coverage: 1,010 North American, 515 UK and 440 European companies. Other companies identified include eBay, United Parcel Service and Adobe. More details on ROCGA’s systematic and interactive valuation tools can be found here. A free trial is available on request.
Edition: 152
- 20 January, 2023
Technology
Guess it wasn’t just a pig through a python…but is this a compounder on sale? While eBay alone is not the reason PYPL’s stock crashed 25% this week, Aaron Gabin believes management kitchen sinked this quarter and its guidance. Once PYPL works its way through the tough comps, the narrative for 2H22 is a great one…reaccelerating growth, which will put it back in the hearts of GARP investors and compounding earnings 20%+. He thinks 2022 EPS comes in closer to $5 than the $4.70ish guidance and if PYPL returns to 20% EPS growth in 2023, we’re looking at $6 in earnings, putting it closer to a 22x P/E on today’s stock price, which is a very attractive entry point.
Edition: 128
- 04 February, 2022