Latest news with #Sanjiv
Yahoo
20 hours ago
- Business
- Yahoo
Broadcom Inc. (AVGO): A Bull Case Theory
We came across a bullish thesis on Broadcom Inc. (AVGO) on Sanjiv's Substack. In this article, we will summarize the bulls' thesis on AVGO. Broadcom Inc. (AVGO)'s share was trading at $246.93 as of 6th June. AVGO's trailing and forward P/E were 90.05 and 37.88 respectively according to Yahoo Finance. spacedrone808/ Broadcom stands at the heart of AI infrastructure buildout, with surging demand for its custom XPUs and Ethernet-based networking solutions. The company expects at least three hyperscalers to deploy over one million AI-accelerated clusters each by 2027, with custom silicon playing a dominant role. Volume shipments are already underway to three such customers, while four additional large tech firms are deeply engaged in development, potentially expanding Broadcom's AI TAM beyond the current $60–90 billion estimate. Demand is increasingly inference-led, with Broadcom anticipating a steeper ramp in XPU orders through late 2025. Networking demand is also accelerating, especially in high-density scale-up configurations within data centers, where Broadcom's new Tomahawk 6 switch, offering 102.4 Tbps throughput, is uniquely positioned. AI aside, the VMware acquisition is proving accretive, with strong uptake of VCF (vSphere Cloud Foundation) enabling on-prem private AI deployments. Over 87% of Broadcom's largest customers have adopted VCF, while ARR is growing in double digits. Core enterprise software benefits from an open ecosystem and tight NVIDIA collaboration, as evidenced by uptake of the Private AI Foundation. Non-AI segments remain sluggish, though broadband and server storage saw sequential growth. Valuation is stretched: at ~$247, AVGO trades at ~30x forward earnings and ~29.6x forward FCF, yielding 3.3–3.4%. A DCF analysis with conservative assumptions implies a fair value of ~$208, suggesting a 15% premium. Given high R&D intensity and strategic positioning in custom silicon and AI networking, Broadcom's long-term prospects are strong, but its near-term upside appears limited. Previously, we highlighted a on Broadcom (AVGO) by Daan Rijnberk on Substack in March 2025, which emphasized the company's exceptional AI-driven growth, VMware integration, and industry-leading margins. The stock has appreciated by approximately 26% since our coverage. Sanjiv focuses on Broadcom's custom silicon ramp, inference-led XPU demand, and expanding AI TAM via deep hyperscaler partnerships. While both agree on Broadcom's centrality to the AI buildout, Rijnberk sees valuation as attractive post-pullback, whereas Sanjiv expresses near-term caution given the stock's premium pricing. Broadcom Inc. (AVGO) is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 158 hedge fund portfolios held AVGO at the end of the first quarter which was 161 in the previous quarter. While we acknowledge the risk and potential of AVGO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Business
- Yahoo
Helen of Troy Limited (HELE): A Bull Case Theory
We came across a bullish thesis on Helen of Troy Limited (HELE) on Value Investing subreddit by Individual_Buy7254. In this article, we will summarize the bulls' thesis on HELE. Helen of Troy Limited (HELE)'s share was trading at $27.91 as of 4th June. HELE's trailing and forward P/E were 5.14 and 5.18 respectively according to Yahoo Finance. Iakov Filimonov/ Helen of Troy (HELE), owner of steady cash-generating consumer brands like OXO, Hydro Flask, Braun, and Osprey, is trading at just 3.5x adjusted P/E—an irrationally low valuation given the company's underlying fundamentals. Much of this dislocation stems from overblown tariff fears, misunderstood one-time charges like the non-cash Drybar impairment, and temporary headwinds such as lower-margin sales post-COVID. The company is addressing these issues through Project Pegasus, a multi-year cost-saving initiative expected to deliver $75–85 million annually by 2027, while also reducing its China exposure below 20% of COGS by 2026. Beauty and wellness brands are rebounding, with Olive & June growing 8.7% in Q4, and Drybar's restructuring now complete. At the same time, HELE's $7.17 FY25 EPS and modest leverage (net debt/EBITDA ~3x with 4x interest coverage) highlight its financial resilience. While the stock was overvalued during the COVID bull run, trading at nearly 30x earnings in December 2021 due to a temporary boost in household items, the nearly 90% decline since then has been largely due to multiple contractions, not a fundamental collapse. Revenue has declined slightly from $2.1B in 2021 to a projected $1.9B in FY2025, but book value has grown by about 40%, showing the business isn't burning cash. Now trading below book value, HELE is a traditional, cash-generative business with recession-resistant brands that offer stability. With a base-case 50–100% upside and private equity interest a plausible catalyst, this is a classic value play with limited downside and significant rerating potential as execution continues. Previously, we have covered a bullish thesis on On Holding AG (ONON) in October 2024, written by Sanjiv on Substack, which, like Helen of Troy (HELE), operates in the consumer space with strong brand equity and margin expansion potential. While ONON represents a premium growth story and HELE a classic value opportunity, both showcase how differentiated brands can thrive despite broader market pressures. Helen of Troy Limited (HELE) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 22 hedge fund portfolios held HELE at the end of the first quarter which was 28 in the previous quarter. While we acknowledge the risk and potential of HELE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey.
Yahoo
a day ago
- Business
- Yahoo
Costco Wholesale Corporation (COST): A Bull Case Theory
We came across a bullish thesis on Costco Wholesale Corporation (COST) on Sanjiv's Substack. In this article, we will summarize the bulls' thesis on COST. Costco Wholesale Corporation (COST)'s share was trading at $1,051.69 as of 4th June. COST's trailing and forward P/E were 59.65 and 51.81 respectively according to Yahoo Finance. A grocery store employee stocking shelves with fresh fruits and vegetables. Costco's Q3 FY2025 results reaffirm its status as a uniquely disciplined and predictable retail compounder. With a decade-long revenue CAGR of 9%, decomposed into 2.64% store growth and 6.13% comparable sales growth, the company continues to execute on its '12/9/3' margin model—anchored in capped gross margins and low opex to deliver relentless value to members. In Q3, sales rose 8% y/y to $63.2bn, with net income up 13.2% to $1.90bn. Membership income—65% of net profits—remains central to Costco's strategy, with renewal rates staying above 90% despite recent dilution from promotional cohorts. Even amid broad inflationary and tariff headwinds, Costco's low-SKU model and agile sourcing—including pulling forward seasonal imports and shifting production geographically—allow it to avoid widespread price hikes, unlike peers such as Walmart or Target. E-commerce (+14.8%) and Kirkland Signature (+50 bps sales mix gain) reinforce Costco's brand value and adaptability. Capex remains disciplined (~$5bn expected for FY25), aligned with its historic 7.8% CAGR, keeping capital intensity in check. The high-traffic store challenge is being addressed through new openings, tech-enabled checkout, and expanded gas station hours. Yet, despite its operational excellence and 17.5% CAGR shareholder return over 23 years, the stock trades at a two-year forward P/E of 52.8x and FCF yield of just 1.9%—too rich for the implied 4–6% long-term return. 'While we continue to respect the business and hold a 1% legacy position, we believe the current valuation offers little margin of safety, and do not plan to add to the position at these levels.' - Sanjiv. Previously we have covered a bullish thesis on Costco Wholesale Corporation (COST) by FluentInQuality on Substack in March 2025, which aligns with Sanjiv's June 2025 analysis highlighting Costco's consistent execution, member-first model, and strategic discipline. Since March, the stock has appreciated by 0.4%. Both investors admire Costco as a high-quality compounder, though Sanjiv expresses caution on valuation, unlike FluentInQuality, who emphasizes Costco's long-term compounding potential despite its premium multiple. Costco Wholesale Corporation (COST) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 93 hedge fund portfolios held COST at the end of the first quarter which was 96 in the previous quarter. While we acknowledge the risk and potential of COST as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey.
Yahoo
a day ago
- Business
- Yahoo
Costco Wholesale Corporation (COST): A Bull Case Theory
We came across a bullish thesis on Costco Wholesale Corporation (COST) on Sanjiv's Substack. In this article, we will summarize the bulls' thesis on COST. Costco Wholesale Corporation (COST)'s share was trading at $1,051.69 as of 4th June. COST's trailing and forward P/E were 59.65 and 51.81 respectively according to Yahoo Finance. A grocery store employee stocking shelves with fresh fruits and vegetables. Costco's Q3 FY2025 results reaffirm its status as a uniquely disciplined and predictable retail compounder. With a decade-long revenue CAGR of 9%, decomposed into 2.64% store growth and 6.13% comparable sales growth, the company continues to execute on its '12/9/3' margin model—anchored in capped gross margins and low opex to deliver relentless value to members. In Q3, sales rose 8% y/y to $63.2bn, with net income up 13.2% to $1.90bn. Membership income—65% of net profits—remains central to Costco's strategy, with renewal rates staying above 90% despite recent dilution from promotional cohorts. Even amid broad inflationary and tariff headwinds, Costco's low-SKU model and agile sourcing—including pulling forward seasonal imports and shifting production geographically—allow it to avoid widespread price hikes, unlike peers such as Walmart or Target. E-commerce (+14.8%) and Kirkland Signature (+50 bps sales mix gain) reinforce Costco's brand value and adaptability. Capex remains disciplined (~$5bn expected for FY25), aligned with its historic 7.8% CAGR, keeping capital intensity in check. The high-traffic store challenge is being addressed through new openings, tech-enabled checkout, and expanded gas station hours. Yet, despite its operational excellence and 17.5% CAGR shareholder return over 23 years, the stock trades at a two-year forward P/E of 52.8x and FCF yield of just 1.9%—too rich for the implied 4–6% long-term return. 'While we continue to respect the business and hold a 1% legacy position, we believe the current valuation offers little margin of safety, and do not plan to add to the position at these levels.' - Sanjiv. Previously we have covered a bullish thesis on Costco Wholesale Corporation (COST) by FluentInQuality on Substack in March 2025, which aligns with Sanjiv's June 2025 analysis highlighting Costco's consistent execution, member-first model, and strategic discipline. Since March, the stock has appreciated by 0.4%. Both investors admire Costco as a high-quality compounder, though Sanjiv expresses caution on valuation, unlike FluentInQuality, who emphasizes Costco's long-term compounding potential despite its premium multiple. Costco Wholesale Corporation (COST) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 93 hedge fund portfolios held COST at the end of the first quarter which was 96 in the previous quarter. While we acknowledge the risk and potential of COST as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Business
- Yahoo
On Holding AG (ONON): A Bull Case Theory
We came across a bullish thesis on On Holding AG (ONON) on Quality Stocks' Substack. In this article, we will summarize the bulls' thesis on ONON. On Holding AG (ONON)'s share was trading at $58.53 as of 3rd June. ONON's trailing and forward P/E were 76.41 and 55.25 respectively according to Yahoo Finance. A professional football team running onto the field, in an iconic stadium of the company. On Holding has consolidated its leadership under a single-CEO structure, with Co-CEO and CFO Martin Hoffmann assuming the role of sole Chief Executive Officer as of April 1st. This transition comes amid a period of exceptional growth for the company, which continues to outperform its broader footwear market. Posting a 43% year-over-year revenue increase to $727 million—far exceeding analyst expectations of $680 million—On demonstrated strong execution across both Direct-to-Consumer and wholesale channels, which grew 45% and 41%, respectively. This favorable channel mix, with a tilt toward higher-margin DTC sales, contributed to gross margins expanding to 60%, reinforcing On's premium brand positioning. The company subsequently raised full-year guidance, now targeting 28% revenue growth, reflecting continued confidence in its trajectory. Amidst a shifting industry landscape where legacy giants like Nike are losing share, On stands out as a disruptive force with compelling brand momentum. However, this rapid expansion has led to a premium valuation, with shares trading at over 60 times earnings, leaving little room for error and limited downside protection. Despite having nearly doubled since its April low, the stock's elevated multiple suggests that patient investors might consider awaiting a pullback. Going forward, the critical variable to watch is market share: sustained share gains are central to On's thesis, and any signs of stagnation or reversal could materially alter the investment case. For now, On remains a high-growth, high-conviction story, albeit one priced for perfection, and dependent on continued flawless execution to justify its valuation. We previously covered a on ONON written by Sanjiv on Substck. The thesis highlighted its strong DTC-led growth, premium positioning, and rapid global expansion—validated by a 16.1% stock price increase since then and a 28.5% YoY revenue surge and its first year of positive free cash flow. The latest update by Quality Stocks reinforces this momentum, with 43% revenue growth and margin expansion, but cautions that ONON's high valuation (60x earnings) leaves little room for missteps. While the growth story remains intact, new investors may want to await a better entry point. On Holding AG (ONON) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 53 hedge fund portfolios held ONON at the end of the first quarter which was 49 in the previous quarter. While we acknowledge the risk and potential of ONON as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
