$178.7

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Published On: 05/31/20

Thesis: Focused on Original Local Content across the world. That’s good, but it costs a lot of money. Massive subscriber growth in Asia and Africa is utterly believable, but nobody knows how much content spend is required to fuel that.

Buylyst Valuation

$434.7

Valuation Details >>

Market Price

$493.2

07/07/20

Upside

-12%

Competitive Advantage

Core Competency? Easy access to a library of movies and shows.
Product Differentiation? Differentiated. Investing more in Original Content, internationally.
Recent Growth? Revenue growth finally outpacing content expense growth.

Durability of Competitive Advantage

Competition/Threats? Amazon Prime, Disney+, HBO, YouTube, Apple TV+.
Economic Moat? Should widen with library of Original Content and viewer behavior data.

Management Quality

Strategy & Action? Still focused on “spend & grow” rather than cash flow generation.
Financial Risk? Still too debt-laden. When will Netflix self-fund production?
Sustainable Free Cash Flow? About $9.6 billion. Translates to roughly $440 billion.

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Thesis Details Valuation Details Commentary

Published On: 05/21/20

Thesis: Despite factoring in “key man”, Energy & Airline exposure risks and little to no future growth, BRK is trading at a substantial discount. Much of the value lies in optionality - in its massive cash balance, which we expect to be deployed prudently, especially in a bad recession.

Buylyst Valuation

$247

Valuation Details >>

Market Price

$211

08/14/20

Upside

17%

Competitive Advantage

Core Competency? Long-term investments in Private & Public companies across the world.
Products: Better or Cheaper? Better. Business structure and investment style superior.
Growth Prospects? >$100 billion ready to deploy. And warmed up to Tech investments.

Durability of Competitive Advantage

Competition/Threats? “Key Man Risk”. Airlines and Energy exposure.
Moat? Brand value of Buffett/Munger. Company structure. Pile of cash balance.

Management Quality

Strategy & Action? Superior. Investment style lends itself well to bear markets.
Risk Management? Business risk minimal. But investment risk in Energy/Airline exposure.
Valuation? $247 per share based on little to no growth expectations.

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Thesis Details Valuation Details Commentary

Published On: 04/28/20

Thesis: Growth in number of smartphones and in music streaming penetration is primed to boom in the next 3 years. Spotify will likely command a high market share (albeit reduced), given its focus on Personalization and Ubiquity.

Buylyst Valuation

$179.4

Valuation Details >>

Market Price

$253.7

08/14/20

Upside

-29%

Competitive Advantage

Core Competency? Music Streaming Software – the pioneer in this revolution.
Product Differentiation? Claims to have better data & software. Translates to better UI/UX.
Historical Growth? High Revenue and Active User growth. Expected to continue.

Durability of Competitive Advantage

Competition/Threats? Apple and Amazon have deep pockets.
Moat? User History + better AI = better experience. Also, relationships with Music Labels.
Market Share Growth? Expect that it will decrease from current level of 50%.

Management Quality

Strategy & Action? Good. Focused on Scale, Software and Acquisitions.
Sustainable Return on Equity? Low. Margin pressure will remain.
Sustainable Free Cash Flow? Roughly $1.7 billion. Translates to $180/share.

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Thesis Details Valuation Details Commentary

Published On: 03/04/20

Thesis: Transitioning from CPU to AI company with the “XPU” approach. Target Price assumes Cloud+AI business grows 10% per year while legacy PC business declines by 2% per year. Achievable if execution is better than last 2 years.

Buylyst Valuation

$82.1

Valuation Details >>

Market Price

$58.3

05/20/20

Upside

41%

Competitive Advantage

Core Competency? Design and manufacturing of Logic semiconductors.
Product Differentiation? Trying with “XPU” approach; “moonshot” projects like AV and IoT.
Recent Growth? Decent revenue and EBITDA growth despite “challenging” years.

Durability of Competitive Advantage

Competition/Threats? AMD, Nvidia and Xilinx. Biggest threat is TSMC.
Moat? Shrinking, but could widen with investments in “XPUs” and Software.

Management Quality

Strategy & Action? Mistakes on 10nm production delays. But “XPU” strategy may work.
Return on Equity? High. >20% consistently with high margins and low debt.
Sustainable Free Cash Flow? About $18 billion. Translates to roughly $82 per share.

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Thesis Details Valuation Details Commentary

Published On: 02/18/20

Thesis: Paypal started the cardless movement and is now competing with many “newbees”. But it remains a dominant company that’s aiming to be a “network-of-networks”, which could significantly increase revenue as cash flow in the next 2 years.

Buylyst Valuation

$120.6

Valuation Details >>

Market Price

$193.1

08/14/20

Upside

-38%

Competitive Advantage

Core Competency: Technology to make digital payments cardless, frictionless.
Product Differentiation? Need more. Aiming to become the “network of networks”.
Revenue Growth? Solid. 20%-ish a year, due to growth in number of Active Users.

Durability of Competitive Advantage

Competition/Threats? Card Networks, Banks, Neobanks, Big Tech firms.
Economic Moat? Inherent nature of product discourages switching; plus Network Effects.

Management Quality

Strategy? Good. Thinking in terms of ecosystem to widen Moat. But too acquisitive.
Return on Equity? Mid-teens. Need to find a way to improve margins.
Sustainable Free Cash Flow? About $7 billion. Translates to roughly $120 per share.

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Thesis Details Valuation Details Commentary

Published On: 02/05/20

Thesis: KLA is the biggest Process Control company in semiconductor mfg., with a >50% market share. In the next 3-5 years, its market dominance should increase with the proliferation of EUV & other processes that promise to extend Moore’s Law.

Buylyst Valuation

$227

Valuation Details >>

Market Price

$209.1

08/14/20

Upside

9%

Competitive Advantage

Core Competency? Quality control in semiconductor manufacturing.
Product Differentiation? Strong. KLA market share is above 50%. Focus is on EUV.
Growth Drivers? New production methods: EUV in Logic, 3D stacking in Memory.

Durability of Competitive Advantage

Competition/Threats? Competition is weak, but high customer concentration.
Moat? Entrenched nature of long life-cycle products. Services business growing.
Cash Flow Volatility? Volatile. Capex needs and margins are cyclical.

Management Quality

Strategy? Good. Focused on EUV process control and Services.
Return on Equity? High. Above 50%. With high margins and manageable debt.
Sustainable Free Cash Flow? About $1.8 billion. Translates to $227 per share.

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Thesis Details Valuation Details Commentary

Published On: 02/05/20

Thesis: Has mostly shifted towards Retail lending, largely cleaned up its loan book, digitized, expanded its reach, and is positioned to remain a dominant player in a cleaner Indian Banking system – our conduit to invest in the rising Indian Consumer.

Buylyst Valuation

$18.3

Valuation Details >>

Market Price

$10.1

08/14/20

Upside

82%

Competitive Advantage

Core Competency? Retail & Corporate banking in India.
Products – Better or Cheaper? Better. Scale & Reach Advantage. Better Technology.
Historical Growth? Good Revenue and Cash Flow growth in last 12 months

Durability of Competitive Advantage

Competition? Heavy. HDFC Bank, Axis, Kotak. And some government banks.
Economic Moat? Digitization, combined with Scale and Reputation.
Cash Flow Volatility? Volatile due to impact of Loan Loss Provisions, not competition.

Management Quality

Strategy & Action? Good. Been applying the HDFC Bank playbook: Vanilla Retail loans.
Return on Equity? Low. May improve over next 12 months. 15% target by 2020.
Sustainable Free Cash Flow? About $3 billion. Translates to roughly $18.3 per share.

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Thesis Details Valuation Details Commentary

Published On: 12/10/19

Thesis: Focus on 1) better information organization like “Topics”, (2) on quality of discourse or “Health” of the platform, and (3) on improving its Ad tools, all suggest upside in revenue, cash flow and stock price.

Buylyst Valuation

$37.9

Valuation Details >>

Market Price

$36

08/14/20

Upside

-9%

Competitive Advantage

Core Competency? Platform designed to exchange views/ideas with random people.
Product Differentiation? The “Issues/Topics” social medium. New focus on “convo health”.
Growth? Users and Revenue both growing but Avg. Revenue per User flat.

Durability of Competitive Advantage

Competition? Facebook, Instagram, LinkedIn.
Economic Moat? Twitter’s moat is narrower than competition’s.
Cash Flow Volatility? R&D needs are uncertain. But expected to increase to widen Moat.

Management Quality

Strategy & Action? Dorsey & Team on the right path with Topics and Health initiative.
Return on Equity? High. Around 20%. Expected to increase over the next few years.
Sustainable Free Cash Flow? $1,371 million. Translates to roughly $34.3 per share.

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Published On: 11/15/19

Thesis: Same core product as Uber but markedly different strategy: focus on transportation only, memberships & partnerships, and US & Canada. Increase in urbanization and decrease in car ownership are big drivers. But stock is expensive.

Buylyst Valuation

$43.8

Valuation Details >>

Market Price

$28.9

08/14/20

Upside

52%

Competitive Advantage

Core Competency? Mobile marketplace matching software.
Products: Better or Cheaper? Differentiating with product focus, partnerships, memberships.
Growth Drivers? Urbanization, International riders, Memberships.

Durability of Competitive Advantage

Competition/Threats? Uber, Taxis and Public Transport. AB5 and Safety.
Economic Moat? Weak. But Partnership + Memberships can widen Moat.
Cash Flow Volatility? Less than Uber. Lyft’s R&D needs lower, and is debt-free.

Management Quality

Strategy & Action? Good. Founder-led company. Focused scope and eye on profits.
Return on Equity? Need massive scale before positive ROE. But no debt.
Sustainable Free Cash Flow? About $650 million. Translates to roughly $44 per share.

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Thesis Details Valuation Details Commentary

Published On: 10/29/19

Thesis: Market leader in ridesharing, determined to grow internationally and into ancillary areas such as food & grocery delivery and logistics. But it’s hard to justify current stock price even with generous volume assumptions.

Buylyst Valuation

$14

Valuation Details >>

Market Price

$32.8

07/07/20

Upside

-57%

Competitive Advantage

Core Competency? Mobile Marketplace Matching software.
Products – Different or Cheaper? No pricing power. Moving to become a “delivery solution”.
Growth Potential? In international ride-share, UberEats, Urbanization and Subscriptions.

Durability of Competitive Advantage

Competition? Limited. Lyft/Cabs for ridesharing. Specialized players in other areas.
Economic Moat? Weak but could widen with “network effects” once services expanded.
Cash Flow Volatility? High – R&D needs and working capital swings.

Management Quality

Strategy & Action? Not enough focus on positive cash flow.
Financial Productivity? Negative. Typical of growing company. Need to focus on margins.
Sustainable Free Cash Flow? About $1 billion. Translates to roughly $12/share.

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Thesis Details Valuation Details Commentary

Published On: 10/22/19

Thesis: Leader in Virtualization technology - with tailwinds like Cloud Computing, Containerization and 5G all set to push its already growing business. Competition is strong but limited in number. Main risk is expensive acquisitions.

Buylyst Valuation

$135.4

Valuation Details >>

Market Price

$137.2

08/14/20

Upside

0%

Competitive Advantage

Core Competency? Market leader in Hardware and Software Virtualization.
Products: Better or Cheaper? Trying to be Better by offering end-to-end virtualization.
Historical Growth? Solid Revenue, EBITDA Margin and Free Cash Flow growth.

Durability of Competitive Advantage

Competition/Threats? Big Cloud providers, Red Hat, Nutanix. Container startups.
Protection/Moat? Strong. High Switching Costs. Tie-ups with Big Cloud Providers.
Cash Flow Volatility? Should be muted because of the stickiness of the business.

Management Quality

Strategy/Action? Average. Price paid for recent acquisitions is questionable.
Return on Equity? High. High margin business, low debt.
Sustainable Free Cash Flow? About $2.8 billion. Translated to roughly $135/share.

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Thesis Details Valuation Details Commentary

Published On: 09/11/19

Thesis: Thriving in a competitive but growing industry as a top manufacturer. It generates cash despite pricing pressure. Growth in Offshore and in India should help accelerate growth in revenue and cash flow. But stock is fairly priced.

Buylyst Valuation

$12.4

Valuation Details >>

Market Price

$13

03/10/20

Upside

-7%

Competitive Advantage

Core Competency? Wind Turbines, end-to-end manufacturing and services.
Products: Better of Cheaper? Cheaper. That would explain SGRE’s market ascendancy.
Revenue growth? Been growing by 10% recently. Expect similar growth in next 2-3 years.

Durability of Competitive Advantage

Competition/Threats? Vestas, GE, Goldwind and some other Chinese manufacturers.
The Moat? Medium. Long-cycle nature of product. Focus on Services and Software.
Cash Flow Volatility? Should decrease with Services and Re-powering.

Management Quality

Strategy & Action? Good. Focused on cash flow and profitability.
Return on Equity? Low. Margins have been declining due to pricing pressure.
Sustainable Free Cash Flow? About 420 million EUR. Translates to roughly 12.4 per share.

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Thesis Details Valuation Details Commentary

Published On: 08/13/19

Thesis: Leading manufacturer of Solar Panels & Modules that has weathered the storm of stiff Chinese competition and falling selling prices by diversifying into a utility business that sells power via long-term contracts.

Buylyst Valuation

$29.2

Valuation Details >>

Market Price

$22.3

07/07/20

Upside

31%

Competitive Advantage

Core Competency? Solar Power Modules and Utility-Scale Solar Farms.
Products: Cheaper or Better? Commoditized industry but Energy business is attractive.
Historical Performance? Good. Revenue stable-to-growing despite price pressures.

Durability of Competitive Advantage

Competition/Threats? Chinese Solar companies and thin-film technology.
Protection? Moat is narrow but move towards Utilities business should help.
Cash Flow Volatility? Volatile, but Power Purchasing Agreements should mitigate risk.

Management Quality

Strategy & Action? Move to Utilities is smart. But uncertainty about CEO and innovation.
Return on Equity? Average. Low-to-Mid-Teens. But Margins are always under pressure.
Sustainable Free Cash Flow? About $87 million. Translates to roughly $29/share.

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Published On: 07/23/19

Thesis: After years of stagnation, primed to gain from new growth vectors – Cloud Computing, 5G, Fiber Optics, Software-Enabled-Networks and IoT. Business is transitioning to a SaaS company based on those inevitable vectors.

Buylyst Valuation

$71.6

Valuation Details >>

Market Price

$46.9

07/23/20

Upside

52%

Competitive Advantage

Core Competency? Network Hardware and Software – Routers, Switches, and DCI.
Products: Better or Cheaper? Moving to differentiated products – Software, Silicon, Optics.
Recent Growth? Anemic growth but stable revenue and EBITDA profile.

Durability of Competitive Advantage

Competition/Threats? Specialists like Arista, Juniper, Palo Alto, Huawei.
Protection/Moat? Inherent stickiness of products + move towards software subscriptions.
Cash Flow Volatility? Should decrease due to higher % of subscription revenue.

Management Quality

Strategy & Action? Good. Focused on transition to software, optics, 5G and IoT.
Return on Equity? High ROE company. Expect ROE to improve in next 12-24 months.
Sustainable Free Cash Flow? About $15 billion. Translates to about $72 per share.

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Published On: 06/26/19

Thesis: Key player in 5G network deployments, with expertise in hardware and software required to incorporate fiber optics into existing cellular infrastructure. A worthy "Huawei Hedge".

Buylyst Valuation

$40.8

Valuation Details >>

Market Price

$55.9

07/07/20

Upside

-26%

Competitive Advantage

Core Competency? Hardware and Software to enable data transport in cellular networks.
Products: Better or Cheaper? Better. Focused on 5G and Optical, and the combination.
Historical Performance? Double-digit revenue growth over last 3 years. Accelerated recently.

Durability of Competitive Advantage

Competition/Threats? Huawei, Nokia, Juniper, Cisco, ZTE. But none are as focused.
Protection? High capex products, mission-critical, and reliant on custom software.
Cash Flow Volatility? Should decrease as 5G networks become more software-oriented.

Management Quality

Strategy & Action? Good. Focused on the right growth avenues.
Return on Equity? Mid-teens. Expect ROE to improve in the next 2 years.
Sustainable Free Cash Flow? About $318 million. Translates to roughly $40/share.

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Published On: 06/18/19

Thesis: Playing the right sports – the only company in the business of making Renewable Energy sexy and reliable through cars and batteries for homes and utilities. But cost management, capital expenditure discipline, incessant capital-raising are the main risks. Thesis updated on 5/29/2019.

Buylyst Valuation

$202

Valuation Details >>

Market Price

$1389

07/07/20

Upside

-86%

Competitive Advantage

Core Competency? Making Renewable Energy sexy.
Products – Better or Cheaper? Better. Vertically integrated engineering will make products reliable.
Evidence: Recent Profitability? Revenues increasing fast. EBITDA is decidedly positive now.

Durability of Competitive Advantage

Competition? Slim. Nobody else has similar sex-appeal and battery production capabilities.
Protection? Economies of Scale, and Scope at their Gigafactories. Data for AV tech.
Resiliency of Cash Flows? Not resilient yet. New products + Capex needs are erratic.

Management Quality

Strategy & Action? Tesla has a definitive “true north”. Capex and debt discipline missing.
Financial Productivity? Margins still not reliable. Debt is high. Future ROE/ROIC uncertain.
Sustainable Free Cash Flow? About $1.8 billion. Translates to roughly $202/share.

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Published On: 05/29/19

Thesis: EA lies at the center of the potentially lucrative vortex of Gaming, Streaming, Virtual Reality, 5G, and Cloud Computing. With many cash-cow franchise games, and its recent success with Apex Legends, it should thrive even in a “Netflixed” gaming world.

Buylyst Valuation

$118.6

Valuation Details >>

Market Price

$141.8

08/14/20

Upside

-16%

Competitive Advantage

Core Competency? Interactive videogames on PC, Consoles and Mobile.
Products: Better or Cheaper? Better. Several “cash cow” franchises like the FIFA series.
Historical Performance? Stable. Anemic growth over last few years. But high margins.

Durability of Competitive Advantage

Competition? Activision, Sony, Microsoft and upstarts like Fortnite.
Protection? IP rights and contracts. And move towards a Cloud-Streaming-Subscription model.
Cash Flow Volatility? Good prospects – should decrease over the next few years.

Management Quality

Strategy & Action? Average. Need clarity on how EA will thrive in a changing industry.
Return on Equity? High. Historically in the 20% range. Expect this to continue.
Sustainable Free Cash Flow? About $1,777 million. Translates to roughly $118.6/share.

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Published On: 05/14/19

Thesis: Efficient Wind and Solar Power assets in the US, Europe and South America that should ride the impending wave of Renewables across the world. Run by competent management team focused on asset quality and de-leveraging balance sheet.

Buylyst Valuation

$18.9

Valuation Details >>

Market Price

$19.4

07/07/20

Upside

-2%

Competitive Advantage

Core Competency? Operating Wind and Solar Energy generators in the US and abroad.
Products – Better or Cheaper? Commoditized. But investing in better turbines and panels.
Historical Performance? Stable, but lackluster growth. However, revenue expected to increase.

Durability of Competitive Advantage

Competition? Advanced Natural Gas power plants and other Renewable Energy farms.
Protection? Long-term Capacity Payment contracts with US Power companies.
Cash Flow Volatility? Vagaries of wind and sun offset by stability of contracts.

Management Quality

Strategy & Action? Good. Focused on accretive acquisitions and paying down debt.
Return on Equity Profile? Average – about 10% in the next 2 years. But low volatility.
Sustainable Free Cash Flow? About $198 million. Translates to roughly $19 per share.

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Published On: 05/08/19

Thesis: FLIR is an optionality play. It’s a thermal, infra-red, gas sensor company that’s set up to find sudden relevance in Augmented Reality, Drones, Autonomous Vehicles, Smart Cities and Robotics. These new end-markets are yet to take-off.

Buylyst Valuation

$52

Valuation Details >>

Market Price

$37.8

08/14/20

Upside

38%

Competitive Advantage

Core Competency? Thermal and other “non-visual” sensing for Industrial/Military uses.
Products: Better or Cheaper? Better. Moving towards integrated solutions in emerging tech.
Historical Results? Revenue growth flat-ish. But Operating Margins have expanded.

Durability of Competitive Advantage

Competition? Heavy. Crowded market. But FLIR holds #1 to #5 positions in most segments.
Protection? Switching costs of products is high. Move towards Solutions should widen Moat.
Cash Flow Volatility? Modest. Government contracts are lumpy. Working Capital swings.

Management Quality

Strategy & Action? Mixed. Focused on right end-markets. But a penchant for acquisitions.
Sustainable ROE? Mid-level ROE company, sustainable high margins. Higher debt is a risk.
Sustainable Free Cash Flow? About $340 million. Translates to about $49.6 per share.

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Published On: 04/23/19

Thesis: Updated 8/15/20: Sony is a play on subscriptions, streaming, gaming, VR and, possibly, Industry 4.0 via its leading CMOS tech. There is enough margin of safety in the price for us to buy into the story over the next few years.

Buylyst Valuation

$106.2

Valuation Details >>

Market Price

$82.9

08/14/20

Upside

28%

Competitive Advantage

Core Competency? Entertainment – content and hardware. Legacy Electronics business.
Products: Better or Cheaper? Mixed. Leader in Videogames. Laggard in Films and Electronics.
Historical Results? Revenues stable overall, EBITDA and Cash Flow are volatile.

Durability of Competitive Advantage

Competition/Threats? Threat from gaming-delivered-via Cloud from new entrants.
Protection? Good now, but new entrants are narrowing the Moat.
Cash Flow Volatility? High. Game Consoles have hardware cycle. But half-life is increasing.

Management Quality

Strategy & Action? Mixed. Right approach on Games but adamant on Phones and TVs.
Historical Return on Equity? Most businesses are high ROE. But fluctuates with cash flow.
Future Sustainable Free Cash Flow? About $2.5 billion. Translates to roughly $39/share.

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Thesis Details Valuation Details Commentary

Published On: 03/26/19

Thesis: At the heart of Fiber Optics. 3D Sensing is a differentiated product used in iPhones today but has massive growth potential in Android phones, Virtual Reality, Autonomous Vehicles, 5G & IoT and Quantum Computing.

Buylyst Valuation

$84.2

Valuation Details >>

Market Price

$74.3

07/07/20

Upside

-21%

Competitive Advantage

Core Competency? Optical Components to transport and transmit data. And 3D Sensing.
Products – Better or Cheaper? Optical components commoditized. 3D Sensing differentiated.
Historical Results? Revenue and Cash Flow growing in double-digits. But recent hiccups.

Durability of Competitive Advantage

Competition/Threats? Transceiver segment crowded. Customer concentration in 3D Sensing.
Protection? Entrenched nature of Optical Components and 3D Sensing.
Cash Flow Volatility? Customer concentration is an issue. But diversifying base this year.

Management Quality

Strategy & Action? Good. Moving to differentiated products like Photonic Chip and 3D Sensing.
Financial Productivity? Mid-teens ROE, with manageable debt. But Operating Margins low.
Sustainable Free Cash Flow? About $260 million. Translates to about $67/share.

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Thesis Details Valuation Details Commentary

Published On: 03/19/19

Thesis: Leading Cybersecurity firm successfully transforming from a Firewall business to a Full-Service Enterprise-grade firm. Expected to keep gaining market share and widening moat as it moves to a Cloud-SaaS subscription model.

Buylyst Valuation

$245.6

Valuation Details >>

Market Price

$261.6

08/14/20

Upside

-5%

Competitive Advantage

Core Competency? Cybersecurity. Moving from just Firewalls to full-service.
Products: Better or Cheaper? Better. Products are considered premium in the industry.
Evidence: Sales and Cashflow? Strong revenue and cashflow growth. Outperforming industry.

Durability of Competitive Advantage

Competition/Threats? Cybersecurity market is crowded. And Cloud giants are a threat.
Protection? Strong. Products entrenched in clients’ workflows. Reputation matters.
Cash Flow Volatility? Should decrease as Cloud-SaaS delivery boosts subscriptions.

Management Quality

Strategy/Action? Focused on Cloud & AI. Core team intact. But new CEO not an expert.
Return on Equity? Very high ROE; generates a lot of cash; low debt.
Sustainable Free Cash Flow? About $1.1 billion. Translates to $246/share.

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Thesis Details Valuation Details Commentary

Published On: 03/05/19

Thesis: SPGI is a Global Dominator, but it is exposed to market volatility. Ratings business is exposed to Credit Markets; Index business to Equity Markets. But >40% of revenue is Subscriptions. Even so, need more Margin of Safety in price.

Buylyst Valuation

$233

Valuation Details >>

Market Price

$351.4

07/07/20

Upside

-37%

Competitive Advantage

Core Competency? Equity market indexes, and ratings of corporate and sovereign debt.
Products – Better or Cheaper? Better. Brand is synonymous with trustworthy data.
Evidence: Historical Results? Revenue and EBITDA growing: reflects the Passive Investing boom.

Durability of Competitive Advantage

Competition? Oligopolistic markets. Moody’s, MSCI, FTSE Russell, Factset, Bloomberg.
Protection? SPGI’s data and tools are entrenched into clients’ workflows.
Cash Flow Volatility? Ratings & Index businesses are volatile. Offset by Market Intelligence.

Management Quality

Strategy & Action? Good. Creating a “Flywheel” effect where each segment helps others.
Financial Productivity? Mid-high teens ROE business, mostly due to high margins.
Sustainable Free Cash Flow? About $2.7 billion. Translates to $221/share.

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Thesis Details Valuation Details Commentary

Published On: 02/26/19

Thesis: The turnaround may be real and the inflection point mirrors the world's transformation from 4G to 5G. It has returned to revenue growth in 2018 and its competition is limited. If management can meet its cost cutting targets, it's a buy.

Buylyst Valuation

$10.5

Valuation Details >>

Market Price

$11.8

07/23/20

Upside

-11%

Competitive Advantage

Core Competency? Wireless Technology – backend infrastructure equipment for 5G.
Products: Better or Cheaper? Neither. Striving towards better with design & software.
Historical Profitability? Revenue declining since 2013. But back to growth in 2018.

Durability of Competitive Advantage

Competition? Huawei, Nokia, and more recently, Samsung.
Protection? Weak. But long-cycle nature of product reduces threat of substitution.
Cash Flow Resiliency? With 5G services revenue, cash flow could be less volatile.

Management Quality

Strategy & Action? Good. Focused on 5G backend-equipment and cost management.
Financial Productivity? Run-rate of about 10% ROE. But expect to improve to mid-teens.
Sustainable Free Cash Flow? About $1.3 billion. Translates to roughly $9/share.

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Thesis Details Valuation Details Commentary

Published On: 01/29/19

Thesis: Adobe is a cash flow machine, thanks to its industry-leading products and popular SaaS model, which has allowed it to widen the gap between competitors and itself. Management needs to keep building the Adobe ecosystem lock-in.

Buylyst Valuation

$151

Valuation Details >>

Market Price

$455.1

07/07/20

Upside

-67%

Competitive Advantage

Core Competency? Digital design tools for creative professionals and amateurs.
Products – Better or Cheaper? Better. Industry-standard products like Photoshop, Acrobat.
Historical Profitability? Revenue grew by 24%; EBITDA by 30%, annualized over last 2 years.

Durability of Competitive Advantage

Competition? Limited for Creative Cloud. Shopify, Salesforce for Digital Experiences segment.
Protection? Strong. Delivery via Cloud widens Moat.
Cash Flow Resiliency? Subscription model via Cloud reduces cash flow volatility.

Management Quality

Strategy & Action? Transition to Cloud complete. Need to make ecosystem cohesive.
Financial Productivity? Industry-leading Return of Equity – 40% to 50%.
Sustainable Free Cash Flow?About $3.7 billion. Translates to about $151/share.

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Thesis Details Valuation Details Commentary

Published On: 01/22/19

Thesis: NXP is one of 2 or 3 companies that is focused on solving the Autonomous Driving problem. With its expertise in MCUs, networking, and security in Edge devices, it should be a formidable player in AVs.

Buylyst Valuation

$122.2

Valuation Details >>

Market Price

$115.4

07/07/20

Upside

6%

Competitive Advantage

Core Competency? Microprocessors and Microcontroller chips for Automobiles.
Products: Better or Cheaper? Better. Focused on Networking, Safety and System architecture.
Historical Profitability? Anemic Revenue growth (ex. acquisition). But stable Free Cash Flow.

Durability of Competitive Advantage

Competition/Threats? All Logic Chip companies: Intel, Nvidia, Xilinx. And also Aptiv.
Protection? Medium. Direct contracts with Auto OEMs. Software Stack.
Cash Flow Resiliency? Long-Cycle Product. But new modular architecture of cars is a risk.

Management Quality

Strategy & Action? Good. Newfound focus on Autonomous & Electro Mobility.
Return on Equity? Average. Mid-Teens. Fueled by high margins but also some debt.
Sustainable Free Cash Flow? About $2.1 billion. Translates to about $122/share.

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Thesis Details Valuation Details Commentary

Published On: 12/04/18

Thesis: Dominant GPU company that's front-and-center in the AI revolution. Main threats are AMD and FPGAs but should carve out a space in markets beyond Gaming and data-centers like Autonomous Vehicles and Virtual Reality.

Buylyst Valuation

$193.8

Valuation Details >>

Market Price

$457.7

08/14/20

Upside

-58%

Competitive Advantage

Core Competency? Graphics Processing Units (GPUs) for Gaming and AI Computing.
Products: Better or Cheaper? Better. Improving GPU’s and making them more AI-friendly.
Evidence: Growth? Revenue growing at 40%-plus. EBITDA margins expanding.

Durability of Competitive Advantage

Competition/Threats? AMD for GPUs. Xilinx/Intel for FPGAs. And ASICs.
Protection? Complexity, IP rights, and CUDA – Nvidia’s software stack for GPUs.
Cash Flow Resiliency? Resilient. Common Architecture and CUDA extend product cycle.

Management Quality

Strategy & Action? Positive. Founder Huang focused on the right end-markets.
Financial Productivity? High. ROE > 50%, due to high margins.
Sustainable Free Cash Flow? About $5.9 billion. Translates to roughly $194/share.

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Thesis Details Valuation Details Commentary

Published On: 11/06/18

Thesis: Sensors. Slow-Cycle product. High Switching costs. Pivoting from Autos Sensors to high growth markets – Autonomous Cars, IoT etc. Economies of Scope should lead to higher cash flow. Moved from Watch to Buy on 10/25/18. Moved from Watch to Hold on 2/22/19.

Buylyst Valuation

$53.1

Valuation Details >>

Market Price

$36.3

07/07/20

Upside

47%

Competitive Advantage

Core Competency? Sensors across multiple industries; similar tech, many uses;
Products – Better/Cheaper? Cheaper in some applications; somewhat commoditized product.
Recent Profitability? Organic Revenue growth 4-6%. EBITDA growth rate similar.

Durability of Competitive Advantage

Competition? Heavy in Autos; fragmented in other sectors.
Protection? High switching costs for customers.
Resiliency of Cash Flows? Resilient. High Cash Flow visibility once sale is made.

Management Quality

Strategy & Action? Good capital allocation. Acquisitions make sense; de-levered Balance Sheet.
Incentives Aligned? No nuanced perspective. Assume it’s not aligned.
Financial Productivity? Mid-to-High teens ROE; Margins-driven going forward.
Sustainable Free Cash Flow? About $400mn - conservative assumption.

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Thesis Details Valuation Details Commentary

Published On: 03/18/18

Thesis: ASML’s specialized lithography products put it in an enviable position – monopoly in a new technology that’s necessary in an industry that’s witnessing a massive revolution. Price Target raised to $356 on 6/3/2020.

Buylyst Valuation

$368

Valuation Details >>

Market Price

$374.8

08/14/20

Upside

-1%

Competitive Advantage

Core Competency? Specialized lithography tools for semiconductor manufacturers.
Products: Better or Cheaper? Better. They are The EUV Company.
Revenue and Margins? Revenue grew 33% in 2017. Expect >10% growth next 2-3 years.

Durability of Competitive Advantage

Competition? Limited. Possibly None. No one else makes EUV machines.
Protection? Complexity of EUV machines. IP built on decades of research.
Cash Flow Resiliency? Resilient. Long-Cycle products and recurring Service revenue.

Management Quality

Strategy & Action? Good. Focused on success of EUV; reinvesting in EUV enhancements.
Financial Productivity? High. ROE consistently in mid-high teens.
Sustainable Free Cash Flow? About $3.6 billion. Translates to roughly $167/share.

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Thesis Details Valuation Details Commentary

Published On: 10/22/18

Thesis: Quickly becoming “everyone’s semiconductor fab” with a top-shelf client list at the heart of the AI-5G-IoT revolution. The biggest risk is the US-China trade war, but competition is limited from both US or Chinese firms. Effects should be muted. Thesis Updated 8/1/2020.

Buylyst Valuation

$105.1

Valuation Details >>

Market Price

$78.3

08/14/20

Upside

35%

Competitive Advantage

Core Competency? Semiconductor fabrication for chip companies that don’t have factories.
Products: Better or Cheaper? Both. Economies of Scale and Node Transition fuel each other.
Historical Profitability? 5-10% revenue growth. EBITDA margins > 50%.

Durability of Competitive Advantage

Competition? Limited. Intel, Samsung, Global Foundries, and Chinese upstarts in 5-10 years.
Protection? Intellectual Property protection laws. Smaller nodes are more complex.
Resiliency of Cash Flows? Resilient. Long-cycle. Intricately involved in client’s design phase.

Management Quality

Strategy & Action? Good. Focused on being “everyone’s fab”; investing in node transitions.
Alignment of Incentives? Average. Senior Management owns less than 1% of shares.
Financial Productivity? High Return-on-Equity company. ROE consistently > 20%.
Sustainable Free Cash Flow? About $15 billion – expected to reach that level in 2-3 years.

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Thesis Details Valuation Details Commentary

Published On: 09/24/18

Thesis: Xylem's products solve a major global problem - Water - especially in areas that are ht worst by the crisis: India and China. That, coupled with its cost improvements and focus on Analytics paint a compelling growth picture.

Buylyst Valuation

$101.7

Valuation Details >>

Market Price

$74.4

07/23/20

Upside

37%

Competitive Advantage

Core Competency? Technology to transport, treat and measure water.
Products: Better or Cheaper? Better. Offers comprehensive water solutions.
Growth Story? India, China, and the Data Analytics business.

Durability of Competitive Advantage

Competition? Fragmented. No one else offers a “one-stop-shop” solution yet.
Protection? Strong. Hard to uproot products which are built into Water infrastructure.
Cash Flow Resiliency? Resilient. Analytics business could be a wide Moat.

Management Quality

Strategy & Action? Good. Focusing on China, India, Middle East. And Analytics.
Alignment of Incentives? Good. Line-managers’ compensation tied to Cash Flow.
Financial Productivity? Return-on-Equity > 30%. Improving Margins. Low Debt.
Sustainable Free Cash Flow? About $900 million. Translates to roughly $102/share

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Thesis Details Valuation Details Commentary

Published On: 09/10/18

Thesis: Eaton’s products are boring but key components in cool, new growing themes like increasing Urbanization, the Smart Grid, and Electrification of vehicles, preferably in more emerging markets. No growth assumptions built into valuation.

Buylyst Valuation

$106.4

Valuation Details >>

Market Price

$88.2

07/07/20

Upside

22%

Competitive Advantage

Core Competency? Reliable Electrical and Mechanical components in buildings and vehicles.
Products: Better or Cheaper? Mostly commoditized products; shifting to specialized solutions.
Historical Profitability? Revenue hovers around $20 bn. But seen good growth recently.

Durability of Competitive Advantage

Competition? Heavy. Schneider, Emerson, Hubbell, ABB etc.
Protection? Weak. Some patents & IP; and nuts-and-bolts nature of products.
Resiliency of Cash Flows? Resilient. Slow cycle products. Also focusing in aftermarket-parts.

Management Quality

Strategy & Action? Good. Finally focusing on growing end-markets and internal synergies.
Alignment of Incentives? Good. Significant link to cash flow and ROIC numbers.
Financial Productivity? Medium-ROE company. Should improve in 2-3 years.
Sustainable Free Cash Flow? About $2.3 billion. Translates to roughly $106/share.

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Thesis Details Valuation Details Commentary

Published On: 08/20/18

Thesis: At the junction of 2 big construction necessities: 1) Urbanization in the developing world and 2) Impending infrastructure & Electrical Grid makeover in the US. That should offset the biggest risk: cyclicality in the Mining Industry.

Buylyst Valuation

$167.2

Valuation Details >>

Market Price

$137

07/23/20

Upside

23%

Competitive Advantage

Core Competency? Heavy Construction and Mining machinery. Built at scale.
Products: Better or Cheaper? Unclear. Leading market share suggests Better. Strong brand.
Evidence: Historical Profitability? Tough few years since 2012. Recent turnaround.

Durability of Competitive Advantage

Competition? Heavy. Komatsu, Volvo, Hitachi, Liebherr, XCMG, Sany.
Protection? High barriers-to-entry industry; dealer network.
Cash Flow Resiliency? Low. Slow-cycle product; recurring Service/Parts business. But cyclical.

Management Quality

Strategy & Action? Average. Too focused on cost management and buybacks/dividends.
Alignment of Incentives? Good. Comp. is linked to measures of cash flow and ROE.
Financial Productivity? Good. Medium-ROE company – should improve in the next 2 years.
Sustainable Free Cash Flow? About $5 billion. Translates to rough valuation of $167/share.

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Thesis Details Valuation Details Commentary

Published On: 08/13/18

Thesis: Massive loyal fan-base and war-chest of cash generated from its core products. Now it needs to move on to new types of computers – Entertainment Operating Systems, Autonomous Cars and VR/AR. Has invested heavily in all 3.

Buylyst Valuation

$234.3

Valuation Details >>

Market Price

$389.1

07/23/20

Upside

-40%

Competitive Advantage

Core Competency? Top-notch consumer electronics – software encased in top-notch hardware.
Products: Better or Cheaper? Better – high quality software and hardware built in unison.
Evidence: Historical Profitability? Stable revenue and EBITDA, but dependent on iPhone cycle.

Durability of Competitive Advantage

Competition? Heavy. Amazon, Roku for Entertainment. Google, for everything.
Protection? IP laws, Reputation, and Ecosystem lock-ins.
Evidence: Cash Flow Resiliency? Standard-cycle products but resilient customer-base.

Management Quality

Strategy & Action? Rightly moving beyond the iPhone. There are many growth avenues.
Alignment of Incentives? Good. Comp. linked to stock returns and to operating income.
Financial Productivity? High ROE business, with modest debt.
Sustainable Free Cash Flow? About $58 billion. Translates to rough valuation of $234/share.

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Thesis Details Valuation Details Commentary

Published On: 07/30/18

Thesis: HDFC Bank should pick up its fair share of the growth story in India, as she starts consuming more, borrowing more, and transacting more digitally. I expect the bank to maintain its industry-leading prudence in lending as it harnesses this growth.

Buylyst Valuation

$54

Valuation Details >>

Market Price

$50.1

07/23/20

Upside

8%

Competitive Advantage

Core Competency? Full-service Indian commercial bank. Focused on prudent lending.
Products: Better or Cheaper? Neither. Investing heavily in tech. to improve customer experience.
Evidence: Historical Profitability? Solid growth in Revenue and EBITDA over last 3 years.

Durability of Competitive Advantage

Competition? Heavy. ICICI and Axis Bank. Non-banks like Paytm.
Protection? Weak. But Clients are sticky; and snowball effect from prudent lending practices.
Resiliency of Cash Flows? More resilient with technology, analytics, and systemic support.

Management Quality

Strategy & Action? Positive. Customer acquisition via technology. Stick to prudent lending.
Financial Productivity? High. Consistent, mid/high teens ROE.
Alignment of Incentives? Below average. Payouts via stock options, not stocks.
Sustainable Free Cash Flow? About $4.9 billion. Translates to rough valuation of $54/share.

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Thesis Details Valuation Details Commentary

Published On: 07/09/18

Thesis: Xilinx is the largest programmable chip maker with a stable core business, and a new, innovative product that combines their expertise in FPGAs and SOCs, catering specifically to the new computing paradigm of Cloud/AI/IoT/5G/Edge – all five of them. Update April 2020.

Buylyst Valuation

$90

Valuation Details >>

Market Price

$99.2

07/07/20

Upside

-11%

Competitive Advantage

Core Competency? Specialized chips (FPGAs, SOCs) for Cloud/AI/IoT/5G/Edge devices.
Products: Better or Cheaper? Better; 1 of 2 dominant FPGA makers. Innovated new ACAP product.
Evidence: Profitability? High, stable margins. But low revenue growth over last 5 years.

Durability of Competitive Advantage

Competition? Limited. Intel/Altera for FPGAs/SOCs. Hyperscalers may in-source AI Chips.
Protection? High barriers to entry – very specialized, patented technology.
Resiliency of Cash Flows? Resilient. Slow Cycle product with limited competition.

Management Quality

Strategy & Action? Positive. New Management centers strategy on Datacenters/AI/IoT/Edge.
Alignment of Incentives? Average. > 80% in long-term incentives. Management ownership low.
Financial Productivity? High ROE/ROIC company. Mostly driven by high margins.
Sustainable Free Cash Flow? Roughly $1.1 billion. Translates to roughly $90/share.

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Thesis Details Valuation Details Commentary

Published On: 06/18/18

Thesis: Micron is transforming from a Memory Component to a Memory Solutions company for the Cloud/AI/Big Data era with innovative products. Revenues, margins and free cash flow should be more stable in this new, post-PC era.

Buylyst Valuation

$100

Valuation Details >>

Market Price

$51.7

07/23/20

Upside

94%

Competitive Advantage

Core Competency? Memory for Cloud Datacenters, Mobile, IoT devices and Autonomous Cars.
Products: Better or Cheaper? Moving from commoditized products to Memory “solutions”.
Evidence: Profitability? Revenues and EBITDA increasing fast due to growth in end-markets.

Durability of Competitive Advantage

Competition? Heavy. Samsung, SK Hynix and new Chinese upstarts. And new technology.
Protection? Low. But focus is now on technology innovation (more IP).
Resiliency of Cash Flows? Fast Cycle product. But less volatile in the post-PC world.

Management Quality

Strategy & Action? Positive. Investing in R&D; not capacity growth. But heavy share buybacks.
Alignment of Incentives? Average. Stock-based compensation, but no direct link to ROE/ROIC.
Financial Productivity? High ROE/ROIC company with low debt.
Sustainable Free Cash Flow? Roughly $5.8 billion. Translates to roughly $100/share.

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Thesis Details Valuation Details Commentary

Published On: 06/11/18

Thesis: Reorienting the organization to become “the productivity company” to play the right sport: Cloud/AI/IoT/Edge. It has a competitive advantage in most of that “stack”. Relative lack of expertise in AI, however, could be the thesis buster.

Buylyst Valuation

$128

Valuation Details >>

Market Price

$211.8

07/23/20

Upside

-39%

Competitive Advantage

Core Competency? Bona Fide software developer – specializes in Productivity software.
Better or Cheaper? Veering towards Better. Seamlessness in Cloud/AI/IoT/Edge.
Evidence: Historical Profitability? Revenue & EBITDA growing fast. Harnessing Cloud tailwind.

Durability of Competitive Advantage

Competition? Heavy. Amazon and Google in Cloud. Also, IBM in AI. And PlayStation.
Protection? Familiarity & lock-ins with Windows users. And a new Services Architecture.
Resiliency of Cash Flows? More resilient now – moving towards subscription models.

Management Quality

Strategy and Action? Clear, decisive move towards becoming a Cloud/AI/IoT/Edge powerhouse.
Alignment of Incentives? Good. Significant portion of incentive-comp. is stock-based.
Financial Productivity? High Returns on Capital – higher with new Cloud/AI business.
Sustainable Free Cash Flow? About $49 billion. Translates to roughly $128/share.

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Thesis Details Valuation Details Commentary

Published On: 05/29/18

Thesis: Amazon now runs on a virtuous loop in which it's E-commerce, Cloud and AI businesses power each other and create a seemingly impenetrable castle with a wide moat. But it's still hard to justify the market price.

Buylyst Valuation

$606

Valuation Details >>

Market Price

$3000

05/20/20

Upside

-80%

Competitive Advantage

Core Competency? Unparalleled customer satisfaction through innovative technology.
Products – Better or Cheaper? Both. Traditionally cheaper; now gearing towards Better with AI.
Evidence: Historical Profitability? Revenues growing fast. AWS is now the main profit-driver.

Durability of Competitive Advantage

Competition? Heavy in Cloud/AI with Google, Microsoft. Walmart/Jet in groceries.
Protection? Massive head-start on e-commerce and Cloud. And Prime Video.
Resiliency of Cash Flows? Cloud/AI and Prime more long-cycle than e-commerce.

Management Quality

Strategy & Action? Has a “true-north”. Constantly feeding the “flywheel” effect.
Alignment of Incentives? Good. Share ownership is encouraged over cash compensation.
Financial Productivity? Returns on Capital low. But improving with AWS.
Sustainable Free Cash Flow? About $15 billion. Translates to roughly $600 per share.

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Thesis Details Valuation Details Commentary

Published On: 05/21/18

Thesis: Volvo’s trucks, buses and construction equipment are right at the intersection of 3 major global phenomena: 1) Increased e-commerce, 2) Increased Urbanization and 3) The Electrification and Autonomous Driving movement.

Buylyst Valuation

$22.7

Valuation Details >>

Market Price

$16.8

07/07/20

Upside

37%

Competitive Advantage

Core Competency? Big vehicles – Trucks, Buses, Construction Equipment. Global portfolio.
Products – Better or Cheaper? Mostly Better. Focus is on innovation and end-user experience.
Evidence – Historical Profitability? 2017 revenue up 11%. EBITDA up 26%.

Durability of Competitive Advantage

Competition? Heavy. Daimler, for trucks and buses. BYD, for electric buses.
Protection? Weak. Common Architecture and Shared Tech. (CAST), and investment in Servicing.
Resiliency of Cash Flows? Long-cycle products, but electrification shortening product lifespan.

Management Quality

Strategy & Action? Focusing on organic growth. But move towards electrification is slow.
Alignment of Incentives? Below average. CEO and Deputy CEO share-ownership underwhelming.
Financial Productivity? High. ROE in high teens. ROIC above 20%.
Sustainable Free Cash Flow? About $2.3 billion. Translates to roughly $22.7 per share.

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Thesis Details Valuation Details Commentary

Published On: 05/07/18

Thesis: New Management has the right strategy in place: Refocus on core products like F-150, Mustang, SUVs, and finally invest in the Electrification movement. The Refocusing strategy should reduce operating costs, which is Ford’s biggest problem.

Buylyst Valuation

$15.5

Valuation Details >>

Market Price

$6.1

07/07/20

Upside

153%

Competitive Advantage

Core Competency? Pickup Trucks, SUVs, other Utility-Vehicles and some American Icons.
Products: Better or Cheaper? Better in core strengths. Other products are in no man’s land.
Evidence: Historical Profitability? Revenues increasing. But EBITDA declined 10% since 2015.

Durability of Competitive Advantage

Competition? Heavy. GM/Chrysler/Toyota in Utility Vehicles. Almost everyone in Electric.
Protection? Somewhat weak. But strong icons and Distribution network.
Resiliency of Cash Flows? Standard Cycle products. Products need to be refreshed often.

Management Quality

Strategy & Action? Mixed. Positive on Strategy. But no clarity on Action.
Alignment of Incentives? Poor. CEO paid $16 million for what exactly?
Financial Productivity? Above average. Low-teens ROE. Margins need to improve.
Sustainable Free Cash Flow? About $3 billion. Translates to rough valuation of $15/share.

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Thesis Details Valuation Details Commentary

Published On: 04/23/18

Thesis: Heavy involvement in wireless communication tech for 4 decades, most recently in “Standards” formation of upcoming 5G technology, IoT and Sensors. Sticky revenue, operating leverage, and limited competition.

Buylyst Valuation

$144

Valuation Details >>

Market Price

$59.2

07/23/20

Upside

137%

Competitive Advantage

Core Competency? Intellectual Property in wireless comms. 5G, IoT, Industry Standards.
Products – Better or Cheaper? Better. Almost necessary for licensees.
Recent Profitability? Revenue generally growing but dipped in 2017.

Durability of Competitive Advantage

Competition? Limited. Mostly from Tech Firms’ internal research departments.
Protection? Patents; but dependent on litigation and courts.
Resiliency of Cash Flows? Resilient. Multi-Year Contracts. But high customer concentration.

Management Quality

Strategy & Action? Expanding to megatrends related to core competency through acquisitions.
Alignment of Incentives? Above Average. Substantial portion based on cash flow.
Financial Productivity? High ROE firm. Favorable operating leverage.
Sustainable Free Cash Flow? About $250 million. Not including growth from acquisitons.

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Thesis Details Valuation Details Commentary

Published On: 04/16/18

Thesis: The combination of Watson, Industry-Specific Data, Industry expertise, and Hardware built for heavy-duty AI, makes for a strong castle. The virtuous feedback loop amongst these businesses could widen the Moat against competition.

Buylyst Valuation

$218

Valuation Details >>

Market Price

$128.7

07/23/20

Upside

73%

Competitive Advantage

Core Competency? Data Analysis Solutions through AI, Cloud and Industry Expertise.
Better or Cheaper Products? Potentially better, by infusing AI with better industry-specific data.
Historical Profitability? Revenues down 3% since 2015. EBITDA down 20% over same timeframe.

Durability of Competitive Advantage

Competition? Heavy. Giants like Google, Microsoft and Amazon investing heavily in AI.
Protection? End-to-End services model: AI, Data, Cloud, Consulting, Hardware offered seamlessly.
Resiliency of Cash Flows? Have been volatile. But new business is more long-cycle.

Management Quality

Strategy & Action? High marks for aligning company around AI. Capital Allocation questionable.
Alignment of Incentives? Above Average. Variable comp. is a mix of Cash Flow metrics and stock.
Financial Productivity? High ROE business – but inflated by Share Buybacks.
Sustainable Free Cash Flow? About $10 billion a year. Translates to valuation of $218/share.

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Thesis Details Valuation Details Commentary

Published On: 04/13/18

Thesis: GE is transforming itself into a simpler, more focused company. It needs to revert back to its core competency, which is distinct. Once the fat is trimmed, GE could be a lean, mean free cash flow machine.

Buylyst Valuation

$14.8

Valuation Details >>

Market Price

$6.9

04/02/20

Upside

114%

Competitive Advantage

Core Competency: Complex engineering – Turbines/Engines
Differentiator or Cost-Leader? Neither. Aviation is differentiated.
Profitability: Declining. Not much pricing power.

Durability of Competitive Advantage

Resliency of Cash Flows: High. Cashflows resilient for 2-3 years per product.
Competition: Heavy. GE competes as a conglomerate amongst niche players.
Protection: Strong. Switching costs for customers are high.

Management Quality

Strategy & Action: Saying the rights things. New CEO Flannery wants trim the fat.
Financial Productivity: Mixed Bag. GE, overall, is a medium-ROE business.
Sustainable Free Cash Flow: About $6 billion – assuming promises are met.
Alignment of Incentives: Positive. New system ties compensation to equity.

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Thesis Details Valuation Details Commentary

Published On: 03/27/18

Thesis: ABB is playing the right sports e.g. Power Grids, Automation. And it seems to have some distinctive products. It shows in the numbers - it’s financially productive, has low debt, and stable cash flows.

Buylyst Valuation

$30

Valuation Details >>

Market Price

$24

07/07/20

Upside

25%

Competitive Advantage

Core Competency? Power Grids; Infrastructure; Robotics. Global Rolodex.
Products – Better or Cheaper? Better. Pioneers of High Voltage Direct Current, Flash Charging.
Recent Profitability? Improving operating margins due to cost management.

Durability of Competitive Advantage

Competition? Moderate. Infrastructure giants or niche players; depends on product.
Protection? High. Technology know-how and Scale of their projects.
Are Cash Flows Resilient? Yes. “Slow-Cycle” Products; but some “lumpy” sectors.

Management Quality

Strategy & Action? Reinvesting in right end-markets; but cash bill for Dividends/Buybacks high.
Alignment of Incentives? Average. But more incentive-based comp. included in 2017.
Financial Productivity? Good. Mid/High teens ROE business – mostly due to decent margins.
Sustainable Free Cash Flow? About $3 billion; assuming no growth.

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Thesis Details Valuation Details Commentary

Published On: 03/03/18

Thesis: Vestas remains a cost-leader, and it gets its fair share of new sales across the world, much of which are driven by the overall proliferation of Wind Energy.

Buylyst Valuation

$35

Valuation Details >>

Market Price

$44.2

07/23/20

Upside

-19%

Competitive Advantage

Core Competency: Wind Turbines – production and maintenance.
Products – Better or Cheaper? Among the cost-leaders in the industry.
Profitability: Increasing. Margins are high relative to competition but declining industry-wide.

Durability of Competitive Advantage

Competition: Heavy. 3-4 major competitors – SGRE, Goldwind, GE etc.
Protection: Medium. The Services part of the business fortifies customer relationships.
Are Cash Flows Resilient? Long-cycle nature of product & services helps.

Management Quality

Strategy & Action: Cost-focused. Investing in R&D to become the lowest-cost producer.
Alignment of Incentives: Average. Part of Management compensation is linked to EBIT.
Financial Productivity: High ROE business. But margins are decreasing.
Sustainable Free Cash Flow: About Euro 1.2 billion. Assuming current levels of revenue/costs.

Related Worldviews

GE: Not So Electric »

Related Themes

Thesis Details Valuation Details Commentary

Published On: 02/23/18

Thesis:

Buylyst Valuation

$0

Valuation Details >>

Market Price

$0

01/01/70

Upside

0%

Competitive Advantage

Durability of Competitive Advantage

Management Quality

Related Worldviews

Related Themes

Thesis Details Valuation Details Commentary

Published On: 01/01/70

Thesis:

Buylyst Valuation

$0

Valuation Details >>

Market Price

$0

01/01/70

Upside

0%

Competitive Advantage

Durability of Competitive Advantage

Management Quality

Related Worldviews

Related Themes

Thesis Details Valuation Details Commentary

Published On: 01/01/70

Thesis:

Buylyst Valuation

$0

Valuation Details >>

Market Price

$0

01/01/70

Upside

0%

Competitive Advantage

Durability of Competitive Advantage

Management Quality

Related Worldviews

Related Themes

Thesis Details Valuation Details Commentary

Published On: 01/01/70

Thesis:

Buylyst Valuation

$0

Valuation Details >>

Market Price

$0

01/01/70

Upside

0%

Competitive Advantage

Durability of Competitive Advantage

Management Quality

Related Worldviews

Related Themes

Thesis Details Valuation Details Commentary

Published On: 01/01/70

Thesis:

Buylyst Valuation

$0

Valuation Details >>

Market Price

$0

01/01/70

Upside

0%

Competitive Advantage

Durability of Competitive Advantage

Management Quality

Related Worldviews

Related Themes

Thesis Details Valuation Details Commentary

Published On: 01/01/70

Thesis:

Buylyst Valuation

$0

Valuation Details >>

Market Price

$0

01/01/70

Upside

0%

Competitive Advantage

Durability of Competitive Advantage

Management Quality

Related Worldviews

Related Themes

Thesis Details Valuation Details Commentary

Published On: 01/01/70

Thesis:

Buylyst Valuation

$0

Valuation Details >>

Market Price

$0

01/01/70

Upside

0%

Competitive Advantage

Durability of Competitive Advantage

Management Quality

Related Worldviews

Related Themes

Thesis Details Valuation Details Commentary

Published On: 01/01/70

Thesis:

Buylyst Valuation

$0

Valuation Details >>

Market Price

$0

01/01/70

Upside

0%

Competitive Advantage

Durability of Competitive Advantage

Management Quality

Related Worldviews

Related Themes

Thesis Details Valuation Details Commentary

Published On: 01/01/70

Thesis:

Buylyst Valuation

$0

Valuation Details >>

Market Price

$0

01/01/70

Upside

0%

Competitive Advantage

Durability of Competitive Advantage

Management Quality

Related Worldviews

Related Themes

Thesis Details Valuation Details Commentary

Published On: 01/01/70

Thesis:

Buylyst Valuation

$0

Valuation Details >>

Market Price

$0

01/01/70

Upside

0%

Competitive Advantage

Durability of Competitive Advantage

Management Quality

Related Worldviews

Related Themes