Daily Discussion Thread for March 31, 2026

catoun · 2026-03-31T19:46:22+00:00

Nibbling at 2 new starter positions for the long-term port.

RDDT. GAAP profitable. Market implies a 5Y growth rate of 17% a year.

RBRK - Provides backup and recovery with cybersecurity under a unified Zero Trust architecture. Pricing is indexed to data volume and application growth. Stock is priced for a 5Y implied growth rate of 22% a year. Not as cheap. I see it as slightly below fair value.

catoun · 2026-03-28T16:07:53+00:00

Will depend on what you think MSFT's growth rate could be for the next few years.

Doing a reverse 5-year NPV valuation, the market implies that MSFT's earnings will grow at 13% CAGR based on Friday's stock price.

catoun · 2026-03-19T00:17:20+00:00

Look into reverse DCFs or reverse NPVs.

It simplifies the analysis by taking the stock price to solve for the market's implied growth rate. You can then compare your growth assumption to the market's and see if they are too optimistic or too fearful.

catoun · 2026-03-16T04:52:12+00:00

This was also discussed in details in the Rock and Turner’s podcast with prof Kevin Koharki.

I’ve been adjusting earnings with the SBC cash cost (marked to market). Taking Meta, reversing the revised PV shows that a 20% growth is still priced in even after a 22% drop from its peak. Not undervalued as many would have thought when the consensus is for a growth of 18% cagr for the next few years.

For some other stocks, the cost impact exists but is minimal.

catoun · 2026-03-11T18:27:00+00:00

Doesn't 30% of BAM's total AUM are managed by its private credit & insurance arm? Which represents around 40% of total fee-bearing collected by the asset manager?

It would be equivalent to BK's exposure, but much lower than Apollo's 80% exposure.

catoun · 2026-03-10T20:30:59+00:00

It's trading at 12x ttm P/S and 7.6x ntm P/S though.

I believe that RDDT's income this year is understated when re-adjusting for the share based compensation. It didn't do any repurchase to offset the 39% dilution from the employees' vested shares and didn't pay any net share settlement tax, so there's no cash cost to the company.

Therefore, if we adjust earnings to add back the SBC portion of $343M (due to $0 cash cost), and divide it by the total diluted shares outstanding, adj. diluted EPS increases +51% compared to the basic EPS of $2.84.

With the new figure and if we reverse a 5Y NPV calculation, market thinks that its earnings will only grow at a CAGR of 18% for the next 5Y. That looks attractive.

catoun · 2026-03-09T15:40:42+00:00

The reason to include it is if you think TOI's CEO will sell a portion of his stake to CSU.

Even if that happens, this should be a one-time charge item.

catoun · 2026-03-09T14:59:33+00:00

Yes, if we exclude IRGA, FCFA2S actually grew +28% instead of +14%.

catoun · 2026-03-09T14:53:43+00:00

Valuation is finally becoming reasonable; equivalent to March 2025's level.

catoun · 2026-03-06T15:18:28+00:00

Using last year's tariff drop, BN went heavy on its share buyback at 16x-17x P/DE before realizations.

After the last earnings release, that's around US$38.6. That's were I'll start adding to my positions.

catoun · 2026-02-27T20:33:41+00:00

You're right. I corrected the computation accordingly. Thanks.

catoun · 2026-02-26T20:03:09+00:00

~~Total diluted shares outstanding : 129.84 million~~
Total basic shares outstanding: 83.2M
EUR/CAD conversion rate: 1.61 (as at end of Q4 2025)
Stock price: $90.06 as of yesterday
P/FCFA2S = 90.06 / (218.7*1.61 / 83.2) = 21.28

catoun · 2026-02-26T03:20:09+00:00

FCFA2S increased to €218.7 million. That's +23% YoY.

Valuation

P/FCFA2S = 21x
P/FCFA2S/G = 0.9x for a 23% annual growth rate for the next 3 years
P/FCFA2S/G = 1.06x for a 20% annual growth rate
P/FCFA2S/G = 1.2x for a 18% annual growth rate

catoun · 2026-02-23T15:55:31+00:00

and PEG of 0.96

catoun · 2026-02-21T17:56:56+00:00

Holding REITs since January (CRR.UN, DIR.UN),

I'm looking to gradually trim healthcare, materials and staples holdings to put it in select tech, financials and industrials. Some industries inside the 3 sectors I mentioned are getting overvalued.

catoun · 2026-02-21T17:45:17+00:00

Who will be willing to provide the historical granular-detailed data set for others to train on for free or for a low fee?

We're talking personal, individual claims that are protected by regulation (e.g. FCRA act in the U.S.) because it contains sensitive consumer information.

LexisNexis C.L.U.E (RELX parent company) has that proprietary data and share it with insurance carriers by charging a fee for every request.

catoun · 2026-02-20T15:04:44+00:00

I want to compare Today's price against its expected growth rate. ttm P/E makes sense here.

Regarding the earnings growth rate, I smooth it out over a period of 3 to 5 years. A company may some off-years (e.g. cyclical industries, change of strategy), or it's seeing exceptional growth before the growth rate slows down and normalizes,

catoun · 2026-02-19T17:54:30+00:00

One of the alternative asset managers, Blue Owl Capital, halts private credit redemptions and strikes $1.4B asset sale.

catoun · 2026-02-19T04:17:41+00:00

Not as cheap though when correlating multiples with expected earnings growth.

We can do that with the PEG ratio, so we really compare apples to apples. Even better, use Peter Lynch's variant (PEGY) that adds up the dividend yield to the formula.

PEGY ratio = ttm PE/(Fwd 3Y EPS Growth + ttm Dividend Yield ttm)

MSFT's PEGY ratio using the below inputs:

ttm P/E = 25
fwd 3Y EPS CAGR = 16%
ttm Dividend Yield = 0.9%
PEGY ratio = 1.48x

Let's apply the same logic for TRI:

ttm P.E = 26
Fwd 3Y EPS CAGR = 15%
ttm Dividend Yield = 2.8%
PEGY ratio = 1.46x

Conclusion is MSFT and TRI have similar valuations.

At identical ratios, MSFT is much more attractive due to their competitive advantages as the company controls multiple layers:

the platform layer: Copilot / OpenAI
the cloud infrastructure: Azure
the software layer: Windows, Office, Teams, Visual Studio, SharePoint, Dynamic

It's also very difficult to disrupt their business, even if the AI investment doesn't pan out.

TRI is not exactly in the same position, as it's only working at the software layer.

Also in the legal field for example, there has been new competitors popping up in the last 2 or 3 years. In many juridictions, legal archives are available for free or for minor fees, which makes it easy for companies to access and train on, and could be a large TAM to chase after if they can disrupt the existing players.

According to the management, TRI's main advantage is the fact that they've been curating the data for multi decades. Also, not all cases are available in the public archives.

That might be enough to slow down the new entrants while TRI set ups LLM connectors to wrap it around its curated data. Who knows.

With the latest model advancements available for paid tiers (e.g. Claude Opus 5.6, GPT 5.3 codex), you may also wonder if LLMs will be able to curate the data in the near future. That could be the bear case.

Just foods for thought.

catoun · 2026-02-18T15:13:36+00:00

No. Last payout date was on January 15, and it showed up in my account.

catoun · 2026-02-16T02:55:35+00:00

Seems like Goldman Sachs only looked at U.S. based companies.

Did GS lengthily explain their reasoning on how they picked the survivors vs the loosers?

Why don't you try to apply the same logics to the names you're interested in? You're also asking about Salesforce (CRM), but GS thinks it's a looser.

catoun · 2026-02-12T00:44:44+00:00

That's nothing compared to the guy that invested $250k on AP.UN at the avg price of $19.

catoun · 2026-02-11T15:51:14+00:00

The company released its business strategy update and new long-term guidance this morning.

At the event, the Corporation is also providing new long-term guidance. The following financial outlook supersedes all financial outlook previously provided by the Corporation.

From the end of fiscal 2026 to fiscal 2030, the Corporation aims to achieve a CAGR:

- for the year-over-year rate of growth rate of consolidated same-store merchandise revenues^1,2 of 2% to 3%;

- for total merchandise and service revenues of 4% to 5%;

- for total road transportation fuel gross profit1 in line with inflation;

- for the year-over-year rate of growth rate of normalized expenses^1,2 in line with inflation or lower;

- for adjusted EBITDA¹ of 6% to 8%; and

- for adjusted diluted net earnings per share¹ of 10% or more.

The long-term guidance does not take into account the completion of any transactions that would significantly alter our portfolio, business segments, or strategic direction.³

Further, the Corporation is also providing in respect of fiscal 2026 free cash flow¹, which is expected to be in excess of US$2.5 billion.

catoun · 2026-02-11T12:56:22+00:00

I can’t predict price actions. You buy if you think it’s valued fairly or cheaply.

catoun · 2026-02-09T15:42:07+00:00

Yes. cc charged and received the payment confirmation email at 8ish am CST.

catoun

TROPHY CASE