Multisack bagger personal page - To The Moon

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Multisack bagger

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Multisack bagger

2023-07-28

$Javelin Minerals Ltd(JAV.AU)$ Not financial advice but a company with some very interesting tenements. Particularly the Mount Ida Ida Project, being closely located to Delta Lithium, once Red Dirt, a potentially seriously underappreciated lithiumprospect.

Multisack bagger

2023-01-08

Definitely written by some right wing nut job

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Multisack bagger

09-12

People who invest in this are a bunch of genocidal idiots 🐷🐷🐷

Palantir Stock: The Hype Train Speeds Ahead, But I'm Not Hopping On

Multisack bagger

2023-09-04

Trading halt, potential takeover, not financial Advice but WATCH THIS SPACE! ✨✨✨✨✨

@Multisack bagger:$Javelin Minerals Ltd(JAV.AU)$ Not financial advice but a company with some very interesting tenements. Particularly the Mount Ida Ida Project, being closely located to Delta Lithium, once Red Dirt, a potentially seriously underappreciated lithiumprospect.

Multisack bagger

2023-05-01

Gross fear mongering

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Multisack bagger

2023-04-14

Golden Sachs doesn't have a good grip on the energy transition materials required, their value or importance. If they knew what they were talking about, they'd be bullish on Core lithium too

Goldman Sachs names the ASX 200 lithium shares to buy (and avoid)

Multisack bagger

2023-04-05

Lithium is long term bullish despite the sentiment

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Go to Tiger App to see more news

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Its services are highly customizable, meaning that they can meet very specific customer needs, which creates loyal customers and product stickiness, and, in turn, a high gross profit margin and solid growth. After all, if a company creates a highly customized, advanced solution for you and you end up incorporating it into your company, it would be a pain to then abandon the so","content":"<html><head></head><body><ul style=\"\"><li><p>Palantir is a polarizing stock, with value investors deeming it overpriced and many growth investors believing its growth potential isn&#39;t fully priced in.</p></li><li><p>I recognize the possibility of me underestimating Palantir&#39;s future earnings potential, but I believe too much growth is priced into Palantir stock for easy gains, making it very risky.</p></li><li><p>Stock-based compensation continues to be a drag when assessing the company&#39;s financial metrics and valuation.</p></li><li><p>The recent gains from the S&amp;P 500 inclusion highlight the hype around the stock.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/ca0459f275b9aed733014624cae2dc80\" alt=\"Michael Vi\" title=\"Michael Vi\" tg-width=\"750\" tg-height=\"500\"/><span>Michael Vi</span></p><p>Palantir (NYSE:PLTR) is an extremely divisive stock, with plenty of value investors saying it&#39;s overpriced and some growth investors saying that not enough growth is priced in. I&#39;m taking the first side. I think this data analytics and software stock has gotten a bit ahead of itself for now and that there&#39;s some hype involved, especially with the recent S&amp;P 500 inclusion. Plus, I&#39;m not a fan of the company&#39;s high SBC (stock-based compensation) and its &#34;adjusted&#34; financial metrics, which add back SBC to make the numbers look better.</p><p>Nonetheless, Palantir has proven that it&#39;s a great company with a competitive advantage, and I will talk about some of its positive metrics below. But it&#39;s the high valuation that makes me have to give the stock a Hold rating.</p><h2 id=\"id_567606566\">S&amp;P 500 Inclusion Reaction Proves That PLTR Stock Carries Lots Of Hype</h2><p>Yesterday (September 9), news came out that Palantir will join the S&amp;P 500. Of course, this is good news for the stock, as an inclusion in the index will force index funds to buy it, and it will increase the stock&#39;s liquidity as well.</p><p>Here&#39;s where the hype can be somewhat quantified, though. Palantir wasn&#39;t the only stock that received that news this week. Dell Technologies (DELL) and Erie Indemnity (ERIE) are also set to join the S&amp;P 500. However, DELL and ERIE finished 3.8% higher and 0.6% <em>lower</em>, respectively, after the announcement, while PLTR stock gained over 14%. And it&#39;s not as if this was some sort of huge short squeeze. Palantir only had 3% of its float sold short, as of August 15. So, in my opinion, this just shows the difference in hype level between the stocks.</p><h2 id=\"id_3112688311\">What Makes Palantir So Special?</h2><p>Palantir is a data analytics and software firm that helps organizations customers interpret/use massive amounts of data. Its services are highly customizable, meaning that they can meet very specific customer needs, which creates loyal customers and product stickiness, and, in turn, a high gross profit margin and solid growth. After all, if a company creates a highly customized, advanced solution for you and you end up incorporating it into your company, it would be a pain to then abandon the solution for a new one, and this would come with high switching costs.</p><p>Here&#39;s a quick example. BP p.l.c. (BP) uses a digital twin of its oil production operations to monitor and optimize its operations. Notably, BP has been a customer since 2014, and just yesterday, it &#34;entered a five-year strategic collaboration to introduce new artificial intelligence capabilities with Palantir&#39;s AIP software.&#34;</p><p>Loyal customers are a sign of a good product, and you can quantify that based on Palantir&#39;s net dollar retention rate of 114% for Q2.</p><p>In the company&#39;s Q2 earnings call, Palantir&#39;s CFO, Dave Glazer, stated the following:</p><blockquote><p>&#34;Net dollar retention was 114%, an increase of 300 basis points from last quarter. The increase was driven both by expansions at existing customers and new customers acquired in Q2 of last year. As net dollar retention does not include revenue from new customers that were acquired in the past 12 months, it does not yet fully capture the acceleration in velocity in our US commercial business over the past year.&#34;</p></blockquote><p>This means that Palantir&#39;s existing customers are not only remaining as clients but are also spending 14% more year-over-year. And the 114% figure excludes revenue from new customers, so it&#39;s entirely driven by existing clients increasing their spending.</p><h3 id=\"id_4000511723\">The Customer Acquisition Strategy Is Working Very Well</h3><p>Palantir offers AIP, which stands for Artificial Intelligence Platform. This is Palantir&#39;s AI-driven software platform that allows organizations to use advanced large language models (LLMs) and other AI tools for real-time data analysis and decision-making. From the videos I&#39;ve seen, it seems like a super customized ChatGPT (along with the other AI tools) on steroids that&#39;s integrated with your business.</p><p>For AIP, it offers free AIP Bootcamps. These Bootcamps are hands-on training sessions that quickly help clients understand and implement AIP.</p><p>Once customers see the value in these free bootcamps, they sign deals with Palantir. You can see some examples below.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/ce4b1e7a30bae90933b8a83b23ec21ff\" alt=\"Palantir Customer Acquisition Examples (Palantir&#39;s Investor Presentation)\" title=\"Palantir Customer Acquisition Examples (Palantir&#39;s Investor Presentation)\" tg-width=\"640\" tg-height=\"300\"/><span>Palantir Customer Acquisition Examples (Palantir&#39;s Investor Presentation)</span></p><h3 id=\"id_688498941\">Growth Is Strong As A Result</h3><p>Due to the high importance and quality of its product, Palantir has seen exceptional growth in the past few years, with a 3-year revenue CAGR of 23.1%. Further, revenue growth is expected to come in at 24% for Fiscal 2024 and 20.7% for Fiscal 2025. Notably, its GAAP net income grew from $28.1 million in Q2 2023 to $134.1 million in Q2 2024.</p><h3 id=\"id_1505170237\">Rising Gross Profit Margin Indicates A Competitive Advantage</h3><p>Aside from qualitative factors, the company&#39;s rising gross profit margin suggests that it has a competitive advantage, as it means that competitors aren&#39;t eroding its profitability. Palantir&#39;s gross margin went from 72.2% in Fiscal 2018 to 81.4% for the past 12 months.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/cd93fde2bdf2fd613863d4c0c6272918\" alt=\"Palantir&#39;s Gross Profit Margin (Finbox)\" title=\"Palantir&#39;s Gross Profit Margin (Finbox)\" tg-width=\"543\" tg-height=\"340\"/><span>Palantir&#39;s Gross Profit Margin (Finbox)</span></p><h2 id=\"id_1473036878\">Some Financial Metrics I Don&#39;t Like</h2><p>Although Palantir is solid overall, there are some things I don&#39;t like, including its high stock-based compensation and adjusted financial metrics.</p><p>For the last 12 months, SBC comes in at $514.4 million. This is a large chunk of its $696.4 million in TTM free cash flow (and I&#39;m not talking about its adjusted free cash flow).</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/868923f801f47df5981560b2a5d8a007\" alt=\"Palantir&#39;s Stock-Based Compensation (Finbox)\" title=\"Palantir&#39;s Stock-Based Compensation (Finbox)\" tg-width=\"539\" tg-height=\"358\"/><span>Palantir&#39;s Stock-Based Compensation (Finbox)</span></p><p>I, and many other value investors, view SBC as a real expense. Sure, it&#39;s technically not a cash expense, but it dilutes shareholders, and it&#39;s a way of paying employees. If the company didn&#39;t use SBC, it would likely have to pay more in salaries to retain talent, which is then a cash outflow. Thus, many people treat SBC in the same way and subtract it from free cash flow to get a more conservative figure.</p><p>If you do the math, you&#39;ll see that its FCF minus SBC comes out to $182 million. Another interesting thing to point out is that its TTM interest income on its $4 billion cash pile is $171.4 million. Therefore, most of that $182 million figure is from interest income rather than the firm&#39;s operations.</p><p>However, it&#39;s not all bad, as SBC as a percentage of FCF has certainly come down in the past few years (~74% for the past 12 months compared to 242% in Fiscal 2021). It looks like that trend is set to continue, especially since FCF is expected to surge to $881.27 million for the full year, per analyst estimates found on simplywall.st. So this is something that I&#39;ll monitor going forward.</p><p>Now, back to what I don&#39;t like. Below, you can see that Palantir reports adjusted free cash flow, which actually adds $7.35 million in &#34;Cash Paid for Employer Payroll Taxes Related to Stock-Based Compensation&#34; to the figure to boost it. Although it&#39;s not a large amount, the fact that the company is adding back a recurring cash expense to its adjusted free cash flow gives me pause.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/9cc6e284447a4a226301da1c237951f0\" alt=\"Palantir&#39;s Adjusted FCF (Palantir&#39;s Investor Presentation)\" title=\"Palantir&#39;s Adjusted FCF (Palantir&#39;s Investor Presentation)\" tg-width=\"640\" tg-height=\"245\"/><span>Palantir&#39;s Adjusted FCF (Palantir&#39;s Investor Presentation)</span></p><p>You can also see the difference in adjusted operating income for Q2 2024 ($253.57 million) compared to regular operating income ($105.34 million). The reason I bring up these metrics is because, again, SBC is a real expense, and my hope is that investors will take a closer look at Palantir&#39;s unadjusted earnings and financial metrics before making investment decisions.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/220723e9eeb0231a7e694dc5eeb6ee5c\" alt=\"Palantir&#39;s Adjusted Operating Income (Palantir&#39;s Investor Presentation)\" title=\"Palantir&#39;s Adjusted Operating Income (Palantir&#39;s Investor Presentation)\" tg-width=\"640\" tg-height=\"229\"/><span>Palantir&#39;s Adjusted Operating Income (Palantir&#39;s Investor Presentation)</span></p><h2 id=\"id_3314825111\">The Valuation Prices In Lots of Growth</h2><p>Now, let&#39;s talk about PLTR stock&#39;s valuation, which seems high to me. For the valuation, I&#39;ve used an H-Model valuation calculator that I created. I actually <strong>reverse engineered the inputs</strong> to see how high of a FCF growth rate Palantir would have to experience in order to justify its current share price of around $34.80. So just to be clear, the fair value calculation from the calculator below is <strong>not</strong> my estimate of fair value.</p><p>Allow me to explain how it works (although you can find a more in-depth explanation here). The H-Model starts with FCF/share, which is $0.31, per Finbox. Then, I need a high growth rate for FCF/share. This is the growth rate that will be seen in the first year (I put 59%). I then input how long I think the high growth period will last. I put 30 years because Palantir has many years of growth ahead.</p><p>The model assumes a linear decline in the growth rate, which will gradually drop from 59% to a terminal growth rate of 3% by year 31. The 3% terminal growth rate reflects Palantir&#39;s perpetual growth potential once it matures. I chose 3% because it&#39;s a reasonable growth rate after maturity based on long-term GDP growth. Generally, I use 2.5%, but I use 3% for companies with better growth prospects.</p><p>Regarding the discount rate, I used 11.4%, which was calculated by Finbox using the CAPM model.</p><p>For the PLTR example below, FCF growth would be 59% in year 1, 57.13% in year 2, ~55.27% in year 3, 53.4% in year 4, and steadily downward in this fashion until it reaches exactly 3% in year 31. After that, the growth rate will be 3% per year in perpetuity.</p><p>In short, that&#39;s the type of growth it would take PLTR stock to justify its current valuation, as you can see below. For me, that&#39;s just a bit too optimistic to want to buy the stock. Let&#39;s also not forget that the valuation uses FCF per share, and per-share metrics will be negatively affected by the high stock-based compensation.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/90a8b0f7852c662dde11362130a958f5\" alt=\"Palantir H-Model Valuation (Author)\" title=\"Palantir H-Model Valuation (Author)\" tg-width=\"322\" tg-height=\"621\"/><span>Palantir H-Model Valuation (Author)</span></p><p>The valuation is obviously very sensitive to the growth rate. If I just change the high growth rate to 45%, which is still very high, the fair value drops to $27.05 per share. This highlights the limited margin of safety in the stock&#39;s valuation.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/269604819ecfaf55875b133ac2f80cd9\" alt=\"Palantir H-Model Valuation (Author)\" title=\"Palantir H-Model Valuation (Author)\" tg-width=\"322\" tg-height=\"631\"/><span>Palantir H-Model Valuation (Author)</span></p><h2 id=\"id_212462397\">The Risk In My Thesis: I Could Be Underestimating Palantir&#39;s Growth Potential</h2><p>This week, Bank of America (BAC) analyst Ronald Epstein raised his price target on PLTR stock to $50 from a previous target of $30. The analyst made an important point.</p><p>He stated the following:</p><blockquote><p>&#34;In 1980, AT&amp;T hired a consultancy company to estimate the market size for cell phones by 2000. The study suggested there would only be 900k users. The actual number of mobile subscriptions in 2000 was over 100 million. These early estimates also failed to anticipate the world of apps, streaming, smart devices, and ultimately, how this new product would bring forward the first public trillion-dollar company.</p><p>We view Palantir&#39;s (PLTR) capabilities, technology and path forward facing a similar fundamental misunderstanding. The upcoming S&amp;P 500 inclusion provides a watershed moment for institutional investors to revisit what they &#39;know&#39; about PLTR. We reiterate our Buy rating and raise our PO to $50.&#34;</p></blockquote><p>Therefore, if Palantir is truly in a similar situation as the one mentioned from 1980 and analysts are underestimating its growth potential, then it can truly be undervalued. I&#39;m just not willing to bet on that at the moment.</p><h2 id=\"id_2194374295\">The Takeaway</h2><p>Palantir is an excellent company with a great product and customer acquisition strategy. The highly specialized services it offers create a competitive advantage via high switching costs. This competitive advantage and customer loyalty can be quantified by looking at the firm&#39;s rising gross profit margin, 114% net dollar retention rate, and consistent growth while improving profitability.</p><p>Nonetheless, as shown above, the current valuation is pricing in lots of growth. I&#39;m not saying there&#39;s a 0% chance that the high-growth rate will be reached, and the Bank of America analyst certainly made a good point that the market can be underestimating its growth potential. However, I just find it too risky to bet on a company with such high expectations already baked in.</p><p>Plus, I&#39;m not a fan of the high stock-based compensation, which will negatively impact per-share growth and leaves the company with a relatively low amount of what I call &#34;true&#34; cash flow. Lastly, I believe that investors should consider looking at the company&#39;s unadjusted metrics when analyzing the stock, as they paint a different picture of the company&#39;s profitability.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Palantir Stock: The Hype Train Speeds Ahead, But I'm Not Hopping On</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nPalantir Stock: The Hype Train Speeds Ahead, But I'm Not Hopping On\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-09-12 15:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4720406-palantir-stock-the-hype-train-speeds-ahead-but-im-not-hopping-on><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Palantir is a polarizing stock, with value investors deeming it overpriced and many growth investors believing its growth potential isn't fully priced in.I recognize the possibility of me ...</p>\n\n<a href=\"https://seekingalpha.com/article/4720406-palantir-stock-the-hype-train-speeds-ahead-but-im-not-hopping-on\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"LU1894683264.USD":"AMUNDI FUNDS US EQUITY RESEARCH VALUE \"A2\" (USD) ACC","LU0320765646.SGD":"FTIF - Franklin Income A MDIS SGD-H1","BK4201":"综合性石油与天然气企业","LU0106831901.USD":"贝莱德世界金融基金A2","LU0321505439.SGD":"Schroder ISF Global Dividend Maximiser A Acc SGD","BK4023":"应用软件","BK4515":"5G概念","LU0128525689.USD":"TEMPLETON GLOBAL BALANCED \"A\"(USD) ACC","BK4585":"ETF&股票定投概念","LU1861558580.USD":"日兴方舟颠覆性创新基金B","IE00BKVL7J92.USD":"Legg Mason ClearBridge - US Equity Sustainability Leaders A Acc USD","LU0130518102.USD":"HARRIS ASSOCIATES GLOBAL EQUITY \"R\" INC","LU2129689514.USD":"FRANKLIN GLOBAL INCOME \"A\" (USD) INC","BK4535":"淡马锡持仓","LU1496350171.SGD":"FRANKLIN DIVERSIFIED BALANCED \"A\" (SGDHDG) ACC","IE00BLSP4239.USD":"Legg Mason ClearBridge - Tactical Dividend Income A Mdis USD Plus","LU0321505868.SGD":"Schroder ISF Global Dividend Maximiser A Dis SGD","IE00BLSP4452.SGD":"Legg Mason ClearBridge - Tactical Dividend Income A Mdis SGD-H Plus","LU2129689605.HKD":"FRANKLIN GLOBAL INCOME \"A\" (HKD) INC","BK4559":"巴菲特持仓","IE00B7SZLL34.SGD":"Legg Mason ClearBridge - Value A Acc SGD-H","LU0072461881.USD":"BGF US BASIC VALUE \"A2\" ACC","LU1201861165.SGD":"Natixis Harris Associates Global Equity PA SGD","BK4550":"红杉资本持仓","LU0417517546.SGD":"Allianz US Equity Cl AT Acc SGD","LU0130103400.USD":"Natixis Harris Associates Global Equity RA USD","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","LU0098860793.USD":"FRANKLIN INCOME \"A\" INC","BK4547":"WSB热门概念","IE00B19Z3B42.SGD":"Legg Mason ClearBridge - Value A Acc SGD","LU1162221912.USD":"FRANKLIN INCOME \"A\" (USD) ACC","BK4504":"桥水持仓","PLTR":"Palantir Technologies Inc.","LU0234572021.USD":"高盛美国核心股票组合Acc"},"source_url":"https://seekingalpha.com/article/4720406-palantir-stock-the-hype-train-speeds-ahead-but-im-not-hopping-on","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2466281880","content_text":"Palantir is a polarizing stock, with value investors deeming it overpriced and many growth investors believing its growth potential isn't fully priced in.I recognize the possibility of me underestimating Palantir's future earnings potential, but I believe too much growth is priced into Palantir stock for easy gains, making it very risky.Stock-based compensation continues to be a drag when assessing the company's financial metrics and valuation.The recent gains from the S&P 500 inclusion highlight the hype around the stock.Michael ViPalantir (NYSE:PLTR) is an extremely divisive stock, with plenty of value investors saying it's overpriced and some growth investors saying that not enough growth is priced in. I'm taking the first side. I think this data analytics and software stock has gotten a bit ahead of itself for now and that there's some hype involved, especially with the recent S&P 500 inclusion. Plus, I'm not a fan of the company's high SBC (stock-based compensation) and its \"adjusted\" financial metrics, which add back SBC to make the numbers look better.Nonetheless, Palantir has proven that it's a great company with a competitive advantage, and I will talk about some of its positive metrics below. But it's the high valuation that makes me have to give the stock a Hold rating.S&P 500 Inclusion Reaction Proves That PLTR Stock Carries Lots Of HypeYesterday (September 9), news came out that Palantir will join the S&P 500. Of course, this is good news for the stock, as an inclusion in the index will force index funds to buy it, and it will increase the stock's liquidity as well.Here's where the hype can be somewhat quantified, though. Palantir wasn't the only stock that received that news this week. Dell Technologies (DELL) and Erie Indemnity (ERIE) are also set to join the S&P 500. However, DELL and ERIE finished 3.8% higher and 0.6% lower, respectively, after the announcement, while PLTR stock gained over 14%. And it's not as if this was some sort of huge short squeeze. Palantir only had 3% of its float sold short, as of August 15. So, in my opinion, this just shows the difference in hype level between the stocks.What Makes Palantir So Special?Palantir is a data analytics and software firm that helps organizations customers interpret/use massive amounts of data. Its services are highly customizable, meaning that they can meet very specific customer needs, which creates loyal customers and product stickiness, and, in turn, a high gross profit margin and solid growth. After all, if a company creates a highly customized, advanced solution for you and you end up incorporating it into your company, it would be a pain to then abandon the solution for a new one, and this would come with high switching costs.Here's a quick example. BP p.l.c. (BP) uses a digital twin of its oil production operations to monitor and optimize its operations. Notably, BP has been a customer since 2014, and just yesterday, it \"entered a five-year strategic collaboration to introduce new artificial intelligence capabilities with Palantir's AIP software.\"Loyal customers are a sign of a good product, and you can quantify that based on Palantir's net dollar retention rate of 114% for Q2.In the company's Q2 earnings call, Palantir's CFO, Dave Glazer, stated the following:\"Net dollar retention was 114%, an increase of 300 basis points from last quarter. The increase was driven both by expansions at existing customers and new customers acquired in Q2 of last year. As net dollar retention does not include revenue from new customers that were acquired in the past 12 months, it does not yet fully capture the acceleration in velocity in our US commercial business over the past year.\"This means that Palantir's existing customers are not only remaining as clients but are also spending 14% more year-over-year. And the 114% figure excludes revenue from new customers, so it's entirely driven by existing clients increasing their spending.The Customer Acquisition Strategy Is Working Very WellPalantir offers AIP, which stands for Artificial Intelligence Platform. This is Palantir's AI-driven software platform that allows organizations to use advanced large language models (LLMs) and other AI tools for real-time data analysis and decision-making. From the videos I've seen, it seems like a super customized ChatGPT (along with the other AI tools) on steroids that's integrated with your business.For AIP, it offers free AIP Bootcamps. These Bootcamps are hands-on training sessions that quickly help clients understand and implement AIP.Once customers see the value in these free bootcamps, they sign deals with Palantir. You can see some examples below.Palantir Customer Acquisition Examples (Palantir's Investor Presentation)Growth Is Strong As A ResultDue to the high importance and quality of its product, Palantir has seen exceptional growth in the past few years, with a 3-year revenue CAGR of 23.1%. Further, revenue growth is expected to come in at 24% for Fiscal 2024 and 20.7% for Fiscal 2025. Notably, its GAAP net income grew from $28.1 million in Q2 2023 to $134.1 million in Q2 2024.Rising Gross Profit Margin Indicates A Competitive AdvantageAside from qualitative factors, the company's rising gross profit margin suggests that it has a competitive advantage, as it means that competitors aren't eroding its profitability. Palantir's gross margin went from 72.2% in Fiscal 2018 to 81.4% for the past 12 months.Palantir's Gross Profit Margin (Finbox)Some Financial Metrics I Don't LikeAlthough Palantir is solid overall, there are some things I don't like, including its high stock-based compensation and adjusted financial metrics.For the last 12 months, SBC comes in at $514.4 million. This is a large chunk of its $696.4 million in TTM free cash flow (and I'm not talking about its adjusted free cash flow).Palantir's Stock-Based Compensation (Finbox)I, and many other value investors, view SBC as a real expense. Sure, it's technically not a cash expense, but it dilutes shareholders, and it's a way of paying employees. If the company didn't use SBC, it would likely have to pay more in salaries to retain talent, which is then a cash outflow. Thus, many people treat SBC in the same way and subtract it from free cash flow to get a more conservative figure.If you do the math, you'll see that its FCF minus SBC comes out to $182 million. Another interesting thing to point out is that its TTM interest income on its $4 billion cash pile is $171.4 million. Therefore, most of that $182 million figure is from interest income rather than the firm's operations.However, it's not all bad, as SBC as a percentage of FCF has certainly come down in the past few years (~74% for the past 12 months compared to 242% in Fiscal 2021). It looks like that trend is set to continue, especially since FCF is expected to surge to $881.27 million for the full year, per analyst estimates found on simplywall.st. So this is something that I'll monitor going forward.Now, back to what I don't like. Below, you can see that Palantir reports adjusted free cash flow, which actually adds $7.35 million in \"Cash Paid for Employer Payroll Taxes Related to Stock-Based Compensation\" to the figure to boost it. Although it's not a large amount, the fact that the company is adding back a recurring cash expense to its adjusted free cash flow gives me pause.Palantir's Adjusted FCF (Palantir's Investor Presentation)You can also see the difference in adjusted operating income for Q2 2024 ($253.57 million) compared to regular operating income ($105.34 million). The reason I bring up these metrics is because, again, SBC is a real expense, and my hope is that investors will take a closer look at Palantir's unadjusted earnings and financial metrics before making investment decisions.Palantir's Adjusted Operating Income (Palantir's Investor Presentation)The Valuation Prices In Lots of GrowthNow, let's talk about PLTR stock's valuation, which seems high to me. For the valuation, I've used an H-Model valuation calculator that I created. I actually reverse engineered the inputs to see how high of a FCF growth rate Palantir would have to experience in order to justify its current share price of around $34.80. So just to be clear, the fair value calculation from the calculator below is not my estimate of fair value.Allow me to explain how it works (although you can find a more in-depth explanation here). The H-Model starts with FCF/share, which is $0.31, per Finbox. Then, I need a high growth rate for FCF/share. This is the growth rate that will be seen in the first year (I put 59%). I then input how long I think the high growth period will last. I put 30 years because Palantir has many years of growth ahead.The model assumes a linear decline in the growth rate, which will gradually drop from 59% to a terminal growth rate of 3% by year 31. The 3% terminal growth rate reflects Palantir's perpetual growth potential once it matures. I chose 3% because it's a reasonable growth rate after maturity based on long-term GDP growth. Generally, I use 2.5%, but I use 3% for companies with better growth prospects.Regarding the discount rate, I used 11.4%, which was calculated by Finbox using the CAPM model.For the PLTR example below, FCF growth would be 59% in year 1, 57.13% in year 2, ~55.27% in year 3, 53.4% in year 4, and steadily downward in this fashion until it reaches exactly 3% in year 31. After that, the growth rate will be 3% per year in perpetuity.In short, that's the type of growth it would take PLTR stock to justify its current valuation, as you can see below. For me, that's just a bit too optimistic to want to buy the stock. Let's also not forget that the valuation uses FCF per share, and per-share metrics will be negatively affected by the high stock-based compensation.Palantir H-Model Valuation (Author)The valuation is obviously very sensitive to the growth rate. If I just change the high growth rate to 45%, which is still very high, the fair value drops to $27.05 per share. This highlights the limited margin of safety in the stock's valuation.Palantir H-Model Valuation (Author)The Risk In My Thesis: I Could Be Underestimating Palantir's Growth PotentialThis week, Bank of America (BAC) analyst Ronald Epstein raised his price target on PLTR stock to $50 from a previous target of $30. The analyst made an important point.He stated the following:\"In 1980, AT&T hired a consultancy company to estimate the market size for cell phones by 2000. The study suggested there would only be 900k users. The actual number of mobile subscriptions in 2000 was over 100 million. These early estimates also failed to anticipate the world of apps, streaming, smart devices, and ultimately, how this new product would bring forward the first public trillion-dollar company.We view Palantir's (PLTR) capabilities, technology and path forward facing a similar fundamental misunderstanding. The upcoming S&P 500 inclusion provides a watershed moment for institutional investors to revisit what they 'know' about PLTR. We reiterate our Buy rating and raise our PO to $50.\"Therefore, if Palantir is truly in a similar situation as the one mentioned from 1980 and analysts are underestimating its growth potential, then it can truly be undervalued. I'm just not willing to bet on that at the moment.The TakeawayPalantir is an excellent company with a great product and customer acquisition strategy. The highly specialized services it offers create a competitive advantage via high switching costs. This competitive advantage and customer loyalty can be quantified by looking at the firm's rising gross profit margin, 114% net dollar retention rate, and consistent growth while improving profitability.Nonetheless, as shown above, the current valuation is pricing in lots of growth. I'm not saying there's a 0% chance that the high-growth rate will be reached, and the Bank of America analyst certainly made a good point that the market can be underestimating its growth potential. However, I just find it too risky to bet on a company with such high expectations already baked in.Plus, I'm not a fan of the high stock-based compensation, which will negatively impact per-share growth and leaves the company with a relatively low amount of what I call \"true\" cash flow. Lastly, I believe that investors should consider looking at the company's unadjusted metrics when analyzing the stock, as they paint a different picture of the company's profitability.","news_type":1},"isVote":1,"tweetType":1,"viewCount":212,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":216204318330992,"gmtCreate":1693814972354,"gmtModify":1693814977242,"author":{"id":"4129610444163112","authorId":"4129610444163112","name":"Multisack bagger","avatar":"https://community-static.tradeup.com/news/a8eb9acf4086f39488cf03d1190bbada","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4129610444163112","authorIdStr":"4129610444163112"},"themes":[],"htmlText":"Trading halt, potential takeover, not financial Advice but WATCH THIS SPACE! ✨✨✨✨✨","listText":"Trading halt, potential takeover, not financial Advice but WATCH THIS SPACE! ✨✨✨✨✨","text":"Trading halt, potential takeover, not financial Advice but WATCH THIS SPACE! ✨✨✨✨✨","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/216204318330992","repostId":"202839381733624","repostType":1,"repost":{"id":202839381733624,"gmtCreate":1690550614334,"gmtModify":1690550617932,"author":{"id":"4129610444163112","authorId":"4129610444163112","name":"Multisack bagger","avatar":"https://community-static.tradeup.com/news/a8eb9acf4086f39488cf03d1190bbada","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4129610444163112","authorIdStr":"4129610444163112"},"themes":[],"htmlText":"<a href=\"https://ttm.financial/S/JAV.AU\">$Javelin Minerals Ltd(JAV.AU)$&nbsp;</a>Not financial advice but a company with some very interesting tenements. Particularly the Mount Ida Ida Project, being closely located to Delta Lithium, once Red Dirt, a potentially seriously underappreciated lithiumprospect.&nbsp;","listText":"<a href=\"https://ttm.financial/S/JAV.AU\">$Javelin Minerals Ltd(JAV.AU)$&nbsp;</a>Not financial advice but a company with some very interesting tenements. Particularly the Mount Ida Ida Project, being closely located to Delta Lithium, once Red Dirt, a potentially seriously underappreciated lithiumprospect.&nbsp;","text":"$Javelin Minerals Ltd(JAV.AU)$ Not financial advice but a company with some very interesting tenements. Particularly the Mount Ida Ida Project, being closely located to Delta Lithium, once Red Dirt, a potentially seriously underappreciated lithiumprospect.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/202839381733624","isVote":1,"tweetType":1,"viewCount":0,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},"isVote":1,"tweetType":1,"viewCount":264,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":202839381733624,"gmtCreate":1690550614334,"gmtModify":1690550617932,"author":{"id":"4129610444163112","authorId":"4129610444163112","name":"Multisack bagger","avatar":"https://community-static.tradeup.com/news/a8eb9acf4086f39488cf03d1190bbada","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4129610444163112","authorIdStr":"4129610444163112"},"themes":[],"htmlText":"<a href=\"https://ttm.financial/S/JAV.AU\">$Javelin Minerals Ltd(JAV.AU)$&nbsp;</a>Not financial advice but a company with some very interesting tenements. Particularly the Mount Ida Ida Project, being closely located to Delta Lithium, once Red Dirt, a potentially seriously underappreciated lithiumprospect.&nbsp;","listText":"<a href=\"https://ttm.financial/S/JAV.AU\">$Javelin Minerals Ltd(JAV.AU)$&nbsp;</a>Not financial advice but a company with some very interesting tenements. Particularly the Mount Ida Ida Project, being closely located to Delta Lithium, once Red Dirt, a potentially seriously underappreciated lithiumprospect.&nbsp;","text":"$Javelin Minerals Ltd(JAV.AU)$ Not financial advice but a company with some very interesting tenements. Particularly the Mount Ida Ida Project, being closely located to Delta Lithium, once Red Dirt, a potentially seriously underappreciated lithiumprospect.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":1,"repostSize":1,"link":"https://ttm.financial/post/202839381733624","isVote":1,"tweetType":1,"viewCount":550,"authorTweetTopStatus":1,"verified":2,"comments":[{"author":{"id":"4129610444163112","authorId":"4129610444163112","name":"Multisack bagger","avatar":"https://community-static.tradeup.com/news/a8eb9acf4086f39488cf03d1190bbada","crmLevel":1,"crmLevelSwitch":0,"idStr":"4129610444163112","authorIdStr":"4129610444163112"},"content":"Trading halt, potential takeover, not financial Advice but WATCH THIS SPACE! ✨✨✨✨✨","text":"Trading halt, potential takeover, not financial Advice but WATCH THIS SPACE! ✨✨✨✨✨","html":"Trading halt, potential takeover, not financial Advice but WATCH THIS SPACE! ✨✨✨✨✨"}],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9947829357,"gmtCreate":1682941612879,"gmtModify":1682944529000,"author":{"id":"4129610444163112","authorId":"4129610444163112","name":"Multisack bagger","avatar":"https://community-static.tradeup.com/news/a8eb9acf4086f39488cf03d1190bbada","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4129610444163112","authorIdStr":"4129610444163112"},"themes":[],"htmlText":"Gross fear mongering&nbsp;","listText":"Gross fear mongering&nbsp;","text":"Gross fear mongering","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9947829357","repostId":"2332401066","repostType":2,"repost":{"id":"2332401066","kind":"highlight","pubTimestamp":1682919475,"share":"https://ttm.financial/m/news/2332401066?lang=&edition=fundamental","pubTime":"2023-05-01 13:37","market":"hk","language":"en","title":"Dalio says US and China ‘on brink of war’. Which ASX shares could be impacted?","url":"https://stock-news.laohu8.com/highlight/detail?id=2332401066","media":"MotleyFool","summary":"Legendary American investor Ray Dalio caused quite a stir last month. In a LinkedIn post on 26 April","content":"<html><body><div> <p><span>Legendary American investor Ray Dalio caused quite a stir last month. In a LinkedIn post on 26 April, Dalio warned that he sees the United States and China “on the brink of war”. Today, we contemplate the unthinkable and assess what such a war might mean for Australia and ASX shares. </span></p> <p><span>Ray Dalio is one of the most successful hedge fund managers in history. He founded Bridgewater Associates in the 1970s, which was grown into one of the world’s largest hedge funds today. With hundreds of billions of US dollars under its management, Bridgewater counts billionaires and sovereign wealth funds amongst its clients, including our own Future Fund.</span></p> <h2><span>Dalio beats the drums</span></h2> <p><span>Dalio has stepped back from Bridgewater in recent years. But he still aims to educate investors around the world about lessons from history. And right now, his focus seems to be on the rivalry between the United States and China. In his LinkedIn post, Dalio said the following about how he sees the future of US-China relations:</span></p> <blockquote><p><span>What I mean when I say that the US and China are on the brink of war is that it appears that they are close to having a sanctions war and/or military war that neither side wants but many believe will probably happen because a) each side is very close to the other’s red lines, b) each side is using brinksmanship to push the other at the risk of crossing each other’s red lines, and c) politics will probably cause more aggressive brinksmanship over the next 18 months.</span></p> <p><span>I want to emphasize that by saying that they are on the brink, I don’t mean to say that they will necessarily go over the brink. I mean to say that they are very close to crossing red lines that, if crossed, will irrevocably push them over the brink into some type of war that damages these two countries and causes damage to the world order in severe and irrevocable ways—like Russia’s invasion of Ukraine did for Russia and the world, just much bigger. </span></p></blockquote> <p><span>Just to be clear, Dalio’s definition of ‘war’ does not just include a kinetic war. He also canvasses the possibilities of an economic war (consisting of sanctions and other economic coercion) or a proxy war.</span></p> <p><span>But let’s discuss what any kind of conflict between the US and China could mean for ASX shares.</span></p> <h2><span>What would a US-China conflict do to the ASX?</span></h2> <p>Before we start, it is important to note that wars are abhorrent and tragic events. The human devastation and suffering they too often bring can be immense, especially for the most vulnerable. But since we at The Motley Fool are primarily focused on investing and the share market, this is the lens we will be discussing this potential conflict and its possible ramifications through.</p> <p><span>It is my belief that any kind of conflict between the United States and China would be devastating for the Australian economy, as well as the share market. China remains one of our most valuable trading partners. The Australian economy is highly dependent on trade with China, with major exports including iron ore, gold and food.</span></p> <p><span>Australia is a treaty ally of the United States, as codified under the ANZUS Treaty. This stipulates that if either the United States or Australia is attacked by a third party, the other country is bound to assist.</span></p> <p><span>Thus, if the United States is attacked by China, or drawn into a conflict, it is very possible that Australia could immediately halt the vast majority of, if not all, trade with China.</span></p> <p><span>Perhaps the largest immediate casualties of this scenario would be our mining shares. <strong>BHP Group Ltd</strong> (ASX: BHP), <strong>Rio Tinto Limited</strong> (ASX: RIO) and <strong>Fortescue Metals Group Limited</strong> (ASX: FMG) all export massive volumes of iron ore to China. </span></p> <p><span>That has the potential to immediately cease in the event of a war. As would any gold exports from the likes of <strong>Newcrest Mining Ltd</strong> (ASX: NCM). Our American allies would probably not take kindly to Australian gold or iron fuelling the Chinese war machine. </span></p> <h2>Miners, food producers amongst ASX shares that could suffer</h2> <p><span>Food and consumer staples companies like <strong><a href=\"https://laohu8.com/S/TWE.AU\">Treasury Wine Estates Ltd</a> </strong>(ASX: TWE) and <strong><a href=\"https://laohu8.com/S/A2M.AU\">A2 Milk</a> Company Ltd</strong> (ASX: A2M), which are also dependent on the Chinese market, would also feel the pinch.</span></p> <p><span>But any ASX share that has any kind of major export operations or international exposure could suffer immensely, in my view.</span></p> <p><span>It’s not just exporters that might be in the firing line either.</span></p> <p><span>Think about a company like </span><strong><span>Wesfarmers Ltd</span></strong><span> (ASX: WES). Wesfarmers owns Kmart, OfficeWorks and Bunnings. All of these businesses are heavily reliant on the Chinese economy in their supply chains. </span></p> <p><span>There is a possibility that China would cease exporting products to Australia in the event of any war, just as we would halt our own exports. This would be an enormously disruptive event for the likes of Wesfarmers, along with most other ASX retailers who rely on the Chinese economy to help produce their products.</span></p> <h2><span>Would any ASX shares prosper?</span></h2> <p><span>The only companies that I might be willing to consider relatively safe from a US-China war would be those that provide essential services and don’t derive any revenue from the Chinese economy. These might include </span><strong><span>Telstra Group Ltd</span></strong><span> (ASX: TLS) or </span><strong><span>Transurban Group</span></strong><span> (ASX: TCL).</span></p> <p><span>There would be precious few beneficiaries in my view. But one possible company that could see its fortunes bolstered by a US-China conflict might be</span><strong><span> <a href=\"https://laohu8.com/S/LYC.AU\">Lynas Rare Earths</a> Ltd</span></strong><span> (ASX: LYC). Lynas is one of the only producers of essential rare earth metals outside China. So if the US forced its bevvy of global allies to decouple from China, Lynas could stand to benefit enormously.</span></p> <p><span>But that said, there is little doubt that a US-China war would be catastrophic for the global economy, as well as Australia. Let’s hope that Dalio is being too pessimistic and that these two counties can sort out their differences peacefully.</span></p> <p>That’s certainly the view of another China expert: former prime minister Kevin Rudd. Rudd has just taken up his new post as Australia’s ambassador to the United States. Here are his views on the current situation, given in a recent interview with Politico, to round us out:</p> <blockquote><p>The challenge that we all face is to reduce the risk of crisis, conflict and war by accident. And that’s why leaders in both China and the United States have been speaking about the need to stabilize and to manage this competitive relationship.</p> <p>Because managing it at that level is important if you’re going to reduce the risk of accidental escalation.</p></blockquote> </div></body></html>","source":"motleyfoolau_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Dalio says US and China ‘on brink of war’. Which ASX shares could be impacted?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nDalio says US and China ‘on brink of war’. Which ASX shares could be impacted?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-05-01 13:37 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com.au/2023/05/01/dalio-says-us-and-china-on-brink-of-war-which-asx-shares-could-be-impacted/><strong>MotleyFool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Legendary American investor Ray Dalio caused quite a stir last month. In a LinkedIn post on 26 April, Dalio warned that he sees the United States and China “on the brink of war”. Today, we contemplate...</p>\n\n<a href=\"https://www.fool.com.au/2023/05/01/dalio-says-us-and-china-on-brink-of-war-which-asx-shares-could-be-impacted/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"https://cdn-dfpai.nitrocdn.com/gJsEsVaCFesDAEYOdjncMdcuJdoeUsXv/assets/images/optimized/rev-f6a3920/wp-content/uploads/2021/07/woman-looks-surprised-at-laptop-1200x675.jpg","relate_stocks":{"BK4124":"机动车零配件与设备","BHP.AU":"BHP GROUP LTD","BK7507":"资源股","A2M.AU":"A2 MILK CO LTD","BK7129":"钢铁","FMG.AU":"FORTESCUE LTD","BK7042":"综合电信业务","BK7505":"食品股","BK7097":"酿酒商与葡萄酒商","BK7041":"综合货品商店","RIO.AU":"力拓","BK7511":"ESG概念","BK7506":"金矿股","XAO.AU":"标普/澳交所 普通股指数","BK7153":"综合零售","LYC.AU":"LYNAS RARE EARTHS LTD","XJO.AU":"标普/澳交所 200指数","TWE.AU":"TREASURY WINE ESTATES LTD","XKO.AU":"标普/澳交所 300指数","BK7141":"包装食品与肉类","CAAS":"中汽系统","NCM.AU":"NEWCREST MINING LIMITED","TCL.AU":"TRANSURBAN GROUP","BK7090":"公路与铁路","BK7104":"黄金","TLS.AU":"TELSTRA GROUP LTD","BK7095":"多种金属与采矿","WES.AU":"WESFARMERS LTD"},"source_url":"https://www.fool.com.au/2023/05/01/dalio-says-us-and-china-on-brink-of-war-which-asx-shares-could-be-impacted/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2332401066","content_text":"Legendary American investor Ray Dalio caused quite a stir last month. In a LinkedIn post on 26 April, Dalio warned that he sees the United States and China “on the brink of war”. Today, we contemplate the unthinkable and assess what such a war might mean for Australia and ASX shares.  Ray Dalio is one of the most successful hedge fund managers in history. He founded Bridgewater Associates in the 1970s, which was grown into one of the world’s largest hedge funds today. With hundreds of billions of US dollars under its management, Bridgewater counts billionaires and sovereign wealth funds amongst its clients, including our own Future Fund. Dalio beats the drums Dalio has stepped back from Bridgewater in recent years. But he still aims to educate investors around the world about lessons from history. And right now, his focus seems to be on the rivalry between the United States and China. In his LinkedIn post, Dalio said the following about how he sees the future of US-China relations: What I mean when I say that the US and China are on the brink of war is that it appears that they are close to having a sanctions war and/or military war that neither side wants but many believe will probably happen because a) each side is very close to the other’s red lines, b) each side is using brinksmanship to push the other at the risk of crossing each other’s red lines, and c) politics will probably cause more aggressive brinksmanship over the next 18 months. I want to emphasize that by saying that they are on the brink, I don’t mean to say that they will necessarily go over the brink. I mean to say that they are very close to crossing red lines that, if crossed, will irrevocably push them over the brink into some type of war that damages these two countries and causes damage to the world order in severe and irrevocable ways—like Russia’s invasion of Ukraine did for Russia and the world, just much bigger.  Just to be clear, Dalio’s definition of ‘war’ does not just include a kinetic war. He also canvasses the possibilities of an economic war (consisting of sanctions and other economic coercion) or a proxy war. But let’s discuss what any kind of conflict between the US and China could mean for ASX shares. What would a US-China conflict do to the ASX? Before we start, it is important to note that wars are abhorrent and tragic events. The human devastation and suffering they too often bring can be immense, especially for the most vulnerable. But since we at The Motley Fool are primarily focused on investing and the share market, this is the lens we will be discussing this potential conflict and its possible ramifications through. It is my belief that any kind of conflict between the United States and China would be devastating for the Australian economy, as well as the share market. China remains one of our most valuable trading partners. The Australian economy is highly dependent on trade with China, with major exports including iron ore, gold and food. Australia is a treaty ally of the United States, as codified under the ANZUS Treaty. This stipulates that if either the United States or Australia is attacked by a third party, the other country is bound to assist. Thus, if the United States is attacked by China, or drawn into a conflict, it is very possible that Australia could immediately halt the vast majority of, if not all, trade with China. Perhaps the largest immediate casualties of this scenario would be our mining shares. BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) all export massive volumes of iron ore to China.  That has the potential to immediately cease in the event of a war. As would any gold exports from the likes of Newcrest Mining Ltd (ASX: NCM). Our American allies would probably not take kindly to Australian gold or iron fuelling the Chinese war machine.  Miners, food producers amongst ASX shares that could suffer Food and consumer staples companies like Treasury Wine Estates Ltd (ASX: TWE) and A2 Milk Company Ltd (ASX: A2M), which are also dependent on the Chinese market, would also feel the pinch. But any ASX share that has any kind of major export operations or international exposure could suffer immensely, in my view. It’s not just exporters that might be in the firing line either. Think about a company like Wesfarmers Ltd (ASX: WES). Wesfarmers owns Kmart, OfficeWorks and Bunnings. All of these businesses are heavily reliant on the Chinese economy in their supply chains.  There is a possibility that China would cease exporting products to Australia in the event of any war, just as we would halt our own exports. This would be an enormously disruptive event for the likes of Wesfarmers, along with most other ASX retailers who rely on the Chinese economy to help produce their products. Would any ASX shares prosper? The only companies that I might be willing to consider relatively safe from a US-China war would be those that provide essential services and don’t derive any revenue from the Chinese economy. These might include Telstra Group Ltd (ASX: TLS) or Transurban Group (ASX: TCL). There would be precious few beneficiaries in my view. But one possible company that could see its fortunes bolstered by a US-China conflict might be Lynas Rare Earths Ltd (ASX: LYC). Lynas is one of the only producers of essential rare earth metals outside China. So if the US forced its bevvy of global allies to decouple from China, Lynas could stand to benefit enormously. But that said, there is little doubt that a US-China war would be catastrophic for the global economy, as well as Australia. Let’s hope that Dalio is being too pessimistic and that these two counties can sort out their differences peacefully. That’s certainly the view of another China expert: former prime minister Kevin Rudd. Rudd has just taken up his new post as Australia’s ambassador to the United States. Here are his views on the current situation, given in a recent interview with Politico, to round us out: The challenge that we all face is to reduce the risk of crisis, conflict and war by accident. And that’s why leaders in both China and the United States have been speaking about the need to stabilize and to manage this competitive relationship. Because managing it at that level is important if you’re going to reduce the risk of accidental escalation.","news_type":1},"isVote":1,"tweetType":1,"viewCount":436,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9945622047,"gmtCreate":1681461417589,"gmtModify":1681461982808,"author":{"id":"4129610444163112","authorId":"4129610444163112","name":"Multisack bagger","avatar":"https://community-static.tradeup.com/news/a8eb9acf4086f39488cf03d1190bbada","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4129610444163112","authorIdStr":"4129610444163112"},"themes":[],"htmlText":"Golden Sachs doesn't have a good grip on the energy transition materials required, their value or importance.&nbsp; If they knew what they were talking about, they'd be bullish on Core lithium too","listText":"Golden Sachs doesn't have a good grip on the energy transition materials required, their value or importance.&nbsp; If they knew what they were talking about, they'd be bullish on Core lithium too","text":"Golden Sachs doesn't have a good grip on the energy transition materials required, their value or importance. If they knew what they were talking about, they'd be bullish on Core lithium too","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9945622047","repostId":"2327578970","repostType":2,"isVote":1,"tweetType":1,"viewCount":380,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9948854527,"gmtCreate":1680681432369,"gmtModify":1680682164282,"author":{"id":"4129610444163112","authorId":"4129610444163112","name":"Multisack bagger","avatar":"https://community-static.tradeup.com/news/a8eb9acf4086f39488cf03d1190bbada","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4129610444163112","authorIdStr":"4129610444163112"},"themes":[],"htmlText":"Lithium is long term bullish despite the sentiment&nbsp;","listText":"Lithium is long term bullish despite the sentiment&nbsp;","text":"Lithium is long term bullish despite the sentiment","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9948854527","repostId":"2325133636","repostType":2,"repost":{"id":"2325133636","kind":"highlight","pubTimestamp":1680684705,"share":"https://ttm.financial/m/news/2325133636?lang=&edition=fundamental","pubTime":"2023-04-05 16:51","market":"us","language":"en","title":"Lithium bears come out to play – again","url":"https://stock-news.laohu8.com/highlight/detail?id=2325133636","media":"Small Caps","summary":"Lithium and other battery metals are the hottest sector of Australian resources and will likely rema","content":"<html><body><div>\n<div><figure><img height=\"400\" sizes=\"(max-width: 640px) 100vw, 640px\" src=\"https://smallcaps.com.au/wp-content/uploads/2023/04/Lithium-bears-stocks.jpg\" srcset=\"https://smallcaps.com.au/wp-content/uploads/2023/04/Lithium-bears-stocks.jpg 640w, https://smallcaps.com.au/wp-content/uploads/2023/04/Lithium-bears-stocks-300x188.jpg 300w\" title=\"Lithium bears stocks\" width=\"640\"/><figcaption>Lithium and other battery metals are the hottest sector of Australian resources and will likely remain that way for years, but it is likely to remain a rollercoaster until the market matures.</figcaption></figure></div>\n<p>Albemarle’s $5.5 billion takeover bid for Liontown Resources (ASX: LTR) has refreshed interest in lithium stocks, but in the background there are unmistakable rumblings which indicate the price of the leading battery metal has further to fall.</p>\n<p>The latest warnings are easy to dismiss because we’ve been down this road before only to discover that the threats of a lithium price crash were a false alarm.</p>\n<p>In fact, it was more than that because anyone who sold their lithium shares after top investment bank Goldman Sachs told clients in June last year that “the battery metal bull market is over” missed the final surge to the peak which only came in November.</p>\n<div>\n</div>\n<p>Pilbara Minerals (ASX: PLS), for example, rocketed up from $2.13 in the days after the Goldman Sachs comments, to an all-time high of $5.66 in early November.</p>\n<p>Soundly criticised at the time by lithium company managers and specialist commodity research firms such as Benchmark Mineral Intelligence, it turned out that Goldman Sachs had only committed the blooper of being six months early.</p>\n<p>After the November lithium price surge to a record US$87,000 a tonne in its carbonate form, the metal has crashed back to US$35,000/t, which is still handsomely profitable even if the direction of the price is a worry.</p>\n<h2>Lithium miners on the short sell list</h2>\n<p>History could be repeating because Goldman Sachs is at it again, and this time it has the backing of another US bank, Citi, and a surprising number of Australian investors who are short-selling local lithium stocks.</p>\n<p>According to the latest analysis by the Shortman.com.au website, which tracks stocks being sold short by traders who sell in the belief that will be able to buy back later after the price falls, five of the top 20 short sold stocks on the ASX are lithium producers and explorers.</p>\n<p>Top of the lithium short list is Core Lithium (ASX: CXO) which has 9.99% of its shares shorted.</p>\n<p>Liontown has 9.08% shorted (presumably deals executed before the Albemarle bid), Sayona Mining (ASX: SYA) is 8.5% shorted, <a href=\"https://laohu8.com/S/VUL.AU\">Vulcan Energy</a> Resources (ASX: VUL) 6.64%, and Lake Resources (ASX: LKE) 6.1%.</p>\n<p>What makes the latest attack on lithium particularly newsworthy is that it has arrived just as two other big events occurred in the lithium market,</p>\n<p>First came the bombshell takeover bid for Liontown which boosted the share prices of all companies exposed to lithium.</p>\n<h2>Bullish lithium forecast</h2>\n<p>Then came the arrival of the Australian Government at the lithium party with a bullish report, albeit one that only looked at the value of exports and not profits – and that’s a critical point.</p>\n<p>The government report, in the latest edition of the Resources and Energy Quarterly from the Department of Industry, claims that the total value of Australian lithium will rival thermal (electricity producing) coal by the year 2028 when both will export material worth A$19 billion.</p>\n<p>That forecast is as much a political statement as a comment on the rising value of lithium because it implies a spectacular fall in the value of coal exports which are tipped to plunge by 70% from their current level of $65 billion a year.</p>\n<p>Given what happened with coal over the past two years, including a record price of US$450/t (A$750/t) in September last year, the department’s coal forecast could prove to be overly negative, while its lithium forecast could be too enthusiastic.</p>\n<h2>Goldman Sachs tips large lithium price falls</h2>\n<p>It’s into this heady brew of positive and negative tipping that Goldman Sachs has returned with its latest lithium wake up call, delivered without words but in the form of price tables and graphs.</p>\n<p>In the latest edition of its lithium data report titled Australian Lithium Coverage, Goldman Sachs is forecasting a 79% fall in the average carbonate price from US$53,300/t this year to US$11,000/t next year, where it could stay in 2025.</p>\n<p>Spodumene, lithium ore in a part processed form containing about 6% metal, could also plunge next year according to Goldman Sachs – down 81% from this year’s average price of US$4,330/t to US$800/t.</p>\n<p>If there was a prize for the biggest bear in the lithium market Goldman Sachs would be a clear winner, and while its latest negative price observations will be soundly criticised, just as they were last year, it was the bank which had the last laugh in 2022.</p>\n<h2>Citi’s forecast</h2>\n<p>Goldman Sachs could be wrong again, but it would be a wise investor to remember that it was only wrong by being early with its forecast that the lithium bull market is over.</p>\n<p>Citi, in a note to clients on Monday, asked a question in the headline of its report: “Lithium (still) in freefall, when will it stop?”</p>\n<p>“Carbonate prices breached our three-month price (tip) of US$40,000/t, and we see prices remaining under pressure in the near term as supply chains continue to destock accumulated inventory,” Citi said.</p>\n<p>“We expect support for battery grade carbonate prices around US$25,000/t as most non-integrated chemical producers should be loss making at those levels.</p>\n<p>“An expected restocking of the battery supply chain into the latter half of the June quarter may help prices stabilised and position lithium for a fresh rally.”</p>\n<p>For investors with a taste for lithium the latest short selling data, plus the negative views of big-name banks such as Goldman Sachs and Citi is undoubtedly food for thought.</p>\n<p>But offsetting the negative information are three critical points.</p>\n<p>Firstly, all commodity markets in the early stages of a revolution (and the electric vehicle rush is a revolution) go through the same gyrations of rapid rises and rapid falls as producers and consumers seek a form of equilibrium which only comes when the market develops depth.</p>\n<p>Secondly, what happened last year could well be repeated this year with Citi’s comments about stocking and destocking in the lithium supply chain a guide to the market being in deficit one month and surplus the next – until a point of balance is reached.</p>\n<p>Lithium and other battery metals are the hottest sector of Australian resources and will likely remain that way for years, but it will not be one-way traffic and there will be stocks that over-promise and under-deliver.</p>\n<div><div dir=\"ltr\" lang=\"en-US\" role=\"form\">\n<div> <ul></ul></div>\n<form 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content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Lithium bears come out to play – again</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; 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width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nLithium bears come out to play – again\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-04-05 16:51 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://smallcaps.com.au/lithium-bears-come-out-to-play-again/><strong>Small Caps</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Lithium and other battery metals are the hottest sector of Australian resources and will likely remain that way for years, but it is likely to remain a rollercoaster until the market matures.\n...</p>\n\n<a href=\"https://smallcaps.com.au/lithium-bears-come-out-to-play-again/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"https://smallcaps.com.au/wp-content/uploads/2023/04/Lithium-bears-stocks-511x400.jpg","relate_stocks":{"IE00BSNM7G36.USD":"NEUBERGER BERMAN SYSTEMATIC GLOBAL SUSTAINABLE VALUE \"A\" (USD) ACC","XAO.AU":"标普/澳交所 普通股指数","BK7507":"资源股","BK4127":"投资银行业与经纪业","XJO.AU":"标普/澳交所 200指数","PLS.AU":"PILBARA MINERALS LTD","CXO.AU":"CORE LITHIUM LTD","XKO.AU":"标普/澳交所 300指数","SYA.AU":"SAYONA MINING LTD","BK4585":"ETF&股票定投概念","VUL.AU":"VULCAN ENERGY RESOURCES LTD","BK4533":"AQR资本管理(全球第二大对冲基金)","BK7509":"中概股","LKE.AU":"LAKE RESOURCES NL","BK4588":"碎股","BK7504":"锂钴概念","GS":"高盛","BK4550":"红杉资本持仓","LTR.AU":"LIONTOWN RESOURCES LTD","BK4552":"Archegos爆仓风波概念","BK7095":"多种金属与采矿","BK4504":"桥水持仓"},"source_url":"https://smallcaps.com.au/lithium-bears-come-out-to-play-again/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2325133636","content_text":"Lithium and other battery metals are the hottest sector of Australian resources and will likely remain that way for years, but it is likely to remain a rollercoaster until the market matures.\nAlbemarle’s $5.5 billion takeover bid for Liontown Resources (ASX: LTR) has refreshed interest in lithium stocks, but in the background there are unmistakable rumblings which indicate the price of the leading battery metal has further to fall.\nThe latest warnings are easy to dismiss because we’ve been down this road before only to discover that the threats of a lithium price crash were a false alarm.\nIn fact, it was more than that because anyone who sold their lithium shares after top investment bank Goldman Sachs told clients in June last year that “the battery metal bull market is over” missed the final surge to the peak which only came in November.\n\n\nPilbara Minerals (ASX: PLS), for example, rocketed up from $2.13 in the days after the Goldman Sachs comments, to an all-time high of $5.66 in early November.\nSoundly criticised at the time by lithium company managers and specialist commodity research firms such as Benchmark Mineral Intelligence, it turned out that Goldman Sachs had only committed the blooper of being six months early.\nAfter the November lithium price surge to a record US$87,000 a tonne in its carbonate form, the metal has crashed back to US$35,000/t, which is still handsomely profitable even if the direction of the price is a worry.\nLithium miners on the short sell list\nHistory could be repeating because Goldman Sachs is at it again, and this time it has the backing of another US bank, Citi, and a surprising number of Australian investors who are short-selling local lithium stocks.\nAccording to the latest analysis by the Shortman.com.au website, which tracks stocks being sold short by traders who sell in the belief that will be able to buy back later after the price falls, five of the top 20 short sold stocks on the ASX are lithium producers and explorers.\nTop of the lithium short list is Core Lithium (ASX: CXO) which has 9.99% of its shares shorted.\nLiontown has 9.08% shorted (presumably deals executed before the Albemarle bid), Sayona Mining (ASX: SYA) is 8.5% shorted, Vulcan Energy Resources (ASX: VUL) 6.64%, and Lake Resources (ASX: LKE) 6.1%.\nWhat makes the latest attack on lithium particularly newsworthy is that it has arrived just as two other big events occurred in the lithium market,\nFirst came the bombshell takeover bid for Liontown which boosted the share prices of all companies exposed to lithium.\nBullish lithium forecast\nThen came the arrival of the Australian Government at the lithium party with a bullish report, albeit one that only looked at the value of exports and not profits – and that’s a critical point.\nThe government report, in the latest edition of the Resources and Energy Quarterly from the Department of Industry, claims that the total value of Australian lithium will rival thermal (electricity producing) coal by the year 2028 when both will export material worth A$19 billion.\nThat forecast is as much a political statement as a comment on the rising value of lithium because it implies a spectacular fall in the value of coal exports which are tipped to plunge by 70% from their current level of $65 billion a year.\nGiven what happened with coal over the past two years, including a record price of US$450/t (A$750/t) in September last year, the department’s coal forecast could prove to be overly negative, while its lithium forecast could be too enthusiastic.\nGoldman Sachs tips large lithium price falls\nIt’s into this heady brew of positive and negative tipping that Goldman Sachs has returned with its latest lithium wake up call, delivered without words but in the form of price tables and graphs.\nIn the latest edition of its lithium data report titled Australian Lithium Coverage, Goldman Sachs is forecasting a 79% fall in the average carbonate price from US$53,300/t this year to US$11,000/t next year, where it could stay in 2025.\nSpodumene, lithium ore in a part processed form containing about 6% metal, could also plunge next year according to Goldman Sachs – down 81% from this year’s average price of US$4,330/t to US$800/t.\nIf there was a prize for the biggest bear in the lithium market Goldman Sachs would be a clear winner, and while its latest negative price observations will be soundly criticised, just as they were last year, it was the bank which had the last laugh in 2022.\nCiti’s forecast\nGoldman Sachs could be wrong again, but it would be a wise investor to remember that it was only wrong by being early with its forecast that the lithium bull market is over.\nCiti, in a note to clients on Monday, asked a question in the headline of its report: “Lithium (still) in freefall, when will it stop?”\n“Carbonate prices breached our three-month price (tip) of US$40,000/t, and we see prices remaining under pressure in the near term as supply chains continue to destock accumulated inventory,” Citi said.\n“We expect support for battery grade carbonate prices around US$25,000/t as most non-integrated chemical producers should be loss making at those levels.\n“An expected restocking of the battery supply chain into the latter half of the June quarter may help prices stabilised and position lithium for a fresh rally.”\nFor investors with a taste for lithium the latest short selling data, plus the negative views of big-name banks such as Goldman Sachs and Citi is undoubtedly food for thought.\nBut offsetting the negative information are three critical points.\nFirstly, all commodity markets in the early stages of a revolution (and the electric vehicle rush is a revolution) go through the same gyrations of rapid rises and rapid falls as producers and consumers seek a form of equilibrium which only comes when the market develops depth.\nSecondly, what happened last year could well be repeated this year with Citi’s comments about stocking and destocking in the lithium supply chain a guide to the market being in deficit one month and surplus the next – until a point of balance is reached.\nLithium and other battery metals are the hottest sector of Australian resources and will likely remain that way for years, but it will not be one-way traffic and there will be stocks that over-promise and under-deliver.\n\n \n\n\n\n\n\n\n\n\n\n\n\nJoin Small Caps News\nGet notified of the latest news, interviews and stock alerts.\n\nΔ","news_type":1},"isVote":1,"tweetType":1,"viewCount":379,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9953346986,"gmtCreate":1673172297745,"gmtModify":1676538794916,"author":{"id":"4129610444163112","authorId":"4129610444163112","name":"Multisack bagger","avatar":"https://community-static.tradeup.com/news/a8eb9acf4086f39488cf03d1190bbada","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4129610444163112","authorIdStr":"4129610444163112"},"themes":[],"htmlText":"Definitely written by some right wing nut job","listText":"Definitely written by some right wing nut job","text":"Definitely written by some right wing nut job","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":7,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9953346986","repostId":"2301735185","repostType":2,"repost":{"id":"2301735185","kind":"highlight","pubTimestamp":1673147100,"share":"https://ttm.financial/m/news/2301735185?lang=&edition=fundamental","pubTime":"2023-01-08 11:05","market":"us","language":"en","title":"Tesla: Woke Mob Fury - 20 Top Growth Stocks Ranked","url":"https://stock-news.laohu8.com/highlight/detail?id=2301735185","media":"Seeking Alpha","summary":"SummaryAs the woke mob’s fury grows, Tesla shares are down 70%, despite the fact that revenues and p","content":"<html><head></head><body><h2>Summary</h2><ul><li>As the woke mob’s fury grows, Tesla shares are down 70%, despite the fact that revenues and profits keep growing rapidly.</li><li>We rank Tesla (based on fundamental metrics) versus 20 top growth stocks sourced from the top 10 holdings of two popular active growth ETFs (Future Fund (FFND), ARK Innovation (ARKK)).</li><li>Both funds have large positions in Tesla.</li><li>We dive deeper into Tesla, including its tangled business history with the woke mob, future growth potential, profitability, valuation and big risks.</li><li>We conclude with some critical takeaways and our strong opinion about investing in Tesla and growth stocks in general.</li></ul><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a85f0616585571533c4f60e434cc42b7\" tg-width=\"750\" tg-height=\"500\" referrerpolicy=\"no-referrer\"/><span>Blue Harbinger Research, Big Dividends PLUS jetcityimage</span></p><p>Tesla (NASDAQ:TSLA) shares are down more than 70%, and it’s going to get worse. For starters, the “woke mob” is ticked at CEO Elon Musk. Next, growth stocks in general are getting hammered as interest rates rise and there is no “fed put” in sight. In this report, we rank Tesla (based on fundamental metrics) versus 20 top growth stocks sourced from the top 10 holdings of two popular active growth ETFs, Future Fund (FFND) and ARK Innovation (ARKK), both have very large positions in Tesla. After digging deeper into the details on Tesla (including its tangled business history with the woke mob, future growth potential, profitability, valuation and risks), we conclude with our strong opinion about investing in Tesla and growth stocks in general.</p><h2>Tesla Overview:</h2><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/898f585435879dffaa9dec83e460b41c\" tg-width=\"424\" tg-height=\"98\" referrerpolicy=\"no-referrer\"/><span>Tesla</span></p><p>As you know, Tesla designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems (in the United States, China, and internationally). For reporting purposes, the company is divided into two operating segments (Automotive, and Energy Generation and Storage), but there is a lot more going on. For starters, here is a high level look at Tesla’s recent operations, in terms of vehicle production and deliveries, as well as solar and storage deployment and supercharger stations.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/aedaf32fc31973d75c7cc11d1af38908\" tg-width=\"640\" tg-height=\"278\" referrerpolicy=\"no-referrer\"/><span>Tesla Q3 Investor Presentation</span></p><h2>Electric Vehicles: The Un-Holy Grail</h2><p>Tesla’s electric vehicles (“EVs”) and other solutions have captured mounds of positive (and some negative) attention over the years, in large part because it seems to provide a compelling alternative to the dangers of fossil fuel consumption (pollution) and climate change. And while these are noble aspirations, the reality is:</p><blockquote><i>Electricity grids in most of the world are still powered by fossil fuels such as coal or oil, and EVs depend on that energy to get charged. Separately, EV battery production remains an energy-intensive process.</i></blockquote><p>Basically, EV’s are still largely powered by the fossil fuels that many are trying to avoid. Further, electric vehicle batteries are extraordinarily harmful to the environment when their lives are over (plus the mining that goes into obtaining the rare elements for batteries is particularly unfriendly to the environment too). For example:</p><blockquote><i>Not only do these batteries require large amounts of raw materials, including lithium, nickel and cobalt – mining for which has climate, environmental and human rights impacts – they also threaten to leave a mountain of electronic waste as they reach the end of their lives.</i></blockquote><p>Further still, and despite the fact that Tesla has built out an impressive charging network (you can see the numbers in the table above), it’s still a lot easier and faster to simply fill up with gas than it can be to charge an electric vehicle. We’ll have a lot more to say about Tesla vehicles and other Tesla solutions in the section of this report on growth potential.</p><h2>Tesla’s History: In Bed with the Woke Mob</h2><p>Tesla was incorporated in 2003, and Elon Must became the largest shareholder in 2004 through a $6.5 million investment (Musk had $100 million from his recent sale of <a href=\"https://laohu8.com/S/PYPL\">PayPal</a> (PYPL)—a company he cofounded). However, It wasn’t until 2021 when the company finally become profitable, for the first time, without the help of emissions credits. If you don’t know, emission credits are basically financial incentives created by government entities to help reduce pollution. And these types of government incentives were a huge factor in allowing Tesla to remain in existence over the years. For example, Tesla was only about a month away from going bankrupt during the Model 3 ramp from mid-2017 to mid-2019.</p><p>Clearly emission credits and government incentives helped Tesla become the large organization it is today (we’ll have more to say about Tesla’s current financial position later in this report), and those credits and incentives would not have existed were it not for the social and political pressures of the environmentally-focused woke mob.</p><h2>Why Growth Stocks Are Getting Crushed:</h2><p>Here is a look at the recent performance of growth stocks (including the S&amp;P 500 Growth Index (IVW), the Future Fund and the ARK innovation ETF) versus the S&amp;P 500 (SPY). It’s not been pretty for growth stocks, and it’s going to get worse (as we explain below).</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4e4ecc5604d9091ef9a9441191395d91\" tg-width=\"640\" tg-height=\"451\" referrerpolicy=\"no-referrer\"/><span>YCharts</span></p><p>In simple terms, growth stocks are getting hammered because the pandemic bubble is bursting. Specifically, the extraordinarily easy monetary and fiscal policies that were implemented after the onset of the pandemic led growth stocks to soar (because central banks held borrowing costs / interest rates artificially low (near 0%) and governments were throwing free money everywhere). And now that free money is gone, we’re left with the giant sucking sound of high inflation as central banks rapidly raise rates to fight the inflation they helped create.</p><p>Making matters worse, there is no “fed put” this time around (i.e. the fed isn’t going to bail out the stock market, as they have done in the past). The fed’s dual mandate is full employment and low inflation, and because unemployment is low but inflation is high, they’re going to keep raising rates (to fight inflation) which is driving the economy closer to an ugly recession. Basically, if you are a stock market investor (particularly a growth stock investor) the fed will likely keep tightening the screws on you until high inflation is gone.</p><h2>20 Top Growth Stocks, Ranked:</h2><p>The following tables include the top 10 holdings of two popular growth funds (i.e. Future Fund and ARK Innovation), as well as a variety of additional data points that are important considering the current macroeconomic environment (i.e. recession looming and a hawkish fed). Both funds have large positions in Tesla, as you can see below.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/b634867b9343f2b0b3b27c7d15598ff5\" tg-width=\"640\" tg-height=\"288\" referrerpolicy=\"no-referrer\"/><span>StockRover, Future Fund website</span></p><p>(GOOGL) (PWR) (CELH) (SPLK) (ENPH) (CRM) (ZM) (EXAS) (ROKU) (SQ) (PATH) (SHOP) (CRSP) (NTLA) (TDOC) (TWLO) (U) (COIN) (DKNG) (BEAM)</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/5880c717cb5242d92253c23797f124f9\" tg-width=\"640\" tg-height=\"276\" referrerpolicy=\"no-referrer\"/><span>StockRover, ARK website</span></p><p>The “Growth Score” (blue font) takes into consideration the 5 year history (as well as forward estimates) for EBITDA, Sales, and EPS growth (the best companies score a 100 (green) and the worst score a 0 (red)). If you’d like an expanded list, please reference our new report: Amazon: 100 Top Growth Stocks, Ranked.</p><p>Both funds (FFND and ARKK) invest in companies with very high future growth estimates (as you can see in the table above). However, from a fundamentals standpoint, you’ll also notice FFND invests in a lot more companies with positive net income margins, whereas ARKK does not. This has been an absolutely critical metric over the last year as the fed has increased rates. Specifically, companies that are not yet profitable (because they were banking on future profits) have suffered the worst losses (especially considering many of them may never achieve profits now that the fed has raised rates so much. In case you don’t know, when it comes to stock market investing—interest rates matter—a lot!</p><p>Also worth mentioning, FFND seems to pay a lot more attention to fundamentals, whereas ARKK appears largely focused on long-term growth ideas and concepts—fundamentals be darned!</p><h2>Tesla’s Future Growth Potential:</h2><p>With regards to Tesla, cash flows and profitability are both growing rapidly, a very good thing considering the current challenging capital market environment (e.g. rising interest rates).</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d01496e29a20163f864265e210e046c1\" tg-width=\"640\" tg-height=\"288\" referrerpolicy=\"no-referrer\"/><span>Tesla Q3 Investor Presentation</span></p><p>From a business standpoint, Tesla’s vehicle deliveries continue to grow rapidly (despite the recent delivery miss, which caused the shares to sell off further); deliveries are at an all-time high.</p><p>The growing number of deliveries is so important because as production and deliveries keep ramping, so will Tesla’s economies of scale and profit. Further, Tesla could expand its total addressable market (“TAM”) by ten-fold by cutting the cost of an electric vehicle in half, according to this recent note from Sam Korus at ARK Investments.</p><blockquote><i>Last week, during its third-quarter earnings call, Elon Musk noted that Tesla is developing a vehicle that will sell at roughly half the price of the Model 3 and Model Y. While vehicles at price-points above $60,000 address ~5% of the total US car market, the addressable market expands to 50% at ~$30,000, as shown below.</i></blockquote><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/71ae69f9a434a648ecc86cb921b427de\" tg-width=\"1072\" tg-height=\"709\" referrerpolicy=\"no-referrer\"/><span>ARK Invest</span></p><p>Further still, Tesla has plans to launch a light truck, a semi truck and a more affordable sedan and SUV platforms. These will all contribute to economies of scale ad reduced manufacturing costs per unit. Further, Tesla’s efforts into autonomous driving software can add subscription revenue and keep the brand awareness and image high. Not to mention, Tesla’s robotaxi business add to the upside. Also notable, Tesla’s Dojo supercomputer could incrementally add value at some point in the future.</p><p>Tesla’s Energy Generation and Storage segment also continues to grow. And although not yet contributing meaningfully to profits, it continues to scale and can eventually earn margins similar to Enphase (ENPH) (a long-time Blue Harbinger Disciplined Growth Portfolio holding).</p><h2>Profitability:</h2><p>As Tesla continues to ramp, so too will its profitability (margins). It helps tremendously that the company is already profitable—something many other high-growth companies cannot say (see our earlier top growth stock tables), considering rising interest rates make for a more challenging capital markets environment. Here is a look at the company’s most recent quarterly income statement (as you can see costs are not rising as rapidly as revenues, thereby improving margins and profitability).</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/555327a97cc8577e06e8387529b9896d\" tg-width=\"640\" tg-height=\"335\" referrerpolicy=\"no-referrer\"/><span>Tesla Q3 Investor Presentation</span></p><p>Also very important, Tesla has a healthy balance sheet (see below). In particular, the company has more current assets than total liabilities (a good thing with rates rising and considering a significant portion of debt comes due in the next few years.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/64a1f6709a40f3c590af018baca39e5b\" tg-width=\"640\" tg-height=\"328\" referrerpolicy=\"no-referrer\"/><span>Tesla Q3 Investor Presentation</span></p><p>Tesla does not pay a dividend and has not been repurchasing shares, both good things considering the growth potential is attractive. Specifically, with a return on invested capital above the cost of capital, Tesla has wisely been reinvesting in itself.</p><h2>Valuation:</h2><p>Unlike other growth businesses that have sold off hard over the last year (as the fed has become increasingly hawkish), Tesla is actually profitable and margins are improving. This is a very good thing, but it’s also critically important to acknowledge Tesla’s high uncertainly and volatility (as compared to the auto industry and the overall S&amp;P 500, as you can get some feel for in the graphics below).</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/ca520a7b7f328cb18678eba573444f36\" tg-width=\"640\" tg-height=\"278\" referrerpolicy=\"no-referrer\"/><span>Tesla Q3 Investor Presentation</span></p><p>Assigning an exact valuation to Tesla given the high volatility, growth and uncertainty (Tesla is not a boring predictable company like Procter &amp; Gamble (PG) and Johnson &amp; Johnson (JNJ)) is a challenging endeavor with resulting numbers varying widely based on cost of capital, return on capital invested and growth rate assumptions. That said, it can be worthwhile to compare Tesla’s margins, growth rate, profitability and valuation metrics to other large companies, as shown in the table below.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/36f83e6837820c63254aa38f27f27ca0\" tg-width=\"640\" tg-height=\"224\" referrerpolicy=\"no-referrer\"/><span>StockRover</span></p><p>A few notable things in the table above, Tesla is actually profitable (that’s more than a lot of other high-growth stocks can say) and even though its forward P/E ratio is way above other automakers, so is its expected growth rate much higher. Further, Tesla’s cost of capital is well below its return on invested capital, and its net margins are already very impressive (much better than GM and Ford) and expected to keep improving as economies of scale grow for Tesla.</p><p>For a little more perspective, the 33 Wall Street analysts covering the shares have an aggregate “Buy” rating, and many of them have price targets significantly higher than the current share price (which is down over 70% in the last year).</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/ea343249fa15053559dcc9626d5301f9\" tg-width=\"654\" tg-height=\"295\" referrerpolicy=\"no-referrer\"/><span>Seeking Alpha</span></p><p>In our view, if Tesla continues on its current growth trajectory (a very big “if”) the shares can easily trade dramatically higher, as earnings are set to grow dramatically. And even if the growth rate comes in lower than expected (but still remains relatively high) the shares are still undervalued. From a high level, the market seems overly pessimistic on Tesla relative to its long-term earnings power and value (perhaps a near-term phenomenon related to the woke mob’s increasing contempt for CEO, Elon Musk).</p><h2>Risk Factors:</h2><p><b>Woke Mob Fury</b>: In case you haven’t noticed, Tesla is a volatile stock that gets a lot of media attention, particularly from the environmentally-focused woke mob. As alluded to earlier, the woke mob created significant political pressure that led to the emissions credits and other government-sponsored incentives that have helped Tesla become the large company it is today. However, the woke mob’s opinion of Tesla is changing rapidly.</p><p>For starters, Tesla CEO Elon Musk’s recent purchase of Twitter (a major source for information distribution) has upset many from a political standpoint because they preferred the views of prior Twitter leadership. This has created significant negative media attention for Musk and for Tesla. For example, according to this NBC News article:</p><blockquote><i>“Elon Musk’s uneasy relationship with the left explodes over Twitter takeover… Musk has helped expand America&#39;s use of electric vehicles. The left has found a lot of other things to dislike about him.”</i></blockquote><p>Further, Musk&#39;s recent sanctioning of the Twitter Files has increased the heat on him and his companies.</p><p>Related, Tesla continues to receive low ESG (Environmental, Social and corporate Governance) ratings, while large oil and gas companies are increasingly receiving better ratings. For example, see: How Does Tesla Get A Worse ESG Score Than 2 Oil Companies?</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8b374541c5bfeb0b752079402f643126\" tg-width=\"1203\" tg-height=\"406\" referrerpolicy=\"no-referrer\"/><span>Twitter</span></p><p>However, given the momentum of EV adoption, we expect negative sentiment to create more short-term pressure than long-term pressure. Further still, as constituents work to increase the use of alternative energy sources in the grid, this will decrease the fossil fuel footprint of electric vehicles (although fossil fuels will likely remain the major energy source for decades to come).</p><p><b>Key-Man Risk</b>: CEO Elon Musk splits his time between Tesla, Twitter, SpaceX and The Boring Company. This creates significant demands on his time and could detract from performance (although Musk is reported to be searching for a new Twitter CEO). Further still, Musk owns a significant percentage of Tesla’s shares, which he has recently reduced to fund his Twitter acquisition. Musk sales can negatively impact the share price.</p><p><b>Competition</b>: Traditional automakers are shifting heavily towards EV production which creates increased competition for Tesla. This could cause Tesla’s growth rate to slow. Some pundits argue that Tesla’s valuation multiple should be more in-line with traditional automakers, despite Tesla’s higher growth rate, higher margins and more expansive innovation.</p><p><b>Battery Prices</b>: According to some, battery and solar panel prices will decline faster than Tesla can reduce costs, resulting in little to no profit in this areas.</p><p><b>EV Adoption</b>: The magnitude of EV adoption may not be as great as expected. Some drivers may simply prefer to stick with their gas powered vehicles.</p><p><b>Regulatory Risks</b>: Tesla has historically relied heavily on subsidies and incentives. This may make future growth more challenging. Further, some states are requiring car makes and dealers to be separate, which could create legal challenges for Tesla.</p><p><b>Macro Headwinds</b>: Macroeconomic headwinds, as described earlier, are a significant risk factor for Tesla. Interest rates are higher, economic growth is slowing and the economy is expected to enter an ugly recession. This could dramatically slow growth, although stock prices generally recover faster than the economy.</p><h2>Key Takeaways and Conclusions:</h2><p>Tesla is profitable, growing rapidly and significantly undervalued. However, that doesn’t mean the shares won’t keep falling (the woke mob is angry, and this is bad for public perception). Further, the indiscriminate growth stock selloff continues, especially with recession looming and no “fed put” in sight.</p><p>However, Tesla has the fundamental growth characteristics that Future Fund likes (it’s ranked #1 in that fund). It also ranks above the 90th percentile (a good thing) in our fundamental growth score table above. Further still, Tesla apparently has the long-term rainmaker characteristics that <a href=\"https://laohu8.com/S/ARKK\">ARK Innovation ETF</a> likes (it’s ranked #3 in that fund).</p><p>If you are a low-risk, income-focused investor, stay the heck away from Tesla! But if you are a disciplined long-term growth investor, Tesla is increasingly attractive and worth considering for a spot in your prudently-diversified long-term portfolio. Although volatile, Tesla&#39;s long-term upside is very real.</p><p><i>This article is written by Blue Harbinger for reference only. Please note the risks.</i></p></body></html>","source":"seekingalpha_fund","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Tesla: Woke Mob Fury - 20 Top Growth Stocks Ranked</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nTesla: Woke Mob Fury - 20 Top Growth Stocks Ranked\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-01-08 11:05 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4568437-tesla-woke-mob-fury-20-top-growth-stocks-ranked><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryAs the woke mob’s fury grows, Tesla shares are down 70%, despite the fact that revenues and profits keep growing rapidly.We rank Tesla (based on fundamental metrics) versus 20 top growth stocks...</p>\n\n<a href=\"https://seekingalpha.com/article/4568437-tesla-woke-mob-fury-20-top-growth-stocks-ranked\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"LU1861220033.SGD":"Blackrock Next Generation Technology A2 SGD-H","LU0348723411.USD":"ALLIANZ GLOBAL HI-TECH GROWTH \"A\" (USD) INC","LU1720051108.HKD":"ALLIANZ GLOBAL ARTIFICIAL INTELLIGENCE \"AT\" (HKD) ACC","BK4551":"寇图资本持仓","LU0943347566.SGD":"安联收益及增长平衡基金AM H2-SGD","BK4574":"无人驾驶","LU2357305700.SGD":"Allianz Global Artificial Intelligence ET H2-SGD","LU0234570918.USD":"高盛全球核心股票组合Acc Close","LU1861559042.SGD":"日兴方舟颠覆性创新基金B SGD","LU0823411888.USD":"法巴消费创新基金 Cap","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","BK4581":"高盛持仓","LU1551013342.USD":"Allianz Income and Growth Cl AMg2 DIS USD","BK4099":"汽车制造商","LU0082616367.USD":"摩根大通美国科技A（dist）","LU0056508442.USD":"贝莱德世界科技基金A2","BK4511":"特斯拉概念","BK4548":"巴美列捷福持仓","IE00B1XK9C88.USD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A\" (USD) ACC","LU2249611893.SGD":"BNP PARIBAS ENERGY TRANSITION \"CRH\" (SGD) ACC","LU1839511570.USD":"WELLS FARGO GLOBAL FACTOR ENHANCED EQUITY \"I\" (USD) ACC","IE00BSNM7G36.USD":"NEUBERGER BERMAN SYSTEMATIC GLOBAL SUSTAINABLE VALUE \"A\" (USD) ACC","TSLA":"特斯拉","LU0820561909.HKD":"ALLIANZ INCOME AND GROWTH \"AM\" (HKD) INC","LU0234572021.USD":"高盛美国核心股票组合Acc","LU1852331112.SGD":"Blackrock World Technology Fund A2 SGD-H","LU1861215975.USD":"贝莱德新一代科技基金 A2","LU2063271972.USD":"富兰克林创新领域基金","LU0719512351.SGD":"JPMorgan Funds - US Technology A (acc) SGD","BK4534":"瑞士信贷持仓","BK4585":"ETF&股票定投概念","IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC","LU0823414478.USD":"法巴经典能源转换基金","BK4555":"新能源车","LU2087621335.USD":"ALLSPRING GLOBAL FACTOR ENHANCED EQUITY \"A\" (USD) ACC","LU0689472784.USD":"安联收益及增长基金Cl AM AT Acc","BK4533":"AQR资本管理(全球第二大对冲基金)","LU1720051017.SGD":"Allianz Global Artificial Intelligence AT Acc H2-SGD","LU0097036916.USD":"贝莱德美国增长A2 USD","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","LU0316494557.USD":"FRANKLIN GLOBAL FUNDAMENTAL STRATEGIES \"A\" ACC","LU1861558580.USD":"日兴方舟颠覆性创新基金B","LU1548497426.USD":"安联环球人工智能AT Acc","LU0820561818.USD":"安联收益及增长平衡基金Cl AM DIS","BK4527":"明星科技股","LU1551013425.SGD":"Allianz Income and Growth Cl AMg2 DIS H2-SGD","BK4550":"红杉资本持仓"},"source_url":"https://seekingalpha.com/article/4568437-tesla-woke-mob-fury-20-top-growth-stocks-ranked","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2301735185","content_text":"SummaryAs the woke mob’s fury grows, Tesla shares are down 70%, despite the fact that revenues and profits keep growing rapidly.We rank Tesla (based on fundamental metrics) versus 20 top growth stocks sourced from the top 10 holdings of two popular active growth ETFs (Future Fund (FFND), ARK Innovation (ARKK)).Both funds have large positions in Tesla.We dive deeper into Tesla, including its tangled business history with the woke mob, future growth potential, profitability, valuation and big risks.We conclude with some critical takeaways and our strong opinion about investing in Tesla and growth stocks in general.Blue Harbinger Research, Big Dividends PLUS jetcityimageTesla (NASDAQ:TSLA) shares are down more than 70%, and it’s going to get worse. For starters, the “woke mob” is ticked at CEO Elon Musk. Next, growth stocks in general are getting hammered as interest rates rise and there is no “fed put” in sight. In this report, we rank Tesla (based on fundamental metrics) versus 20 top growth stocks sourced from the top 10 holdings of two popular active growth ETFs, Future Fund (FFND) and ARK Innovation (ARKK), both have very large positions in Tesla. After digging deeper into the details on Tesla (including its tangled business history with the woke mob, future growth potential, profitability, valuation and risks), we conclude with our strong opinion about investing in Tesla and growth stocks in general.Tesla Overview:TeslaAs you know, Tesla designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems (in the United States, China, and internationally). For reporting purposes, the company is divided into two operating segments (Automotive, and Energy Generation and Storage), but there is a lot more going on. For starters, here is a high level look at Tesla’s recent operations, in terms of vehicle production and deliveries, as well as solar and storage deployment and supercharger stations.Tesla Q3 Investor PresentationElectric Vehicles: The Un-Holy GrailTesla’s electric vehicles (“EVs”) and other solutions have captured mounds of positive (and some negative) attention over the years, in large part because it seems to provide a compelling alternative to the dangers of fossil fuel consumption (pollution) and climate change. And while these are noble aspirations, the reality is:Electricity grids in most of the world are still powered by fossil fuels such as coal or oil, and EVs depend on that energy to get charged. Separately, EV battery production remains an energy-intensive process.Basically, EV’s are still largely powered by the fossil fuels that many are trying to avoid. Further, electric vehicle batteries are extraordinarily harmful to the environment when their lives are over (plus the mining that goes into obtaining the rare elements for batteries is particularly unfriendly to the environment too). For example:Not only do these batteries require large amounts of raw materials, including lithium, nickel and cobalt – mining for which has climate, environmental and human rights impacts – they also threaten to leave a mountain of electronic waste as they reach the end of their lives.Further still, and despite the fact that Tesla has built out an impressive charging network (you can see the numbers in the table above), it’s still a lot easier and faster to simply fill up with gas than it can be to charge an electric vehicle. We’ll have a lot more to say about Tesla vehicles and other Tesla solutions in the section of this report on growth potential.Tesla’s History: In Bed with the Woke MobTesla was incorporated in 2003, and Elon Must became the largest shareholder in 2004 through a $6.5 million investment (Musk had $100 million from his recent sale of PayPal (PYPL)—a company he cofounded). However, It wasn’t until 2021 when the company finally become profitable, for the first time, without the help of emissions credits. If you don’t know, emission credits are basically financial incentives created by government entities to help reduce pollution. And these types of government incentives were a huge factor in allowing Tesla to remain in existence over the years. For example, Tesla was only about a month away from going bankrupt during the Model 3 ramp from mid-2017 to mid-2019.Clearly emission credits and government incentives helped Tesla become the large organization it is today (we’ll have more to say about Tesla’s current financial position later in this report), and those credits and incentives would not have existed were it not for the social and political pressures of the environmentally-focused woke mob.Why Growth Stocks Are Getting Crushed:Here is a look at the recent performance of growth stocks (including the S&P 500 Growth Index (IVW), the Future Fund and the ARK innovation ETF) versus the S&P 500 (SPY). It’s not been pretty for growth stocks, and it’s going to get worse (as we explain below).YChartsIn simple terms, growth stocks are getting hammered because the pandemic bubble is bursting. Specifically, the extraordinarily easy monetary and fiscal policies that were implemented after the onset of the pandemic led growth stocks to soar (because central banks held borrowing costs / interest rates artificially low (near 0%) and governments were throwing free money everywhere). And now that free money is gone, we’re left with the giant sucking sound of high inflation as central banks rapidly raise rates to fight the inflation they helped create.Making matters worse, there is no “fed put” this time around (i.e. the fed isn’t going to bail out the stock market, as they have done in the past). The fed’s dual mandate is full employment and low inflation, and because unemployment is low but inflation is high, they’re going to keep raising rates (to fight inflation) which is driving the economy closer to an ugly recession. Basically, if you are a stock market investor (particularly a growth stock investor) the fed will likely keep tightening the screws on you until high inflation is gone.20 Top Growth Stocks, Ranked:The following tables include the top 10 holdings of two popular growth funds (i.e. Future Fund and ARK Innovation), as well as a variety of additional data points that are important considering the current macroeconomic environment (i.e. recession looming and a hawkish fed). Both funds have large positions in Tesla, as you can see below.StockRover, Future Fund website(GOOGL) (PWR) (CELH) (SPLK) (ENPH) (CRM) (ZM) (EXAS) (ROKU) (SQ) (PATH) (SHOP) (CRSP) (NTLA) (TDOC) (TWLO) (U) (COIN) (DKNG) (BEAM)StockRover, ARK websiteThe “Growth Score” (blue font) takes into consideration the 5 year history (as well as forward estimates) for EBITDA, Sales, and EPS growth (the best companies score a 100 (green) and the worst score a 0 (red)). If you’d like an expanded list, please reference our new report: Amazon: 100 Top Growth Stocks, Ranked.Both funds (FFND and ARKK) invest in companies with very high future growth estimates (as you can see in the table above). However, from a fundamentals standpoint, you’ll also notice FFND invests in a lot more companies with positive net income margins, whereas ARKK does not. This has been an absolutely critical metric over the last year as the fed has increased rates. Specifically, companies that are not yet profitable (because they were banking on future profits) have suffered the worst losses (especially considering many of them may never achieve profits now that the fed has raised rates so much. In case you don’t know, when it comes to stock market investing—interest rates matter—a lot!Also worth mentioning, FFND seems to pay a lot more attention to fundamentals, whereas ARKK appears largely focused on long-term growth ideas and concepts—fundamentals be darned!Tesla’s Future Growth Potential:With regards to Tesla, cash flows and profitability are both growing rapidly, a very good thing considering the current challenging capital market environment (e.g. rising interest rates).Tesla Q3 Investor PresentationFrom a business standpoint, Tesla’s vehicle deliveries continue to grow rapidly (despite the recent delivery miss, which caused the shares to sell off further); deliveries are at an all-time high.The growing number of deliveries is so important because as production and deliveries keep ramping, so will Tesla’s economies of scale and profit. Further, Tesla could expand its total addressable market (“TAM”) by ten-fold by cutting the cost of an electric vehicle in half, according to this recent note from Sam Korus at ARK Investments.Last week, during its third-quarter earnings call, Elon Musk noted that Tesla is developing a vehicle that will sell at roughly half the price of the Model 3 and Model Y. While vehicles at price-points above $60,000 address ~5% of the total US car market, the addressable market expands to 50% at ~$30,000, as shown below.ARK InvestFurther still, Tesla has plans to launch a light truck, a semi truck and a more affordable sedan and SUV platforms. These will all contribute to economies of scale ad reduced manufacturing costs per unit. Further, Tesla’s efforts into autonomous driving software can add subscription revenue and keep the brand awareness and image high. Not to mention, Tesla’s robotaxi business add to the upside. Also notable, Tesla’s Dojo supercomputer could incrementally add value at some point in the future.Tesla’s Energy Generation and Storage segment also continues to grow. And although not yet contributing meaningfully to profits, it continues to scale and can eventually earn margins similar to Enphase (ENPH) (a long-time Blue Harbinger Disciplined Growth Portfolio holding).Profitability:As Tesla continues to ramp, so too will its profitability (margins). It helps tremendously that the company is already profitable—something many other high-growth companies cannot say (see our earlier top growth stock tables), considering rising interest rates make for a more challenging capital markets environment. Here is a look at the company’s most recent quarterly income statement (as you can see costs are not rising as rapidly as revenues, thereby improving margins and profitability).Tesla Q3 Investor PresentationAlso very important, Tesla has a healthy balance sheet (see below). In particular, the company has more current assets than total liabilities (a good thing with rates rising and considering a significant portion of debt comes due in the next few years.Tesla Q3 Investor PresentationTesla does not pay a dividend and has not been repurchasing shares, both good things considering the growth potential is attractive. Specifically, with a return on invested capital above the cost of capital, Tesla has wisely been reinvesting in itself.Valuation:Unlike other growth businesses that have sold off hard over the last year (as the fed has become increasingly hawkish), Tesla is actually profitable and margins are improving. This is a very good thing, but it’s also critically important to acknowledge Tesla’s high uncertainly and volatility (as compared to the auto industry and the overall S&P 500, as you can get some feel for in the graphics below).Tesla Q3 Investor PresentationAssigning an exact valuation to Tesla given the high volatility, growth and uncertainty (Tesla is not a boring predictable company like Procter & Gamble (PG) and Johnson & Johnson (JNJ)) is a challenging endeavor with resulting numbers varying widely based on cost of capital, return on capital invested and growth rate assumptions. That said, it can be worthwhile to compare Tesla’s margins, growth rate, profitability and valuation metrics to other large companies, as shown in the table below.StockRoverA few notable things in the table above, Tesla is actually profitable (that’s more than a lot of other high-growth stocks can say) and even though its forward P/E ratio is way above other automakers, so is its expected growth rate much higher. Further, Tesla’s cost of capital is well below its return on invested capital, and its net margins are already very impressive (much better than GM and Ford) and expected to keep improving as economies of scale grow for Tesla.For a little more perspective, the 33 Wall Street analysts covering the shares have an aggregate “Buy” rating, and many of them have price targets significantly higher than the current share price (which is down over 70% in the last year).Seeking AlphaIn our view, if Tesla continues on its current growth trajectory (a very big “if”) the shares can easily trade dramatically higher, as earnings are set to grow dramatically. And even if the growth rate comes in lower than expected (but still remains relatively high) the shares are still undervalued. From a high level, the market seems overly pessimistic on Tesla relative to its long-term earnings power and value (perhaps a near-term phenomenon related to the woke mob’s increasing contempt for CEO, Elon Musk).Risk Factors:Woke Mob Fury: In case you haven’t noticed, Tesla is a volatile stock that gets a lot of media attention, particularly from the environmentally-focused woke mob. As alluded to earlier, the woke mob created significant political pressure that led to the emissions credits and other government-sponsored incentives that have helped Tesla become the large company it is today. However, the woke mob’s opinion of Tesla is changing rapidly.For starters, Tesla CEO Elon Musk’s recent purchase of Twitter (a major source for information distribution) has upset many from a political standpoint because they preferred the views of prior Twitter leadership. This has created significant negative media attention for Musk and for Tesla. For example, according to this NBC News article:“Elon Musk’s uneasy relationship with the left explodes over Twitter takeover… Musk has helped expand America's use of electric vehicles. The left has found a lot of other things to dislike about him.”Further, Musk's recent sanctioning of the Twitter Files has increased the heat on him and his companies.Related, Tesla continues to receive low ESG (Environmental, Social and corporate Governance) ratings, while large oil and gas companies are increasingly receiving better ratings. For example, see: How Does Tesla Get A Worse ESG Score Than 2 Oil Companies?TwitterHowever, given the momentum of EV adoption, we expect negative sentiment to create more short-term pressure than long-term pressure. Further still, as constituents work to increase the use of alternative energy sources in the grid, this will decrease the fossil fuel footprint of electric vehicles (although fossil fuels will likely remain the major energy source for decades to come).Key-Man Risk: CEO Elon Musk splits his time between Tesla, Twitter, SpaceX and The Boring Company. This creates significant demands on his time and could detract from performance (although Musk is reported to be searching for a new Twitter CEO). Further still, Musk owns a significant percentage of Tesla’s shares, which he has recently reduced to fund his Twitter acquisition. Musk sales can negatively impact the share price.Competition: Traditional automakers are shifting heavily towards EV production which creates increased competition for Tesla. This could cause Tesla’s growth rate to slow. Some pundits argue that Tesla’s valuation multiple should be more in-line with traditional automakers, despite Tesla’s higher growth rate, higher margins and more expansive innovation.Battery Prices: According to some, battery and solar panel prices will decline faster than Tesla can reduce costs, resulting in little to no profit in this areas.EV Adoption: The magnitude of EV adoption may not be as great as expected. Some drivers may simply prefer to stick with their gas powered vehicles.Regulatory Risks: Tesla has historically relied heavily on subsidies and incentives. This may make future growth more challenging. Further, some states are requiring car makes and dealers to be separate, which could create legal challenges for Tesla.Macro Headwinds: Macroeconomic headwinds, as described earlier, are a significant risk factor for Tesla. Interest rates are higher, economic growth is slowing and the economy is expected to enter an ugly recession. This could dramatically slow growth, although stock prices generally recover faster than the economy.Key Takeaways and Conclusions:Tesla is profitable, growing rapidly and significantly undervalued. However, that doesn’t mean the shares won’t keep falling (the woke mob is angry, and this is bad for public perception). Further, the indiscriminate growth stock selloff continues, especially with recession looming and no “fed put” in sight.However, Tesla has the fundamental growth characteristics that Future Fund likes (it’s ranked #1 in that fund). It also ranks above the 90th percentile (a good thing) in our fundamental growth score table above. Further still, Tesla apparently has the long-term rainmaker characteristics that ARK Innovation ETF likes (it’s ranked #3 in that fund).If you are a low-risk, income-focused investor, stay the heck away from Tesla! But if you are a disciplined long-term growth investor, Tesla is increasingly attractive and worth considering for a spot in your prudently-diversified long-term portfolio. Although volatile, Tesla's long-term upside is very real.This article is written by Blue Harbinger for reference only. Please note the risks.","news_type":1},"isVote":1,"tweetType":1,"viewCount":266,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"hots":[{"id":202839381733624,"gmtCreate":1690550614334,"gmtModify":1690550617932,"author":{"id":"4129610444163112","authorId":"4129610444163112","name":"Multisack bagger","avatar":"https://community-static.tradeup.com/news/a8eb9acf4086f39488cf03d1190bbada","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4129610444163112","authorIdStr":"4129610444163112"},"themes":[],"htmlText":"<a href=\"https://ttm.financial/S/JAV.AU\">$Javelin Minerals Ltd(JAV.AU)$&nbsp;</a>Not financial advice but a company with some very interesting tenements. Particularly the Mount Ida Ida Project, being closely located to Delta Lithium, once Red Dirt, a potentially seriously underappreciated lithiumprospect.&nbsp;","listText":"<a href=\"https://ttm.financial/S/JAV.AU\">$Javelin Minerals Ltd(JAV.AU)$&nbsp;</a>Not financial advice but a company with some very interesting tenements. Particularly the Mount Ida Ida Project, being closely located to Delta Lithium, once Red Dirt, a potentially seriously underappreciated lithiumprospect.&nbsp;","text":"$Javelin Minerals Ltd(JAV.AU)$ Not financial advice but a company with some very interesting tenements. Particularly the Mount Ida Ida Project, being closely located to Delta Lithium, once Red Dirt, a potentially seriously underappreciated lithiumprospect.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":1,"repostSize":1,"link":"https://ttm.financial/post/202839381733624","isVote":1,"tweetType":1,"viewCount":550,"authorTweetTopStatus":1,"verified":2,"comments":[{"author":{"id":"4129610444163112","authorId":"4129610444163112","name":"Multisack bagger","avatar":"https://community-static.tradeup.com/news/a8eb9acf4086f39488cf03d1190bbada","crmLevel":1,"crmLevelSwitch":0,"idStr":"4129610444163112","authorIdStr":"4129610444163112"},"content":"Trading halt, potential takeover, not financial Advice but WATCH THIS SPACE! ✨✨✨✨✨","text":"Trading halt, potential takeover, not financial Advice but WATCH THIS SPACE! ✨✨✨✨✨","html":"Trading halt, potential takeover, not financial Advice but WATCH THIS SPACE! ✨✨✨✨✨"}],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9953346986,"gmtCreate":1673172297745,"gmtModify":1676538794916,"author":{"id":"4129610444163112","authorId":"4129610444163112","name":"Multisack bagger","avatar":"https://community-static.tradeup.com/news/a8eb9acf4086f39488cf03d1190bbada","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4129610444163112","authorIdStr":"4129610444163112"},"themes":[],"htmlText":"Definitely written by some right wing nut job","listText":"Definitely written by some right wing nut job","text":"Definitely written by some right wing nut job","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":7,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9953346986","repostId":"2301735185","repostType":2,"isVote":1,"tweetType":1,"viewCount":266,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":348593814085832,"gmtCreate":1726124464447,"gmtModify":1726125070176,"author":{"id":"4129610444163112","authorId":"4129610444163112","name":"Multisack bagger","avatar":"https://community-static.tradeup.com/news/a8eb9acf4086f39488cf03d1190bbada","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4129610444163112","authorIdStr":"4129610444163112"},"themes":[],"htmlText":"People who invest in this are a bunch of genocidal idiots 🐷🐷🐷","listText":"People who invest in this are a bunch of genocidal idiots 🐷🐷🐷","text":"People who invest in this are a bunch of genocidal idiots 🐷🐷🐷","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/348593814085832","repostId":"2466281880","repostType":2,"repost":{"id":"2466281880","kind":"highlight","pubTimestamp":1726124400,"share":"https://ttm.financial/m/news/2466281880?lang=&edition=fundamental","pubTime":"2024-09-12 15:00","market":"us","language":"en","title":"Palantir Stock: The Hype Train Speeds Ahead, But I'm Not Hopping On","url":"https://stock-news.laohu8.com/highlight/detail?id=2466281880","media":"Seeking Alpha","summary":"Palantir is a data analytics and software firm that helps organizations customers interpret/use massive amounts of data. Its services are highly customizable, meaning that they can meet very specific customer needs, which creates loyal customers and product stickiness, and, in turn, a high gross profit margin and solid growth. After all, if a company creates a highly customized, advanced solution for you and you end up incorporating it into your company, it would be a pain to then abandon the so","content":"<html><head></head><body><ul style=\"\"><li><p>Palantir is a polarizing stock, with value investors deeming it overpriced and many growth investors believing its growth potential isn&#39;t fully priced in.</p></li><li><p>I recognize the possibility of me underestimating Palantir&#39;s future earnings potential, but I believe too much growth is priced into Palantir stock for easy gains, making it very risky.</p></li><li><p>Stock-based compensation continues to be a drag when assessing the company&#39;s financial metrics and valuation.</p></li><li><p>The recent gains from the S&amp;P 500 inclusion highlight the hype around the stock.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/ca0459f275b9aed733014624cae2dc80\" alt=\"Michael Vi\" title=\"Michael Vi\" tg-width=\"750\" tg-height=\"500\"/><span>Michael Vi</span></p><p>Palantir (NYSE:PLTR) is an extremely divisive stock, with plenty of value investors saying it&#39;s overpriced and some growth investors saying that not enough growth is priced in. I&#39;m taking the first side. I think this data analytics and software stock has gotten a bit ahead of itself for now and that there&#39;s some hype involved, especially with the recent S&amp;P 500 inclusion. Plus, I&#39;m not a fan of the company&#39;s high SBC (stock-based compensation) and its &#34;adjusted&#34; financial metrics, which add back SBC to make the numbers look better.</p><p>Nonetheless, Palantir has proven that it&#39;s a great company with a competitive advantage, and I will talk about some of its positive metrics below. But it&#39;s the high valuation that makes me have to give the stock a Hold rating.</p><h2 id=\"id_567606566\">S&amp;P 500 Inclusion Reaction Proves That PLTR Stock Carries Lots Of Hype</h2><p>Yesterday (September 9), news came out that Palantir will join the S&amp;P 500. Of course, this is good news for the stock, as an inclusion in the index will force index funds to buy it, and it will increase the stock&#39;s liquidity as well.</p><p>Here&#39;s where the hype can be somewhat quantified, though. Palantir wasn&#39;t the only stock that received that news this week. Dell Technologies (DELL) and Erie Indemnity (ERIE) are also set to join the S&amp;P 500. However, DELL and ERIE finished 3.8% higher and 0.6% <em>lower</em>, respectively, after the announcement, while PLTR stock gained over 14%. And it&#39;s not as if this was some sort of huge short squeeze. Palantir only had 3% of its float sold short, as of August 15. So, in my opinion, this just shows the difference in hype level between the stocks.</p><h2 id=\"id_3112688311\">What Makes Palantir So Special?</h2><p>Palantir is a data analytics and software firm that helps organizations customers interpret/use massive amounts of data. Its services are highly customizable, meaning that they can meet very specific customer needs, which creates loyal customers and product stickiness, and, in turn, a high gross profit margin and solid growth. After all, if a company creates a highly customized, advanced solution for you and you end up incorporating it into your company, it would be a pain to then abandon the solution for a new one, and this would come with high switching costs.</p><p>Here&#39;s a quick example. BP p.l.c. (BP) uses a digital twin of its oil production operations to monitor and optimize its operations. Notably, BP has been a customer since 2014, and just yesterday, it &#34;entered a five-year strategic collaboration to introduce new artificial intelligence capabilities with Palantir&#39;s AIP software.&#34;</p><p>Loyal customers are a sign of a good product, and you can quantify that based on Palantir&#39;s net dollar retention rate of 114% for Q2.</p><p>In the company&#39;s Q2 earnings call, Palantir&#39;s CFO, Dave Glazer, stated the following:</p><blockquote><p>&#34;Net dollar retention was 114%, an increase of 300 basis points from last quarter. The increase was driven both by expansions at existing customers and new customers acquired in Q2 of last year. As net dollar retention does not include revenue from new customers that were acquired in the past 12 months, it does not yet fully capture the acceleration in velocity in our US commercial business over the past year.&#34;</p></blockquote><p>This means that Palantir&#39;s existing customers are not only remaining as clients but are also spending 14% more year-over-year. And the 114% figure excludes revenue from new customers, so it&#39;s entirely driven by existing clients increasing their spending.</p><h3 id=\"id_4000511723\">The Customer Acquisition Strategy Is Working Very Well</h3><p>Palantir offers AIP, which stands for Artificial Intelligence Platform. This is Palantir&#39;s AI-driven software platform that allows organizations to use advanced large language models (LLMs) and other AI tools for real-time data analysis and decision-making. From the videos I&#39;ve seen, it seems like a super customized ChatGPT (along with the other AI tools) on steroids that&#39;s integrated with your business.</p><p>For AIP, it offers free AIP Bootcamps. These Bootcamps are hands-on training sessions that quickly help clients understand and implement AIP.</p><p>Once customers see the value in these free bootcamps, they sign deals with Palantir. You can see some examples below.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/ce4b1e7a30bae90933b8a83b23ec21ff\" alt=\"Palantir Customer Acquisition Examples (Palantir&#39;s Investor Presentation)\" title=\"Palantir Customer Acquisition Examples (Palantir&#39;s Investor Presentation)\" tg-width=\"640\" tg-height=\"300\"/><span>Palantir Customer Acquisition Examples (Palantir&#39;s Investor Presentation)</span></p><h3 id=\"id_688498941\">Growth Is Strong As A Result</h3><p>Due to the high importance and quality of its product, Palantir has seen exceptional growth in the past few years, with a 3-year revenue CAGR of 23.1%. Further, revenue growth is expected to come in at 24% for Fiscal 2024 and 20.7% for Fiscal 2025. Notably, its GAAP net income grew from $28.1 million in Q2 2023 to $134.1 million in Q2 2024.</p><h3 id=\"id_1505170237\">Rising Gross Profit Margin Indicates A Competitive Advantage</h3><p>Aside from qualitative factors, the company&#39;s rising gross profit margin suggests that it has a competitive advantage, as it means that competitors aren&#39;t eroding its profitability. Palantir&#39;s gross margin went from 72.2% in Fiscal 2018 to 81.4% for the past 12 months.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/cd93fde2bdf2fd613863d4c0c6272918\" alt=\"Palantir&#39;s Gross Profit Margin (Finbox)\" title=\"Palantir&#39;s Gross Profit Margin (Finbox)\" tg-width=\"543\" tg-height=\"340\"/><span>Palantir&#39;s Gross Profit Margin (Finbox)</span></p><h2 id=\"id_1473036878\">Some Financial Metrics I Don&#39;t Like</h2><p>Although Palantir is solid overall, there are some things I don&#39;t like, including its high stock-based compensation and adjusted financial metrics.</p><p>For the last 12 months, SBC comes in at $514.4 million. This is a large chunk of its $696.4 million in TTM free cash flow (and I&#39;m not talking about its adjusted free cash flow).</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/868923f801f47df5981560b2a5d8a007\" alt=\"Palantir&#39;s Stock-Based Compensation (Finbox)\" title=\"Palantir&#39;s Stock-Based Compensation (Finbox)\" tg-width=\"539\" tg-height=\"358\"/><span>Palantir&#39;s Stock-Based Compensation (Finbox)</span></p><p>I, and many other value investors, view SBC as a real expense. Sure, it&#39;s technically not a cash expense, but it dilutes shareholders, and it&#39;s a way of paying employees. If the company didn&#39;t use SBC, it would likely have to pay more in salaries to retain talent, which is then a cash outflow. Thus, many people treat SBC in the same way and subtract it from free cash flow to get a more conservative figure.</p><p>If you do the math, you&#39;ll see that its FCF minus SBC comes out to $182 million. Another interesting thing to point out is that its TTM interest income on its $4 billion cash pile is $171.4 million. Therefore, most of that $182 million figure is from interest income rather than the firm&#39;s operations.</p><p>However, it&#39;s not all bad, as SBC as a percentage of FCF has certainly come down in the past few years (~74% for the past 12 months compared to 242% in Fiscal 2021). It looks like that trend is set to continue, especially since FCF is expected to surge to $881.27 million for the full year, per analyst estimates found on simplywall.st. So this is something that I&#39;ll monitor going forward.</p><p>Now, back to what I don&#39;t like. Below, you can see that Palantir reports adjusted free cash flow, which actually adds $7.35 million in &#34;Cash Paid for Employer Payroll Taxes Related to Stock-Based Compensation&#34; to the figure to boost it. Although it&#39;s not a large amount, the fact that the company is adding back a recurring cash expense to its adjusted free cash flow gives me pause.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/9cc6e284447a4a226301da1c237951f0\" alt=\"Palantir&#39;s Adjusted FCF (Palantir&#39;s Investor Presentation)\" title=\"Palantir&#39;s Adjusted FCF (Palantir&#39;s Investor Presentation)\" tg-width=\"640\" tg-height=\"245\"/><span>Palantir&#39;s Adjusted FCF (Palantir&#39;s Investor Presentation)</span></p><p>You can also see the difference in adjusted operating income for Q2 2024 ($253.57 million) compared to regular operating income ($105.34 million). The reason I bring up these metrics is because, again, SBC is a real expense, and my hope is that investors will take a closer look at Palantir&#39;s unadjusted earnings and financial metrics before making investment decisions.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/220723e9eeb0231a7e694dc5eeb6ee5c\" alt=\"Palantir&#39;s Adjusted Operating Income (Palantir&#39;s Investor Presentation)\" title=\"Palantir&#39;s Adjusted Operating Income (Palantir&#39;s Investor Presentation)\" tg-width=\"640\" tg-height=\"229\"/><span>Palantir&#39;s Adjusted Operating Income (Palantir&#39;s Investor Presentation)</span></p><h2 id=\"id_3314825111\">The Valuation Prices In Lots of Growth</h2><p>Now, let&#39;s talk about PLTR stock&#39;s valuation, which seems high to me. For the valuation, I&#39;ve used an H-Model valuation calculator that I created. I actually <strong>reverse engineered the inputs</strong> to see how high of a FCF growth rate Palantir would have to experience in order to justify its current share price of around $34.80. So just to be clear, the fair value calculation from the calculator below is <strong>not</strong> my estimate of fair value.</p><p>Allow me to explain how it works (although you can find a more in-depth explanation here). The H-Model starts with FCF/share, which is $0.31, per Finbox. Then, I need a high growth rate for FCF/share. This is the growth rate that will be seen in the first year (I put 59%). I then input how long I think the high growth period will last. I put 30 years because Palantir has many years of growth ahead.</p><p>The model assumes a linear decline in the growth rate, which will gradually drop from 59% to a terminal growth rate of 3% by year 31. The 3% terminal growth rate reflects Palantir&#39;s perpetual growth potential once it matures. I chose 3% because it&#39;s a reasonable growth rate after maturity based on long-term GDP growth. Generally, I use 2.5%, but I use 3% for companies with better growth prospects.</p><p>Regarding the discount rate, I used 11.4%, which was calculated by Finbox using the CAPM model.</p><p>For the PLTR example below, FCF growth would be 59% in year 1, 57.13% in year 2, ~55.27% in year 3, 53.4% in year 4, and steadily downward in this fashion until it reaches exactly 3% in year 31. After that, the growth rate will be 3% per year in perpetuity.</p><p>In short, that&#39;s the type of growth it would take PLTR stock to justify its current valuation, as you can see below. For me, that&#39;s just a bit too optimistic to want to buy the stock. Let&#39;s also not forget that the valuation uses FCF per share, and per-share metrics will be negatively affected by the high stock-based compensation.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/90a8b0f7852c662dde11362130a958f5\" alt=\"Palantir H-Model Valuation (Author)\" title=\"Palantir H-Model Valuation (Author)\" tg-width=\"322\" tg-height=\"621\"/><span>Palantir H-Model Valuation (Author)</span></p><p>The valuation is obviously very sensitive to the growth rate. If I just change the high growth rate to 45%, which is still very high, the fair value drops to $27.05 per share. This highlights the limited margin of safety in the stock&#39;s valuation.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/269604819ecfaf55875b133ac2f80cd9\" alt=\"Palantir H-Model Valuation (Author)\" title=\"Palantir H-Model Valuation (Author)\" tg-width=\"322\" tg-height=\"631\"/><span>Palantir H-Model Valuation (Author)</span></p><h2 id=\"id_212462397\">The Risk In My Thesis: I Could Be Underestimating Palantir&#39;s Growth Potential</h2><p>This week, Bank of America (BAC) analyst Ronald Epstein raised his price target on PLTR stock to $50 from a previous target of $30. The analyst made an important point.</p><p>He stated the following:</p><blockquote><p>&#34;In 1980, AT&amp;T hired a consultancy company to estimate the market size for cell phones by 2000. The study suggested there would only be 900k users. The actual number of mobile subscriptions in 2000 was over 100 million. These early estimates also failed to anticipate the world of apps, streaming, smart devices, and ultimately, how this new product would bring forward the first public trillion-dollar company.</p><p>We view Palantir&#39;s (PLTR) capabilities, technology and path forward facing a similar fundamental misunderstanding. The upcoming S&amp;P 500 inclusion provides a watershed moment for institutional investors to revisit what they &#39;know&#39; about PLTR. We reiterate our Buy rating and raise our PO to $50.&#34;</p></blockquote><p>Therefore, if Palantir is truly in a similar situation as the one mentioned from 1980 and analysts are underestimating its growth potential, then it can truly be undervalued. I&#39;m just not willing to bet on that at the moment.</p><h2 id=\"id_2194374295\">The Takeaway</h2><p>Palantir is an excellent company with a great product and customer acquisition strategy. The highly specialized services it offers create a competitive advantage via high switching costs. This competitive advantage and customer loyalty can be quantified by looking at the firm&#39;s rising gross profit margin, 114% net dollar retention rate, and consistent growth while improving profitability.</p><p>Nonetheless, as shown above, the current valuation is pricing in lots of growth. I&#39;m not saying there&#39;s a 0% chance that the high-growth rate will be reached, and the Bank of America analyst certainly made a good point that the market can be underestimating its growth potential. However, I just find it too risky to bet on a company with such high expectations already baked in.</p><p>Plus, I&#39;m not a fan of the high stock-based compensation, which will negatively impact per-share growth and leaves the company with a relatively low amount of what I call &#34;true&#34; cash flow. Lastly, I believe that investors should consider looking at the company&#39;s unadjusted metrics when analyzing the stock, as they paint a different picture of the company&#39;s profitability.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Palantir Stock: The Hype Train Speeds Ahead, But I'm Not Hopping On</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nPalantir Stock: The Hype Train Speeds Ahead, But I'm Not Hopping On\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-09-12 15:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4720406-palantir-stock-the-hype-train-speeds-ahead-but-im-not-hopping-on><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Palantir is a polarizing stock, with value investors deeming it overpriced and many growth investors believing its growth potential isn't fully priced in.I recognize the possibility of me ...</p>\n\n<a href=\"https://seekingalpha.com/article/4720406-palantir-stock-the-hype-train-speeds-ahead-but-im-not-hopping-on\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"LU1894683264.USD":"AMUNDI FUNDS US EQUITY RESEARCH VALUE \"A2\" (USD) ACC","LU0320765646.SGD":"FTIF - Franklin Income A MDIS SGD-H1","BK4201":"综合性石油与天然气企业","LU0106831901.USD":"贝莱德世界金融基金A2","LU0321505439.SGD":"Schroder ISF Global Dividend Maximiser A Acc SGD","BK4023":"应用软件","BK4515":"5G概念","LU0128525689.USD":"TEMPLETON GLOBAL BALANCED \"A\"(USD) ACC","BK4585":"ETF&股票定投概念","LU1861558580.USD":"日兴方舟颠覆性创新基金B","IE00BKVL7J92.USD":"Legg Mason ClearBridge - US Equity Sustainability Leaders A Acc USD","LU0130518102.USD":"HARRIS ASSOCIATES GLOBAL EQUITY \"R\" INC","LU2129689514.USD":"FRANKLIN GLOBAL INCOME \"A\" (USD) INC","BK4535":"淡马锡持仓","LU1496350171.SGD":"FRANKLIN DIVERSIFIED BALANCED \"A\" (SGDHDG) ACC","IE00BLSP4239.USD":"Legg Mason ClearBridge - Tactical Dividend Income A Mdis USD Plus","LU0321505868.SGD":"Schroder ISF Global Dividend Maximiser A Dis SGD","IE00BLSP4452.SGD":"Legg Mason ClearBridge - Tactical Dividend Income A Mdis SGD-H Plus","LU2129689605.HKD":"FRANKLIN GLOBAL INCOME \"A\" (HKD) INC","BK4559":"巴菲特持仓","IE00B7SZLL34.SGD":"Legg Mason ClearBridge - Value A Acc SGD-H","LU0072461881.USD":"BGF US BASIC VALUE \"A2\" ACC","LU1201861165.SGD":"Natixis Harris Associates Global Equity PA SGD","BK4550":"红杉资本持仓","LU0417517546.SGD":"Allianz US Equity Cl AT Acc SGD","LU0130103400.USD":"Natixis Harris Associates Global Equity RA USD","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","LU0098860793.USD":"FRANKLIN INCOME \"A\" INC","BK4547":"WSB热门概念","IE00B19Z3B42.SGD":"Legg Mason ClearBridge - Value A Acc SGD","LU1162221912.USD":"FRANKLIN INCOME \"A\" (USD) ACC","BK4504":"桥水持仓","PLTR":"Palantir Technologies Inc.","LU0234572021.USD":"高盛美国核心股票组合Acc"},"source_url":"https://seekingalpha.com/article/4720406-palantir-stock-the-hype-train-speeds-ahead-but-im-not-hopping-on","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2466281880","content_text":"Palantir is a polarizing stock, with value investors deeming it overpriced and many growth investors believing its growth potential isn't fully priced in.I recognize the possibility of me underestimating Palantir's future earnings potential, but I believe too much growth is priced into Palantir stock for easy gains, making it very risky.Stock-based compensation continues to be a drag when assessing the company's financial metrics and valuation.The recent gains from the S&P 500 inclusion highlight the hype around the stock.Michael ViPalantir (NYSE:PLTR) is an extremely divisive stock, with plenty of value investors saying it's overpriced and some growth investors saying that not enough growth is priced in. I'm taking the first side. I think this data analytics and software stock has gotten a bit ahead of itself for now and that there's some hype involved, especially with the recent S&P 500 inclusion. Plus, I'm not a fan of the company's high SBC (stock-based compensation) and its \"adjusted\" financial metrics, which add back SBC to make the numbers look better.Nonetheless, Palantir has proven that it's a great company with a competitive advantage, and I will talk about some of its positive metrics below. But it's the high valuation that makes me have to give the stock a Hold rating.S&P 500 Inclusion Reaction Proves That PLTR Stock Carries Lots Of HypeYesterday (September 9), news came out that Palantir will join the S&P 500. Of course, this is good news for the stock, as an inclusion in the index will force index funds to buy it, and it will increase the stock's liquidity as well.Here's where the hype can be somewhat quantified, though. Palantir wasn't the only stock that received that news this week. Dell Technologies (DELL) and Erie Indemnity (ERIE) are also set to join the S&P 500. However, DELL and ERIE finished 3.8% higher and 0.6% lower, respectively, after the announcement, while PLTR stock gained over 14%. And it's not as if this was some sort of huge short squeeze. Palantir only had 3% of its float sold short, as of August 15. So, in my opinion, this just shows the difference in hype level between the stocks.What Makes Palantir So Special?Palantir is a data analytics and software firm that helps organizations customers interpret/use massive amounts of data. Its services are highly customizable, meaning that they can meet very specific customer needs, which creates loyal customers and product stickiness, and, in turn, a high gross profit margin and solid growth. After all, if a company creates a highly customized, advanced solution for you and you end up incorporating it into your company, it would be a pain to then abandon the solution for a new one, and this would come with high switching costs.Here's a quick example. BP p.l.c. (BP) uses a digital twin of its oil production operations to monitor and optimize its operations. Notably, BP has been a customer since 2014, and just yesterday, it \"entered a five-year strategic collaboration to introduce new artificial intelligence capabilities with Palantir's AIP software.\"Loyal customers are a sign of a good product, and you can quantify that based on Palantir's net dollar retention rate of 114% for Q2.In the company's Q2 earnings call, Palantir's CFO, Dave Glazer, stated the following:\"Net dollar retention was 114%, an increase of 300 basis points from last quarter. The increase was driven both by expansions at existing customers and new customers acquired in Q2 of last year. As net dollar retention does not include revenue from new customers that were acquired in the past 12 months, it does not yet fully capture the acceleration in velocity in our US commercial business over the past year.\"This means that Palantir's existing customers are not only remaining as clients but are also spending 14% more year-over-year. And the 114% figure excludes revenue from new customers, so it's entirely driven by existing clients increasing their spending.The Customer Acquisition Strategy Is Working Very WellPalantir offers AIP, which stands for Artificial Intelligence Platform. This is Palantir's AI-driven software platform that allows organizations to use advanced large language models (LLMs) and other AI tools for real-time data analysis and decision-making. From the videos I've seen, it seems like a super customized ChatGPT (along with the other AI tools) on steroids that's integrated with your business.For AIP, it offers free AIP Bootcamps. These Bootcamps are hands-on training sessions that quickly help clients understand and implement AIP.Once customers see the value in these free bootcamps, they sign deals with Palantir. You can see some examples below.Palantir Customer Acquisition Examples (Palantir's Investor Presentation)Growth Is Strong As A ResultDue to the high importance and quality of its product, Palantir has seen exceptional growth in the past few years, with a 3-year revenue CAGR of 23.1%. Further, revenue growth is expected to come in at 24% for Fiscal 2024 and 20.7% for Fiscal 2025. Notably, its GAAP net income grew from $28.1 million in Q2 2023 to $134.1 million in Q2 2024.Rising Gross Profit Margin Indicates A Competitive AdvantageAside from qualitative factors, the company's rising gross profit margin suggests that it has a competitive advantage, as it means that competitors aren't eroding its profitability. Palantir's gross margin went from 72.2% in Fiscal 2018 to 81.4% for the past 12 months.Palantir's Gross Profit Margin (Finbox)Some Financial Metrics I Don't LikeAlthough Palantir is solid overall, there are some things I don't like, including its high stock-based compensation and adjusted financial metrics.For the last 12 months, SBC comes in at $514.4 million. This is a large chunk of its $696.4 million in TTM free cash flow (and I'm not talking about its adjusted free cash flow).Palantir's Stock-Based Compensation (Finbox)I, and many other value investors, view SBC as a real expense. Sure, it's technically not a cash expense, but it dilutes shareholders, and it's a way of paying employees. If the company didn't use SBC, it would likely have to pay more in salaries to retain talent, which is then a cash outflow. Thus, many people treat SBC in the same way and subtract it from free cash flow to get a more conservative figure.If you do the math, you'll see that its FCF minus SBC comes out to $182 million. Another interesting thing to point out is that its TTM interest income on its $4 billion cash pile is $171.4 million. Therefore, most of that $182 million figure is from interest income rather than the firm's operations.However, it's not all bad, as SBC as a percentage of FCF has certainly come down in the past few years (~74% for the past 12 months compared to 242% in Fiscal 2021). It looks like that trend is set to continue, especially since FCF is expected to surge to $881.27 million for the full year, per analyst estimates found on simplywall.st. So this is something that I'll monitor going forward.Now, back to what I don't like. Below, you can see that Palantir reports adjusted free cash flow, which actually adds $7.35 million in \"Cash Paid for Employer Payroll Taxes Related to Stock-Based Compensation\" to the figure to boost it. Although it's not a large amount, the fact that the company is adding back a recurring cash expense to its adjusted free cash flow gives me pause.Palantir's Adjusted FCF (Palantir's Investor Presentation)You can also see the difference in adjusted operating income for Q2 2024 ($253.57 million) compared to regular operating income ($105.34 million). The reason I bring up these metrics is because, again, SBC is a real expense, and my hope is that investors will take a closer look at Palantir's unadjusted earnings and financial metrics before making investment decisions.Palantir's Adjusted Operating Income (Palantir's Investor Presentation)The Valuation Prices In Lots of GrowthNow, let's talk about PLTR stock's valuation, which seems high to me. For the valuation, I've used an H-Model valuation calculator that I created. I actually reverse engineered the inputs to see how high of a FCF growth rate Palantir would have to experience in order to justify its current share price of around $34.80. So just to be clear, the fair value calculation from the calculator below is not my estimate of fair value.Allow me to explain how it works (although you can find a more in-depth explanation here). The H-Model starts with FCF/share, which is $0.31, per Finbox. Then, I need a high growth rate for FCF/share. This is the growth rate that will be seen in the first year (I put 59%). I then input how long I think the high growth period will last. I put 30 years because Palantir has many years of growth ahead.The model assumes a linear decline in the growth rate, which will gradually drop from 59% to a terminal growth rate of 3% by year 31. The 3% terminal growth rate reflects Palantir's perpetual growth potential once it matures. I chose 3% because it's a reasonable growth rate after maturity based on long-term GDP growth. Generally, I use 2.5%, but I use 3% for companies with better growth prospects.Regarding the discount rate, I used 11.4%, which was calculated by Finbox using the CAPM model.For the PLTR example below, FCF growth would be 59% in year 1, 57.13% in year 2, ~55.27% in year 3, 53.4% in year 4, and steadily downward in this fashion until it reaches exactly 3% in year 31. After that, the growth rate will be 3% per year in perpetuity.In short, that's the type of growth it would take PLTR stock to justify its current valuation, as you can see below. For me, that's just a bit too optimistic to want to buy the stock. Let's also not forget that the valuation uses FCF per share, and per-share metrics will be negatively affected by the high stock-based compensation.Palantir H-Model Valuation (Author)The valuation is obviously very sensitive to the growth rate. If I just change the high growth rate to 45%, which is still very high, the fair value drops to $27.05 per share. This highlights the limited margin of safety in the stock's valuation.Palantir H-Model Valuation (Author)The Risk In My Thesis: I Could Be Underestimating Palantir's Growth PotentialThis week, Bank of America (BAC) analyst Ronald Epstein raised his price target on PLTR stock to $50 from a previous target of $30. The analyst made an important point.He stated the following:\"In 1980, AT&T hired a consultancy company to estimate the market size for cell phones by 2000. The study suggested there would only be 900k users. The actual number of mobile subscriptions in 2000 was over 100 million. These early estimates also failed to anticipate the world of apps, streaming, smart devices, and ultimately, how this new product would bring forward the first public trillion-dollar company.We view Palantir's (PLTR) capabilities, technology and path forward facing a similar fundamental misunderstanding. The upcoming S&P 500 inclusion provides a watershed moment for institutional investors to revisit what they 'know' about PLTR. We reiterate our Buy rating and raise our PO to $50.\"Therefore, if Palantir is truly in a similar situation as the one mentioned from 1980 and analysts are underestimating its growth potential, then it can truly be undervalued. I'm just not willing to bet on that at the moment.The TakeawayPalantir is an excellent company with a great product and customer acquisition strategy. The highly specialized services it offers create a competitive advantage via high switching costs. This competitive advantage and customer loyalty can be quantified by looking at the firm's rising gross profit margin, 114% net dollar retention rate, and consistent growth while improving profitability.Nonetheless, as shown above, the current valuation is pricing in lots of growth. I'm not saying there's a 0% chance that the high-growth rate will be reached, and the Bank of America analyst certainly made a good point that the market can be underestimating its growth potential. However, I just find it too risky to bet on a company with such high expectations already baked in.Plus, I'm not a fan of the high stock-based compensation, which will negatively impact per-share growth and leaves the company with a relatively low amount of what I call \"true\" cash flow. Lastly, I believe that investors should consider looking at the company's unadjusted metrics when analyzing the stock, as they paint a different picture of the company's profitability.","news_type":1},"isVote":1,"tweetType":1,"viewCount":212,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":216204318330992,"gmtCreate":1693814972354,"gmtModify":1693814977242,"author":{"id":"4129610444163112","authorId":"4129610444163112","name":"Multisack bagger","avatar":"https://community-static.tradeup.com/news/a8eb9acf4086f39488cf03d1190bbada","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4129610444163112","authorIdStr":"4129610444163112"},"themes":[],"htmlText":"Trading halt, potential takeover, not financial Advice but WATCH THIS SPACE! ✨✨✨✨✨","listText":"Trading halt, potential takeover, not financial Advice but WATCH THIS SPACE! ✨✨✨✨✨","text":"Trading halt, potential takeover, not financial Advice but WATCH THIS SPACE! ✨✨✨✨✨","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/216204318330992","repostId":"202839381733624","repostType":1,"repost":{"id":202839381733624,"gmtCreate":1690550614334,"gmtModify":1690550617932,"author":{"id":"4129610444163112","authorId":"4129610444163112","name":"Multisack bagger","avatar":"https://community-static.tradeup.com/news/a8eb9acf4086f39488cf03d1190bbada","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4129610444163112","authorIdStr":"4129610444163112"},"themes":[],"htmlText":"<a href=\"https://ttm.financial/S/JAV.AU\">$Javelin Minerals Ltd(JAV.AU)$&nbsp;</a>Not financial advice but a company with some very interesting tenements. Particularly the Mount Ida Ida Project, being closely located to Delta Lithium, once Red Dirt, a potentially seriously underappreciated lithiumprospect.&nbsp;","listText":"<a href=\"https://ttm.financial/S/JAV.AU\">$Javelin Minerals Ltd(JAV.AU)$&nbsp;</a>Not financial advice but a company with some very interesting tenements. Particularly the Mount Ida Ida Project, being closely located to Delta Lithium, once Red Dirt, a potentially seriously underappreciated lithiumprospect.&nbsp;","text":"$Javelin Minerals Ltd(JAV.AU)$ Not financial advice but a company with some very interesting tenements. Particularly the Mount Ida Ida Project, being closely located to Delta Lithium, once Red Dirt, a potentially seriously underappreciated lithiumprospect.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/202839381733624","isVote":1,"tweetType":1,"viewCount":0,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},"isVote":1,"tweetType":1,"viewCount":264,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9947829357,"gmtCreate":1682941612879,"gmtModify":1682944529000,"author":{"id":"4129610444163112","authorId":"4129610444163112","name":"Multisack bagger","avatar":"https://community-static.tradeup.com/news/a8eb9acf4086f39488cf03d1190bbada","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4129610444163112","authorIdStr":"4129610444163112"},"themes":[],"htmlText":"Gross fear mongering&nbsp;","listText":"Gross fear mongering&nbsp;","text":"Gross fear mongering","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9947829357","repostId":"2332401066","repostType":2,"isVote":1,"tweetType":1,"viewCount":436,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9945622047,"gmtCreate":1681461417589,"gmtModify":1681461982808,"author":{"id":"4129610444163112","authorId":"4129610444163112","name":"Multisack bagger","avatar":"https://community-static.tradeup.com/news/a8eb9acf4086f39488cf03d1190bbada","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4129610444163112","authorIdStr":"4129610444163112"},"themes":[],"htmlText":"Golden Sachs doesn't have a good grip on the energy transition materials required, their value or importance.&nbsp; If they knew what they were talking about, they'd be bullish on Core lithium too","listText":"Golden Sachs doesn't have a good grip on the energy transition materials required, their value or importance.&nbsp; If they knew what they were talking about, they'd be bullish on Core lithium too","text":"Golden Sachs doesn't have a good grip on the energy transition materials required, their value or importance. If they knew what they were talking about, they'd be bullish on Core lithium too","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9945622047","repostId":"2327578970","repostType":2,"repost":{"id":"2327578970","kind":"highlight","pubTimestamp":1681351905,"share":"https://ttm.financial/m/news/2327578970?lang=&edition=fundamental","pubTime":"2023-04-13 10:11","market":"us","language":"en","title":"Goldman Sachs names the ASX 200 lithium shares to buy (and avoid)","url":"https://stock-news.laohu8.com/highlight/detail?id=2327578970","media":"MotleyFool","summary":"Goldman Sachs has been busy running the rule over the lithium industry again this week. And while th","content":"<html><body><div> <p>Goldman Sachs has been busy running the rule over the lithium industry again this week.</p> <p>And while the broker remains bearish on the price of the battery making ingredient, it is starting to see value in ASX lithium shares following recent weakness. It commented:</p> <blockquote><p>With lithium prices continuing to decline, and stock prices pulling back, we expect increased focus on finding defendable value in the sector, noting the Australian lithium sector is still largely flat YTD. While we remain cautious as these declines and our lowered CY23 lithium forecasts come through realised pricing/earnings on a lagged basis, we see emerging fundamental value in the sector.</p></blockquote> <h2>Which ASX lithium shares does Goldman like?</h2> <p>Goldman has buy ratings on just two ASX lithium shares following its recent downgrade of <strong>Mineral Resources Ltd</strong> (ASX: MIN) to a neutral rating.</p> <p>These are <strong>Allkem Ltd</strong> (ASX: AKE), which it has been bullish on for some time, and <strong>IGO Limited</strong> (ASX: IGO), which has been upgraded to a buy rating from neutral today.</p> <p>In respect to valuations, Goldman has a price target of $13.20 on Allkem’s shares and a price target of $13.90 of IGO’s shares. This implies potential upside of 19% and 10%, respectively, over the next 12 months for investors.</p> <h2>Why is it bullish?</h2> <p>Goldman advised that it is bullish on these ASX lithium shares due to their low costs, production growth potential, and vertical integration. It explains:</p> <blockquote><p>With our continued expectation that low cost producers with growth optionality &amp; vertical integration will be more defensive and best placed for future opportunities, we reiterate our preference for Allkem (Buy) and upgrade IGO to Buy.</p></blockquote> <p>In light of the above, the broker believes that “IGO and AKE deserve to trade at a premium to peers.”</p> <p>Elsewhere, Goldman has maintained its neutral ratings on <strong>Liontown Resources Limited</strong> (ASX: LTR) and <strong><a href=\"https://laohu8.com/S/PLS.AU\">Pilbara Minerals Ltd</a></strong> (ASX: PLS) shares, as well as its sell rating on <strong>Core Lithium Ltd</strong> (ASX: CXO) shares.</p> </div></body></html>","source":"motleyfoolau_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Goldman Sachs names the ASX 200 lithium shares to buy (and avoid)</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nGoldman Sachs names the ASX 200 lithium shares to buy (and avoid)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-04-13 10:11 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com.au/2023/04/13/goldman-sachs-names-the-asx-200-lithium-shares-to-buy-and-avoid/><strong>MotleyFool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Goldman Sachs has been busy running the rule over the lithium industry again this week. And while the broker remains bearish on the price of the battery making ingredient, it is starting to see value ...</p>\n\n<a href=\"https://www.fool.com.au/2023/04/13/goldman-sachs-names-the-asx-200-lithium-shares-to-buy-and-avoid/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"https://cdn-dfpai.nitrocdn.com/gJsEsVaCFesDAEYOdjncMdcuJdoeUsXv/assets/images/optimized/rev-ea50ffe/wp-content/uploads/2021/08/GettyImages-1059062968-1-150x150.jpg","relate_stocks":{"BK7506":"金矿股","LTR.AU":"LIONTOWN RESOURCES LTD","BK4585":"ETF&股票定投概念","BK4533":"AQR资本管理(全球第二大对冲基金)","IE00BSNM7G36.USD":"NEUBERGER BERMAN SYSTEMATIC GLOBAL SUSTAINABLE VALUE \"A\" (USD) ACC","IGO.AU":"IGO LTD","CXO.AU":"CORE LITHIUM LTD","BK7504":"锂钴概念","MIN.AU":"MINERAL RESOURCES LTD","BK4550":"红杉资本持仓","AKE.AU":"Allkem Limited","BK4588":"碎股","BK4552":"Archegos爆仓风波概念","BK7095":"多种金属与采矿","PLS.AU":"PILBARA MINERALS LTD","BK4504":"桥水持仓","BK7507":"资源股","BK4127":"投资银行业与经纪业","GS":"高盛"},"source_url":"https://www.fool.com.au/2023/04/13/goldman-sachs-names-the-asx-200-lithium-shares-to-buy-and-avoid/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2327578970","content_text":"Goldman Sachs has been busy running the rule over the lithium industry again this week. And while the broker remains bearish on the price of the battery making ingredient, it is starting to see value in ASX lithium shares following recent weakness. It commented: With lithium prices continuing to decline, and stock prices pulling back, we expect increased focus on finding defendable value in the sector, noting the Australian lithium sector is still largely flat YTD. While we remain cautious as these declines and our lowered CY23 lithium forecasts come through realised pricing/earnings on a lagged basis, we see emerging fundamental value in the sector. Which ASX lithium shares does Goldman like? Goldman has buy ratings on just two ASX lithium shares following its recent downgrade of Mineral Resources Ltd (ASX: MIN) to a neutral rating. These are Allkem Ltd (ASX: AKE), which it has been bullish on for some time, and IGO Limited (ASX: IGO), which has been upgraded to a buy rating from neutral today. In respect to valuations, Goldman has a price target of $13.20 on Allkem’s shares and a price target of $13.90 of IGO’s shares. This implies potential upside of 19% and 10%, respectively, over the next 12 months for investors. Why is it bullish? Goldman advised that it is bullish on these ASX lithium shares due to their low costs, production growth potential, and vertical integration. It explains: With our continued expectation that low cost producers with growth optionality & vertical integration will be more defensive and best placed for future opportunities, we reiterate our preference for Allkem (Buy) and upgrade IGO to Buy. In light of the above, the broker believes that “IGO and AKE deserve to trade at a premium to peers.” Elsewhere, Goldman has maintained its neutral ratings on Liontown Resources Limited (ASX: LTR) and Pilbara Minerals Ltd (ASX: PLS) shares, as well as its sell rating on Core Lithium Ltd (ASX: CXO) shares.","news_type":1},"isVote":1,"tweetType":1,"viewCount":380,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9948854527,"gmtCreate":1680681432369,"gmtModify":1680682164282,"author":{"id":"4129610444163112","authorId":"4129610444163112","name":"Multisack bagger","avatar":"https://community-static.tradeup.com/news/a8eb9acf4086f39488cf03d1190bbada","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4129610444163112","authorIdStr":"4129610444163112"},"themes":[],"htmlText":"Lithium is long term bullish despite the sentiment&nbsp;","listText":"Lithium is long term bullish despite the sentiment&nbsp;","text":"Lithium is long term bullish despite the sentiment","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9948854527","repostId":"2325133636","repostType":2,"isVote":1,"tweetType":1,"viewCount":379,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"lives":[]}