Ashwood

Investing in undervalued stocks.
Not investment advice.

[Ashwood @ashwoodequities]

“I never use valuation to time the market. I use liquidity considerations and technical analysis for timing. Valuation only tells me how far the market can go once a catalyst enters the picture to change the market direction.”

— Stanley Druckenmiller

[Ashwood @ashwoodequities]

@Hawkeye_74 nice one

[Ashwood @ashwoodequities]

Interesting price action with Vistry today, looks like some shorts covering during the day. Shares opened down almost 10%, now ~2%:

#vty $vty.l

[Ashwood @ashwoodequities]

@Fin_Eng_Net @bullbot321 @HeroDividend oh sorry i didnt see the chart properly, i didn't clock where the x axis was

[Ashwood @ashwoodequities]

Will hold onto #AT despite jump yesterday. Still trading at a ~16% discount to the bid price. Low risk of the bid being pulled or blocked given it's a financial sponsor. Doubt it will take that long to close, either so TVM hardly worth a 16% discount. Good R/R at 527p.

[Ashwood @ashwoodequities]

Exited #PINE today for a 108% gain since my purchase on 25th March. Nice little win in the portfolio!

[Ashwood @ashwoodequities]

@Aktieland @cchoomngern NOVO’s pipeline is bad. Lilly is submitting Retatrutide to the FDA in Q1 and will probably start producing in 1H28. That drug blows the current generation out of the water and NOVO’s version, which they’ve licensed from United Laboratories, is only in Phase 2 trials

[Ashwood @ashwoodequities]

@Fin_Eng_Net @bullbot321 @HeroDividend Is 2x cover not enough?

[Ashwood @ashwoodequities]

Offer’s come in at £6.15. Need to run the numbers but this looks like a good premium to me even tho this is an attractive asset. Don’t see many obvious trade buyers either. Shares are up a lot today but still a 12% discount to Ember’s offer.

[Ashwood @ashwoodequities]

Bought shares in #AT $at.l on Monday. Been on my wish list since mid Jan but didn’t have cash - should have sold something to participate in the gain since then

[Ashwood @ashwoodequities]

Have watched some usage of Muse online (I’m a europoor and not available here)

This is going to fuck up a lot of business models

Any consumer facing business calling time-based switching costs their ‘moat’ is structurally challenged for the next 5-10yrs IMO

[Ashwood @ashwoodequities]

@c_miser If consumers want to use agents to find products and services, why wouldn’t websites have an incentive to allow them?

[Ashwood @ashwoodequities]

More convinced than ever that $GOOG Search is structurally fucked

[Ashwood @ashwoodequities]

$GOOG $AMZN $META $MSFT among the best businesses in the world but calling LT ROIC on AI spend is hard. Range of outcomes is wide, esp in the rental businesses of GCP/AWS/Azure. Rental businesses usually trade at ~2x invested capital.

One thing that strikes me tho is that while a reasonable chunk of GOOG/AMZN/MSFT revenues are from their compute rental businesses, META's mammoth spend is largely unmonetised

So when I look at META trading at a 9% OCF yield, that is a real yield of their ad business' cash flows. If they decide to turn their back on their AI spending tomorrow, that cash is distributable to shareholders. You can't say the same thing about GOOG/AMZN/MSFT because if you want to value them on OCF you'd need to subtract the OCF attributable to their cloud businesses

So what's the downside here for $META? At 20x mult there's 75% upside to the market cap, an extra $1.5t. Are they going to torch $1.5t of shareholder value in CAPEX? In today's money it would take them ~12 years to spend that at current CAPEX run rate. Zuck has proven to be a wild card at times (see 2021-22 Metaverse) due to his incentives and ambition but if this AI stuff really goes tits up he will dial CAPEX back.

Opening a small position in $META today

[Ashwood @ashwoodequities]

@PythiaR Where are your numbers most variant vs consensus? Think AWS top line is too low thru 28

[Ashwood @ashwoodequities]

@SayNoToTrading @brent_e_trader Isn’t $SUNB equipment brand agnostic too?

[Ashwood @ashwoodequities]

@rhomboid1MF Do you know what is in the Mechanical Engineering segment excluding the businesses they've mentioned?

[Ashwood @ashwoodequities]

Interesting, thanks sm. Just starting to look at this space. Liking Buzzi capital allocation and valuation a lot. If you strip out their stake in a public Mexican cement co they are at ~1x book value.

Also keen on sigmaroc given potential upside from Ukraine rebuilding and tailwind from CBAM on Euro steel producers.

Do you like sand? Sand cost per tonne is much lower than the other aggregates so might have better pricing power but don’t know that for sure

[Ashwood @ashwoodequities]

@taobanker Thanks, that’s interesting bc I would have guessed you don’t get scale benefits in this industry given the local monopoly/low-cost-to-weight dynamics

[Ashwood @ashwoodequities]

@absreturnchaser Reminds me of #PINE Pinewood Software

[Ashwood @ashwoodequities]

@Retail_Guru Thanks