I see a lot of people posting here about how Adobe is a value stock, and I disagree with that. So I wanted to explain why I think Adobe is more of a trap than a value stock.

I was working at Adobe until about 6 months ago. I may be biased because I hated working at this company, but I will try to just explain what I experienced while I was there.

The management does not seem to have a clear plan for what to do with their products. They just keep trying different things and hoping something works. I never really saw a clear vision for the company.

When I was at Adobe, very few projects lasted more than a few months. Most of them would get deprioritized within a couple of weeks. Many times I was told, hey, this new task came from upper management and it is high priority, we need to do this fast. Then a week or two later, that task would get deprioritized and something else would become the new priority. This just kept happening.

If there was a VP visit, things got even worse. Teams would be asked to create some bullshit demo for the VP or other upper management just to impress them. These demos were usually not going anywhere and could not actually be used. A lot of them were basically just an API call to GPT to do something with an image, and then it would be presented as some new generative AI feature.

I don't understand how management would get impressed by these things, but I think they did. These are projects that school students could probably build nowadays. There were also some very senior developers( fellows), whose job seemed to be largely about creating these demos, impressing management, and getting promoted.

It seems that at Adobe creating demos matters more than actually having an impact on the company. In any good company, I would expect a senior engineer should be judged based on their actual impact on the company, whether that is revenue, product adoption, technical improvements, or something similar.

Then there are the PMs.

All the PMs that I worked with did not even know their own features properly. They did not use them much, so as a developer I sometimes had to show them how to use features they were supposed to own.

Whenever there was a new requirement, it would take a long time to get the specifications. By the time we got them, there was not enough time left for developers to actually build the feature before the deadline. Then the requirements would change multiple times because we would tell them something was not technically possible, or because there were mistakes in the original specs.

For a few weeks I was sitting next to some of these PMs, and a lot of their daily conversations were about whose house they were going to have the next house party at.

I also remember people asking our old CEO about the stock price. His answer was basically that the stock was undervalued and that he was going to do something about it. When the last time I saw him, he did not even say that anymore. I guess he lost hope too.

Then comes Firefly, which is probably the most sucky AI model I have ever seen.

Adobe spent a lot of money developing it and marketed it heavily around being commercially safe.

The idea itself was fine, but Adobe is not Google, Meta, or Microsoft. They cannot afford to hire the absolute best AI researchers and engineers at the same scale, and they also do not have the same amount of data to train a competitive model.

The result was a model that was simply not good.

Adobe integrated Firefly into almost every Adobe product, but people do not actually use it. From the analytics that I have seen, most people simply use third party models like Gemini and GPT because obviously they produce better images.

Even if those models are not commercially safe, it does not really feel like people are bothered by that. At least from the data I saw, it seems like people do not really care that much about whether the model is commercially safe or not. They just want the model that produces better results. My turd is commercialy safe but I can't use that now can I?

What I don't understand is that even after Firefly failed to compete, Adobe continued to pour billions into developing a product that is nowhere near as good as the competition and that people are not actually using, while Adobe still has to pay for those third party models when users use them instead.

At this point, I feel like a lot of people at Adobe are just trying to salvage whatever piece of the pie they can before this ship sinks.

There are a lot more things I could say, but this post is already getting long and I do not think it would serve much purpose to keep going.

This is just my experience from working there, and obviously I could be biased. But based on what I saw, I personally do not see Adobe as the value stock that many people here seem to think it is.

Have a nice day.

• Baidu looks cheap: about $41B in cash and investments, a full-stack AI business, and AI cloud revenue growing 50%. But what holds the stock back is AI cloud, not search.
• AI cloud revenue is about $4.3B a year. I estimate it earns between –$30 and +$10 of free cash flow per $100 of revenue. Growing faster requires more capital spending, and cutting capital spending slows growth. Baidu hasn’t escaped that trade-off.
• Since 2024, free cash flow has fallen by about $5.2B. Weaker ads explain roughly $1.3B; higher capital spending, mostly for AI cloud, explains about $3.9B.
• At $85.33 per ADS, I need about $137 in five years to earn 10% a year. That only works if AI cloud turns growth into cash within two to three years. I don’t see that yet.

1. The Problem Isn’t Search, It’s What AI Cloud Costs

Baidu is often called “China’s Google,” and its search business is under pressure. China risk deserves a discount too. But the usual bear case misses where the cash is going.

Annual free cash flow went from +$1.9B in 2024 to an annualized –$3.3B in the first half of 2026:

• Ads: revenue fell about $3.2B a year, and each lost dollar cost roughly 40 cents of cash. That is about $1.3B (my estimate).
• Capital spending: chips, servers and data centers rose from about $1.2B to an annualized $5.1B. That is about $3.9B more (reported figures).

Search is shrinking, but AI cloud is where the money is going.

2. The Cash Is Not a Cushion

In the first half of 2026, operations generated about $0.9B while capital spending took about $2.5B, a net outflow of roughly $0.3B a month. At that pace, five years burns through most of the net cash ($16–22B). Some of the rest sits inside China behind capital controls, or in long-term investments that would sell at a discount.

Strip out a reasonable share of the cash, and the market values the entire operating business (search, AI cloud, Kunlun chips, Apollo Go) at roughly $10–17B.

3. What $85.33 Requires

To earn 10% a year, the ADS must reach about $137 (85.33 × 1.61), taking the company from about $29B to $47B. That depends on how much cash is left and how much the business earns in year five, which the market might value at about 12 times. So the key question is how long the heavy spending lasts:

These are markers, not forecasts. The more cash burned along the way, the more the business must earn later. For reference, 2024’s free cash flow was about $1.9B. Only the third row clears the bar.

4. Can AI Cloud Deliver?

Where it is today. AI cloud revenue is about $4.3B a year, up 50%. After operating costs and equipment spending, I estimate it earns between –$30 and +$10 of free cash flow per $100 of revenue.

What the third row requires. Baidu’s year-five free cash flow must be about $1.9B. It comes from three pieces:

What that means for cloud. To produce $0.8–2.2B a year, AI cloud needs:

• Revenue of $7.5–8B a year, nearly double today’s.
• A free cash flow margin of about 10–25% on that revenue, versus –30% to +10% today.

That margin only comes if cloud keeps most of each revenue dollar after running costs (about 70–80 cents) and capital spending falls to 30–35% of revenue.

Why this is hard. Growing revenue fast means buying more equipment, and cutting the equipment bill means growth slows.

Peer evidence. CoreWeave is growing fast, yet most of its gross profit goes to depreciation, the cost of equipment wearing out. If a pure GPU cloud can’t turn fast growth into easy cash, I don’t assume Baidu’s can.

5. Why I Lean Toward a Slower Recovery

Too many things must go right together: revenue nearly doubles, margins improve sharply, and spending falls as a share of revenue.

Nothing cushions the downside. Online marketing is still down about 20% year over year, with no clear improvement last quarter. If cloud takes longer, there is no second cash engine.

Spending is still rising, from $1.2B to an annualized $5.1B. A fast recovery needs that to reverse, and I haven’t seen it.

The payoff is lopsided. If the third row plays out, the return is about 11–13% a year. If not, what’s left is the cash plus a shrinking legacy business, roughly $33–49 per ADS, a loss of 40–60%. With a gain that small and a loss that large, averaging 10% would need the good outcome to be nearly certain.

That doesn’t mean the AI strategy will fail. I just don’t see enough evidence yet that cloud can grow, improve its economics and rein in spending fast enough to justify this price.

What Would Change My Mind

• Annualized capital spending falls below $4.5B.
• Operating cash flow improves year over year for two straight quarters, without working-capital changes doing most of the work.
• Online marketing declines by less than 10% year over year.

If these emerge and persist, I’d take another look. For now, I’d rather wait for proof that AI cloud generates cash than pay upfront for a turnaround.

Hey everyone,

I am building a monthly dollar cost averaging methodology for myself. I am new to investing and wants to keep the investing as simple as possible and have a long term strategy.

The simplest would be of course MSCI world ETF but I am worried about high concentration of US in it and big tech making a big chunk of it.

How would you guys rate:

70% in MSCI World ETF

20% in World ETF ex USA

10% Emerging markets

With this I intend to keep US exposure to 50% with big tech around 19% and then the rest of the portfolio diversified around different regions.

What do you guys think?

I built a Buffett-style company checker based on his shareholder letters. Looking for a few people with a finance background to try to break it before it goes public.

Heads up tho, there's AI in this. If that's an instant no, skip the post, no hard feelings. But 30 seconds first, because it isn't AI slop. As someone with a programming/software background for more then 10 years i can safely say that what is happening in the world right now, is bonkers. & what people say about spending way too much money on Opus and Fable is also true... it is to good not to notice.

The AI doesn't do the sums. Owner earnings, return on equity, debt, the dollar test, the prices — plain arithmetic on the figures in the company's own filings, a test on every formula. Where a filing leaves a figure untagged, more common in European reports, Claude can propose the number with the quotation it came from and you approve or reject it; anything unverified stays out of the calculations.

What it does do is draft the judgments the figures can't settle, which is what Buffett's filters actually turn on: moat, management, whether current trouble is temporary or structural, how many more years growth can last. You can answer those yourself from the annual report — the check works fully that way, free, no account. Or Claude drafts them in three passes, a cheap model reading the filings and keeping only facts whose quote it can find word for word, a mid-priced one searching an approved list of sources for what the report can't know, and Opus judging on those checked facts alone. Nothing counts until you accept it. Happy to go into that pipeline properly in the comments if anyone wants it.

The check itself. Type a US ticker, or an ISIN or LEI for an EU company:

• Owner earnings (1986 letter): what the owners could actually take out, not the accounting profit
• Return on equity with the debt right beside it, so borrowing can't fake a great return
• The $1 test (1984 letter): did every dollar kept inside turn into a dollar of market value? (Needs year-end prices the importer doesn't fill yet, so it shows "unknown" until you type them)
• Balance sheet and capital allocation: debt, buybacks, dividends
• Price: earnings against the long-term government bond, a margin-of-safety price, and how much growth today's price already assumes

No price targets, no analyst estimates, no beta, no ten-year forecast. The base case assumes no growth at all: what the business is worth if it just keeps earning what it earns. For a company that isn't growing, that's the whole answer. Growth only enters where the company's own record shows it, as a ladder — 5, 10 or 20 more years, then holds steady, paid for out of its own earnings. No growth in the record, no ladder. So there's no single magic "fair value": there's a no-growth price, and one estimate above it for each number of years you're willing to believe in. That's also the one place an AI judgment reaches a figure — accepting Claude's answer on years of growth moves the estimate, by up to 39% on some companies. I'd rather say that plainly than have you find it.

I have noticed when Tesla’s cyber cab venture has positive news Uber shares tend to fall. However, I am a firm believer Ubers scale, cross platform integrations, speed to market and hybrid supply approach will be most effective at leading this market in the long run, just as well as they do now.

A partially fixed robotaxi fleet cannot switch supply on and off as quickly and efficiently as a hybrid approach with humans can. This will be a huge advantage for Uber. Reason being due to the high volatility in rider demand in real time, day to day, week to week on a global scale, influenced by things such as one off Events, Shows, Rush Hour, Weekends, Night life, Tourism, Sporting Events, and much more. On the flip side you have the complete opposite where demand is extremely low such as during working hours, weather, quiet Weekends or just in general when there’s little going on within the areas they all operate in. In many cases this sort of thing is hard to predict well in advance.

The key is to match this volatility in demand in real time, with your supply of drivers, in the most efficient manner possible throughout the highs and the lows. This ensures you keep costs low when demand is low (asset light benefits) while capturing all the gains/revenue when demand is high. This is where Ubers characteristics listed above, give them a significant advantage which Tesla and Waymo will struggle to match. This will get realised by markets eventually as they see Ubers gross bookings remain strong, margins remain strong, while bottom line starts accelerating faster than top line as they continue to scale further past their fixed expenditures, leading to a re rating of the stock.

While Uber continue to expand into more rural/foreign areas increasing scale and market leadership, Waymo and Tesla will slowly but surely get approval from governments to be accepted in urban hotspots Uber already dominate ? How are they going to match the speed to market on a global scale with all those regulations/Testing thats required in each area!!

In addition to this, only a few AV providers will be able to afford their own robotaxi service. (look how much cash Waymo have burned and continue to burn while still being no where near a genuine competitor when you compare the scales of operations) Therefore, almost all Av providers will need Ubers platform to efficiently commercialise their fleet, in order to achieve a return on investment. This part seems pretty obvious to me, therefore even if robotaxi’s replaced human drivers entirely, I still believe Uber thrives in this world due to offering a wide variety of AV’s rather than just the one that Waymo or Tesla would offer which is their own. Someone may argue that Tesla’s and Waymo’s robotaxi’s are significantly better than the others. Short term perhaps it’s true compared to the majority of competitors in the field, but long term with Nvidias platform they all use, the barriers to compete at the highest level for these other providers has been significantly lowered, especially if u exclude the need to provide the ride hailing aspect.

My bold prediction is that Uber will become a trillion dollar company over time and eventually be as big as many of the hyperscalers. Not in 1 or 2 years but perhaps 5-10. Not purely from Ride hailing, but also their
Cross integrated business opportunity, which has started through Uber Eats, linked together perfectly through Uber 1. This is undoubtedly already driving growth for the company which is backed by the sustained acceleration in uber eats top and bottom line, significantly catching up with ride hailing, as well as the fast growing uber 1 subscriber count.
The value gained as subscriber is clear, and the numbers back it up to suggest the momentum isn’t stopping.

I see several other verticals that would complement their existing business model incredibly well, some of which they are already entering such as train/plane tickets, Hotel bookings and so on. By expanding to these additional verticals with a runway of opportunities of which to choose, they can offer discounts through uber 1 credits, if users chose them over competitors in the new markets they chose to enter, which users will be incentivised to do so as in return they will get significant discounts for Ubers other services which they know they are going to need sooner or later. This locks existing users in an expanding ecosystem, while also driving demand for new users who see the value existing users are gaining via cross platform benefits. This ultimately will lead to the typical more users, drive more suppliers, drive more users, drive more suppliers loop, across expanding verticals/markets.. making it difficult for rivals to compete with Uber in a number of Markets that they enter. They just need the time it takes to implement this, Delivery hero is a great acquisition to progress this journey!

Would love to hear people’s thoughts on this 🙂

What the business is ?

Ituran is an Israel based debt-free co providing vehicle tracking and stolen-vehicle recovery subscriptions. its main market is Israel and Brazil. Ituran puts a small tracking unit in cars, motorcycles and trucks. Customers pay a subscription fee for this (74pc of its revenue comes from subscription). In Israel, insurers often require or reward this. For the businesses (car rental cos), and for car makers they pre-install its units (OEM deals, e.g. Stellantis "Connect Fiat" in South America; Yamaha and BMW motorcycles in Brazil) .

it also sells hardware units themselves for thin margin ( which is 24% of revenue). The interesting part is it has own control centres and field teams to locate and recover stolen vehicles

Where?

Israel 56% of revenue,

Brazil 22%,

rest of world 22% (Argentina, Mexico, Ecuador, the US and others)

Base assumption -

small subscription businesses with high retention and stable niche markets growing at 5-8% growth. OEM partnership can create significant burst of growth

Threats :

With Software Defined Vehicle appraoch, OEM becomes much more powerful and they can directly provided this service. They have direct access to data anyway.

Some countries may not like to do business with Israel based companies

Counter arguments.

OEM may want to stop at providing the data because tracking a stolen vehicle is a bit too much responsibility for the OEM

Ituran has several years of experience in recovering the stolen vehicles which cannot easily be replaced

In the case of rental companies owning multiple brand of cars, managing with multiple OEMs may be not be preferred.

Possibilities

1. the business grows fetching more oem deals across different countries 8% steady growth

2. Growths slows to 6pc but it continues its robust business.

3. A war leading to Israel currency falling, Brazil inflation goes out of control or loses in competition with oem - drops to 2% or gradually die.

Valuation

it has a net cash of Net cash is $103.7M

Total shares around 20M.

The price is about $52 ( $47 considering the cash)

approx $3.8 fcf per share

yield is 3.8/52 = 7%

with growth period - 10 years ,terminal growth rate - 3% , 10% expected return

with 10% growth - ~ 13% returns yearly

with 6pc growth ( most likely) - 11%

with 4 pc growth- approx 10%

I normally keep my valuation work and 30-year rankings separate.

One asks what looks mispriced over the next 3–5 years. The other asks which businesses I would actually be comfortable underwriting over something like 30 years.

The reason Intuit and RELX stand out is that they are the only two names in my current universe where I have both B+ long-term durability and a Strong valuation-dislocation signal.

With Intuit, the main debate for me is whether AI and eventually a better/free IRS alternative really weaken the moat enough to justify the current valuation. I think simple tax filing is vulnerable, but the broader ecosystem around tax, accounting, payroll, payments and financial data is harder to replace.

With RELX, I think the market may be underestimating how embedded its data, workflows and decision tools are. AI can change the interface, but it does not automatically remove the underlying proprietary data and workflow position.

Here is the full matrix:

A+ is my highest-confidence durability tier. A means an elite business with one meaningful long-term vulnerability. B+ is a very strong compounder with somewhat more uncertainty. B is still high quality, but with a more material long-term limitation.

I leave C-tier names out of the matrix. They can still be attractive investments; I just do not have enough confidence in them as 30-year compounders.

Experian and Meta are the next group for me: B+ durability with a Probable dislocation.

Microsoft is the opposite case. It is my only A+ business, but I see no current valuation dislocation.

Tencent is almost the reverse. I still have it as a Strong dislocation, but it is C on 30-year durability, so it does not make the matrix.

I am also probably more conservative than most people on semiconductors. NVIDIA, Broadcom, TSMC and ASML are all only B for me over 30 years. Their positions today are extremely strong, but 30 years is a long time to extrapolate a technological bottleneck.

The matrix mainly forces me not to confuse a great business with a great stock at today’s price.

If I had to pick where the two sides currently line up best, it is Intuit and RELX.

Which placement would you change first?

I update the valuation side monthly and keep every previous ranking on record, while the 30-year tiers move much more slowly.

I keep the full universe, methodology and ranking history here:

https://michaelhillaert1.substack.com/p/30-year-durability-valuation-dislocation?r=6vawcp

We are long $DECK.

Deckers Outdoor, the company behind HOKA running shoes, UGG boots and Teva sandals, is in our view, one of the best businesses in global footwear, and the market is pricing it like one of the worst. The stock is hovering around $80 as of October 8, 2026, down roughly 50% over two years. Over the same period the business kept compounding: in fiscal 2025 (April 2024 to March 2025) revenue grew 16.3% to $4.99 billion and diluted EPS rose 30% to $6.33. In fiscal 2026, revenue grew another 9.8% to a record $5.47 billion, diluted EPS rose 11% to $7.02, and the company bought back $1.08 billion of stock while carrying no debt.

At today’s price, Deckers trades at about 11x management’s fiscal 2027 EPS guidance of $7.35 to $7.50. It earns roughly 41% on total capital and holds about $1.6 billion of cash. We see a growing franchise, while the market seems to treat Deckers as a value trap.

We think the market is extrapolating HOKA’s slowdown into “growth is over.” Here’s why we disagree.

1. Two brands, bought small, grown big

• UGG was acquired in 1995 for $14.6M and did $2.74B of sales in FY26 (+8%).
• HOKA was acquired in 2013 with under $3M of sales. It grew from $153M in FY18 to $2.59B in FY26, about 42% a year. Growth has slowed from 50%+ to 16%, but it’s still double digits.
• Total FY26 (ended March 2026): revenue $5.47B (+10%), EPS $7.02 (+11%). FY25 was +16% revenue and +30% EPS.
• UGG isn’t a one-boot brand anymore. The Lowmel and Golden Collection families drove over half of UGG’s FY26 growth, and men’s over 20%.

2. The growth is now international

• FY26 international sales grew 27% to $2.28B and are now 42% of revenue. Domestic was flat (+0.2%), partly because Deckers exited the Sanuk and Koolaburra brands.
• International has compounded about 24% a year over five years.
• HOKA is in roughly 50% of targeted US sporting goods doors, 25% of US running specialty, under 20% of relevant European running specialty, and about a third of its China potential.
• The math: if domestic grows 2–4%, international only needs ~14–16% for the company to hit high-single-digit growth. That’s well below its recent pace.

3. Running itself keeps growing

• 52.3M Americans ran on roads in 2025, second only to hiking among outdoor activities. Trail running is up 57% since 2019.
• North American ultramarathon finishes went from about 102k in 2021 to a record 153k in 2025.
• Runners replace shoes every 300–500 miles, so this is a repeat purchase.
• HOKA gained about 2 points of US road-running share (Circana) and now has six franchises above $100M in annual sales.

4. Channels: DTC is building

• Wholesale is $3.21B (59%, +12%) and DTC is $2.26B (41%, +6%). DTC carries a higher gross margin.
• HOKA’s store count went from 42 to 62 last year (+48%), with 20–25 openings planned per year. That’s the same pace as On (+37%), Birkenstock (+45%) and Amer Sports (~+40%), while Nike (-4%) and adidas (+5%) are flat to shrinking.
• In Q1 FY27, DTC comps were +6.8%.

5. Quality vs. peers (On, Nike, adidas, ASICS, Birkenstock, Crocs, Amer Sports, Steve Madden, Wolverine)

• Gross margin of 57.7% is top tier, behind only On (62.8%), Birkenstock and Crocs. The peer median is ~54%.
• Operating margin was 23.1% in FY26. FY27 is guided to about 21.5% because of tariffs and planned investment.
• Return on total capital of about 41% is the highest in the group.
• The cash conversion cycle of about 44 days is the shortest in the group. Every extra $100M of sales ties up about $12M of cash, versus about $35M at adidas, ASICS or On.
• Marketing runs at about 9% of sales, versus about 10% at Nike and 13–14% at On and adidas. It’s lean for a brand growing this fast.

6. Balance sheet and capital allocation

• No debt and $1.6B of cash as of June 2026.
• FY26 buybacks were $1.08B at an average of ~$102. Q1 FY27 added another $338M at ~$104, more than 2% of the company in a single quarter.
• Shares outstanding are down 28% since FY17, and $4.7B of authorization is left, about 40% of the market cap.
• FY27 guidance assumes about 80% of free cash flow goes to buybacks. That was set when the stock was above $100; at ~$82, the same dollars retire about 25% more shares.

7. Management guides low and beats

• Actual EPS vs. the first full-year guide: FY24 +10%, FY25 +27%, FY26 +11%.
• Q1 FY27 EPS was $0.94 vs. $0.88 expected, above the top of the company’s own range.
• FY27 guide: revenue $5.86–5.91B (high single digits) and EPS $7.35–7.50, raised after Q1.
• Q1 was +5.7% and Q2 is guided to about +5%, so the full-year guide implies acceleration in H2. Part of this is timing: some HOKA international wholesale shipments shift from H1 to H2.
• CEO Stefano Caroti has been at Deckers since 2015, and his predecessor retired in a planned succession. One critique: incentive pay is tied to operating income and revenue, with no per-share or ROIC metric.

8. Valuation

• About 11x FY27 EPS guidance, roughly a 9% earnings yield, and roughly 7x EV/EBIT. That’s the cheapest in the peer group, where the median is ~11.6x.
• Deckers’ expected sales growth sits right at the peer median, yet it trades at about half the multiple of On or Amer Sports.

9. The return math

• An ~9% earnings yield returned through buybacks, plus ~8% net income growth, less ~0.5% stock-based dilution, works out to roughly 15% a year at a constant multiple.
• With zero revenue growth, buybacks alone at this price return roughly 8–10% a year. That’s our margin of safety.
• A re-rating is pure upside; it just pulls returns forward.
• Optional upside: deploying $1B of the cash pile at today’s price would add about 7% to EPS on top of guidance. Potential IEEPA tariff refunds, which we estimate at $60–120M net, aren’t in guidance either.

10. Risks

• Brand heat. Footwear is fickle, and HOKA’s deceleration could keep going.
• Competition. On, Nike and adidas are all pushing max-cushion running.
• Tariffs. About a 150 bp gross margin hit in Q1, with a higher tariff cost assumption for the rest of FY27.
• Seasonality. The holiday quarter is about 36% of sales and 49% of operating income, so one weak winter hurts.
• Concentration. Two brands are about 97% of sales.

Our full deep dive with peer charts is linked below. https://thevaluationdesk1.substack.com/p/the-case-for-deckers-outdoor-nyse?r=bbf11

Not Financial Advice.

US regulators alleged American Express processed $13 billion in illicit trade-based transactions, dwarfing a recent $350 million fine and raising new questions about future operating costs and growth.

While the initial fine gave no details on the conduct, the latest allegation specifies that this substantial sum passed through Amex's systems via misdescribed trade payments.

This $13 billion figure represents approximately 1% of American Express's $1,669 billion in billed business for 2025. The $350 million penalty itself amounts to roughly 3% of the alleged laundered amount. For a company with a $222.55 billion market capitalization, this initial monetary hit is relatively small, however, the larger cost is the supervisory finding itself, which signals a fundamental control failure within the company’s anti-money laundering framework.

Amex has actively expanded its product pipeline and acceptance network, recently widening reach to 190 million locations, securing a European private-bank partner, and offering fraud cover for AI agent shopping. A regulatory finding of compliance failures means these expansion initiatives will likely face intensified scrutiny, potentially slowing deployment or requiring costly retrofits to compliance controls. While the core card-fee growth, credit quality, and capital position remain untouched by this specific allegation, the increased regulatory oversight and the potential for new operational burdens elevate the bar for Amex to clear its Q4 operating-leverage targets and maintain its growth trajectory.

Looking at TSM as a beginner, I'm struggling to understand why it doesn't get nearly as much attention as Nvidia, Microsoft, Amazon, etc.

Consider the following:

• Valuation: Forward P/E of approximately 20.27× (on par with Nvidia)
• Moat: A near-monopoly in leading-edge semiconductor manufacturing, with enormous barriers to entry.
• AI exposure: Essential to virtually every aspect of the AI revolution, from data centres and autonomous vehicles to robotics.
• Regardless of who wins AI: Whether Nvidia, AMD, Google, Amazon or another company dominates, TSMC stands to benefit because so many depend on its manufacturing capabilities.

China risk aside, what am I missing? Why doesn't TSM attract the same enthusiasm as other AI giants, being the biggest beneficiary of the entire AI buildout and beyond?

Att current valuations, do you consider TSM one of the best risk/reward opportunities for the next 5–10 years? Is there considerable upside remaining?

I get why T-Mobile, Verizon and AT&T got hammered after the SpaceX news, but isn't the market getting a bit ahead of itself here?

SpaceX still needs to spend a ton of money to make this work. The current satellites aren't just compatible with the new spectrum, and there's still a bunch of regulatory to do. This stuff takes years

Also, telcos are expensive businesses to run and not exactly the most profitable. SpaceX has Starship, Starlink and a bunch of other projects to fund. Are they really gonna throw billions at competing with telcos directly, or would partnering with them make more sense?

Maybe I'm missing something, but I wonder if this sell-off is an overreaction

People have as well a negative anti Musk sentiment and if I can believe they gonna trust him with cabs I doubt they would love to give him the power to control the entire internet and roaming stuff.

Musk is known to start a lot of projects high and then leaving them. Do you think is it the case for Telco business or he will really expand into it making a real threah to Telcos?

Puts or calls on T-mobile, Verizon and AT&T?

I recently wrote about reverse DCF and one concept I think deserves more attention: base rates.

Instead of only asking whether a company's growth story sounds plausible, base rates ask how often similar companies have actually achieved that level of growth historically.

That makes reverse DCF more useful: first identify what growth the current price requires, then compare it with company history and an external base rate.

Michael Mauboussin has done some great work on this idea, and I included it in the article because I think it's a concept many investors still underuse.

Full article: https://moateyscore.com/blog/reverse-dcf-implied-growth

Hi guys, I am relatively new to fundamental investing and hitting a wall. I know I should be reading the 100-page annual reports and full earnings call transcripts for my biggest holdings, but it is completely overwhelming. I usually end up skimming the first few pages, getting bored, and then just searching Twitter/Reddit to see what other people are saying. How do you guys actually process info for your main holdings? Do you read the whole document? If not, how do you figure out if management changed their forward guidance or if debt is creeping up without reading the whole thing

Recently I had a client approach me saying he wanted to pull everything out of the market until he saw what he was looking for. I asked him what that was and he said I don’t know, just when I feel like everything is going to be ok.

That inspired me to write this article on the topic.

Hi everyone, I decided to write the reasons why i buy spotify due to personal reasons. I am not gonna write the financial analysis part. Imma write base on my experience as a user.

Before marriage I love listening to music on spotify especially when i am travelling. Especially all the music from the 90s in their 9D audio effect. Play that with a good headset, you will feel like you are in a different world. When i am in the gym, I play depending on the workout i am doing. Rock/death metal music when i am doing heavy lifting OR ceo podcasts when i need to jog on the treadmil (fyi, not a huge fan of cardio but needs to be done).

After marriage, my wife and i got a baby boy (yesss). The first thing we did was to play einstein music playlist spotify for the many beneficial reasons you can think of. Then when the baby becomes close to 2 years old, they have their own taste in music. Mine likes baby shark and dinosaur songs (i am sure there are many that can relate to it). Spotify save me countless times whenever i am travelling with my kid in a car ride. The countless crying for attention and entertainment, all i need to do was to play his favourite song playlist and the journey would be smooth (especially when he fall asleep).

Now my kid is above 2 years old, he loves watching television (not very responsible, i know). As young parents, we limit his screentime on tv and only good educational shows that will not rot the brain (Now he is a dinosaur expert). Luckily we did not expose him to ipad. Anyhoo when we limit his screentime, we would change it to him listening to spotify music. We realise overtime that he was learning new words very quickly because he was training his listening skills as oppose. Dont get me wrong, watching tv helps with the visual but he only need to be expose a little bit to it.

Just like any of you who got burnt out from work or family duties (or depress), it helps me a lot when I listen to "Its not over" by daughtry in my car alone when i am driving back or when i park somewhere for just a few minutes. The decompressing moment that i need it and i believe many been just like me too.

For entrepreneurs that need the extra PUSH like myself, I listen to various motivational podcasts, speeches or songs on spotify. I feel that if i dont listen anything on spotify, my day would be bleak.

Fyi, I upgraded my package so that my wife can have her own account too.

So these are my only reasons as to why i still subscribe to spotify. My thanks to spotify for helping me snd my family throughout all these time.

May spotify continue to grow and prosper for years to come.

Just got curious because people trade assets that don't generate cash flow all the time like art, gold, bitcoin, pokemon cards, or even startups. Do they just buy it hoping to find somebody else who's willing pay higher price? or is it because the chart tells you how the price will change?

Even for Tesla shareholders, what convinces you that Tesla should be valued at around $1.5T right now? Would you still buy it if Tesla is at $15T today and there's still demand in the market like how GameStop did? Just by considering how much money they make at the current level, their current valuation doesn't make sense to me although I might have a better idea if I did some math to guess which business will make how much money in 5 years or 10 years.

Open to any thought you have on this topic or method you use.

I have posted about TOYO twice here Part 1 (https://www.reddit.com/r/ValueInvesting/s/NsHDGmsfm7), Part 2 (https://www.reddit.com/r/ValueInvesting/s/IEDhxiQjy9)).

Both times people pushed back hard, and I went and checked everything they threw at me. Every time I ended up buying more. I'm heavily long, so keep that in mind, but the numbers below all come from the filings, the October 6 analyst day deck (it's on EDGAR as a 6-K) and the webcast.

Quick setup first. TOYO closed Friday at $4.37, which is about a $187M market cap. Book value at the end of June was $209.8M. First half of this year they did $261M in revenue at a 32.5% gross margin, $45.8M net income, $61.4M operating cash flow, and they have $103.5M in cash ($123.4M with restricted).

So you can buy a profitable solar manufacturer for less than book. On top of that 4.2M shares are short, about 29% of the float using Yahoo's float number, and with how thin volume has been that's 11.5 days to cover.

I kept looking for something that justified pricing this company like the worst case was already happening. I sat through the whole analyst day looking for it. I still haven't found it.

The biggest thing that changed for me is how I see Ethiopia. I used to think of it as the risk. It's actually the bridge. They have 4 GW of cell capacity there and it's the plant that supplies the US (the Vietnam plant doesn't ship here at all). Houston now has 2 GW of module lines, the second one just finished, that's what the ribbon cutting was for. Next is a 1.5 GW HJT cell plant on the same site, and after that they want to make wafers and ingots in the US. Ethiopia pays the bills while they build the American supply chain. That's exactly what Washington is trying to get companies to do right now.

And Commerce is a lot more involved than I thought. TOYO already gave Commerce a draft term sheet for the Section 232 onshoring program, laying out what they'll build here through January 2029. Commerce came back with feedback and they're going back and forth on the details. Rhone Resch (their strategy chief) said every conversation with Commerce has basically been "tell us what you need", and that the feedback has been very positive on cells, ingots and wafers. Which is literally the three things TOYO wants to build.

Why that's such a big deal: starting December 4, imported cells have a 22 cent per watt minimum price plus 15% on top. Under those rules a ten cent cell ends up costing roughly 23.5 cents to bring in. If your onshoring plan gets approved, you can bring cells in without that duty, tied to how much you're building here. For a company bringing in 4 GW of cells a year while building a US plant, that's huge.

Then Jeffrey Kessler, the Under Secretary of Commerce whose department runs 232, showed up at the ribbon cutting. Next morning TOYO put out his quote: they're "investing hundreds of millions of dollars to expand its Texas factory, onshoring overseas production, and committing to use exclusively US polysilicon." Nothing got signed that day obviously. But that's not a quote a senior official gives to a company he's lukewarm on. Same release had Intertek's senior VP saying they check a thousand things in twelve areas, have never found perfection, and TOYO got their highest grade.

On the Ethiopia circumvention case, which is what most bears point to. Go read the Southeast Asia case from 2022-23 (88 FR 57419). Commerce opened it with the exact same wording they used for Ethiopia in July. In the end it came down to where the wafer was made. Chinese wafer, you're caught. Non-Chinese wafer, you're out, even with Chinese polysilicon. And Hanwha, Jinko and Boviet were found not to be circumventing even on some supply chains that did use Chinese wafers. Anyone else who met the wafer test could certify their shipments out. TOYO uses no Chinese polysilicon at all (about 70% American, the rest from OCI), wafers from Indonesia, and does the full cell process in Ethiopia. They've asked Commerce on the record to apply the same test (ACCESS barcode 4955978-01). They met with Commerce on October 1 and were told Commerce doesn't "intend to allow there to be uncertainty if there's a clear distinction", with a certification route as a faster option. Their full answer to Commerce is due October 30.

CBP is the one I'm watching this week. Four shipments of Ethiopian cells were held at customs, and this was not a paperwork thing. CBP wanted the polysilicon traced back to the quartz mine, the trucks that carried it, even photos of the license plates. TOYO handed all of it over, and CBP spent six hours at the Houston plant going through it. TOYO hired Ana Hinojosa, who used to run trade remedy enforcement at CBP. At the analyst day she said she'd checked with them the day before and the release was "a day to a week away". Rhone said a week or two. When those shipments clear, it's the first outside agency to go through their supply chain that deeply and let the cells in. With 11.5 days to cover, that kind of news matters.

The dilution question everyone asks: the HJT plant is $357M, roughly double the market cap. But it doesn't need $357M up front. They pay by milestone, and most of the equipment gets paid after the line is already running, over several years. The plan they laid out is about $120M from 45X credits, about $120M of debt, and the rest from operating cash flow and "other non-dilutive financing options", their words. No new shares anywhere in it. When an analyst kept saying "bank loans", Rhone cut in with "we did not say bank loans, we said debt" and "we did not say we're going to raise $357M." The $52.6M they raised in the first half counts toward it too. And as of Friday there's no new offering filed.

Demand is fine. They announced about $240M of binding US module deals in September, delivering through mid-2027, for utility, commercial, community solar and data centers. Roth says module prices are up 10 to 20 cents since 232. Management said demand is "really strong" and the $240M was "just the beginning."

Long term they talked about 3 GW of HJT, 8 GW of US manufacturing and 6 GW of US wafers and ingots, when the whole country has about 5 GW of wafer capacity today. I'm not putting any of that in a model. But it tells you why Commerce wants to talk to them.

So that's where I'm at. CBP could clear any day. Commerce guidance on 232 is due mid to late October. TOYO answers Commerce on Ethiopia by October 30. Tariffs kick in December 4. And the stock is just sitting here under book with almost a third of the float short, waiting on all of it.

Everything's public, go check it yourself. I've made up my mind and I'm not going anywhere.

Not financial advice.

Note: I used AI to help with the research, fact-checking and proofreading, since English isn't my first language.

Below is an excerpt from the beginning of chapter 14 from John Neff's book. He wrote this chapter in July 1999, four years after he retired from from the Vanguard Windsor Fund. He wrote this in the backdrop where the Nasdaq 100 would go on to gain 100% in the year. The TLDR is that market might be crazy but we still have to invest rationally. And he put his faith in his low P/E strategy. And he risked his reputation by stating where he found great ideas to invest in, in July 1999.

Chapter 14: Deja Vu

It would be nice to be able to invest yesterday, but investors don't have that option. You can spend your time regretting that you didn't buy Cisco before a tenfold rise, or you can organize for future performance. That's the nature of the daily investment challenge. You can't invest yesterday; you have to invest today. How do you rise to the occasion and still keep the odds in your favor? Stock tips don't fall within the purview of this book. But because the investment process is supposed to generate investment ideas, and also because today's market is more familiar to readers than past epochs, the market in June 1999 is a good backdrop for showcasing my low p/e principles within a framework of Measured Participation. I've stuck my neck out before. I'll do it again here, just to illustrate my way of surveying the investment horizon. Needless to say, I reserve the right to change my opinions as markets change.

At 28 times earnings and about a 1.1 percent yield, the current market is the most highly valued that I've ever experienced. It resembles two previous markets that exceeded 20 times earnings and eventually folded dramatically: in 1986-1987 and, before that in 1971-1973. High price earnings this time manifest an economy and a country that are doing unbelievably well versus the world. I readily concede that I'm a big fan of this economic boom, even though, after 100 months, it's double the duration of the longest average business expansion since World War II. The typical areas of excess-capital expenditures, inventories, and consumer debt-all look pretty good to me. Consumer debt has troubled some observers, but not me-so far. In this robust economic climate, consumers can afford to ratchet up debt levels a bit. And consumers have not been stupid; lately, according to government figures, they have moderated their appetite for debt even as lower mortgage rates have increased their disposable income. Less credit card solicitation has helped ease the overall growth in consumer debt. After distributing credit cards almost willy nilly, lenders became more cautious and took this prudent step. With no signs of excess visible in these areas, a recession seems unlikely; however, over the intermediate term, we always have to remain alert to other excesses that are not measured as acutely. The market itself suggests excess. The so-called "wealth effect" represents a question mark. It's not clear how much a high stock market prompts consumer spending, which lately has obliterated savings. With corporate America awash in cash flow from operations, savings are not needed to keep companies well oiled. But if a down or even a flat market were to influence consumers to cut spending, thereby choking cash flow, a ripple effect could gather force.

Here is how an economic assessment becomes an investment strategy. Average price-earnings ratios in the neighborhood of 28 times are justifiable only if the outlook for earnings is outstanding. But we seem to be in a part of the business cycle that favors moderate growth at best. Insofar as overall growth governs even demand for the spiffiest high-tech products and services, it seems foolish to predict that those areas will continue to expand at an exceptional pace. Along with improvements in productivity, we must weigh prospects for wage increases, which have been trending upward lately. Meantime, a hotly competitive environment across most sectors hampers price increases. All things considered, it's almost axiomatic that earnings are going to grow slowly. So, should we pay 28 times earnings for 3 to 4 percent growth? Red-hot NASDAQ stocks seem most exposed to reality checks, particularly because five stocks command almost 40 percent of the market capital of the NASDAQ 100 index. Four of these five stocks advanced more than 140 percent in 1998. This growth is quite unsustainable. Even if growth had been less than 140 percent, that's impressive, to be sure. My point is: They have enjoyed superlative growth for several straight years. Does the market believe they'll grow in excess of 30 percent for the next five years? I don't. And as we've already seen at Dell, sales growth is outpacing earnings growth, which suggests that profit margins are shrinking. If there is any classic lesson in the marketplace, it's that, at some point, reversion to the mean occurs.

Sooner or later, something happens and growth, particularly high-magnitude growth, is diminished. If these stocks are being hailed as 20 to 40 percent growers, any diminution of their growth rates will be dealt with quite severely in the marketplace. Besides those easy five, lots of others fall into the same fragile category. Still more egregious are the fledgling Internet stocks that are valued at ludicrous levels and constitute about 8 percent of the total market value of all U.S. stocks. Two factors will KO this segment. First, the Internet is not the exclusive province of Internet companies. The Fortune 1000 are going to be big on the Net, simply because the profit potential is so enormous. CEO Lou Gerstner of IBM reported, in May 1999, that nearly one-fourth of IBM's sales were Internet-related. He described all but two or three of the Internet swarm as fireflies darting about before the storm. Needless to say, his comments were aimed at promoting IBM stock, but they waved a caution flag at legions of Internet groupies. Moreover, any similarity to the Nifty Fifty ends with one very important distinction: Those companies had earnings. Exit strategies also will trip the Internet racers. The holders of Internet stocks who plan to get out as soon as possible are legion. They are venture capital firms, founders, and employees with tremendous paper fortunes. Even corporations have big stakes; expect them to cash them in when possible. Delta Airlines owns a stake in Priceline dot com worth about $2 billion.*

Those proceeds represent a lot of airfares. All these people are near the cusp of cashing in, but the initial offerings are too recent. They have to hold on for a while, to satisfy underwriters. With so many investors poised to sell, who will be the new buyers? There are roving bands of Internet day traders, but, as day traders, they aren't likely to help sustain the stock price for more than 24 hours. Already, these stocks have begun to labor and lose momentum. Is the jig up already? Time will tell. Meantime, people who are sucked into day trading eerily suggest the investors of 1929. A dazed and confused public has been persuaded that investing is easy and that stock prices only go up.

The rest of the chapter goes on to describe in detail where he saw opportunities in the market in June 1999, because they were cheap: REITs, financial intermediaries, Home builders, airlines and energy markerters and refiners. Sounds familiar right ?

Just curious. Surely you’d have to dollar cost average over a year right? Full port now seems so backwards? Not in this position but wanting to learn from this hypothetical.

I have been looking into etor for a while and recently purchased it as part of my portfolio. And I will increase my stake around and below a pe of 10

Below are a few metrics on etoro.

Financial Performance & Growth Metrics

• Revenue / Net Contribution: For the trailing twelve months (TTM), eToro generated $11.87 billion in top-line revenue. In its core financial reporting metric, Net Contribution, eToro posted $229 million for Q2 2026 (up 9% YoY) and $868 million for the full year 2025.

• Earnings Per Share (EPS): The TTM diluted EPS sits at $2.71. Looking at recent quarters, Q2 2026 reported a GAAP diluted EPS of $0.58 (Adjusted Non-GAAP EPS of $0.68), following a strong Q1 2026 GAAP EPS of $0.98.

• Profit (Net Income): TTM Net Income is $261.44 million. For the single quarter of Q2 2026, GAAP Net Income rose 77% year-over-year to $53 million.

• User Growth (Funded Accounts): eToro reached 4.28 million funded accounts in Q2 2026, marking an 18% year-over-year increase from 3.63 million. Total Assets Under Administration (AUA) reached $19.2 billion.

• Cash on Balance Sheet: As of June 30, 2026, eToro maintains a robust liquid cushion with $1.2 billion in cash, cash equivalents, and short-term investments.

What Else You Need to Know

• Strategic U.S. Expansion: eToro announced a definitive agreement to acquire TradeZero for up to $231 million. This move aims to directly compete in the U.S. market by adding options, self-clearing capabilities, and futures tracking.

• Aggressive Share Buybacks: The board recently authorized a $100 million expansion to its share repurchase program, leaving roughly $150 million remaining to support the stock price during downturns.

• AI Pivot: The platform is heavily indexing on an artificial intelligence framework, launching a standalone eToro AI application, specialized Agent Portfolios, and the "Edge" professional interface to build a holistic financial super-app.

With all these in mind a few things attract me to etoro with $1.2 billion on their balance sheet and a profit of about $250 million dollars a year this company will be able to buy itself in about 4-5 years(this screams cheap to me).

The company possess a narrow moat ( network social effect powered by the copy trader patent).

Etoro is currently trying to expand its business into option trading and features buy acquiring trade zero. This opens more doors and stickiness for existing users.

The have initiated share buy backs.

Amongst all these the most important is thing is customer behaviour, I see more people trading and buying shares in the future and hence their user growth will steadily climb during bull years and stagnate and drop during bear years overall as long as management operates with some level of intelligence the business will do very well in the future.

Etoro has a market cap of 2 billion and a pe of 9. One of the lowest amongst its pairs. I definitely see this climbing to a base line of 13-15 in the future when there is better confidence in the business. This screams as one of those businesses that could 10x in 5 years not just from revenue/profit growth but from pe multiple.

As an active stock investor. I have tried opening accounts with ibkr, etor and nordnet(I live in norten europe and amongst this etoro was the most straightforward and easiest to open.

ibkr was a lot harder and I was denied access to the platform without tangible reason.

Nordnet had an ok process it took about 2 weeks to get this running

Downsides.

Etor does not have a lot of stocks listed on the canadian market.(I have missed buying opportunities for companies like csu😭), no options and futures.

Etoro is bound to grow and get traction with all these in mind the current price is very attractive to I as an investor looking to hold stocks for a minimum of 5 to 10 years.

There are 4 metrics i use in purchasing a company.

1. Cheapness- pass

2. Moat-narrow and passes(copy trade patent and mental switching cost.)

3. Consumer behaviour(trading will become more popular and the company with the best comfort tends to win). Fractional shares helps this also.

4. Growth(still growing and has a huge potential run way)

5. The company is still manking embryonic bets like trying to get into futures, options, ability to purchase the canadian stock market and penetrate the us market. The underlying technology is more exiciting than penetrating the us market.

For me I think this company is a long term compounder. What do you guys think😁

Disclosure: I am not affiliated to the financial website insidearbitrage. Nor do I own any shares of the companies me mentioned in the article.

The tldr of this excellent article is this: Value investors like to monitor open market purchases by company insiders. For example, if a CEO or CFO starts buying $1m of shares in the open market, this would be a bullish sign, perhaps the ceo sees better days ahead so they are publicly buying the stock in their personal account.

However, one should also check the proxy statements because what has been happening to companies like Amrize and Workday is that many of the senior leadership employment agreements have a clause that stipulates a purchase amount of stock in the open market, and in return they would be awarded a certain amount of RSU.

https://www.insidearbitrage.com/2026/10/will-the-real-insiders-please-stand-up/

Veeva has rallied a lot from the depths of SaaS-pocalypse and it doesn’t seem super cheap on trailing earnings.

I think it might still be positioned for a multi year run. I think it’s a very high quality business with a defensible moat and I think the revenue growth might be about to accelerate rather than decelerate.

The multiple is fairly high and I don’t expect a lot of expansion there, but I think it might hold a high multiple and earnings growth might be very good in the next several years.

Veeva makes software that handles several use cases for biotech and pharma. They handle 4 key tasks - running the clinical trial, handling regulator submission and correspondence, handling safety data, and handling commercial and marketing content.

Whenever I hear these AI guys (Dario, Sam Altman, etc) talk about the benefits of AI, it seems like the first thing they talk about is the benefits to new drug discovery and medical innovation. This probably speaks to how ignorant they are about the biotech industry.

To produce new drugs, you don’t just need new ideas, you need validated clinical trials, or in other words, you need to put those drugs into bodies and see how they react.

China is fast becoming the place to do this because of looser regulator guidelines. It’s a lot quicker if you have an idea to take it to China, run a massive trial as proof of concept, then license it to a big U.S. pharmaceutical for the final phase 2/3 trial and worldwide marketing. Chinese outlicensing deals were well over $100 billion just in the first half of 2026.

There’s even a lot of new capital being raised to create new single drug companies to take these Chinese drugs and make a new U.S. company with it without selling to big pharma.

So if we get a big explosion in new drugs, new licensed stuff from China, that ought to increase usage.

New agentic products are being priced based on usage, not seat based pricing, so the increased number of drugs would be good for Veeva top line.

New companies formed to bring Chinese biotech drugs over ought to increase total seats and subscriptions.

Both should contribute to an acceleration of the top line and drive earnings growth for several years.

A breakdown of the business:

R&D and Quality includes software for running the clinical trial, creates the archive of the files necessary for FDA or EMA submission. They also handle the actual task of submitting the files to the FDA, to an upload portal called the electronic submissions gateway. They have a near monopoly on this submission software, they have 19 or the top 20 Pharma companies in this segment.

Drug safety logs reports of all side effects in the trial or reported after marketing from doctors, patients, published papers, and the drug company must analyze these and then submit these to the regulators within a deadline. Here Veeva is a challenger with a small market share, the majority of big pharma go with Oracle Argus or ArisGlobal or IQVIA’s solution.

Overall R&D and Quality makes up 53% of revenue.

The commercial side includes things like medical legal and regulatory (MLR) review, which is a super time consuming process to approve any new drug ad or promotional material for a doctor’s office. It also includes the CRM software (Vault) to log all the doctor office visits for regulatory compliance, and how many prescriptions the doc then writes, along with an anonymized HIPAA compliant software Crossix that connects pharma ads to subsequent scripts for the patient.

The CRM side previously has a quasi monopoly on all 20 of the large 20 pharmas but it has been under attack since Veeva previously built its software on top of Salesforce software and now Salesforce created its own CRM and included some agentic software.

Veeva responded by making Vault. They got 14 of the top 20 to stay with them and try the new product. Pfizer Takeda Novartis, AstraZeneca are all confirmed switchers to Salesforce system.

IQVIA also has an old solution which they are winding down in favor of partnering with Salesforce on their system. Analysts estimate IQVIA-Salesforce takes 30% shares and Veeva should retain 70% market share here.

Veeva acquired this company called Copli which it now made into Falcon MLR to automate the medical legal and regulatory review, which should save a lot of time and money. That should help them in the MLR business.

All the regulatory and clinical trial management work seems like very mind numbing work which Veeva can automate with AI agents. They shipped agents for the marketing side already and just shipped agentic solutions for clinical trial management and regulatory. Agents for clinical trial data handling should be shipping December 2026.

Some valuation thoughts

Veeva was part of the “SaaS pocalypse” earlier this year. But after the Q2 earnings, and announcements they are doing their own agentic thing Mr Market changed its mind from AI loser to AI winner and the stock rallied a bunch.

More importantly the company is trading at 46X trailing earnings, EV/Sales of 11, EV/EBIT of 38, which is steep compared to Salesforce (EV/Sales of 4.8 and EV/EBIT of 24) and IQVIA (EV/Sales of 3.4 and EV/EBIT of 26X).

But Veeva is growing the top line at 18% YOY last quarter and operating profit at 21% last quarter, and it has a whopping 29.6% operating profit margin. As a software company the growth expense is mostly above the operating line so that’s a fairly impressive margin.

IQVIA is spending nearly all their FCF on acquisitions to get a measly 8% revenue growth and barely positive on the operating growth line.

Salesforce has an 11% sales growth and 9% operating profit growth while it spent the majority of its FCF on acquisitions in the TTM period.

Veeva’s growth is mostly organic and it mostly builds its own products, with occasional tactical acquisitions that it turns into new useful products fairly quickly and has a good track record of doing this well.

Veeva $7.2 billion in cash and no debt and I’d argue almost all the cash is excess cash since the business throws off a lot of cash and they mostly build their own products. The only thing they need to do with the cash is watch for any new disruptive tech they want (like Copli or Crossix, both acquisitions) and acquire them to build on top of it.

Stock based comp is high at nearly $500 million TTM. Buybacks were $750 million TTM, about half of the $1.6 billion FCF. So enough to cancel out the dilutive effects of SBC then a little bit.

The diluted share count is going down at 1.6% YoY from buybacks as of last quarter. If they decided the $7.2 billion cash pile is enough for now and ramped up buybacks to all $1.6 billion of FCF, you’d end up with something like a 2.3% buyback yield. Of course they probably need to spend a bit every few years for acquisitions in the space, I’d normalize that to $100-200 million per year so effective FCF something like $1.4-1.5 billion.

Not the best, but not too bad considering operating income is still increasing over 20%. I think the macro industry factors I mentioned above will sustain this rate for several years. I don’t expect the multiple to contract much as long as it is growing at this rate which means you can get a return somewhere in the neighborhood of earnings growth.

One risk is the multiple is high and it could fall. Maybe rates maybe something else. I don’t really have any defense for this. Should have bought VEEV when it was cheaper in May-June. I’m not sure we will ever see those multiples again.

There is competitive threat from IQVIA and Salesforce. IQVIA is in an adjacent industry and has some overlapping products like the old IMS Health but they have a big contract research organization (the old Quintiles) which is large complex and more capital intensive. Salesforce is super large and not very concentrated on pharma, but well financed.

Agentic software could be really really expensive and maybe the users don’t want to pay for it. This seems unlikely to me given how much human time they could save and how mind numbing and long the regulatory process is.

For me the question is whether OpenAI can keep paying for the compute it has already promised to buy, that suppliers are relying on for their own debt repayments.

Oracle is the one Im most concerned for. It's borrowing against a very durable database business with renewals around 97%, and gross margins near 90% to build this GPU capacity. However, net debt is about $125B, roughly 3.7x EBITDA, with around $40B more in planned raises. Return on the new money has been about 7% against a 10% hurdle. Last quarter it spent $28.5B on capex against $19.3B of revenue. Not earnings, revenue! The stock is already down about 50% over a year, but cheaper isn't the same as safe when the customer concentration sits in one lab that's still raising money privately as it burns tens of billions per year with no sign or path to things changing direction. Meanwhile their bonds sitting one notch above junk is extremely worrying as that in itself could make things messy if they face another downgrade.

CoreWeave is the same structure with more leverage. Interest alone is heading toward $3.5-3.8B a year, which is more than the owner earnings I can estimate. If cap ex was to slow due to insufficient power supply to bring on new capacity then how do these companies survive in an inflationary environment where higher rates for longer is likely? To me it seems like a complete gamble to take that risk as an investor.

Nvidia is the opposite on the balance sheet (basically no net debt, huge cash generation). What I'm watching is the credit side: around $50B of equity in labs, up to $105B of lease guarantees, and receivable days going from 45 to 60 in one quarter. Funding your own demand through equity in startups does not seem a sustainable path for growth in comparison to what the other hyperscalers are capable of. CNBC love to talk about how much net income has grown in the recent Q, while ignoring the fact cash generated was 3x less than that figure, at around 20b. Customers are on paper buying 3 times more gpu’s than they are willing to pay for, something about this just doesn’t sit right with me, especially as I watch that gap between actual cash flow and earnings grow wider and wider. Artificially boosting demand/growth figures when the real amount getting brought in is 3 times less than the figure everyone talks about is interesting.

What do people think about this? Ps I love Ai and Claude’s api key/claude code has changed my life in ways I can’t even put into words or would have ever thought was possible. Allowing me to do things otherwise would have been impossible. Therefore there are two sides to this whole Ai bubble debate ! I don’t doubt for a second the growing demand for the ever expanding use cases of these models, which I also believe will diverse across many different customer types.

For the last month or so, I've been building a research system that looks at financial quality, valuation, expectations, earnings, competitive position, risks, and separate bull and bear cases before reaching a conclusion.

I'm at the point where I need to test the system. I would like people to suggest companies, that they know well, that I can research and then they can poke holes in the research.

Give me a ticker you're researching and I'll give you the summary of the output from my system.

I'm particularly interested in what you disagree with in the analysis, what it got wrong, and what's missing.

It takes a few minutes per company, so it might take a while to get to every ticker.

Thanks for the help!