Two Way

Memento Audere Semper
Trader since 1994 (Commodities, Stocks, Forex, Bonds)

[Two Way @Two_Way_Trader]

Long $CME and adding. This perp paranoia is way overdone IMO and by the way Q2 volume do not look so bad so far considering Q2 2025 marked record volumes due to liberation day madness...

[Fiscal.ai @fiscal_ai]

CME Group -- the world's largest derivatives exchange -- is now trading at its lowest multiple since 2017.

EV/EBIT: 19.5x

$CME

[COACHTY @TheRealTRTalks]

💢 $CME CEO Terry Duffy is fighting back hard:
CME Group will sue the @CFTC over its approval of #Bitcoin & $crypto perpetual futures for platforms like Kalshi.

Duffy calls it a “disaster waiting to happen” for retail investors and argues perps are actually swaps under Dodd-Frank — meaning they should trade on CME.

Incumbent vs innovation? Battle starts tomorrow 💥

[LWS Financial Research @lwsresearch]

⚖️ CME Group Inc. $CME CEO Terry Duffy said the exchange operator will sue the CFTC over its approval of perpetual futures, calling the process rushed and warning of risks to retail investors.

The move comes after Coinbase Global, Inc. $COIN and Kalshi received approval to launch crypto perpetual futures in the U.S., introducing no-expiry derivatives that can offer high leverage and continuous exposure.

Shares of CME Group Inc. $CME, Cboe Global Markets Inc. $CBOE and Intercontinental Exchange Inc. $ICE fell as investors weighed the long-term competitive threat to traditional exchanges 📉

#CMEGroup #Derivatives #CryptoMarkets

[Two Way @Two_Way_Trader]

$388.hk starting to look interesting here after joining the multiple compression trend suffered by other major listed stock exchanges

[Two Way @Two_Way_Trader]

I also like $br at 146 the fcf yield is approximately 7% with growth and rising eps expectations (zacks chart) AI madness derated it way too mach IMO

[Two Way @Two_Way_Trader]

$ice with rising earnings expectations, FCF yield 5.5% , 10% growth, lowest multiples in years, to me this seems an opportunity: long. I see the moat safe, perps and tokens are not gonna change it...chart from https://t.co/w58PonYnrl

[Fiscal.ai @fiscal_ai]

Adyen is now trading near its cheapest multiple on record.

Forward P/E: 20.9x

$ADYEN

[Fiscal.ai @fiscal_ai]

Mastercard is now trading at its lowest multiple since the pandemic.

EV/EBIT: 21.75x

$MA

[Two Way @Two_Way_Trader]

I believe that the market, in order to make room for the next IPOs and to buy semis and memories, is draining liquidity from all the other equities... $ice, $cme, $ma, $spgi, $v can be purchased today at valuations that have not been seen for a long time.

[Two Way @Two_Way_Trader]

I agree with this about $ma : a clear description of the current valuation and potential opportunity. A 4%+ FCF yield with growth and embedded inflation protection

[Dimitry Nakhla | Babylon Capital® @DimitryNakhla]

A quality valuation analysis on $MA 🧘🏽‍♂️

•NTM P/E Ratio: 23.60x
•10-Year Mean: 32.21x

•NTM FCF Yield: 4.35%
•10-Year Mean: 3.25%

As you can see, $MA appears to be trading below fair value

Going forward, investors can receive ~36% MORE in EPS & ~34% MORE FCF per share 🧠***

Before we get into valuation, let’s take a look at why $MA is a great business

BALANCE SHEET✅
•Cash & Short-Term Inv: $8.22B
•Long-Term Debt: $17.21B

$MA has a strong balance sheet, an A+ S&P Credit Rating, & 25x FFO Interest Coverage

RETURN ON CAPITAL✅
•2020: 36%
•2021: 37%
•2022: 39%
•2023: 40%
•2024: 40%
•2025: 41%

$MA maintains strong returns on capital, highlighting the financial efficiency of the business

REVENUES✅
•2016: $10.78B
•2026E: $37.06B
•CAGR: 11.16%

FREE CASH FLOW✅
•2016: $4.42B
•2026E: $17.50B
•CAGR: 14.75%

NORMALIZED EPS✅
•2016: $3.70
•2026E: $19.65
•CAGR: 11.36%

SHARE BUYBACKS✅
•2016 Shares Outstanding: 1.10B
•LTM Shares Outstanding: 0.90B

By reducing its shares outstanding by 18%, $MA increased its EPS by 22% (assuming 0 growth)

MARGINS✅
•LTM Gross Margins: 100%
•LTM Operating Margins: 59.5%
•LTM Net Income Margins: 45.9%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive ~36% MORE in EPS & ~34% MORE FCF per share

Using Benjamin Graham’s 2G rule of thumb, $MA has to grow earnings at an 11.80% CAGR over the next several years to justify its valuation

Today, analysts anticipate 2026 - 2028 EPS growth over the next few years to be greater than the (11.80%) required growth rate:

2026E: $19.65 (16% YoY) *FY Dec

2027E: $22.75 (16% YoY)
2028E: $26.43 (16% YoY)

$MA has a good record of meeting analyst estimates ~2 years out, so let’s assume $MA ends 2028 with $26.43 in EPS & see its CAGR potential assuming different multiples

27x P/E: $714💵 … ~18.3% CAGR

26x P/E: $687💵 … ~16.5% CAGR

25x P/E: $661💵 … ~14.8% CAGR

24x P/E: $634💵 … ~13.1% CAGR

As you can see, $MA appears to have attractive return potential if we assume >24x earnings multiple

Given its growth, quality, & expanding VAS segment, a >24x multiple appears more than reasonable for $MA

$MA currently trades near its lowest valuation in the past 10 years — this is precisely the time it may feel the most difficult to be a contrarian

As Nick Sleep has said: “when there is a frenzy of activity in one area of the market there is very often an anti-bubble of discarded companies. In the dot come era these were companies with steady cash flow.”

Today, $MA seems to be one of those discarded companies

Today, at $467💵 $MA appears to be a strong consideration for investment
___

𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️

𝐓𝐡𝐢𝐬 𝐜𝐨𝐧𝐭𝐞𝐧𝐭 𝐢𝐬 𝐩𝐫𝐨𝐯𝐢𝐝𝐞𝐝 𝐟𝐨𝐫 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐚𝐧𝐝 𝐞𝐝𝐮𝐜𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐧𝐥𝐲 𝐚𝐧𝐝 𝐝𝐨𝐞𝐬 𝐧𝐨𝐭 𝐜𝐨𝐧𝐬𝐭𝐢𝐭𝐮𝐭𝐞 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐚𝐝𝐯𝐢𝐜𝐞, 𝐚𝐧 𝐨𝐟𝐟𝐞𝐫, 𝐨𝐫 𝐚 𝐬𝐨𝐥𝐢𝐜𝐢𝐭𝐚𝐭𝐢𝐨𝐧 𝐭𝐨 𝐛𝐮𝐲 𝐨𝐫 𝐬𝐞𝐥𝐥 𝐚𝐧𝐲 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐲.

𝐁𝐚𝐛𝐲𝐥𝐨𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥® 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐫𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐚𝐭𝐢𝐯𝐞𝐬 𝐦𝐚𝐲 𝐡𝐨𝐥𝐝 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐝. 𝐀𝐧𝐲 𝐨𝐩𝐢𝐧𝐢𝐨𝐧𝐬 𝐞𝐱𝐩𝐫𝐞𝐬𝐬𝐞𝐝 𝐚𝐫𝐞 𝐚𝐬 𝐨𝐟 𝐭𝐡𝐞 𝐝𝐚𝐭𝐞 𝐨𝐟 𝐩𝐮𝐛𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧 𝐚𝐧𝐝 𝐬𝐮𝐛𝐣𝐞𝐜𝐭 𝐭𝐨 𝐜𝐡𝐚𝐧𝐠𝐞 𝐰𝐢𝐭𝐡𝐨𝐮𝐭 𝐧𝐨𝐭𝐢𝐜𝐞.

𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐨𝐛𝐭𝐚𝐢𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞 𝐛𝐮𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲 𝐨𝐫 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬. 𝐏𝐚𝐬𝐭 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 𝐝𝐨𝐞𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞 𝐟𝐮𝐭𝐮𝐫𝐞 𝐫𝐞𝐬𝐮𝐥𝐭𝐬.

[Two Way @Two_Way_Trader]

@Tintincapital I am also buying $ICE and $CME .....

[Two Way @Two_Way_Trader]

@Tintincapital Yes, at current prices at 4% FCF yielded with implicit inflation protection, double digits cash flow growth both $V and $MA are excellent investments IMO....it seems to me that semiconductors, memories and the upcoming IPOs are draining liquidity from the rest of the market

[Two Way @Two_Way_Trader]

I have just seen this...https://t.co/ZkLPM2RDNS it seems I am in good company on this one...$db1

[Shivam Kashan | Knight Vision Capital @shivamkashan]

$ICE is approaching a fwd P/FCF of 17x, a valuation it has approached 7x over the past 10 years, and then expanded from shortly after.

[Eric Nuttall @ericnuttall]

Neil Chapman, SVP of Exxon this morning at the Sanford Bernstein Strategic Decisions Conference perhaps going a little off corporate script:

[Bob's Payment Stock Substack @bobspaysubstack]

https://t.co/bcoJRCHSo1

[The Orca Fin @axbkol]

For the first time since 2000, the 10-Year Yield (4.55%) is now higher than the S&P500 Forward Earnings Yield (4.40% = 100 / Fwd P/E 22.71). Yes, this didn't happen during even the GFC.

Bond vigilantes out in full force globally? For now, it seems so.

[Ole S Hansen @Ole_S_Hansen]

Iran has, as expected, has seen the smallest decline in output (-11%) since the war started, while production across other Persian Gulf producers has collapsed. Saudi Arabia (-29%) - and to a lesser extent the UAE (-40%) - have been partly shielded by pipeline infrastructure that allows crude exports to bypass the Strait of Hormuz, while Iraq (-63%) and Kuwait (-69%) have taken the biggest hit. Meanwhile, Venezuela’s production continues to recover, reaching a seven-year high, while Libya holds output near a 13-year high. Data from Bloomberg's monthly survey #CrudeOil #MiddleEast #OPEC

[zerohedge @zerohedge]

Entire market is now one giant gamma squeeze: S&P traded $2.6 trillion notional of calls yesterday, all time high

[Pentti Jokinen @PenttiJokinen]

$ADYEN 🇳🇱 is one of the rare ones I wouldn't consider a shitco.

2026 est PE = 20 (ex cash)