L

a minimalist global investor/ go where the value is/ slow to anger, quick to listen/ love & forgive/ free overlooked insights, sometimes with a touch of humour

[L @zeroxpectation]

$COST May comp sales ex-gas & FX

US +8.7% (+5.5% last yr)
Canada 5.3% (+6.3%)
other international +6.9% (+8.4%)

EC +20.9% (+12%)

Home market: rock solid; continue gaining mkt shares
overseas: decelerating (no surprise), still decent

Recession-proof biz priced like a bond!

[L @zeroxpectation]

@mingbo5820 Most people get so caught up in short-term tasks that they rarely hav time to optimize their workflows for long-term gains. It's also a common employee mindset: Why should I spend time improving efficiency for my employer? Efficiency initiatives only happen when pushed by bosses.

[L @zeroxpectation]

$SPGI Bernstein event

a key concern: if LLMs get better, clients may bypass SPGI & just buy raw data to clean & process themselves—potentially weakening data-layer defensibility & pressuring pricing

mgmt: clients r willing to pay 35-45% premium at renewal for AI-ready data

[L @zeroxpectation]

$CSU insider podcast explains:

how Benjamin Ernst got into M&A w/ no biz degree
how CSU goes under the radar in Germany
why CSU has a minimal presence in Germany
how CSU values targets w/ no traditional logic
why niche payment SaaS remains AI-resistant

https://t.co/4AQ8LufnAF

[L @zeroxpectation]

$CSU insider view on Jonas CFO Jeff MacKinnon

involved in 150+ M&A deals
did a leveraged carve-out from FICO
not just a bean counter
a humble steward, operator, catalyst & strategist
recommend to follow @natebjones @john__glasgow

This insight shows the kind of people CSU hires.

[L @zeroxpectation]

@dcurras1 We are each other’s eyes.

[L @zeroxpectation]

$HEI buys a key supplier of armored vehicle track systems. Niche!

Notably, most of Cook Defence Systems' rev is derived outside the United States and allows HEICO added international growth opportunities.

[L @zeroxpectation]

@Hottie_Baker_ $SPGI CapIQ is largely a byproduct, requiring relatively limited incremental investment, since it already leverages proprietary data sourced from other divisions such as credit ratings and indices.

[L @zeroxpectation]

$ACN partners w/ AlphaSense (AS) to help clients use data & AI more effectively. AS uses natural language processing to summarize transcripts, filings & broker research. It's often considered complementary to CapIQ rather than direct substitute. $SPGI could easily replicate that.

[L @zeroxpectation]

@mingbo5820 Many analysts don’t fully utilize what $SPGI platforms offer. At my old workplace, many never used the Excel plugins for better integration. It’s a bit like a $COST membership, many members dont spend enough to justify it, yet they keep it anyway for optional value & convenience.

[L @zeroxpectation]

@cactusmaac Asset management firms are increasingly hiring fundamental analysts w/ coding & AI skills. Quantamental analysts r becoming common.

I’m not fully convinced great fundamental investors can also be great quants—the thinking styles r quite different. But who knows. Prove me wrong.

[L @zeroxpectation]

@_PatientWallet_ I agree. They are a net beneficiary. The market has been too fixated on "disruption" and/or is trying to make room for more AI pure-play bets as opposed to AI-proxy plays.

[L @zeroxpectation]

$TOI.V hired its 1st M&A member in Asia. $CSU already has several people & partners there, particularly in Vietnam & Indonesia, building M&A pipelines. No pure-play Asian software has been done yet, tho a few acquired biz hav meaningful presence in Asia despite being HQ elsewhere

[L @zeroxpectation]

HR & payroll software consolidation continues to accelerate, particularly at regional level. PE-backed BCS & Timegrip are merging to create a pan-European platform. A similar trend is playing out across $CSU VMS. Once enough units get folded into a group, CSU can spin it off.

[L @zeroxpectation]

$CSU buys Finastra’s US mid-mkt banking biz, providing enterprise-grade tech cheaper than Tier-1 systems. Vista PE announced to sell it Dec. The sale was estimated to fetch $200m+ in Dec, implying a ~1x revenue deal. Finastra sells it to focus on lending & payments. Milk the cow!

[Adrián, Head of the arena  @adrivalue]

Cora Group carves-out banking assets from Finastra (a company owned by Vista EP)

Seems like a significant acquisition for $CSU.TO.
Claude 🤖 estimates $130-230MM in annual revenue, a ~30% EBITDA margin and between 500-900 employees

Finastra is - probaby - another forced seller, with 5x+ Net Debt / EBITDA and a B3 credit rating (almost at the bottom of the HY)

Keep'em coming!

[L @zeroxpectation]

Here's how $SPGI's data is being leveraged via a 3rd-party analytics layer.

PMs can access S&P Global's bond data, pricing, & liquidity metrics via SQN to streamline portfolio mgmt lifecycle. Combined with Lucror's quantamental framework, it improves efficiency & scalability.

[L @zeroxpectation]

$SPGI Bernstein event

a key concern: if LLMs get better, clients may bypass SPGI & just buy raw data to clean & process themselves—potentially weakening data-layer defensibility & pressuring pricing

mgmt: clients r willing to pay 35-45% premium at renewal for AI-ready data

[L @zeroxpectation]

$SPGI P/E currently trades well below its 10y average, with consensus-implied 14% eps cagr over the next 3y. Mgmt's confidence also appears supported by recent insider buying. While calling the exact bottom is never easy, the margin of safety is becoming increasingly attractive.

[L @zeroxpectation]

$SPGI Bernstein event

a key concern: if LLMs get better, clients may bypass SPGI & just buy raw data to clean & process themselves—potentially weakening data-layer defensibility & pressuring pricing

mgmt: clients r willing to pay 35-45% premium at renewal for AI-ready data

[L @zeroxpectation]

$SPGI Global Market Intelligence's President is leaving to join Qlik Technologies ($10B valuation) as President & CEO. Qlik & CapIQ aren't in direct competition. Qlik is primarily a BI & data integration platform used to build custom dashboards from internal company data.

[L @zeroxpectation]

$LMN.V

[Lumine Group @Lumine_Group]

Press Release: Lumine Group Enters into an Agreement to Acquire the Video Network Business from Synamedia.

Headquartered in the UK, Synamedia is a global provider of video software solutions helping operators, broadcasters and media companies transform how video is delivered, experienced and monetised. With more than 30 years of industry expertise, Synamedia combines cloud and AI technologies, operational scale, managed services, and deep domain knowledge to support customers through the evolution of video.

Consistent with Lumine’s decentralization strategy, the business will operate independently under its primary product name, ‘Quortex.’ Upon completion, this will mark Lumine Group’s 16th corporate carve-out transaction.

Read the release here: https://t.co/HOTTEJWOJG

[L @zeroxpectation]

$ACN valuation all time low
despite order book growth past 3Qs
FCF yld 10% FY26
market not convinced AI biz could outgrow legacy biz
consulting isnt just labour arbitrage anymore

my base case: fewer low-value, more high-value advisory & implementation works

ROIC recovery is key

[L @zeroxpectation]

@ariaradnia that can spook some investors. LOL